The debtors' legal malpractice claim was "not property of their bankruptcy estate," held a split Ninth Circuit on June 30, 2020. In re Glaser, 816 Fed. Appx. 103, 104 (9th Cir. June 30, 2020) (2-1). But the U.S. District Court for the District of Minnesota one week later affirmed a bankruptcy court judgment that "the [debtor's] estate was the proper owner" of such a claim. In re Bruess, 2020 WL3642324, 1 (D. Minn. July 6, 2020).

A secured lender's "mere retention of property [after a pre-bankruptcy repossession] does not violate" the automatic stay provision [362(a) (3)] of the Bankruptcy Code, held a unanimous U.S. Supreme Court on Jan. 14, 2021. City of Chicago v. Fulton, 2021 WL 125106, 4 ( Jan. 14, 2021). Reversing the Seventh Circuit's affirmance of a bankruptcy court judgment holding a secured lender in contempt for violating the automatic stay, the Court resolved "a split" in the Circuits. Id. at 2. The Second, Eighth and Ninth Circuits had agreed with the Seventh Circuit.

A bill introduced by Democratic U.S. senators looks to make it easier for Americans to discharge student loans and medical debt. If passed as currently written, the Medical Bankruptcy Fairness Act of 2021 would drastically change the U.S. bankruptcy system by removing certain procedural hurdles that make the bankruptcy process complex and by creating a clearer path to discharging debts that impact millions of Americans.

The bankruptcy trustee of a bank holding company was not entitled to a consolidated corporate tax refund when a bank subsidiary had incurred losses generating the refund, held the U.S. Court of Appeals for the Tenth Circuit on May 26, 2020. Rodriguez v. FDIC (In re United Western Bancorp, Inc.), 2020 WL 2702425(10th Cir May 26, 2020). On remand from the U.S. Supreme Court, the Tenth Circuit, as directed, applied "Colorado law to resolve" the question of "who owns the federal tax refund." Id., at 2.

A lender’s state law tort claims against “non-debtor third-parties for tortious interference with a contract” were “not preempted” by “federal bankruptcy law,” held the New York Court of Appeals on Nov. 24, 2020. Sutton 58 Associates LLC v. Pilevsky, 2020 WL 6875979, *1 (N.Y. Ct. Appeals, Nov. 24, 2020) (4-3). In a split opinion, the Court of Appeals reversed the Appellate Division’s dismissal of a lender’s complaint against the debtors’ non-debtor insiders. The lender will still have to prove its case at trial.

The Asserted Claims

On August 31, 2020, the Tenth Circuit affirmed the United States Bankruptcy Court for the District of Colorado’s holding that certain student loans not guaranteed by a governmental unit may be discharged in bankruptcy.

The bankruptcy trustee of a bank holding company was not entitled to a consolidated corporate tax refund when a bank subsidiary had incurred losses generating the refund, held the U.S. Court of Appeals for the Tenth Circuit on May 26, 2020. Rodriguez v. FDIC (In re United Western Bancorp, Inc.), 2020 WL 2702425(10th Cir May 26, 2020). On remand from the U.S. Supreme Court, the Tenth Circuit, as directed, applied “Colorado law to resolve” the question of “who owns the federal tax refund.” Id., at *2.

Earlier this month, in Davis v. Carrington Mortgage Services, LLC, et al., the United States District Court for the District of Nevada held that consumer reporting agencies are not obligated to determine the legal status of debts. The Court also reinforced the plausible pleading standard for Fair Credit Reporting Act cases, while providing an overview of CRAs’ obligations under the act.

On March 27, Minnesota Gov. Tim Walz clarified that Executive Order 20-20, which directed Minnesota residents to stay at home, applies to debt collection professionals. Due to ongoing coronavirus (“COVID-19”) concerns, Executive Order 20-20, which will remain in effect until April 10, 2020, orders all persons living in the State of Minnesota to stay at home except to engage in exempted activities and critical sector work.

A bankruptcy court’s preliminary injunction was “not a final and immediately appealable order,” held the U.S. District Court for the District of Delaware on Dec. 10, 2019. In re Alcor Energy, LLC, 2019 WL 6716420, 4 (D. Del. Dec. 10, 2019). The court declined to “exercise [its] discretion” under 28 U.S.C. §158(a)(3) to hear the interlocutory appeal. Id., citing 16 Wright & Miller, Federal Practice and Procedure, §3926.1 (3d ed. 2017) (“There is no provision for appeal as of right from an injunction order of a bankruptcy judge to the district court.”).