Recent Cases

Complaint for "emotional distress due to violation of Stay dismissed

In re L'Heureux, (8th Cir. BAP 2005)

Held: Bankruptcy Court did not err in dismissing adversary proceeding seeking emotional distress damages based on creditor's failure to remove a publicly-posted notice of sale where the sale itself was discontinued.

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Collateral for credit may be property of Estate

In re Kaiser Group Internal Inc. (3rd Cir. 2005)

Although the "independence principle" establishes that a letter if credit is not property of the Estate, where Debtor has posted collateral to secure the letter of credit disputes pertaining to loss of such collateral are deemd to pertain to property of the Estate and may be subject to jurisdiction of the Bankruptcy Court.

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Debtor's Attorney without authority to bind Debtor to settlement (yikes)

In re Grayson (9th Cir. 2005)

Held: Authority to negotiate with the opposing party does not by itself imply authority to enter into a binding settlement. Court did not err in finding that the Debtor's Attorney had neither actual nor apparent authority to bind the Debtor to a negotiated settlement.

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Mistaken standard used in educational-loan hardship action

In re Howe (9th Cir. BAP 2005)

Held: Bankruptcy Court erred by applying an incorrect standard in evaluating whether a Debtor seeking an undue hardship discharge of her student loan could maintain a minimal standard of living. While the Federal poverty level standard is too strict -- a middle class living is too liberal. The Court erred in applying IRS guidelines rather than examining the individual facts of the case to make its determination.