Client Alert

Deirdra Renee Gause v. Citifinancial Services, Inc. (In re Deirdra Renee Gause), 525 B.R. 35 (Bankr. M.D. N.C. 2014) –

A chapter 13 debtor sought a court determination that a mortgage loan was unsecured because there was a small typo in her name when the mortgage was indexed.  The mortgagee brought a motion to dismiss for failure to state a claim.

Applicable state law included the following provisions:

Desmond v Raymond C. Green, Inc. (In re Harborhouse of Gloucester, LLC), 523 B.R. 749 (1st Cir. BAP 2014) –

Ring v. First Niagara Bank, N.A. (In re Sterling United, Inc.), 519 B.R. 586 (Bankr. W.D.N.Y. 2014) –

A chapter 7 trustee sought to recover as preferences payments made by the debtor to a lender and proceeds of collateral liquidation received by the lender based on arguments regarding whether UCC financing statements adequately perfected the lender’s security interests.

In re Arenas, 514 B.R. 887 (Bankr. D. Colo. 2014) –

The U.S. trustee sought to dismiss “for cause” a chapter 7 case filed by a marijuana grower and his wife. The debtors countered by moving to convert to a chapter 13 case. The case turned on the impact of the federal Controlled Substances Act.

In re The Free Lance-Star Publ’g Co. of Fredericksburg, VA, 512 B.R. 798 (Bankr. E.D. Va. 2014) –

After the debtors obtained court approval of bidding procedures to auction substantially all of their assets, a secured creditor sought a court determination that it had valid perfected liens on the assets, and the debtors sought to limit the secured creditor’s right to credit bid in the bankruptcy sales.

Law v Siegel, 134 Sup.Ct. 1188, 188 L.Ed.2d 146 (2014) -

A bankruptcy court ordered that a debtor’s homestead exemption be surcharged to pay the attorney’s fees of a Chapter 7 incurred in overcoming the debtor’s fraud. The order was affirmed on appeal until it reached the Supreme Court.

Thomas v. Citimortgage (In re Thomas), 476 B.R. 691 (Bankr. D. Mass. 2012) –

Reynolds v. Rushton, 473 B.R. 436 (D. Utah 2012) –

The United States Supreme Court recently ruled in Stern v. Marshall1 that a bankruptcy court lacks constitutional authority to render a final judgment on a bankruptcy estate’s counterclaim against a creditor based on state common law, despite an express statutory grant of jurisdiction. This ruling is the most significant decision regarding bankruptcy court jurisdiction since the Court’s 1982 decision in Northern Pipeline v. Marathon2 and it could significantly affect the administration of bankruptcy cases.

Root of the Constitutional Problem