In a case that has broad implications for trustees and taxing authorities embroiled in preference avoidance actions, the Bankruptcy Court for the Western District of Missouri weighed in on the parameters of a trustee’s ability to avoid preferential sales and use tax payments under section 547 of the Bankruptcy Code.
Overdue Tax Payments
The U.S. Court of Appeals for the Seventh Circuit ruled in October that a creditor’s misconduct must result in harm to other creditors to justify the equitable subordination of a claim under Section 510(c) of the Bankruptcy Code.
The U.S. Court of Appeals for the Ninth Circuit has held that a nondischargeable debt for malicious and willful injury must include proof of tortious conduct. An intentional breach of contract does not suffice.
Introduction
Introduction
In In re Entringer Bakeries, Inc.,1 the United States Court of Appeals for the Fifth Circuit affirmed the viability of the “earmarking doctrine” as a judicially-created defense to a preference action under section 547(b) of the Bankruptcy Code.
Introduction:
Investors victimized by the fraud perpetrated by Bernard Madoff and his company, Bernard L. Madoff Investment Securities, LLC (collectively Madoff), should be aware of their legal options and risks. Some of these options have very short deadlines. Likewise, investors who successfully withdrew their investments before Madoff`s fraud came to light could face potential claims. In either circumstance, the prospects of litigation are high.
The Sixth Circuit recently held that section 2-702(3) of the Uniform Commercial Code (the "UCC"), which permits good faith purchasers to defeat a valid right to reclaim, does not allow a secured creditor to defeat that right.[1] The Sixth Circuit found that the security interest held by a DIP lender could not be used to defeat the right of a reclaiming creditor under the UCC or pre-BAPCPA section 546(c) of the Bankruptcy Code. This decision may impact the way bankruptcy courts consider reclamation claims under revised section 546(c) of the Bankruptcy Code.
Yesterday, the House Judiciary Committee held a hearing to discuss two proposed bills, H.R. 200, the “Helping Families Save Their Homes in Bankruptcy Act of 2009” and H.R. 225, the “Emergency Homeownership and Equity Protection Act", that would allow bankruptcy judges to modify the terms of certain mortgages on principal homes during bankruptcy proceedings. H.R.