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.

In Salyersville Nat’l Bank v. Bailey (In re Bailey), 664 F.3d 1026 (6th Cir.

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.

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.

The United States Bankruptcy Court for the Western District of Kentucky recently found that a vendor’s filing of a prepetition notice of lis pendens served to place any hypothetical judicial lien creditor, execution creditor, or purchaser of real property on notice of its equitable lien against the property for the unpaid portion of the purchase price. This prepetition notice of lis pendens prevented the debtors-in-possession from avoiding the vendor’s lien in exercise of their strong-arm powers under 11 U.S.C. § 544.

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.

Under BAPCPA, enacted in 2005, a Bankruptcy Court may not approve a Chapter 13 plan which does not provide for the payment of all unsecured claims in full if the plan does not devote all of the debtor’s projected disposable income over the life of the plan to repayment of the unsecured creditors.

Many bankruptcy practitioners are familiar with the general tenet that an obligation secured only by a mortgage on the Debtor’s principal residence is immune from modification or avoidance by the Debtor. Sections 1123(b)(5) and 1322(b)(2) of the Bankruptcy Code protect residential mortgages from being “stripped-down” to the value of the subject real estate or subjecting the terms of the underlying obligation to modification.

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.