When an adversary proceeding is transferred to the district court pursuant to a withdrawal of the reference, which rules—and deadlines—apply: those contained within the Federal Rules of Civil Procedure, or those contained within the Federal Rules of Bankruptcy Procedure? The Eleventh Circuit recently held the Federal Rules of Bankruptcy Procedure, not the Federal Rules of Civil Procedure, govern adversary proceedings before the district courts. Rosenberg v. DVI Receivables XIV, LLC, 2016 WL 1392642 (11th Cir. 2016).
UNITED STATES SUPREME COURT
Wellness Int'l Network, Ltd. v. Sharif, 135 S. Ct. 1932 (2015)
Key Issue: Post-Stern v. Marshall, whether a Bankruptcy Court (as an Art. I court) has a proper delegation of authority from the District Court (as an Art. III court) to enter findings of fact and final orders on non-core issues upon the consent of the parties and, if so, whether consent must be express or may be implied?
Official Comm. of Unsecured Creditors of Arcapita, Bank. B.S.C. v. Bahr. Islamic Bank, No. 15-cv-03828 (S.D.N.Y. Mar. 30, 2016) [click for opinion]
In this exciting age of startups, the market is brimming with opportunities for individuals and entities alike to invest in emerging companies. Today’s rapid rate of technology development justifies investors’ eagerness to take an interest in innovative companies, hoping to find the next “unicorn.” Notwithstanding the fast pace of the tech industry, it remains important for investors to conduct due diligence before kicking funds into any business, especially when bargaining for a security interest or license.
Until the recent U. S. Supreme Court’s decision in Husky International Electronics, Inc. v. Ritz, __ U.S. __, 136 S.Ct. 1581, 194 L.Ed.2d 655, 84 U.S. L.W. 4270 (2016), there was disagreement in the circuit courts regarding whether a debtor in bankruptcy could be denied a discharge under 11 U.S.C. § 523(a)(2)(A) where the evidence of wrongdoing proved the debtor committed actual fraud, but there was no evidence that the debtor made a misrepresentation to the creditor seeking to bar the discharge.
A decision from the United States Supreme Court penned by Justice Sonia Sotomayor adopted a broad reading of “actual fraud” in section 523(a)(2)(A) of the Bankruptcy Code, which excepts from discharge debts “obtained by . . .
Recently, a bankruptcy court in the First Circuit, confronted with whether the debtors’ chapter 12 case could be converted to a chapter 11 case – an issue over which there is split in the case law – determined that the Debtors’ chapter 12 case could not be converted to a chapter 11 case.
Relevant Statutes and Statutory Provisions:
In a recent decision by the U.S. Court of Appeals for the Second Circuit in the General Motors case, the court held certain claimants were not afforded procedural due process with respect to the § 363 sale of General Motor Corporation’s assets in the bankruptcy case. As a result, the assets were not sold free and clear of these claims, and these claimants may now seek recovery against New GM.
Editor’s Note: While we at The Bankruptcy Cave always enjoy writing about new cases or legal developments, we really love using our posts as an opportunity to pass along tips, easily forgotten rules, and things that make the client think you are a rock star (and avoid a client’s distrust in your ability to captain the Chapter 11 ship).
The Supreme Court of Ohio recently held that, when debt on promissory note secured by mortgage has been discharged in bankruptcy, the holder of the note may not pursue collection against the maker of note, but the mortgagee has standing to foreclose on the collateral property, and can use the amounts due on the note as evidence to establish that it may collect from the forced sale of the property.