Case Roundup

3rd Circuit

Gen. Datacomm Indus. v. Arcara (05/16/05 - No. 04-1710)

Involuntary termination of employees on the verge of retirement cannot deprive such employees of procedural protections of Sec. 1114 of the Code.

5th Circuit

Pettle v. Bickham (05/18/05 - No. 04-30611)

In Bankruptcy proceeding Defendant's motion to voluntarily dismiss his Adversary action with prejudice does not constitute a "mistake" or "excusable neglect" for purposes of FRCP 60(b)(1).

6th Circuit

Cluxton v. Fifth Third Bank (05/19/05 - No. 04-8028)

Bankruptcy Court properly found plaintiff-debtor's mobile home to be part of debtor's real property and consequently debtor's proposed "cramdown" of the debt on his mobile home violated the anti-modification provisions of 1322(b)(2).

7th Circuit

United Airlines, Inc. v. US Bank (05/16/05 - No. 05-1871)

Sec. 1110(a)(1) prevents Bankruptcy Judges from using any source of law, including antitrust, as the basis of an injunction against repossession.

Bankruptcy Statistics

Statistics on Bankruptcy filings from the Administrative Office of the Courts.

Reform, Reform and more Reform ...

Technical Corrections Bill The “technical corrections” bill pending in Congress is up to 100 pages and growing. As if the Reform Act isn't complicated enough ... =============================== Effective date for new filing fees The Administrative Office of the Courts indicates that these new fees will be effective Octover 17, 2005: Chapter 7 $274 [includes Clerk $220; Trustee $15; Admin $39] Chapter 13 $189 [includes Clerk $220; Trustee $15; Admin $39] Fees will not be retroactive. The changes were contained in §325 of the Reform Act, as amended by H.R. 1268, Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Tsunami Relief, signed into law May 11, 2005.

In Re: Computer Learning Ctr. Inc. (05/13/05 - No. 03-1289)

4th Circuit Plaintiff/former Trustee's appeal from Court's Order awarding interim fees is dismissed for lack of jurisdiction since Order was not "final" under 158(a).

We The People Pledges to Avoid Unauthorized Practice of Law

This post about what is and isn't the "practice of law" when it comes to Bankruptcy is brought to us courtesy of Glenda Berg-Sharp, Executive Director of the DCBA. Thanks Mrs. S.

Question from Member: Sums owed to Toll Authority

The following question is posed by a Member:

Are fines and tolls owed to the Illinois State Highway Toll Authority considered priority debts? Or would they be a mixed bag...tolls priority and fines unsecured? Or is it all just an unsecured debt?

Please share your thoughts by posting to the Blawg or e-mailing me by clicking here.

I appreciate the input from our Members.

MMH

In re International Administrative Services, Inc.

In answer to the question from the Committee Member looking for the citation to this 11th Circuit case, please follow the link in the title to secure a PDF copy of the case. Let me know if you need additional information.

Case Roundup, Episode III (Revenge of the Sith)

Avoidance of "fraudulent transfers"

In re International Administrative Services, Inc. (11th Cir. 2005)

Where, despite exercise of due diligence, trustee fails to timely bring avoidance action due to fraud or extraordinary circumstances beyond trustee's control, equitable tolling prevents expiration of §546(a)'s limitations period. Once plaintiff proves that avoidable transfer exists plaintiff can skip over initial transferee and recover from those next in line. Nothing in the language of §550 requires plaintiff in a fraudulent transfer adversary proceeding to avoid the transfer received by the initial transferee before continuing with avoidance actions down the line of transferees. ________________________

"Good Faith" in Chapter 13 subject to "totality of circumstances" analysis

In re Sullivan (1st Cir. BAP 2005)

Court adopted totality of the circumstances test for assessing good faith of a Ch. 13 filing. Obligation of good faith is imposed on debtor at two stages of a Chapter 13 proceeding:

(1) debtor must file petition in good faith;

(2) debtor must file plan in good faith.

In making a "good faith" determination, Bankruptcy courts generally consider:

(a) debtor's accuracy in stating her debts and expenses

(2) debtor's honesty in the bankruptcy process, including whether debtor has attempted to mislead the court

(3) whether the Code is being unfairly manipulated

(4) type of debt sought to be discharged

(5) whether the debt would be dischargeable in a Chapter 7

(6) debtor's motivation and sincerity in seeking Chapter 13 relief.

Gearing up for the new law to take effect

Technical Correction bill on tap

Congress will deal with a technical corrections billintended to “fix” minor mistakes in the new BK Law. The fix is to be introducted before Memorial Day recess and passed in June.

=============================================

UST program gearing up

The U.S. Trustee program has begun planning and implementation efforts related to assuming its new responsibilities on October 17, 2005 when most provisions of the new BK Law will take effect. Consult the Program’s website for updated information as implementation proceeds.

ABI Online Conference re new BK Law

For those of you who weren't able to catch it online or participate last week, follow the above link to a transcript of Consumer Bankruptcy Practice Under the New Law, the conference held May 3, 2005 by the American Bankruptcy Institute featuring:

• ABI Consumer Bankruptcy Committee Judicial Co-chair Hon. Dennis R. Dow

• ABI Executive Director Samuel J. Gerdano

• ABI Consumer Bankruptcy Committee Co-chair Dennis J. LeVine

• ABI Resident Scholar Jeffrey W. Morris

• ABI Consumer Bankruptcy Committee Judicial Co-chair Hon. Thomas F. Waldron

• ABI Consumer Bankruptcy Committee Co-chair Thomas J. Yerbich

I would be happy to read and post (if you are agreeable) people's reactions to the information put forth at the conference.

Case Roundup

4th Circuit CIT Communications v. Midway Airlines (05/02/05 - No. 04-1502) Under 365(d)(10) the lessor of personal property to the Estate is entitled to an administrative expense for the post-petition period during which the Estate possessed the property. 10th Circuit In re: Luna (05/04/05 - No. 03-7060) ERISA does not automatically make officers of a company who make regular employer contributions to an ERISA-covered employee-benefit plan "fiduciaries" to the employees for purposes of 523(a)(4) . 11th Circuit IBT Int'l, Inc. v. Northen (05/03/05 - No. 04-11829) In an action to recover assets fraudulently transferred during a bankruptcy proceeding, judgment in favor of plaintiff is affirmed over defendant-debtor's claim that plaintiff's suit was barred by statute of limitations. California Appellate Districts Boyer v. Jensen (05/06/05 - No. B174899) Dismissal of plaintiff's personal injury suit is affirmed where trial court properly dismissed defendant since he had been discharged in bankruptcy.

It begins ... poking holes in the new law

On April 26, Reps. Dana Rohrabacher (R-Calif.) and Walter Jones (R-N.C.) introduced H.R. 1860, a bill to amend the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (Public Law Number 109-8) to exempt from the means test for a limited period those who are called to active duty or to perform a homeland defense activity for not less than 60 days. The bill was referred to the Judiciary Committee.

Case Roundup

2nd Circuit In Re: Becker (04/28/05 - No. 03-5005) Court properly ruled that IRS was entitled to assert claim against debtor's estate for unpaid employment taxes despite the fact that timely assessment against debtor for those taxes had been erroneously abated and was reinstated only after the limitations periods for making such assessments had expired. 3rd Circuit

Hefta v. Comm. of Unsecured Creditors (04/27/05 - No. 03-3944) In a bankruptcy action, plaintiff's letter informing claims agent of his claim against the debtors did not constitute a properly filed proof of claim since it was too vague to actually put debtors on notice of the claim. In Re Zinchiak (04/28/05 - No. 03-4509) Court did not abuse its discretion when it reopened a bankruptcy case and allowed a petition to fix the fair market value of certain real estate under Pennsylvania's Deficiency Judgment Act. 8th Circuit Apex Oil Co. v. Sparks (04/29/05 - No. 04-2489) Denial of plaintiff's motion to reopen its bankruptcy case pursuant to 350(b) is affirmed. Court did not abuse its discretion by refusing to reopen a case that had been fully administered and closed for more than 7 years.

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J.G. Furniture Group v. Great-West Life, 4th Circuit (04/20/05 - No. 04-1576) District court properly determined that defendant-insurance company's claim against plaintiff-debtor was entitled to priority under 507(a)(4).

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Hamm v. James, 11th Circuit (04/21/05 - No. 04-10511) Federal income tax credit not part of debtor's estate regardless of whether debtor takes it in monthly payments or as lump-sum.

Attorneys' fees incurred in divorce are non-dischargeable

Eden v. Robert A. Chapski, Ltd., No. 04-2247 7th Cir. April 22, 2005 Attorney's fees incurred by defendant in a divorce proceeding not dischargeable under 523(a)(5) and survive defendant's Chapter 13 bankruptcy. Ed. Note: You like apples? How about them apples?