The U.S. Court of Appeals for the Fourth Circuit recently affirmed the dismissal of a borrower’s lawsuit against a bank, holding that the district court correctly found that sale orders entered in a prior bankruptcy case were res judicata and precluded the borrower’s new claims.

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

The U.S. Supreme Court recently held that a debtor in a Chapter 7 case cannot “strip-off” or void a wholly unsecured junior mortgage under section 506(d) of the Bankruptcy Code.

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

The Bankruptcy Appellate Panel of the U.S. Court of Appeals for the Sixth Circuit recently held that a mortgage foreclosure deficiency judgment lien may be avoided under 11 U.S.C. § 522(f)(2), reversing the bankruptcy court’s ruling to the contrary.

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

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 U.S. Court of Appeals for the Seventh Circuit recently held that a secured creditor must file its proof of claim no later than the 90-day deadline under Federal Rule of Bankruptcy Procedure 3002(c) in order to receive distributions under a Chapter 13 plan of reorganization.

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

In a bankruptcy preferential transfer dispute, the U.S. Court of Appeals for the Eighth Circuit recently held that the bankruptcy trustee could recover true overdraft covering deposits, while deposits covering intra-day overdrafts were not recoverable.

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

The U.S. Court of Appeals for the Sixth Circuit recently held that a bankruptcy court clearly erred in its finding that a debtor proposed a Chapter 11 plan in good faith, when the secured mortgagee would be paid only in part and very slowly after 10 years with no obligation by the debtor to maintain the building and obtain insurance, while a second class would be paid in full in two payments of $1,200 each over 60 days.

The U.S. Bankruptcy Court for the Southern District of Florida recently held that a wholly unsecured second mortgage lien may be “stripped off,” even if the property encumbered by the lien is no longer part of the bankruptcy estate due to abandonment by the bankruptcy trustee.

The Bankruptcy Court did not specifically reference the consolidated cases now before the U.S. Supreme Court in Bank of Amer. v. Toledo-Cardona, and Bank of Amer. v. Caulkett, which should resolve the issue of whether a wholly unsecured lien may be stripped off in a Chapter 7 bankruptcy.

The U.S. Bankruptcy Court for the Southern District of Florida recently held that a bankruptcy debtor’s Chapter 11 proceeding should not be dismissed as filed in bad faith to delay or avoid foreclosure, but could not confirm the debtor’s proposed plan to lease its commercial property asset to a business that generates income from medical marijuana.

The U.S. Court of Appeals for the Seventh Circuit recently held that a lender that is on inquiry notice that its security interest in the collateral had been fraudulently conveyed may lose its secured status.

However, the Court also held that the lender's negligence here did not amount to "purposeful avoidance of the truth" sufficient to justify application of the doctrine of equitable subordination, which allows a bankruptcy court to reduce the priority of a claim in bankruptcy.