Cases, cases, cases

In re Flynn (9th Cir.2005) The Bankruptcy Appellate Panel erred when it decided that plaintiff was required to pay a pro-rata share of the attorney's fees incurred by the bankruptcy trustee during the sale of real property. _________________________ In re Schick (3rd Cir. 2005) A lien held by the New Jersey Motor Vehicles Commission for unpaid motor vehicle surcharges and interest constitutes a statutory lien as defined in the U.S. Bankruptcy Code. ______________________________ In re Erie Forge & Steel, Inc. (3rd Cir. 2005) Because of their failure to move for, and obtain appointment of, an authorized representative, appellant former employees were bound by a collective bargaining stipulation entered into by USWA. _____________________________ In re Disch (7th Cir. 2005) "While many observers have touted Congress’s recent amendments to the Bankruptcy Code as a major overhaul of the law in this area, the changes leave intact one primary purpose of the Code: to provide only honest debtors with relief." Where a debtor's conduct does not meet the grounds for revocation enumerated in § 727(d), which specifically addresses the court’s power to revoke a discharge, the Court does not have equitable authority under 11 USC § 105 to revoke a discharge where necessary to prevent manifest injustice. The Court does however, have authority under Fed. R. Bankr. P. 9024 to vacate an order of discharge provided that such action occurs within one year after the discharge was entered. Federal rules of pleading do not require parties to plead legal theories. Fed. R. Civ. P. provides that "every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in the party’s pleadings.” Where a claim under 11 USC 727 arose from the same set of operative facts as a claim under 11 USC 523, the bankruptcy court did not abuse its discretion in allowing plaintiff to amend the complaint to add the otherwise-time-barred 727 claim. ________________________________ In re Parker (8th Cir. BAP 2005) Bankruptcy court erred in granting plaintiff-debtor a discharge from her student loans where she failed to show that excepting her loans would result in undue hardship.

Debtor sentenced to prison for bankruptcy fraud

Cyndi Carter, a resident of St. Petersburg, Florida, was sentenced to 18 months’ imprisonment after she plead guilty to one count of bankruptcy fraud and one count of making a false declaration in a bankruptcy proceeding.

Debtor sentenced to 18 months in prison for concealing his interest in $350,000 worth of assets

Are you a "debt relief agency?"

The below discussion is from ¶4.5(a) of King's Guide to Practice Under the Bankruptcy Reform Act of 2005 If a client falls within the definition of "assisted person" under the amended Code, and you "provide any bankruptcy assistance to an assisted person in return for payment of money or other valuable consideration,” then you are a “debt relief agency” per §12(A) and a number of new requirements must be satisfied pursuant to §§526, 527 and 528, including advertising constraints, disclosures, instructions, advice, and a written fee agreement. §101(3) defines assisted person as one with primarily consumer debts whose value (in non-exempt assets) is less than $150,000. Thus a debtor with 51% non-consumer debts such as tax liabilities, business debts, and tort claims, is probably not an "assisted person."

Chapter 7 filings up 17.7%

Chapter 7 filings were up 17.7% from the same period last year [308,028 to 362,481] The large increase has been attributed to the rush to beat the new law. Total Bankruptcies however remained stable, rising only 0.1% [1,637,254 to 1,635,725] Non-business filings rose only 0.3% [1,604,848 from 1,599,986] Business filings actually fell 9.3% to 32,406 from 35,739

Man bites dog! and other Bankruptc y-related cases

2nd Circuit Midland Cogeneration Venture v. Enron (08/16/05 - No. 04-3251) Denial of creditor's motion for leave to amend a timely filed proof of claim is affirmed; the bankruptcy court did not abuse its discretion by finding that the creditor's neglect in this case was not excusable. 3rd Circuit Dobrek v. Phelan (08/17/05 - No. 04-3391) Debts of a commercial bail bondsman are non-dischargeable in Chapter 7 pursuant to the restriction in 523(a)(7). 5th Circuit Brown v. Chesnut (08/19/05 - No. 04-10919) Creditor violated the automatic stay by foreclosing on an asset without leave of court, even though the debtor and the estate had only an arguable claim or interest in that property to begin with. 6th Circuit In Re: Am. HomePatient, Inc. (08/16/05 - No. 03-6500, 03-6501) Secured lender unsuccessfully challenged proposed plan of reorganization imposed by the court pursuant to the "cramdown" provisions in 1129(b). 8th Circuit DeBold v. Case (08/17/05 - No. 04-6075) Bankruptcy court erred in holding that plaintiff was not entitled to recover the proceeds of a settlement, because the sum in question had been paid, though not distributed, prior to commencement of the case. California Appellate Districts Zimmerman, Rosenfeld, Gersh, & Leeds v. Larson (08/17/05 - No. B177971) In an action for Attorney Fees, the debt owed to plaintiff-law firm, having arisen before defendant obtained a confirmed plan of reorganization under Chapter 11, was extinguished, except to the extent provided for in the confirmed Plan.

Disch v. Rasmussen , No. 03-3363 (7th Cir. August 09, 2005)

Bankruptcy Court's revocation of plaintiff's discharge affirmed: vacating an order of discharge is an appropriate exercise of the Court's equitable power under Sec. 105(a) of the Code.

1st Circuit: Liberty Mut. Ins. Co. v. Greenwich Ins. Co. (08/04/05 - No. 04-2298, 04-2530)

In a commercial dispute concerning a claim made on a surety bond issued by one insurer to another, recovery on the bond in favor of the plaintiff is affirmed.

Cases for consideration ...

In re Coppola (5th Cir. 2005) Where a divorce decree encumbered part of a debtor/spouse's retirement annuity to secure future alimony payment owed by that spouse, the encumbered portion of the retirement funds ceased to be tax-qualified retirement funds, and thus could not be exempted by the debtor under 11 USC 522(b) and applicable State (Texas) law. In re Church (8th Cir. BAP 2005) The bankruptcy court did not err in finding that plaintiff failed to prove that a debt owed him for attorney's fees is nondischargeable pursuant to 11 U.S.C. section 523(a)(2)(A).

Hearings concerning implimentation of the new law

On July 26 2005 the House Judiciary Committee's Commercial and Administrative Law Subcommittee held a hearing on the new law, focusing primarily on consumer provisions and issues. Here are the comments made at that hearing: Opening statement Remarks by Hon. A Thomas Small, U.S. Bankruptcy Judge Clinton J. White III, acting director, Office of U.S. Trustees Travis B. Plunkett George Wallace

What do you mean Attorneys' fees are dischargeable?

7th Circuit

Belda v. Marshall (07/26/05 - No. 04-3820)

Plaintiff's appeal of an order reversing confirmation of his reorganization plan is dismissed as moot.

8th Circuit

Clauss v. Church (07/26/05 - No. 05-6010)

Court correctly found that plaintiff failed to prove that a debt for Attorney's Fees was nondischargeable pursuant to Sec. 523(a)(2)(A).