An undersecured mortgagee’s “release of [its entire underlying claim] was value obtained ‘in exchange for’ the [pre-bankruptcy] sale of the [debtor’s] property,” held the U.S. Court of Appeals for the Tenth Circuit on Dec. 6, 2016. In re Expert South Tulsa LLC, 2016 U.S. App. LEXIS 21704, at *11 (10th Cir. Dec. 6, 2016). The Tenth Circuit flatly rejected the debtor’s attempt “to set aside as a fraudulent transfer its own sale of real estate that was encumbered by a mortgage far exceeding the sale price.” Id. at *1.

Key Tool for Non-Bankrupt Licensees 

 SEIU-Texas (formerly known as SEIU Local 5) may have pushed its anti-employer corporate campaign too far in 2007, when it alleged publicly that a non-union Texas janitorial contractor systematically failed to pay its employees for all hours worked and instructed janitors to work off the clock. The employer, Professional Janitorial Servicing of Houston, Inc., sued the union in state court for defamation, and in September 2016 won a jury verdict of $5.3 million in lost profits and $2.5 million in pre-judgment interest.

The U.S. Court of Appeals for the First Circuit recently rejected a bankruptcy trustee’s effort to avoid a mortgage on the basis that the acknowledgment signed by the borrowers’ attorney-in-fact was defective under Massachusetts law, holding that the acknowledgment was not materially defective because as a matter of agency law the attorney-in-fact’s signature was the borrowers’ “free act and deed.”

In the Limitless Mobile, LLC bankruptcy proceeding (Delaware Bankruptcy Case No. 16-12685), a formation meeting has been scheduled for December 16, 2016 at 10:00 a.m. (ET) at the J. Caleb Boggs Federal Building, 844 King Street, Room 3209, Wilmington, DE 19801. Click Here for a copy of the Notice of Formation Meeting for Official Committee of Unsecured Creditors issued by the Office of the United States Trustee.

The United States Supreme Court will review a decision of the Eleventh Circuit Court of Appeals, Johnson v. Midland Funding, LLC, to resolve a dispute between the circuits regarding whether the Bankruptcy Code provides the exclusive mechanism to determine the validity of a Proof of Claim or whether the filing of a faulty Proof of Claim gives rise to a debtor’s right to sue under the Fair Debt Collection Practices Act (the “FDCPA”). The Bankruptcy Code permits a creditor to file a claim if, among other things, the creditor has a right to payment.

“Any ... suit [against creditors’ committee members for their official acts] must be brought in the bankruptcy court, or in another court only with the express permission of the bankruptcy court,” held the U.S. Court of Appeals for the Ninth Circuit on Nov. 28, 2016. In re Yellowstone Mountain Club LLC, 2016 U.S. App. LEXIS 21187, *9 (9th Cir. Nov. 28, 2016).

The First Circuit recently issued an important interpretation of bankruptcy law that directly impacts trademark licensing rights. In In re Tempnology LLC, 559 B.R. 809 (1st Cir. BAP 2016), the First Circuit Bankruptcy Appellate Panel held that a debtor-licensor’s rejection of a trademark licensing agreement “did not vaporize” the licensee’s contractual right to use the debtor’s mark and logo.

The Barton doctrine, which has been imposed in “an unbroken line of cases … as a matter of federal common law,” In re Linton, 136 F.3d 544, 545 (7th Cir. 1998) (Posner, J.), requires that plaintiffs “obtain authorization from the bankruptcy court before initiating an action in another forum against certain officers appointed by the bankruptcy court for actions the officers have taken in their official capacities.” In re Yellowstone Mountain Club, LLC, No. 14-35363, ___ F.3d ___, 2016 WL 6936595, at *2 (9th Cir. Nov.

Many bankruptcy cases involve adversary proceedings in which creditors seek to have certain debts deemed nondischargeable. The United States District Court for the Eastern District of Michigan (the “District Court”) recently considered, on appeal, whether the Bankruptcy Court properly held that a debt owed by a debtor (the “Debtor”) to the State of Michigan Unemployment Insurance Agency (the “Agency”) is dischargeable in a Chapter 13 case.1