In a pair of decisions in 2015, the United States Bankruptcy Court of the District of Delaware determined that neither the first lien notes trustee nor the second lien notes trustee of Energy Future Intermediate Holdings Corp. (“EFIH”), a subsidiary of Energy Future Holdings (“EFH”), was entitled to receive a make-whole on the repayment of the corresponding indebtedness resulting from the acceleration of that debt in the EFH bankruptcy case.
Last week, the Seventh Circuit chimed in on whether time barred proofs of claim violate the FDCPA.In Owens v. LVNV Funding, LLC, the Seventh Circuit affirmed three district court decisions which dismissed consumer’s FDCPA claims against debt buyers who filed time barred proofs of claim.Owens v. LVNV Funding, LLC, Nos. 15-2044, 15-2082, 15-2109 (7th Cir. Aug. 10, 2016).In doing so, the Seventh Circuit joins the Second and Eighth Circuits in siding against the Eleventh Circuit’s decision in Crawford v. LVNV Funding, LLC, 758 F.3d 1254 (11th Cir. 2014).
Borrowers, agent banks, syndicate members and secondary market purchasers incur, syndicate, sell and buy bank debt on the assumption that bank debt is not a “security.” However, a June 30, 2016, opinion in the General Motors preference litigation1shows that such an assumption may no longer be valid, at least under the Bankruptcy Code.
The Eleventh Circuit Court of Appeals has clarified the type of injury that must be alleged by a plaintiff suing under the Fair Debt Collection Practices Act (FDCPA). This decision, in Church v. Accretive Health, Inc., is the first from the Eleventh Circuit applying the United States Supreme Court’s recent holding in Spokeo v. Robins.
Filing a proof of claim with a bankruptcy court representing a debt subject to an expired state law limitations period does not violate the federal Fair Debt Collection Practices Act (FDCPA) under an opinion released yesterday from the Seventh Circuit Court of Appeals.
Under the ruling, in Owens v. LVNV, the Seventh Circuit joins the Eighth Circuit Court of Appeals in rejecting the Eleventh Circuit’s holding under Crawford v. LVNV that such proofs of claim violate the FDCPA.
On July 10, 2014, the United States Court of Appeals for the Eleventh Circuit issued its opinion in Crawford v. LVNV Funding, LLC. That opinion began by decrying the “deluge” of proofs of claim filed by debt buyers on debts that are unenforceable under state statutes of limitations.
The Seventh Circuit dismisses the appeal, holding that the bankruptcy court’s final order implementing the district court’s order directing turnover of assets to the bankruptcy estate was valid, because it resolved a core proceeding. The appellants contended that it was a non-core proceeding and thus required a district court order to be final. Opinion below.
Judge: Posner
Attorney for Appellants: Jordan Law P.C., Terrence M Jordan
The Bankruptcy Court for the District of Delaware recently faced a question of first impression: whether an allowed postpetition administrative expense claim can be used to set off preference liability. In concluding that it can, the court took a closer look at the nature of a preference claim.
Facts and Arguments
On August 4, 2016, the Delaware Bankruptcy Court considered cross-motions for summary judgment in a preference action case styled as Pirinate Consulting Group, LLC v. Maryland Department of the Environment (In re NewPage Corp.), Adv. Pro. No. 13-52206 (KG). This gem of an opinion is noteworthy in that it analyzes various defenses raised by a state agency to a preference complaint.
Key Points