Return of the Case Roundup

If at first you don't succeed, dissolve and try again

Fowler v. Shadel (7th Cir. 2005) Dbtor/sole shareholder's equitable interest in property owned by corporation cannot be exempted, though it would have been if the corporation had been dissolved prior to filing (ouch!).

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Libelous statement is "malicious"

In re Sicroff (9th Cir. 2005)

A libelous statement is "malicious" for purposes of non-ischargeability under 523(a)(6) regardless of whether the author had a socially legitimate rationale for publishing it (whatever that means).

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Adjudication of hardship res judicata

In re Woodcock (8th Cir. BAP 2005)

Debtor who litigated and lost an undue hardship discharge dispute cannot reopen the case years later to prove that the Bankruptcy court's original ruling that Debtor could potentially earn enough to pay his student loans had turned out to be inaccurate.

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Bankruptcy Code preempts State law with respect to lien priorities

In re Brinley (6th Cir. 2005)

A taking affected by 522(f) is not unconstitutional where the lien arose after the enactment of 522(f), thereby placing the lien holder on notice that its lien could be impacted.

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Arbitration clause does not require Trustee to arbitrate

In re Oakwood Homes Corp. (Bankr. De. 2005)

An avoidance defendant was not entitled to arbitration of 544(b), 548 and 547 claims asserted by a Trustee regardless of the fact that a Pre-Petition agreement between the Debtor and the defendant compelled arbitration of disputes.

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Mortgage secured by rents and escrow protected from modification only with resepct to primary residence

In re Fernados (3rd CIr. 2005)

Mortgagge on a primary residence secured by: (i) rents [part of the real property under applicable State law] and (ii) an escrow fund for insurance and taxes [not property of the debtor once put in escrow] is secured "only by a security interest in real property that is the debtor's principal residence" and protected against modification in Chapter 13.

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Probate proceeding might deprive Bankruptcy Court of jurisdiction

In re Litzinger (8th Cir. BAP 2005)

A Bankruptcy Appellate Pannel held that the lower Bankruptcy Court erred in deciding issues centrally related to a probate proceeding without first determining whether the probate exception jurisdiction applied.

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Un-Earned Pre-Petition Attorneys' Fees Property of the Estate

In re On-Line Services Ltd. (2005)

Un-earned portions of the advance given to a Debtor's Attorney in a Chapter 7 case were held to be property of the Estate.While applicable State law recognized a a security retainer lien in favor of the Attorney, that lien did not secure future (i.e. Post-Petition) services. While the Court had authority to review the reasonableness of Pre-Petition legal fees, the issue was not the benefit to the Estate but the the reasonable value of the services.