Waldschmidt v. Singletary Construction LLC (In re Tackett), 516 B.R. 498 (Bankr. M.D. Tenn. 2014) –
A bankruptcy trustee sought turnover of profits from the sale of homes constructed by a contractor. The trustee contended that there were contracts between the debtor and the contractor pursuant to which the debtor agreed to reimburse the contractor for its costs plus pay a $15,000 contractor’s fee for each home.
A junior mortgagee sought to subordinate the senior mortgage loan based on an argument that modification of the senior loan impaired the junior mortgagee’s rights.
The trustee of a liquidating trust under a general contractor’s confirmed chapter 11 plan tried to recover pre-petition payments made to a subcontractor as either a preference or a fraudulent conveyance. The court’s decision turned on whether the payments were trust funds under the Illinois Mechanics Lien Act.
© 2011 Bloomberg Finance L.P. All rights reserved. Originally published by Bloomberg Finance L.P. in the Vol. 5, No. 13 edition of the Bloomberg Law Reports—Bankruptcy Law. Reprinted with permission. Bloomberg Law Reports® is a registered trademark and service mark of Bloomberg Finance L.P.
On January 14, the Supreme Court ruled that more than a mere retention of estate property is needed for a party to violate the automatic stay, vacating and remanding a decision by the U.S. Court of Appeals for the Seventh Circuit (In re Fulton, 926 F.3d 916 (7th Cir. 2019)) that held that the City of Chicago (City) violated the automatic stay by retaining vehicles that were impounded before the filing of the owners’ bankruptcy petitions. See City of Chi. v. Fulton, 141 S. Ct. 585 (2021). The decision resolved a split among several circuit courts.
On October 22, the Court of Appeals for the Fifth Circuit issued a ruling in Crocker v. Navient Solutions that could have mixed consequences for student loan borrowers and creditors alike. The Court determined that a bankruptcy court lacks the authority to enforce discharge injunctions issued by bankruptcy courts in other districts.
A federal bankruptcy court for the Southern District of Florida has ruled that the owner of a computer-financing scheme cannot hide behind a bankruptcy filing to shield himself from complying with a contempt order that required him to pay $13.4 million for violating an FTC order.