case roundup: cir 7, cir 8
Cir 7 May 15, 2008
In re: Resource Tech. Corp., No. 07-1879 In a bankruptcy proceeding in which plaintiffs sought to be assigned a contract bankruptcy debtor had with a third party, bankruptcy court’s denial of a motion to compel the trustee to assume the contract and then assign it is affirmed where: 1) the court did not improperly consider whether the contract between the debtor and the third party had expired in order to determine if the trustee could assume the contract without being subject to sanctions under Rule 9011; 2) orders extending the time for the trustee to assume or reject the contract were not a basis to contend that the contract had not expired; 3) third party was not estopped from asserting that the contract had expired; and 4) there was no need for an evidentiary hearing to determine whether the contract had expired.
Cir 8 May 13, 2008
Tri-State Fin., LLC v. Lovald, No. 07-2430, 07-2433 In consolidated bankruptcy proceedings wherein the bankruptcy court denied a motion seeking recusal of the bankruptcy judge, approved a settlement negotiation, denied a motion for hearing on the settlement, and approved an award of attorneys’ fees, judgment is affirmed where: 1) the recusal motion was made untimely; 2) upon reviewing the totality of the circumstances, the bankruptcy court did not abuse its discretion in approving the settlement agreement or denying the motion for settlement hearing; and 3) because the fee award was only challenged on the basis of a conflict and not contested as to whether the amount was reasonable, the court did not abuse its discretion in its award of attorneys’ fees.
Cir 8 May 14, 2008
In re: M & S Grading, Inc.,, No. 07-2434 In an appeal following a bankruptcy court’s denial of a motion to require a Chapter 7 bankruptcy trustee to show cause why he should not be found in contempt for failing to pay contributions ordered while the debtor’s case was in Chapter 11, the appeal is dismissed for lack of jurisdiction where: 1) the bankruptcy court’s order denying a motion to show cause was not a final appealable order; and 2) the order did not qualify as a collateral order, for purposes of the collateral order doctrine.
case update rides again: cir 1, cir 9
cir 1
In Re: Barroso-Herrans, 07-1757 [May 07, 2008]
Bankruptcy court’s approval of settlement presented by trustee is affirmed where trustee’s reading of certain of debtors’ claimed exemptions as limited to a $4,000 share of proceeds from each of 2 underlying lawsuits was objectively reasonable.
cir 9
In re: Slatkin, 06-56334 [May 06, 2008]
Summary judgment in favor of bankruptcy trustee, avoiding certain transfers by the debtor during his operation of a Ponzi scheme under sec. 548(a) of the Code and California Civil Code sec. 3439.04(a) is affirmed where:
1) bk court did not abuse its discretion in denying appellants-investors’ motion for a continuance to conduct further discovery;
2) investors’ right to a jury trial was not violated by grant of summary judgment;
3) bk court properly determined that debtor acted with “actual intent to hinder, delay, or defraud” creditors;
4) determination that debtor was not a “stockbroker” under the Code was proper; and
5) prejudgment interest was properly awarded.
In re: Straightline Invs., Inc., 05-15979 [May 08, 2008]
A judgment under Code sec. 549(a) avoiding the transfer to appellant of corporate bankruptcy debtor’s accounts receivable which had a face value of approximately $200,600 is affirmed over appellant’s claims that: 1) the transfer of accounts receivable was not an avoidable transfer because there was no depletion or diminution of debtor’s estate; 2) the transfer was an outright sale of receivables in the ordinary course of business, and the defenses of recoupment and earmarking should apply to bar recovery by the trustee; and 3) even if it was avoidable, the wrong measure of recovery was awarded.
Reusser v. Wachovia Bank, N.A., 06-35850 [May 08, 2008]
In an action against a bank involving allegations that plaintiffs’ were wrongfully evicted and their property improperly foreclosed upon, dismissal of plaintiffs’ claims is affirmed where: 1) plaintiffs’ sec. 1983 claims constituted a de facto appeal of a state court decision and were therefore barred by the Rooker-Feldman doctrine; and 2) plaintiffs’ collateral attack on a bankruptcy court’s jurisdiction was unavailing, and thus, defendant-bank did not violate sec. 362 in foreclosing on plaintiffs’ property.
Technorati tags: bankruptcy, code, opinion, 1st circuit, 9th circuit, cir 1, cir 9, california, summary judgment, trustee, personal, corporate, chapter 7, chapter 13, chapter 11
updated form: Motions for Relief from Stay
Effective immediately a revised Required Statement to Accompany All Motions for Relief from Stay must be filed with all motions seeking relief from the Automatic Stay
View this information on the Bankruptcy Court’s website here
case roundup - cir 10, 11
10th cir
In re: Aramark Leisure Servs. v. Kendrick, No. 07-4120
In a special proceeding under the Limitation of Vessel Owner’s Liability Act arising from a boating accident, and involving coverage for the accident, a judgment finding that plaintiff-vessel owner’s insurer was required to provide primary coverage to the vessel operator is reversed and remanded where: 1) there was federal subject matter jurisdiction over the matter; and 2) the district court erred in holding the insurer liable to the operator, as the insurer had a valid escape clause and the operator has no claim against it that he is required to exhaust under Utah Code Ann. section 31A-28-213(1)(a).
11th cir
Trusted Net Media Holdings, LLC v. Morrison Agency, Inc., No. 07-13429
The requirements of 11 U.S.C. section 303(b) for filing an involuntary bankruptcy petition must be satisfied in order for the bankruptcy court to have subject matter jurisdiction over an involuntary bankruptcy case.
UST relocating
The Chicago office of the United States Bankruptcy Trustee has moved to the Dirksen Federal Court House. The new address is
Office of the United States Trustee
Dirksen Federal Court House
219 South Dearborn St., Ste. 873
Chicago, IL 60604
The main phone (312) 886-5785 and fax (312) 886-5794 will remain the same as will all individual employees’ numbers.
round-ups: 3rd, 5th, and 7th cir
3rd cir
LaSala v. Bordier et Cie, No. 06-4323
The Securities Litigation Uniform Standards Act (SLUSA) is no impediment to federal adjudication of either: 1) state law aiding-and-abetting-breach-of-fiduciary duty claims, which have passed from a corporation to its bankruptcy estate to a trust; or 2) claims against foreign entities under foreign law for aiding and abetting money laundering brought by trustees, as assignees of individual investors in the bankrupt enterprise.
5th cir
Drive Fin. Servs., L.P. v. Jordan, No. 07-40265, 07-40266
An order amending and confirming debtors’ Chapter 13 bankruptcy plan, which provided for interest on appellant-creditor’s secured claim on their pickup truck at a “prime-plus” interest rate, is affirmed where: 1) Congress did not supercede Till v. SCS Credit Corp., 124 S. Ct. 1951 (2004), when it passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA); 2) the Till plurality’s adoption of the prime-plus interest rate approach is binding precedent in cases presenting an essentially indistinguishable factual scenario; and 3) thus, the bankruptcy court properly rejected creditor’s objections to the interest rate.
7th cir
Airadigm Communications, Inc. v. Fed. Communications Comm’n, No. 07-2212
In a suit by a bankrupt company seeking to eliminate the FCC’s continuing interest in several personal communications services licenses, the bankruptcy court’s determination that an earlier reorganization plan had not affected the FCC’s interests in the licenses and its ratification of a second plan with the FCC as a partially secured creditor are affirmed where: 1) the “default rule” for creditors’ liens did not apply since the earlier reorganization plan was silent on the issue of the licenses; 2) the “strong arm” provision of the bankruptcy code was inapplicable since federal law prevents another creditor from holding a interest in the licenses superior to that of the FCC; 3) the bankruptcy court properly treated the FCC as an undersecured creditor; and 4) the bankruptcy court did not exceed its authority in granting a limitation on a non-debtor’s liability.
roundup 4th cir, 5th cir
4th cir
Smith v. Jordan, 06-2154
Revocation of discharge affirmed in part. District court correctly determined that a Trustee seeking revocation of discharge under 727(a)(6)(A) must establish that debtor wilfully and intentionally refused to obey the court’s order, but incorrectly concluded that debtor’s failure to comply in this case was “willful” within the meaning of the statute.
5th cir
In the Matter Of: Seven Seas Petroleum Inc., 07-20301
Secured creditor of bankrupt corporation sued in state court by an unsecured creditor of the corporation. Secured creditor had the claims against it removed to federal court and unsecured creditor sought to have the dispute remanded back to state court. Unsecured creditor’s motion was denied and case was dismissed. Ruling is vacated by the Appellate Court, which determined that the claims were not property of the bankruptcy estate and did belong in state court (motion to remand must be granted).
I’ll just have to open with a pair of Jacks …
In re Christopher J. Meaney, 07 B 12735
Opinion issued March 7, 2008 by Jack B. Schmetterer
View and download opinion as a PDF here
In re Betty J. Dumas, 07 B 11984
Betty J. Dumas v. Sabre Group, 07 A 00380/00620
Opinion issued March 7, 2008 by Jack B. Schmetterer
View and download opinion as a PDF here
first roundup in a while …
In re: Triple S Restaurants, Inc., No. 07-5452
In a tort action removed to the bankruptcy court, the dismissal of a claim for intentional infliction of emotional distress by the debtor’s general counsel , as well as the imposition of sanctions, was affirmed where: 1) the trustee acted within the scope of his authority when he stated he would refer a particular matter for criminal investigation if plaintiff would not agree to a settlement; 2) the claim of intentional infliction of emotional distress and outrage was properly dismissed; and 3) there was no abuse of discretion in imposing sanctions.
Cir 7
Maxwell v. KPMG, LLP, No. 07-2819
Where a suit by the chapter 7 trustee alleging that the debtor company was harmed by an accounting firm’s breach of its duty of care, and summary judgment in favor of the defendant was affirmed because: 1) even assuming that defendant was negligent in its statement of the company’s earnings, that statement was not the cause of an ill-fated business decision entered into by the company; and 2) the evidence presented did not support the claim for damages, the accounting firm was authorized to seek its Attorneys’ fees before the District Court (hah!).
case update: cir 5, 6
Schlotzsky’s, Ltd. v. Sterling Purchasing & Nat’l Distrib. Co., Inc., No. 06-50720A judgment in favor of restaurant franchisor on claims against food distributor under Lanham Act is affirmed over the distributor’s claims that: 1) the Lanham Act was inapplicable; 2) an award of attorney’s fees and an injunction should be overturned; and 3) its counterclaims should be reinstated.
Cir 6
Construing a gap in the most recent amendment to the Code against the creditor, a bankruptcy court holds that the surrender of a vehicle should wipe out the underlying debt entirely (though greater than the value of the car). Bankruptcy court is reversed and remanded and the higher court holds that the gap in the Code should be construed in a manner consistent with prior judicial decisions and statutory law (which favored the creditor).
reminder: call in waukeegan, il
Lakehurst Branch Court, Courtroom B
430 Lakehurst Road Waukegan, Illinois
in re lopresti, 07-15363; pension fund et al. v. lopresti, 07-01088
in re js II, llc et al., 07-3856
Bankruptcy: In re J.S. II, L.L.C., et al., 07-3856
Opinion Issued: February 20, 2008
Judge: Hon. Jacqueline P. Cox
View the opinion as a PDF here
happy st. patrick’s day! the new IRS standards are in!
Effective March 17, 2008 the IRS will enforce National Standards for Allowable Living Expenses and Local Standards for Transportation and Housing and Utilities Expenses. The revised standards apply to cases filed on or after March 17, 2008.
See Collection Financial Standards for Food, Clothing and Other Items
See Collection Financial Standards for Health Care Expenses
See All Standards (UST page)
new cases (cir 7, 8)
cir 7
HA 2003 Liquidating Trust v. Credit Suisse Sec. (USA) LLC, No. 06-3842 (February 20, 200 
In a suit by a trust set up to collect money for a bankrupt company’s creditors against an investment banker that advised the company during a disastrous deal, judgment for defendant is affirmed where the investment banker was not grossly negligent in issuing a fairness report approving of the deal since it relied on inaccurate numbers provided by the company, and was under no contractual duty to revise its report after technology stocks began an industry-wide downturn.
cir 8
Schaaf v. Residential Funding Corp., No. 06-3694 (February 22, 200
In an action brought by certain investors asserting violations of the Minnesota Consumer Fraud Act (MCFA) and claims of common law fraud and unjust enrichment, dismissal of plaintiffs’ claims is affirmed where the investors failed to plead a sufficient causal nexus between their financial losses and the allegedly fraudulent actions of defendants.
new median income figures as of february
Census Bureau Median Family Income By Family Size (Cases Filed On and After February 1, 200 Median family income data for use in completing Bankruptcy Forms 22A and 22C. FAMILY SIZE STATE 1 EARNER 2 PEOPLE 3 PEOPLE 4 PEOPLE * Alab $36,192 $44,918 $51,103 $62,015 Alask $45,012 $68,008 $72,382 $73,825 Arizon $40,945 $53,153 $59,782 $66,903 Arkans $32,534 $41,760 $48,943 $53,671 Califor $46,814 $61,742 $66,611 $76,931 Colo $44,203 $62,302 $66,731 $77,933 Conn $55,410 $68,879 $78,973 $96,493 Del $44,378 $55,646 $66,687 $80,552 Dist. Col. $39,504 $67,790 $67,790 $73,609 Fla $40,036 $50,636 $56,923 $66,876 Geor $39,171 $51,425 $58,885 $68,611 Haw $47,256 $60,223 $71,553 $86,878 Ida $37,347 $48,211 $54,709 $59,720 Ill $44,673 $56,545 $66,607 $77,634 Ind $39,384 $51,056 $57,510 $69,718 Iowa $37,759 $50,581 $59,331 $69,723 Kans $38,594 $52,989 $58,075 $69,831 Kent $37,097 $43,482 $52,106 $61,917 Louis $34,342 $42,682 $52,231 $61,874 Maine $38,090 $47,699 $59,883 $65,310 Maryl $52,597 $68,075 $80,344 $96,695 Mass $52,633 $63,039 $77,960 $91,892 Mich $43,123 $51,878 $61,796 $74,658 Minn $45,217 $60,377 $70,695 $83,797 Mississ $30,424 $38,919 $43,587 $54,501 Misso $37,747 $48,944 $56,478 $65,076 Mont $38,968 $48,079 $53,595 $62,301 Nebr $37,209 $52,690 $59,708 $70,880 Neva $45,642 $57,860 $65,032 $67,977 New H $51,512 $63,505 $72,736 $89,885 New J $56,151 $64,821 $83,306 $97,131 New M $35,691 $48,870 $48,870 $53,516 New Y $44,587 $54,397 $64,673 $77,664 N Carol $36,271 $49,259 $55,498 $63,169 N Dak $36,735 $49,893 $61,305 $69,484 Ohio $40,168 $49,708 $59,786 $70,532 Okla $34,554 $46,222 $48,730 $56,598 Oreg $42,460 $53,236 $59,686 $66,678 Penns $43,166 $50,628 $63,491 $76,182 Rhode $47,080 $59,763 $64,933 $80,416 S Carol $35,185 $46,521 $52,992 $61,362 S Dakot $32,854 $49,419 $61,884 $65,317 Tenn $36,380 $46,039 $53,337 $61,856 Tex $36,285 $51,355 $53,803 $61,511 Utah $45,724 $51,583 $58,285 $65,397 Vt $42,344 $53,622 $61,825 $69,817 Virg $46,055 $61,115 $69,719 $80,646 Wash $48,030 $60,252 $68,139 $77,280 W. Va $37,164 $39,602 $50,440 $57,513 WIsc $41,528 $54,297 $65,440 $74,560
