Americans get up from their credit feast (for awhile)

this year 27% of consumers plan to cut back on spending because of pressure from credit card bills

last year 16% planned to curtail spending for that reasons

this year 28% of surveyed shoppers said they felt "really confident"

2 months ago 36% said the same things

last year 54% felt "really confident"

Howard Delivery Service v. Zurich American Ins. Co.

Unpaid workers' comp premia are not priority claims

Insurance carriers' claims for unpaid workers' compensation premiums owed by an employer fall outside the priority allowed by §507(a)(5). Although the question is close, such premiums are more appropriately bracketed with liability insurance premiums for, e.g., motor vehicle, fire, or theft insurance, than with contributions made for fringe benefits that complete a pay package, e.g., pension plans and group health, life, and disability insurance, which undisputedly are covered by §507(a)(5).

In re Rivera __ B.R. __ (Bkrtcy.D.NJ May 25 2006).

Filing pre-signed declarations on behalf of creditor violates R 9011

Having certifications pre-signed for use in future motions for relief from stay violated Rule 9011 in 2 ways:

a) affiant could not truthfully say that they verified their statements after reasonable inquiry; and

b) the documents were filed for an improper purpose (viz. to mislead the court)

The court deemed the practice akin to that identified in In re Wenk, 296 B.R. 719 (Bkrtcy.E.D.Va. 2002); as the Wenk court pointed out, attorneys filing electronic petitions "represent to the court" that they have "secured an originally executed petition physically signed by the debtor." Failure to meet this standard was an unacceptable violation of R 9011.

Case Roundup du jour

1st Circuit

Baena v. KPMG LLP (06/22/06 - No. 05-2868)

Dismissal of suit against an accounting firm that failed to notify corporate directors of irregularities in accounting is affirmed where the suit was barred by the in pari delicto doctrine since the wrongful actions of the corporate officers could be imputed to the company as a whole.

Sterling Consulting Corp. v. IRS (06/23/06 - No. 03-1809)

Sanctions order against the IRS is vacated where the order was reviewable and the behavior that triggered the sanctions was not arguably improper.

8th Circuit

Gulfcoast Workstation Corp. v. Peltz (06/23/06 - No. 05-2984)

In a chapter 11 bankruptcy case, judgment for a court-appointed plan administrator in his adversary proceeding seeking to avoid certain alleged preferential transfers is affirmed where the bankruptcy court properly found that a creditor failed to establish the third prong of the ordinary course defense, and abandoned its new value defense.

Trustee v. Real Estate Resource Management, et al. (04 A 4032)

Underlying Bankruptcy: In re Polo Builders, Inc., 04 B 23758 Adversary Opinion Issued: June 21, 2006 Judge: A. Benjamin Goldgar

Vijay Patel v. Arvind Patel (04 A 3014)

Bankruptcy: In re Arvind Patel, 04 B 12301 Issued: April 6, 2006 Judge: Susan Pierson Sonderby

Case Roundup! a Disney Production

Supreme Court

Howard Delivery Serv., Inc. v. Zurich Am. Ins. Co. (06/15/06 - No. 05–128)

In the context of bankruptcy law, premiums owed by an employer to a workers' compensation carrier do not fit within 11 U.S.C. section 507(a)(5), which accords priorities, among unsecured creditors' claims, for unpaid contributions to "an employee benefit plan."

1st Circuit

U.S. v. Sayer (06/13/06 - No. 05-1917, 05-1918)

Judgment of the district court in a tax case involving a farm is vacated insofar as it includes foreclosure of the property and remanded for dismissal of the federal government's foreclosure claims where the federal government failed to satisfy a Maine tax lien on the property within the prescribed period, thus the tax lien took priority over the foreclosure.

Boyd v. Commissioner of IRS (06/13/06 - No. 05-2517)

Dismissal of a tax suit involving the distinction between a "levy" and an "offset" is affirmed where: 1) the tax court did not have jurisdiction over the case since there had been no determination by an IRS appeals officer; and 2) the procedural differences between levy and offset were not eliminated, thus the court's jurisdictional ruling had no adverse impact on plaintiffs' substantive rights.

9th Circuit

ZiLOG, Inc. v. Corning (06/15/06 - No. 04-15787, 04-15794)

A bankruptcy court's decisions are reversed as to: 1) grant of summary judgment to a bankruptcy debtor on female employees' sex discrimination claims; 2) discharge of the employees' statutory, contract and tort claims; 3) a permanent injunction against the employees' pursuit of those claims; 4) a determination that the women failed to show excusable neglect for not filing those claims on time; and 5) an award of sanctions.

11th Circuit

Guerra v. Fernandez-Rocha (06/12/06 - No. 06-10159)

Dismissal of adversary complaint, brought based on debtor's failure to comply with Florida's Financial Responsibility Act, is affirmed where the debt in issue is dischargeable in bankruptcy.

Case Roundup a Go Go

1st Circuit

In Re New Seabury Co., LP (06/07/06 - No. 05-1526, 05-1588)

Order of dismissal is remanded with instructions to affirm the original order of the U.S. Bankruptcy Court denying debtor access to disputed funds where the plain language of a stipulation entered into by the parties as part of a reorganization plan does not support a conclusion that the funds were intended to be retained by the debtor.

3rd Circuit

In re: Oakwood Homes Corp. (06/09/06 - No. 05-2032 & 05-2033)

The language used in 11 U.S.C. section 502(b) does not clearly and unambiguously require discounting an interest-bearing obligation to present value in light of the words' plain meanings and the language used elsewhere in the Bankruptcy Code. Interest-bearing debt should not be discounted to present value after unmatured interest has been disallowed pursuant to section 502(b)(2).

In re Joseph William Giffune, Jr. (05 B 54583)

Issued: May 31, 2006 Judge: John H. Squires

A few cases to consider

1st Circuit

DiMaio Family Pizza & Luncheonette v. Charter Oak Fire Ins. (05/30/06 - No. 05-2459)

Summary judgement for defendant-insurer affirmed where:

1) the suit was time-barred;

2) plaintiff's institution of bankruptcy proceedings did not enjoin or abate action on the policy; and

3) defendant was not required to notify plaintiff of the applicable statute of limitations.

Cordero-Hernandez v. Hernandez-Ballestero (06/02/06 - No. 04-2435)

Dismissal of RICO and state law claims related to the purchase of a business is affirmed where there was no showing that defendants were in exclusive control of crucial information, and no demonstration that useful information would result from further discovery.