On April 19, 2023, the Supreme Court, in a unanimous opinion written by Justice Ketanji Brown Jackson in MOAC Mall Holdings LLC, ruled Bankruptcy Code section 363(m) to be non-jurisdictional, i.e. just a “mere restriction on the effects of a valid exercise” of judicial power “when a party successfully appeals a covered authorization.” Before MOAC, the Third, Sixth, Seventh, Ninth, Tenth and Eleventh Circuits held section 363(m) to be non-jurisdictional, but the Fifth and Second Circuits had diverged.

Reasoning

In a very recent decision by the Court of Appeals for the Eleventh Circuit,In re J.H. Investment Services, Inc., the court held that a creditor must take an affirmative step to pursue an unsecured claim, and that section 506(a)(1) of the Bankruptcy Code does not automatically provide for a deficiency claim.  

Companies that plan to sell goods or services to a debtor in bankruptcy should be aware of a recent case decided by the Court of Appeals for the Eleventh Circuit, holding that a trustee may avoid a debtor’s post-petition transfers of cash collateral if such transfers were made without the consent of the secured party or court order.1

The U.S. Court of Appeals for the Ninth Circuit has held that there is a federal common law of receivership in the context of real property security interest, joining the Eleventh Circuit. Can. Life Assurance Co. v. LaPeter, 557 F.3d 1103 (9th Cir. 2009).

The U.S. Court of Appeals for the Eleventh Circuit has affirmed a lower court ruling that lease termination fees can be considered preferential transfers under the Bankruptcy Code, subject to avoidance. The court’s holding reinforces concerns over whether landlords can structure lease terminations in a manner that protects them from preference recovery.

The U.S. Court of Appeals for the Eleventh Circuit has held that the bankruptcy court’s exclusive jurisdiction to dispose of estate property did not preclude the enforcement of an arbitration provision.

On April 18, 2007, in Fla. Dep’t. of Rev. v. Piccadilly Cafeterias, Inc. (In re Piccadilly Cafeterias, Inc.),1 the United States Court of Appeals for the Eleventh Circuit held that the stamp tax exemption of 11 USC § 1146(c)2 may apply to transfers of assets that were necessary to the consummation of a bankruptcy plan of reorganization and were made prior to confirmation of the plan. In reaching this decision, the Eleventh Circuit declined to follow decisions of the Third and Fourth Circuits to the contrary and thus created a split among the circuits on this issue.