Insider creditors “waived [the] right to charge default interest on” their claims and “failed to prove” their claim for non-default interest, held the U.S. Bankruptcy Appellate Panel for the Tenth Circuit (“BAP”) on Nov. 6, 2015. In re Autterson, 2015 WL 6789168, at *4 (10th Cir. BAP, Nov. 6, 2015).
For those readers who have a sophisticated understanding of bankruptcy law, the holdings of Jester v. Wells Fargo Bank, N.A. (In re Jester) will not be surprising.
The Bankruptcy Appellate Panel for the 9th Circuit in Chantel v. Pierce, 2015 Bankr. Lexis 2174, recently explained what can constitute a sham trust to enable creditors to reach assets transferred to that trust. A California trust had been created with the Chantels as co-trustees. After a judgment had been entered against them, they filed a Chapter 13 bankruptcy, which was converted to a Chapter 7. In their schedules, the Chantels claimed they owned no real property and had not made any transfers to their self-settled trust within the previous 10 years.
The United States Bankruptcy Appellate Panel for the Eighth Circuit recently held that filing a proof of claim on a time-barred debt is not, alone, a prohibited debt collection practice under the federal Fair Debt Collection Practices Act.
A copy of the opinion is available at: Link to Opinion.
The claim of an insider lender (“L”) who invested “in a venture with substantial risk” and who loaned it additional funds on a secured basis to salvage its business should not be recharacterized as equity or subordinated on equitable grounds, held the U.S. Court of Appeals for the Tenth Circuit on June 12, 2015. In re Alternate Fuels, Inc., 2015 WL 3635366 (10th Cir. June 12, 2015) (2-1) (“AFI”).
The Supreme Court of the United States unanimously held in Bullard v. Blue Hills Bank, Case No. 14-115, that a bankruptcy court’s order denying confirmation of a debtor’s proposed plan is not a “final” order that can be immediately appealed. The Supreme Court’s decision implicates practical considerations within the bankruptcy process and the appropriate balance between the bargaining power of debtors and creditors.
Case Summary
On May 4, 2015, the United States Supreme Court unanimously held in Bullard v. Blue Hills Bank, Case No. 14-115, that a bankruptcy court’s order denying confirmation of a debtor’s proposed plan is not a “final” order that can be immediately appealed. The Supreme Court’s decision implicates practical considerations within the bankruptcy process and the appropriate balance between the bargaining power of debtors and creditors
Case Summary
In Diamond Z Trailer, Inc. v. JZ, LLC (In re JZ, LLC), No. 07-1011 (9th Cir. B.A.P., June 18, 2007), the Ninth Circuit Bankruptcy Appellate Panel affirmed a Bankruptcy Court decision holding that an unscheduled executory contract rides through the bankruptcy if not assumed or rejected during the bankruptcy. Further, a debtor has standing to sue for a breach of that executory contract when the breach occurred after the closure of the bankruptcy case.
Assignee creditors are protected by the provision of the Bankruptcy Code that prevents debtors from obtaining a discharge for debts obtained through fraud, the Bankruptcy Appellate Panel for the U.S. Court of Appeals for the Ninth Circuit has held.
The U.S. Court of Appeals for the First Circuit has held that a debtor’s interest in its liquor license constitutes property of the estate pursuant to section 541 of the Bankruptcy Code.
The First Circuit further held that the debtor’s rejection of its lease ended the debtor’s contractual right to continued use of its liquor license, and left the landlord with ordinary remedies for breach of contract—such as specific performance to obtain recovery of the license. See In re Ground Round, Inc. (Abboud v. Ground Round), 482 F.3d 15 (1st Cir. 2007).