The United States Court of Appeals for the Eighth Circuit and the United States Bankruptcy Appellate Panel for the Eighth Circuit (the “BAP”) issued a number of published and unpublished decisions in the fourth quarter of 2014 that impact both consumer and business bankruptcy practice throughout the circuit.

As discussed in Part 1 and Part 2 of this series, any buyer of assets from a company in any degree of financial stress should be concerned about the transaction being attacked as a fraudulent transfer.

In the United States Bankruptcy Court for the District of Delaware, the bankruptcy court dismissed a chapter 11 case for bad faith, relying in part on an email sent by someone other than the debtor relaying to his employees and sales representatives his conversation with the debtor’s chief executive officer. This decision serves as a reminder to debtor lawyers how imperative it is to review with your client what it is saying both privately and publicly about its bankruptcy case. Because even in bankruptcy court, anything you say can and will be used against you.

In a case of first impression, the Tenth Circuit Court of Appeals held a tax return that is filed after the April 15 deadline is not a “return” within the meaning of § 523(a)(1)(B) of the Bankruptcy Code; as a consequence, a debtor is not entitled to a discharge of tax liability if the tax return is filed after the deadline.

As noted in Part 1 of this series, any buyer of assets from a company in any degree of financial stress should be concerned about the transaction being attacked as a fraudulent transfer. Officers and directors of a selling entity also have concerns about this risk due to potential personal liability.

A recent decision by the United States Bankruptcy Court for the Western District of Missouri held that a manufactured home is real property for purposes of Section 1322(b)(2) of the Bankruptcy Code. This holding prevents chapter 13 debtors from modifying a secured lender’s claim where the claim is secured by a lien on a manufactured home in Missouri that is the debtor’s primary residence.

Any buyer of assets from a company in any degree of financial stress should be concerned about the transaction being attacked as a fraudulent transfer. Officers and directors of a selling entity also have concerns about this risk due to potential personal liability.

Trust preferred securities (TRUPs), the highbred security that counted as Tier 1 regulatory capital but generated tax deductible interest payments, were a favored source of capital for community banks. When the financial crisis hit, many bank holding companies (BHCs) with troubled bank subsidiaries exercised the right to defer interest payments on their outstanding TRUPs for up to five years. Interest continued to accrue during the deferral period, but the deferral was not a default and there was nothing that the TRUPs holder could do but wait.

Secured creditors often oppose plans where the only accepting class appears to be one created by the debtor through separate classification of claims when the claims have little in common but their acceptance of the plan and have more in common with other claims. A recent decision by the United States District Court for the Eastern District of North Carolina provides such creditors with additional support in their fight against separate classification.

A case against a hedge fund, and one of its partners and in-house counsel, related to actions at a portfolio company and alleging breach of fiduciary duties survived a motion to dismiss.  The portfolio company, alleged to be insolvent, was a credit derivative product company that had a subsidiary that wrote credit default swaps.