In the bankruptcy world, not all claims are created equal. Rather, certain special categories of claims have priority status and are not only paid ahead of other claims, but are also often paid in full. One such category of claims is found in Bankruptcy Code § 503(b)(9), which grants priority claim status for goods which were sold in the ordinary course of business and received by a debtor within the 20-day window leading up to the bankruptcy filing. The code section is very clear, however.
The United States Court of Appeals for the Sixth Circuit recently issued two opinions examining standing issues in bankruptcy proceedings. This article examines how those cases clarify bankruptcy practice and procedures in the Sixth Circuit related to: (1) obtaining standing to pursue causes of action on behalf of the bankruptcy estate, and (2) the standing of potential defendants to oppose orders granting authority to pursue causes of action against them.
In Salyersville Nat’l Bank v. Bailey (In re Bailey), 664 F.3d 1026 (6th Cir.
The United States Bankruptcy Court for the Northern District of Ohio recently held that under Ohio law, the homestead exemption set forth in Ohio Rev. Code Ann. § 2329.66 applies to contiguous parcels of land only if those parcels are used for a single purpose as the debtor’s homestead. In re Whitney, 459 B.R. 72 (Bankr. N.D. Ohio 2011).
In a recent appeal to the Sixth Circuit Bankruptcy Appellate Panel, Inre Collins, 2011 WL 4445451 (6th Cir. BAP Aug. 12, 2011), the trustee sought a declaratory judgment to determine the validity, extent, and priority of liens on the debtor’s real property held by four defendants. The trustee appealed the district court’s dismissal of his complaint as to purported holders of the debtor’s first and second mortgages on the debtor’s property.
The U.S. Court of Appeals for the Seventh Circuit recently affirmed a bankruptcy court’s decision refusing to confirm debtors’ reorganization plan that included auction procedures that forbade secured creditors from “credit bidding” for the assets. Inre River Road Hotel Partners, LLC, No. 10-3597, 2011 WL 2547615 (7th Cir. June 28, 2011). In that case, the debtors (owners of various hotel properties) proposed a plan of reorganization that included auctioning certain properties encumbered by security interests.
In connection with the administration of the debtors’ bankruptcy case, the trustee in Badovick v. Greenspan (In re Greenspan), No. 10-8019, 2011 Bank. LEXIS 272 (B.A.P. 6th Cir. Feb.
Debtors filed a voluntary petition for relief under Chapter 7. The Debtors own and have title to real property ("Property"). Prior to the Petition Date, the husband borrowed $85,000 from Lender. This loan was reflected by a promissory note signed only by the husband, as "Borrower." The term "Note" is defined in the Mortgage as the promissory note signed by Borrower. On the same date, a mortgage granting Lender a mortgage on the Property was executed.
The Seventh Circuit recently decided that a mortgage that assigns future rental income to the mortgagee creates a security interest that takes priority over a federal tax lien. Bloomfield State Bank v. United States, No.
Recently, some bankruptcy courts in Ohio have given mortgage lenders something new to be concerned over: Is the form of your notary’s certification proper? Everyone in the mortgage industry is aware of the wave of cases challenging the validity or effectiveness of certain mortgages or mortgage assignments on account of sub-standard execution, notarization and recordation practices.