In MERV Properties, L.L.C. v. Forcht Bancorp., Inc. 2015 WL 5827775, 61 BCD 170 (Bankr. 6th Cir. 2015), the 6th U.S. Circuit Bankruptcy Appellate Panel (BAP) affirmed summary judgment entered by the bankruptcy court for the Eastern District of Kentucky in favor of defendant bank on plaintiff borrower’s fraud and collusion claims.
In a recent case, a lawyer was sanctioned by an Ohio bankruptcy judge for his conduct in connection with an adversary proceeding he brought on behalf of a client against a Chapter 7 debtor. The lawyer was vindicated, though, after the Bankruptcy Appellate Panel of the Sixth Circuit (the “BAP”) reversed the bankruptcy court on appeal.
Background Facts
The U.S. Bankruptcy Appellate Panel for the Eighth Circuit recently affirmed an order of the bankruptcy court granting a debtor’s motion to avoid a judgment creditor’s lien on the debtor’s residence held in tenancy by the entirety with his non-debtor spouse, holding because the lien “fixed” under the Bankruptcy Code and thus impaired the debtor’s claimed exemption, it was avoidable.
A copy of the opinion is available at: Link to Opinion.
The Absolute Priority Rule: Zachary v. California Bank & Trust
The Ninth Circuit Court of Appeals has now joined the Courts of Appeals from the Fourth, Fifth, Sixth and Tenth Circuits, and the Eighth Circuit Bankruptcy Appellate Panel (BAP) in holding that the absolute priority rule found in 11 U.S.C. § 1129(b)(2) (“the Absolute Priority Rule”) applies to limit individual debtors’ rights to retain prepetition property of their estate where their Chapter 11 plans propose to pay unsecured creditors less than the full amount of their allowed unsecured claims. Zachary v.
To cram-down a chapter 11 plan on non-accepting classes, at least one impaired class must accept the plan, not counting the votes of insiders. In what is likely to be a controversial opinion, the Ninth Circuit Court of Appeals upheld a decision by the Bankruptcy Appellate Panel that the purchaser of a bankruptcy claim was not an “insider” for plan-confirmation purposes, even though the purchaser acquired the claim from the debtor-LLC’s sole member, an insider, under questionable circumstances.
Court of Appeals Rejects Literal Construction of Bankruptcy Code section 523(a)(1), Ruling Court Must Determine Whether Debtors Subjectively Made an Honest and Reasonable Attempt to Satisfy the Tax Law
In a December 17, 2015 decision in United States v. Martin (In re Martin), 2015 WL 9252590 (9th Cir. BAP 2015) the Bankruptcy Appellate Panel of the Ninth Circuit Court of Appeals (the “Panel”), defined what qualifies as a tax return for dischargeability purposes, specifically disagreeing with three other Courts of Appeals.
In the latest installment of our “Breaking the Code” series, we take a look at the rarely-mentioned section 108(c) of the Bankruptcy Code, which governs the effect of certain deadlines relating to nonbankruptcy legal actions:
Section 109(e) of the Bankruptcy Code limits eligibility for chapter 13 relief to those individual debtors whose noncontingent, liquidated unsecured debts do not exceed statutory limits. In calculating eligibility to file chapter 13, should a court consider debts which have been discharged in a prior chapter 7 case and which are “out of the money” because, while secured by a trust deed against the debtor’s residence, the value of the debtor’s residence is insufficient to cover the debt relating to the first trust deed?