To cram-down a chapter 11 plan on non-accepting classes, at least one impaired class must accept the plan, not counting the votes of insiders. In what is likely to be a controversial opinion, the Ninth Circuit Court of Appeals upheld a decision by the Bankruptcy Appellate Panel that the purchaser of a bankruptcy claim was not an “insider” for plan-confirmation purposes, even though the purchaser acquired the claim from the debtor-LLC’s sole member, an insider, under questionable circumstances.

(E.D. Ky. Feb. 5, 2016)

The district court denies the motion for stay pending the appeal of the bankruptcy court’s order. The bankruptcy court had ordered that the party moving to reopen the bankruptcy case deposit funds into escrow as a condition to reopening the case. The court held that the party must show at a minimum serious questions going to the merits to obtain such a stay, but the party failed to do so. Opinion below.

The Supreme Court’s decision last term in Baker Botts v. Asarco, in which the Court ruled that professionals that are paid from a debtor’s bankruptcy estate cannot be compensated for time spent defending their fee applications, continues to rankle bankruptcy practitioners.  Moreover, a recent decision in a Delaware bankruptcy case shows that the impact of Asarco will not be easily circumvented.

This is the fourth and final post in our series on Judge Sontchi’s postpetition interest decision in Energy Future Holdings, issued on October 30, 2015.  Our first post in this series analyzed Judge Sontchi’s ruling that postpetition interest on an unsecured claim does not constitute a part of the unsecured claim itself.  Our 

(7th Cir. Feb. 4, 2016)

The Seventh Circuit affirms the district court’s reversal of the bankruptcy court. The debtor claimed an exemption for a rare first edition Book of Mormon under Illinois’s exemption statutes, which permit an exemption for “a bible.” The trustee argued that the debtor should be permitted only to exempt one of the debtor’s other copies, because the rare copy was worth approximately $10,000 and, the trustee argued, the statute was being misused in this case. The court holds that the plain wording of the statute permitted the claimed exemption. Opinion below.

The bankruptcy process is often long and arduous for clients, whether debtor or creditor, and their counsel.  Bankruptcy courts feel the pain, too.  So, when we finally reach the glorious goal of plan confirmation, most revel in the conclusion of the plan process.  Though often considered anathema, appeals of plan confirmation orders are sometimes pursued.  Recognizing the public policy desire for finality in bankruptcy proceedings, the Eighth Circuit applies the “person-aggrieved” doctrine in determining whether an appellant has standing to appeal a plan confirmation or

Under the Bankruptcy Code, a reorganization plan may be approved if (1) proposed in “good faith” under  § 1129(a)(3), and (2) accepted by at least one class of creditors whose interests are impaired by the plan, see 11 U.S.C. § 1129(a)(10). In Village Green I, GP v. Fed.

(S.D. Ind. Feb. 3, 2016)

(S.D. Ind. Feb. 5, 2016)

The district court grants the unopposed motion to withdraw the reference and the motion to dismiss the adversary proceeding with prejudice. The court discusses the standard for withdrawal motions, and finds that the standard is met here. The claims arise out of a contractual relationship outside the bankruptcy and would not be resolved through the claims resolution process. Thus, the bankruptcy court could not issue a final judgment in the matter absent the movant’s consent. Opinion below.

On June 15, 2015, the U.S. Supreme Court issued its opinion in the case of Baker Botts L.L.P. v. ASARCO LLC, 135 S. Ct. 2158 (2015), denying compensation to two law firms for the fees they incurred in defending objections to their fee applications.  Subsequent to confirmation of ASARCO’s plan of reorganization, the law firms of Baker Botts L.L.P. and Jordan, Hyden, Womble, Culbreth & Holczer, P.C.