Imagine a creditor filing a claim in a chapter 13 bankruptcy case where neither the debtor nor the bankruptcy trustee objects to the claim. Imagine the chapter 13 plan is confirmed, including the claimed debt, though the creditor receives little to nothing in return for its claim. Can the debtor later bring a separate action under the Fair Debt Collection Practices Act or does res judicata bar the FDCPA claim?
The United States Court of Appeals for the Second Circuit recently articulated a standard to determine what claims may be barred against a purchaser of assets "free and clear" of claims pursuant to section 363(f) of the Bankruptcy Code and highlighted procedural due process concerns with respect to enforcement.1 The decision arose out of litigation regarding certain defects, including the well-known "ignition switch defect," affecting certain GM vehicles. GM's successor (which acquired GM's assets in a section 363 sale in 2009) asserted that a "free and clear" provisi
Recently, the United States Court of Appeals for the Second Circuit entered a decision in the General Motors bankruptcy case that found an exception to the “free and clear” language of Section 363(f) of the Bankruptcy Code2 where adequate notice of the sale order is not provided.3 However, the exception may not be far reaching due to the “peculiar” facts of the case.
Factual Background and Lower Court Decision
The Supreme Court again will be addressing the powers of bankruptcy courts. At the end of the term, the Court granted certiorari in Czyzewski v. Jevic Holding Corp. to decide whether a bankruptcy court may authorize the distribution of settlement proceeds in a way that violates the statutory priority scheme in the Bankruptcy Code. No. 15-649, 2016 WL 3496769 (S. Ct. June 28, 2016). The Supreme Court is expected to address this fundamental bankruptcy issue sometime early next year.
Background
Parties to an appeal who condition a settlement on the vacating of the lower court’s judgment “may still [have] an appropriate remedy,” held the U.S. Court of Appeals for the Eleventh Circuit on July 12, 2016. Hartford Cas. Ins. Co. v. Crum & Forster Specialty Ins. Co., 2016 U.S. App LEXIS 12813, *15 (11th Cir. July 12, 2016). Reversing the district court’s “narrow” refusal to vacate its judgment after the parties had settled, the Eleventh Circuit found that “exceptional circumstances” warranted the vacatur. Id., at *3, *14.
(7th Cir. July 26, 2016)
The Seventh Circuit interprets a Wisconsin exemption statute applicable to annuity contracts. The statute provides that such a contract is exempt from assets available to creditors so long as it “complies with the provisions of the internal revenue code.” The trustee argued for a narrow interpretation of this language, while the Court ultimately agrees with the broader interpretation of the statute employed by Wisconsin bankruptcy courts. Opinion below.
Judge: Hamilton
Attorney for Debtors: Dewitt Ross & Stevens S.C., Craig E. Stevenson
Second Circuit Court of Appeals Decision in GM Cases Casts a Shadow Over Whether Section 363 Sale Orders Insulate Buyers from Debtors’ Product Liability Claims.
The collapse of marine fuel trader OW Bunker & Trading A/S (“OW Bunker”) and its affiliates, in November 2014, has resulted in a blizzard of legal proceedings in the United States. Bunker suppliers and creditors of insolvent OW Bunker entities have sought to secure their claims by arresting vessels or proceeding directly against vessel owners and operators who contracted with OW Bunker entities to supply their vessels with bunkers.
You can "wind up" a partnership without having to liquidate all of its assets and terminating its existence. So ruled Judge McGuire last week in Hardin v. Lewis, 2016 NCBC 55. But that may not be true for all partnerships. This case involved a law firm partnership which was continuing to operate its practice after one of its partners left to start her own law firm.