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It's in the contract: allowance of post-petition claims for attorneys' fees by unsecured creditors

Recent Second Circuit and Ninth Circuit opinions highlight the dispute over whether or not the Bankruptcy Code authorizes allowance of claims for post-petition legal fees incurred by unsecured creditors. Specifically, while not all Circuits agree, in the wake of the 2007 United States Supreme Court decision Travelers Casualty & Surety Co. of North America v. Pacific Gas & Electric Co., 549 U.S.

USA, Insolvency & Restructuring, Litigation, Frost Brown Todd LLP, Bankruptcy, Unsecured debt, Unsecured creditor, Supreme Court of the United States, Ninth Circuit
U.S. Supreme Court clarifies that Chapter 13 debtors may not deduct car ownership expenses when they make no loan or lease payments

In Ransom v. FIA Card Servs., N.A., --- S.Ct. ----, 2011 WL 66438 (U.S. 2011), the United States Supreme Court took up the question of whether a Chapter 13 debtor who owns his or her vehicle outright (“free and clear”) may claim an allowance for car ownership costs and thereby reduce the amount that he or she will repay creditors. In her first opinion, Justice Kagan answered simply—no. The Ransom opinion has been seen as a victory for not only credit card companies like the one involved but other creditors, as well.

USA, Insolvency & Restructuring, Litigation, Frost Brown Todd LLP, Bankruptcy, Costs in English law, Debtor, Unsecured debt, Debt, Tax deduction, Internal Revenue Service (USA), Supreme Court of the United States, Ninth Circuit, Bankruptcy Appellate Panel
Indiana Court of Appeals: arbitration provisions in loan agreements are enforceable after discharge in bankruptcy

The Indiana Court of Appeals ruled on an issue of first impression inGreen Tree Servicing, LLC v. Brough, 930 N.E.2d 1238 (Ind. Ct. App. 2010) that arbitration provisions in consumer loan agreements survive discharge in the borrower’s bankruptcy proceeding.

USA, Indiana, Arbitration & ADR, Banking, Insolvency & Restructuring, Litigation, Frost Brown Todd LLP, Bankruptcy, Credit (finance), Debtor, Waiver, Debt, Default (finance), Bankruptcy discharge, Fair Credit Reporting Act 1970 (USA), Ninth Circuit, Indiana Court of Appeals
Indiana Court of Appeals holds that claim under the Fair Credit Reporting Act survives bankruptcy and must be arbitrated

On July 26, 2010, the Indiana Court of Appeals, in the published decision of Green Tree Servicing, LLC., v. Brian D. Brough, No. 88A01-0911-CV-550, addressed the issue raised by Appellant Green Tree as to whether the trial court erred by vacating its prior Order directing the parties to arbitrate their dispute, which involved a prior bankruptcy filing and a claim under the Fair Credit Reporting Act.

USA, Indiana, Arbitration & ADR, Company & Commercial, Insolvency & Restructuring, Litigation, Frost Brown Todd LLP, Bankruptcy, Arbitration clause, Waiver, Debt, Mortgage loan, Jury trial, Bankruptcy discharge, Wells Fargo, Fair Credit Reporting Act 1970 (USA), Ninth Circuit, Indiana Court of Appeals
Ninth Circuit holds that a security interest must be returned to the bankruptcy estate when the security interest's value is not readily ascertainable

What should be the remedy when a bankruptcy court holds that a security interest is avoidable as a preferential transfer, but the value of the security interest is not readily ascertainable? The Ninth Circuit recently addressed this issue in USAA Federal Savings Bank v. Thacker (In re: Taylors), 2010 U.S. App. LEXIS 5793 (9th Cir. 2010). The Court held that, since the value of the security interest was not readily ascertainable, the only available remedy is for the bankruptcy court to return the security interest itself, not its value, to the bankruptcy estate.

USA, Banking, Insolvency & Restructuring, Litigation, Frost Brown Todd LLP, Bankruptcy, Debtor, Unsecured debt, Interest, Remand (court procedure), US Code, Ninth Circuit, United States bankruptcy court, Bankruptcy Appellate Panel