Judge Parker of the U.S. Bankruptcy Court for the Western District of Texas recently issued an order in the case of Hilltop SPV, LLC, granting debtor Hilltop SPV LLC’s (“Hilltop”) motion to reject a Gas Gathering Agreement (“GGA”) with counter-party Monarch Midstream, LLC (“Monarch”).[1] This decision allows Hilltop to reject the GGA while allowing Monarch to retain the covenants that run with the land post-rejection.

Among the many financial innovations that came out of the COVID era, non-pro rata uptier transactions as a liability management exercise (“LMEs”) are among the more controversial. While lawsuits challenging non-pro rata uptier transactions are making their way through the courts, two important decisions were recently issued by the Court of Appeals for the Fifth Circuit and the New York Appellate Division.

The Barton doctrine provides that a court-appointed receiver cannot be sued absent “leave of court by which he was appointed.” Barton v. Barbour, 104 U.S. 126, 127 (1881).

Written by - Thomas H. Curran, Thomas H. Curran Associates

The opinion is Samson v. The LCF Group, Inc. (In re Bridger Steele, Inc.), Adv. No. 2:24-ap-2003 in the Montana Bankruptcy Court (decided September 30, 2024; Doc. 10).

Background

Debtor is a fabricator and seller of metal roofing and siding products.

Does a Chapter 7 debtor have appellate standing to protect the homestead exemption?

That’s an issue addressed (sort of) in Karamoussayan v Massachusetts Department of Revenue (In re Karamoussayan), Case No. 22-041, First Circuit Bankruptcy Appellate Panel (decided April 11, 2024).

Chronology

Here’s a chronology.

September 9, 2022 — Debtor files a voluntary Chapter 13 petition

A new Seventh Circuit Court of Appeals opinion[fn. 1] involves the motion of a federal inmate, who was also a Chapter 7 bankruptcy debtor, for compassionate-release under 18 U.S. § 3582(c)(1)(A). The new Seventh Circuit opinion denies the motion.

Notably, the bankruptcy Debtor/Inmate is serving a 30-year sentence for making false statements during a bankruptcy proceeding The bankruptcy statute is 18 U.S.C. § 152, which declares it is a crime when a person:

Executive Summary

“A discharge under section 727, 1141, 1192 [Subchapter V], 1228(a), 1228(b), or 1328(b) of this title does not dischargean individual debtor from any debt— . . .”

11 U.S.C. § 523(a) (emphasis added).

Bankruptcy courts applying the foregoing language in the early days of Subchapter V found such language to be clear and unambiguous: that only “an individual debtor” is affected.

Congress, the federal appellate courts and the U.S. Supreme Court all need to recognize this historical reality:

• bankruptcy is an efficient and effective tool for resolving mass tort cases, as demonstrated by cases with huge-majority approval votes from tort victims.

And all those institutions need to prevent anti-bankruptcy biases, legal technicalities, and hold-out groups from torpedoing the huge-majority votes.

Supreme Court moving in the right direction?