In In re Cook, 2014 Bankr. LEXIS 67 (B.A.P. 8th Cir. Jan.

Probably the most significant bankruptcy law development in the past several years has been the narrowing of bankruptcy courts’ constitutional authority to enter final judgments.  See Stern v. Marshall, 131 S. Ct.

In recent years, bankruptcy courts have come closer to reaching a consensus regarding their ability to recharacterize debt into equity. Yet, beneath this consensus lies a deepening divide that lenders should be aware of. Recharacterization challenges “the assertion of a debt against the bankruptcy estate on the ground that the ‘loaned’ capital was actually an equity investment.” In re Insilco Techs., Inc., 480 F.3d 212, 217 (3d Cir. 2007) (internal citations omitted).

The U.S. Bankruptcy Appellate Panel for the Eighth Circuit affirmed a lower court ruling that the funds in a debtor’s Health Savings Account (HSA) are not excluded from the bankruptcy estate and are not exempt. On the date of his bankruptcy filing, the debtor listed the funds in his HSA as an asset that should be excluded from the bankruptcy estate. He specifically asserted that under 11 U.S.C.

The Bottom Line

Is anyone ready for a test on bankruptcy appellate jurisdiction?  For the second time in a week, the Sixth Circuit addressed its appellate jurisdiction in bankruptcy appeals, this time in the context of orders denying the substantive consolidation of two separate chapter 7 bankruptcy estates, In re Cyberco Holdings and Teleservices Group.   On the heels of its decision in Lindsey v.

Secured creditors need to be aware of recent bankruptcy rulings that affect their rights and interests. These rulings have tested the boundaries of key concepts affecting the ability to "cramdown" and involuntarily restructure a secured creditor’s rights and the valuation of collateral. Secured creditors must therefore be mindful of these developments and risks in guiding their negotiating and litigation strategy against a cramdown threat.

Fiduciaries who breach their duties may pay the consequences far longer than they may think, for they may not even be able to escape liability through personal bankruptcy.  In Raso v. Fahey (In re Fahey), No. 11-1118 (June 11, 2013), the U.S Bankruptcy Court for the District of Massachusetts became the first court to apply the new defalcation guidelines laid down by the Supreme Court in Bullock v. BankChampaign, NA, 133 S. Ct.

In In re Village at Lakeridge, LLC, BAP Nos. 12-1456, 12-1474 (B.A.P. 9th Cir. Apr. 5, 2013), the Bankruptcy Appellate Panel of the Ninth Circuit clarified that, in order to apply the common interest doctrine, a trial court must make a finding that the parties expressly or implicitly agreed to participate in a joint legal strategy. In this case, secured creditor, US Bank, deposed the sole unsecured creditor, Rabkin.

Appellate panel affirms that creditor’s failure to seek adequate protection before turning collateral over to trustee terminates possessory lien.

On March 25, 2013, the Eighth Circuit Bankruptcy Appellate Panel affirmed the bankruptcy court’s order in In re WEB2B Payment Solutions, Inc., holding that a creditor loses its possessory lien when it turns collateral over to the bankruptcy trustee without first seeking adequate protection from the bankruptcy court.

FACTS