In LVNV Funding, LLC v. Harling, 852 F.3d 367 (4th Cir. 2017), as amended (Apr. 6, 2017), the Fourth Circuit addressed whether claim objections filed after a Chapter 13 plan had been confirmed are barred by the res judicata effect of the confirmed plan. Here, LVNV Funding filed unsecured proofs of claim that it conceded were barred by the statute of limitations.

In SummitBridge Nat’l Invs. III, LLC v. Faison, 915 F.3d 288 (4th Cir. 2019), the U.S. Court of Appeals for the Fourth Circuit ruled that an unsecured or undersecured creditor may include postpetition attorney’s fees and costs as part of its allowed claim in a bankruptcy case.

Unsecured Creditors and Postpetition Attorney’s Fees and Costs

On June 27, 2017, the Court granted certiorari n PEM Entities LLC v. Levin, No. 16-492 (U.S. June 27, 2017), in which it will have the opportunity to consider "[w]hether bankruptcy courts should apply a federal rule of decision (as five circuits have held) or a state law rule of decision (as two circuits have held, expressly acknowledging a split of authority) when deciding to recharacterize a debt claim in bankruptcy as a capital contribution." The Court agreed to review the Fourth Circuit’s ruling in PEM Entities, LLC v.

Perhaps Next Time the Debtor Will Speak Up a Little Sooner

In Providence Hall Associates Limited Partnership v. Wells Fargo Bank, N.A., the Fourth Circuit denied plaintiff’s attempt to receive a second bite at the apple, finding that plaintiff’s lawsuit was appropriately dismissed by the district court on res judicata grounds.