(6th Cir. Feb. 23, 2017)

The Sixth Circuit affirms the bankruptcy court’s decision to confirm the debtor’s Chapter 13 plan, which included payment of overdue property taxes under Tennessee law with an interest rate of 12%. The state argued that the interest rate should be 18% due to the additional 6% interest permitted under the applicable state statute for a default penalty. The court holds that the 12% provided in the “nonbankruptcy law” is applicable, while the 6% penalty is not applicable. Opinion below.

Judge: Stranch

(S.D. Ind. Feb. 17, 2017)

The district court affirms the bankruptcy court’s judgment in favor of the plaintiff trust. The bankruptcy court held that the trust could pierce the corporate veil and hold the debtor personally liable to the trust. The district court analyzes Indiana law on veil piercing and finds no error. Opinion below.

Judge: Young

Attorney for Debtor: Goering Law LLC, Wilmer E. Goering, II

Attorney for Plaintiff: Kroger Gardis & Regas LLP, David E. Wright

(Bankr. S.D. Ind. Feb. 15, 2017)

(S.D. Ind. Feb. 13, 2017)

(Bankr. S.D. Ind. Feb. 10, 2017)

The bankruptcy court enters judgment in favor of the debtor on the trustee’s claims to avoid transfers of real property, but the court enters judgment in favor of the trustee on the claim under 11 U.S.C. § 727(a)(4) and denies the debtor a discharge. The court finds that the debtor made a false oath on his statement of financial affairs with reckless disregard for the truth. The debtor had transferred property prior to his divorce but claimed those transfers were made as a result of the divorce. Opinion below.

Judge: Moberly

The Perishable Agricultural Commodities Act regulates transactions in fresh and frozen fruits and vegetables. It does this in part by creating a general trust for the benefit of produce sellers.

Most restructuring practitioners are aware, either vaguely or through punishing experience, of the power of PACA creditors. PACA (or the Perishable Agricultural Commodities Act, 7 U.S.C. § 499a et seq. for those who hate brevity) requires that buyers of produce hold such produce – and their proceeds – in trust for the benefit of produce sellers.

(7th Cir. Feb. 8, 2017)

The Seventh Circuit denies the trustee’s motion to dismiss his appeal and remand so that the bankruptcy court could approve the settlement between the parties, as the bankruptcy court recently indicated that it would approve the settlement. The court denies the motion because Appellate Procedure Rule 12.1 requires that the district court indicate that it would grant the same relief as the bankruptcy court. Opinion below.

Judge: Ripple

Attorneys for Trustee: Riordan, Fulkerson, Hupert & Coleman, Alan Fulkerson

Another bankruptcy trustee catches another hapless college unaware. In Roach v. Skidmore College (In re Dunston), Bankr. S.D. Ga. (Jan 31, 2017), a trustee appears to win the next battle of “bankruptcy estates v. child’s college,” ruling that an insolvent parent who paid the college tuition of an adult child made a fraudulent transfer to the college.

Post-judgment interest is not something most lenders consider when making a loan. In fact, it is not ordinarily the subject of significant analysis even when litigation becomes necessary. Where the United States District Court is the preferred venue, however, parties easily can fall into the quandary of being stuck with the federal statutory post-judgment interest rate, which is currently less than 1% per annum.