In re Walker, 526 B.R. 187 (E.D. La. 2015) –
The bankruptcy court (1) denied a mortgage lender’s request to file a late amendment to a proof of claim that had been filed on its behalf by the debtor and (2) confirmed the debtor’s proposed plan over the mortgagee’s objection that the plan payments were not sufficient to cure the actual arrearage. The lender appealed to the district court.
The U.S. Court of Appeals for the Fourth Circuit recently reversed the dismissal of a Chapter 13 bankruptcy debtor’s complaint filed in federal district court alleging that defendants foreclosed on and sold the debtor’s home in violation of the automatic stay, holding that the federal district court had subject matter jurisdiction and the complaint adequately stated a plausible claim for relief under 11 U.S.C. § 362(k).
Although almost all of an individual debtor’s assets become property of the estate upon a bankruptcy filing, certain exceptions exist to the rule at both the federal and state level. In some jurisdictions, funds held for a debtor in retirement plans are exempt assets. An open question, however, is whether payments distributed from such plans prior to the petition date are also exempt assets. The United States Court of Appeals for the Tenth Circuit recently held in
Interested chapter 11 plan investors, beware. A recent decision by the United States Court of Appeals for the Ninth Circuit held that even after the chapter 11 plan has been confirmed and substantially consummated and your money has been invested, an appeal can go forward even if a victory for the appellants would change the chapter 11 plan terms on which you relied and substantially diminish the value of your investment.
Seeking to recharacterize a debt claim as an equity contribution to the debtor through the equitable powers of the bankruptcy court (something we’ve written about quite a bit in our blog) is one way to reduce creditor claims against the bankruptcy estate, but only in certain circuits.
“Many debtors…fail to complete a Chapter 13 [bankruptcy] plan successfully,” noted Justice Ruth Bader Ginsburg in a recent Supreme Court decision, Harris v. Viegelahn, 135 S.Ct. 1829 (2015). It is for this reason that the Bankruptcy Code provides the nonwaiveable right of a debtor to convert a voluntary Chapter 13 case to a Chapter 7 case at any time. 11 U.S.C. § 1307(a). However, this conversion is not without its challenges. One such challenge is determining how postpetition wages that were collected during the Chapter 13 plan should be distributed after the conversion.
In a post-housing crisis economy, many homeowners, facing a plummet in home values, found themselves trapped in homes that are worth less than the amount they owe bank. Those homeowners have sought refuge in Chapter 7 bankruptcy proceedings, attempting to strip down the first mortgage and leaving many junior lienholders holding nothing but the bag—until now. In a big win for lenders, the U.S.
Last month, the Supreme Court announced its decision in Baker Botts LLP v. Asarco LLC. As most readers will be aware, that case involved a dispute over whether debtor’s retained counsel could be compensated for the fees and expenses incurred in the defense of its bankruptcy fee application.
The Bankruptcy Code allows bankruptcy trustees, debtors in possession, and official committees to hire attorneys, accountants, and other professionals to assist them in carrying out their statutory duties, with their fees to be paid by the bankruptcy estate. However, to get paid, these professionals must obtain approval from the bankruptcy court. But what happens when someone objects to their fees? Can the professionals recover the fees they incur in defending their fee applications? The Supreme Court says no.