Last year, Burr & Forman lawyers won a decisive victory in the Eleventh Circuit, in the case of In re Failla, 838 F.3d 1170 (11th Cir. 2016). In Failla, the Eleventh Circuit held that a debtor who files a statement of intention to “surrender” his or her house in bankruptcy may not oppose the secured creditor’s foreclosure proceeding in state court. Failla is a significant victory for secured creditors for two primary reasons. First, the Eleventh Circuit interpreted the meaning of “surrender,” as used in 11 U.S.C.

The District Court of Appeal of the State of Florida, Fifth District, recently reversed final judgment of foreclosure entered in favor of a mortgagee that omitted interest and escrow amounts due, and remanded to the trial court to modify judgment to include these amounts.

In so ruling, the 5th DCA determined that the mortgagee met its burden to provide the trial court with figures necessary to calculate the interest and escrow amounts through its witnesses’ testimony and evidence.

Recently, in Gupta v. Quincy Medical Center, 858 F.3d 657 (1st Cir. 2017), the U.S. Court of Appeals for the First Circuit clarified the limits of the bankruptcy courts’ subject-matter jurisdiction over civil proceedings. The decision, authored by Judge Lipez and joined by retired Supreme Court Justice David Souter (sitting by designation), provides a thorough analysis of the bankruptcy courts’ jurisdiction in such cases.

The ability of a trustee or chapter 11 debtor in possession ("DIP") to sell bankruptcy estate assets "free and clear" of liens on the property under section 363(f) of the Bankruptcy Code has long been recognized as one of the most powerful tools for restructuring a debtor’s balance sheet and generating value in bankruptcy.

Section 510(b) of the Bankruptcy Code provides a mechanism designed to preserve the creditor/shareholder risk allocation paradigm by categorically subordinating most types of claims asserted against a debtor by equityholders in respect of their equity holdings. However, courts do not always agree on the scope of this provision in attempting to implement its underlying policy objectives. In In re Lehman Brothers Holdings Inc., 2017 WL 1718438 (2d Cir.

(Bankr. W.D. Ky. July 28, 2017)

In Royal Bank of Canada v. Casselman, three motions were brought before the Court. First, a continuation of a motion for approval and directions brought by the receiver. Second, a motion to allow counsel for the debtor to withdraw as lawyer of record. Third, a motion by the Sexton Group Ltd.

In Midland Funding, LLC v. Johnson, No. 16-348, 2017 BL 161314 (U.S. May 15, 2017), the U.S. Supreme Court ruled that a credit collection agency does not violate the Fair Debt Collection Practices Act ("FDCPA") when it files a claim in a bankruptcy case to collect on a debt which would be time-barred in another court.

The District Court of Appeal of the State of Florida, Second District, recently held that where loan documents provided that Florida law applied to foreclosure claims, the trial court erred in applying Texas law because the deficiency claim in the case was part of the Florida foreclosure process.

A copy of the opinion is available at:  Link to Opinion.

The U.S. District Court for the Northern District of Illinois recently held that a title insurer may exclude coverage under the exception for defects “created, suffered, assumed, or agreed to by the insured claimant” without intentional or wrongful conduct by the insured. 

In so ruling, the Court also held that the Illinois statute for bad faith denial of coverage by insurers did not apply to title insurers.