The United States District Court for the District of Delaware, on July 21, 2014, held that an indenture trustee’s late filing of senior claims did not waive the lenders’ contractual subordination rights, reversing the bankruptcy court. In re Franklin Bank Corporation, 2014 U.S. Dist. LEXIS 98327 (D. Del. July 21, 2014). Nor did the senior trustee’s late filing show inequitable conduct warranting equitable subordination of the tardily filed senior claims to timely filed junior claims.
Section 506(a)(1) of the Bankruptcy Code provides common-sense instruction that the allowed amount of a secured claim is equal to the value of the collateral securing the claim and that a claim is unsecured to the extent the claim exceeds such collateral value. The section goes on to provide that the value of collateral ”shall be determined in light of the purpose of the valuation and of the proposed disposition or use of such property, and in conjunction with any hearing on
House bill H.R. 2533 was introduced three years ago with much fanfare by the then Chairman of the House Judiciary Committee. H.R. 2533 proposes amending “title 28 of the United States Code with respect to proper venue for cases filed by corporations under chapter 11 of title 11 of such Code.” It is intended to reduce the number of jurisdictions available for filing a bankruptcy case by effectively eliminating a debtor’s “place of incorporation” as a venue option.
As we expected might happen in light of the Court’s previous order, the parties in the Detroit bankruptcy appeal agreed to postpone oral argument. In a letter to the parties, however, Judge Gibbons wrote that the appeals should be resolved before near the beginning of the hearing on the confirmation
Lewis Bros. Bakeries, Inc. v. Interstate Brands Corp. (In re Interstate Bakeries Corp.)
Steve McCroskey: Jacobs, I want to know absolutely everything that’s happened up ‘til now.
Jacobs: Well, let’s see. First the earth cooled. And then the dinosaurs came, but they got too big and fat, so they all died and they turned into oil. . . .
-Airplane II: the Sequel
For a Throwback Thursday, we often go way back, to cases establishing first principles. This time, however, we travel not so far back, but still to a bygone era, the early 80’s. It was a time when the Bankruptcy Code was still new, and judges could interpret it without the weight of much practice and precedent. Often, these cases present the starting point for familiar interpretations that continued to develop in later years, but other times it’s surprising to see a new interpretive opening that, years later, is not thoroughly explored.
In Crawford v. LVNV Funding, LLC, No. 13-12389 (July 10, 2014), the Eleventh Circuit held that the Fair Debt Collection Practices Act (FDCPA) prohibits filing a proof of claim on a time-barred debt in bankruptcy court, where the party attempting to collect knows the debt is time barred. The appellate court observed that a “deluge has swept through U.S. bankruptcy courts” of consumer debt buyers attempting to collect expired debts from debtors in Chapter 13 bankruptcy.