The U.S. Court of Appeals for the Second Circuit recently affirmed the dismissal of LIBOR-manipulation fraud claims brought by a group of hotel-related entities and their investor against a bank and two of its subsidiaries.

In so ruling, the Second Circuit held that:

(a) the borrower and related entities lacked standing to sue because they failed to list their potential claims in their bankruptcy case and the claims were barred by the doctrine of judicial estoppel; and

(b) the claims of the investor and guarantors were untimely and barred by the law of the case.

The U.S. Court of Appeals for the Eighth Circuit recently held that a secured party’s foreclosure did not discharge an otherwise valid security interest in the proceeds of the collateral, nor did it preclude the creditor from pursuing its rights to such proceeds.

In a case addressing what it means to "surrender" property under the Bankruptcy Code, the U.S. District Court for the Southern District of Florida recently held that a Chapter 7 trustee's abandonment of real property only restores legal title to the debtors as if no bankruptcy petition had been filed, and does not also give the debtors the right to contest the mortgagee's foreclosure if the debtors elected to surrender the property.

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 District Court of Appeal for the Fifth District of Florida recently denied a motion to reconsider an order awarding appellate attorney’s fees to borrowers who were the prevailing party on appeal, reversing judgment of foreclosure entered in favor of the mortgagee.

The Appellate Court of Illinois, First District, recently held that where the beneficiary of a land trust filed a motion to intervene in a foreclosure, the trial court did not abuse its discretion in denying the motion to intervene because the beneficiary filed the motion after the trial court had entered the order confirming the foreclosure sale.

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

The U.S. Bankruptcy Court for the Middle District of Alabama recently held that a mortgage servicer did not violate the discharge injunction in 11 U.S.C. § 524 by sending the discharged borrowers monthly mortgage statements, delinquency notices, notices concerning hazard insurance, and a notice of intent to foreclose.

Moreover, because the borrowers based their claims for violation of the federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq., on the violation of the discharge injunction, the Court also dismissed their FDCPA claims with prejudice.

In a split decision, the U.S. Court of Appeals for the Fourth Circuit recently held that “filing a proof of claim in a Chapter 13 bankruptcy based on a debt that is time-barred does not violate the Fair Debt Collection Practices Act when the statute of limitations does not extinguish the debt.”

The U.S. Court of Appeals for the Ninth Circuit, in a case of first impression, recently held that section 1328(f) of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which bars so-called “Chapter 20” debtors from receiving a discharge at the conclusion of their Chapter 13 reorganization if they received a Chapter 7 discharge within four years of filing the petition for Chapter 13 relief, does not prevent a debtor from voiding a secured creditor’s lien under section 506(d) of the Bankruptcy Code.

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.