The U.S. Court of Appeals for the Seventh Circuit recently affirmed the dismissal of a consumer’s lawsuit against a debt collector, holding that the consumer lacked Article III standing to sue because his allegations of ʺconfusion” and “alarm” were not sufficiently concrete to result in an injury in fact.
On May 2, 2023, the US District Court for the Southern District of Indiana reversed a bankruptcy court’s ruling that read limitations into the application of Bankruptcy Code Section 546(e)’s safe harbor to a stock purchase transaction. Specifically, the District Court relied on the plain language of Section 546 in determining that a chapter 7 trustee could not avoid the transfer of $24.9 million by the debtor to repay a bridge loan in connection with a financed acquisition of the debtor’s stock two years prior to its bankruptcy filing.
This week, the Court considers a property owner’s claim to an easement over a maintenance road on federal land, and casts doubt on the longstanding “person aggrieved” standing requirement in bankruptcy appeals.
KIMBALL-GRIFFITH, L.P. v. BRENDA BURMAN, ET AL
The Court rejects a property owner’s claim to an easement over a maintenance road on federal land.
Oral arguments occur on April 24, 2023, before the U.S. Supreme Court in Lac Du Flambeau Band of Lake Superior Chippewa Indians v. Coughlin, Case No 22-227. Here is a link to the oral arguments transcript.
What follows is an attempt to, (i) summarize the facts and issue in the case, and (ii) provide a sampling of questions and comments from the justices during oral arguments.
Facts
Here’s what happened:
Section 363(m) of the Bankruptcy Code is one of the most important and well-known statutes to bankruptcy practitioners. This section of the Bankruptcy Code protects a good faith asset purchaser who purchases assets from a debtor’s bankruptcy estate from having the sale unwound when the sale (or an aspect of the sale) is challenged by an appeal.
Congress passed the operative texts without noticeable fanfare. From its enactment to today, section 363(k) has entitled a secured creditor to “credit bid” the full amount of the debt owed by a debtor in any sale of the underlying collateral pursuant to section 363(b). That this statutory bequest elicited little debate made imminent sense, for Congress had thereby codified one of secured creditors’ seemingly time-honored rights.
In August 1992, the largest indoor shopping mall in the continental United States opened to great fanfare in suburban Minneapolis, Minnesota. Dubbed the Mall of America (MOA), this sprawling retail center enjoyed 330 stores, anchored by retail tenants at the height of their reputations: Macy’s, Bloomingdale’s, Nordstrom, and Sears Roebuck and Co. (Sears).
Every secured lender hates to hear it: Yet another statutory scheme could potentially cause the lender to lose its first priority security interest in certain collateral. While the Perishable Agricultural Commodities Act (PACA) has been around since 1930, it is often forgotten or overlooked by many lenders. However, to the extent that a lender's collateral includes perishable agricultural commodities, such as when the borrower is a restaurant or grocery store, PACA can present significant risks for a lender.
PACA Basics
Dismissal of a bankruptcy—for bad faith filing—is a rarity.
So, how a bankruptcy court grapples with the bad faith issue . . . and ends up dismissing the bankruptcy . . . can provide a lesson for us all.
What follows is a summary of how a Chapter 11 bankruptcy is dismissed when the Court is convinced that the bankruptcy is intended for the benefit of a non-debtor . . . and not for the benefit of the debtor or its creditors.