The U.S. Court of Appeals for the Eleventh Circuit recently vacated a trial court’s dismissal of a mortgagee’s deficiency claims and remanded to the trial court to determine whether the voluntary dismissal of a bankrupt debtor’s Chapter 11 case without a discharge had any effect on the mortgagee’s right to pursue its pre-petition deficiency claims.

In an action against a Florida consumer plaintiffs’ firm that also functions as consumer bankruptcy debtors’ counsel, the U.S. Court of Appeals for the Eleventh Circuit recently held that a bankruptcy attorney violates section 526(a)(4) of the Bankruptcy Code if he instructs a client to pay his legal fees using a credit card.

In so ruling, the Court held that there is no requirement under the statute that the advice be given for an invalid purpose designed to manipulate the bankruptcy process.

The U.S. Court of Appeals for the Eleventh Circuit recently held, in a case of first impression, that “the Bankruptcy Code authorizes payment of attorneys’ fees and costs incurred by debtors in successfully pursuing an action for damages resulting from the violation of the automatic stay and in defending the damages award on appeal.”

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

The U.S. Court of Appeals for the Eleventh Circuit recently held that section 707(b) of the Bankruptcy Code, which allows a bankruptcy court to dismiss a chapter 7 petition if it finds that relief would be an “abuse” as defined in that section, applies to a petition initially filed under chapter 13 and converted to chapter 7.

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

The U.S. Court of Appeals for the Eleventh Circuit recently affirmed the dismissal of a mortgage loan borrower’s federal Fair Debt Collection Practices Act and related state law claims because the defendant mortgagee was not a “debt collector” as defined by the FDCPA.

In so ruling, the Court also rejected the borrower’s allegations that the monthly statements the mortgagee sent to the borrower after her bankruptcy discharge were impermissible implied assertions of a right to collect against her personally.

The U.S. Court of Appeals for the Eleventh Circuit recently held that a court cannot extinguish a secured creditor’s state-law security interests for failure to file a proof of claim during the administration of an equity receivership over entities involved in a Ponzi scheme.

A copy of the opinion in Securities and Exchange Commission v. Wells Fargo Bank is available at: Link to Opinion.

Companies that plan to sell goods or services to a debtor in bankruptcy should be aware of a recent case decided by the Court of Appeals for the Eleventh Circuit, holding that a trustee may avoid a debtor’s post-petition transfers of cash collateral if such transfers were made without the consent of the secured party or court order.1

On April 18, 2007, in Fla. Dep’t. of Rev. v. Piccadilly Cafeterias, Inc. (In re Piccadilly Cafeterias, Inc.),1 the United States Court of Appeals for the Eleventh Circuit held that the stamp tax exemption of 11 USC § 1146(c)2 may apply to transfers of assets that were necessary to the consummation of a bankruptcy plan of reorganization and were made prior to confirmation of the plan. In reaching this decision, the Eleventh Circuit declined to follow decisions of the Third and Fourth Circuits to the contrary and thus created a split among the circuits on this issue.

A discharge of debt in bankruptcy “operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor. . . .” 11 U.S.C. § 524(a)(2). Certain debts, however, including debts “for violation of . . . any of the State securities laws,” are not subject to discharge. See 11 U.S.C. § 523(a)(19). A discharge injunction does not bar the collection of such debts.

The subject matter jurisdiction of bankruptcy courts causes confusion and can be hard to understand. In a recent decision, the United States Court of Appeals for the Eleventh Circuit clarified the meaning of the phrase “related to” in 28 U.S.C. §1334(b), the federal statute that governs the subject matter jurisdiction of bankruptcy courts.[1]