Seafood Shack Ltd v Alan Darlow [2019] EWHC 1567 (Ch)

A lease of restaurant premises was granted to a company that did not exist; there was no legal basis for correcting the lease, and the similarly-named company claiming rights was held to have none.

In determining the legal standard for holding a creditor in civil contempt for attempting to collect a debt in violation of a bankruptcy discharge order, the Supreme Court of the United States adopted an “objectively reasonable” standard, and held that a court may hold a creditor in civil contempt if there is “no fair ground of doubt” as to whether the order barred the creditor’s conduct.

Accordingly, the Supreme Court reversed the Ninth Circuit’s ruling, which had applied a subjective standard for civil contempt.

An IRA owner could not rely on a Florida exemption to shield his IRA account from creditors after engaging in prohibited acts of self-dealing with his IRA funds, the Eleventh Circuit held in Yerian v. Webber, 2019 WL 2610751 (11th Cir. June 26, 2019). The IRA owner, Keith Yerian, opened a self-directed IRA. The IRA was governed by two contracts.

On May 20, 2019, the US Supreme Court clarified that when a trademark licensor rejects a trademark license agreement in a Chapter 11 bankruptcy proceeding, the rejection does not rescind the use rights of the licensee under the license agreement. The decision resolved a circuit split on this issue between the First and Seventh Circuits. The Court held that the licensor’s rejection of the license agreement in bankruptcy has the same effect on the licensee’s rights as a licensor’s breach of the license agreement outside of bankruptcy.

In an agricultural lien contest between three creditors of a bankrupt commercial farm, the U.S. Court of Appeals for the Fifth Circuit recently affirmed the trial court’s award of summary judgment in favor of a bank that provided debtor-in-possession financing, holding that the locale of the farm products determined the applicable lien law and that bank’s lien was superior to the liens of two nurseries that supplied trees and shrubs because the latter were either unperfected or unenforceable.

The Bankruptcy Appellate Panel for the U.S. Court of Appeals for the Sixth Circuit recently affirmed a lower bankruptcy court’s ruling that a refinanced mortgage was enforceable as to the interests of both husband and wife, where the wife did not execute the note and was not defined as a “borrower” in the body of the mortgage, but nonetheless initialed and signed the mortgage document as a “borrower” in the signature block.

The Supreme Court of Missouri recently held that a trial court abused its discretion by certifying an overly broad class with a class representative whose claims against the debt collector defendant were not typical of the class.

The U.S. Court of Appeals for the Sixth Circuit held that a recent change to Ohio law involving notice of a defective lien had no bearing on a bankruptcy trustee’s ability to avoid the defective lien because such notice is irrelevant to a trustee’s status as a judicial lien creditor.

Accordingly, the Sixth Circuit affirmed the Bankruptcy Appellate Panel’s upholding of the bankruptcy court’s denial of the mortgagee’s motion for judgment on the pleadings.

The U.S. Court of Appeals for the Seventh Circuit recently held that a mortgagee’s failure to take a deficiency judgment against a borrower who filed bankruptcy in a concluded state foreclosure action precluded the mortgagee from making a deficiency claim in the borrower’s bankruptcy proceeding.

A copy of the opinion in BMO Harris Bank N.A. v. Anderson is available at: Link to Opinion.

The U.S. Court of Appeals for the Eighth Circuit recently affirmed a trial court judgment holding a bank and its principal in contempt and sanctioning them for violating a bankruptcy discharge injunction, based on the findings in a parallel state court proceeding.

In so ruling, the Eighth Circuit held that the state court judgment did not preclude the bankruptcy court’s ability to enforce its own orders.