The Supreme Court granted cert last Friday in the case of Bullard v.

On Monday, November 17, 2014, the United States Supreme Court agreed to decide a critical issue for mortgage lenders and secondary market investors, whether Section 506(d) of the Bankruptcy Code allows a Chapter 7 debtor to “strip off” a junior mortgage lien when the outstanding senior debt exceeds the current value of the senior lien.  Bank of America, N.A. v. Caulkett, No. 13-1421, 2014 WL 2207208 (U.S. Nov. 17, 2014); Bank of America, N.A. v. Toledo-Cardona, No. 14-163, 2014 WL 3965212 (U.S. Nov. 17, 2014). 

The U.S. Supreme Court (SCOTUS) has denied certiorari to petitioners alleging that Aaroma Holdings LLC is liable for personal injury claims stemming from the use of diacetyl by Emoral Inc., which declared bankruptcy in 2011 after Aaroma bought its assets in 2010. Diacetyl Plaintiffs v. Aaroma Holdings LLC, No. 14-71 (U.S., cert. denied November 3, 2014). The petitioners had argued that freeing Aaroma from liability would create a loophole for companies looking to avoid tort liability by encouraging them to sell assets before filing for bankruptcy.

In a decision that will have profound implications for insolvency professionals of all types, the U.S. Supreme Court has agreed to hear an appeal of the 5th U.S. Circuit Court of Appeals’ decision that Section 330 of the U.S. Bankruptcy Code does not allow applicants to seek compensation in connection with successful defenses to objections to fee applications.

Introduction

As we all know, on June 9 of this year, the Supreme Court issued its long awaited decision in Executive Benefits Ins. Agency vs. Arkison, 134 S. Ct. 2165, 189 L. Ed. 2d 83 (2014), which we had hoped would resolve the open questions arising from Stern v. Marshall, 131 S. Ct. 2594, 180 L.Ed 2d 475 (2011).

Originally appeared in the August 2014 issue of The Bankruptcy Strategist.

Before Ruth Heffron passed away in 2001, she named her daughter, Heidi Heffron-Clark, as the beneficiary of her individual retirement account (“IRA”). What seemed like a simple part of Ruth’s estate planning resulted in a U.S. Supreme Court decision that would cause many to reconsider how to address IRA beneficiary designations for creditor protection purposes.

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On June 12, 2014, the United States Supreme Court unanimously ruled that Inherited IRAs are not exempt in bankruptcy.

The United States Supreme Court, in the case of Clark v. Rameker, ruled that Inherited IRAs enjoy no special protection in bankruptcy, unlike IRAs created and funded by the debtor. Even though the Bankruptcy Code exempts qualified retirement plans, IRAs and similar "retirement funds," the Court decided that this bankruptcy exemption for retirement funds does not extend to an Inherited IRA.