7th Circuit Opinion Summaries courtesy of Justia.com
United States v. Rogan
Bankruptcy, Criminal Law, Government, White Collar Crime
River Road Hotel Partners, LLC v. Amalgamated Bank
Bloomfield State Bank v. United States
Bankruptcy, Real Estate & Property Law, Tax Law
Costello v. Grundon
Bankruptcy, Commercial Law, Securities Law
CDX Liquidating Trust v. Venrock Assocs., et al
Bankruptcy, Business Law, Securities Law
Reedsburg Util. Comm’n v. Grede Foundries, Inc.
Bankruptcy, Utilities Law
Kimbrell v. Brown
Bankruptcy, Injury Law
Posted in 101, 109(h), 11 U.S.C. § 707(b)(3), 11 U.S.C. section 365(a), 1112(b), 1307, 1308, 1322(b)(11), 1325(a)(5), 1325(a)(9), 1325(b), 1326(a)(1)(C), 1328, 15 USC 1692k(c), 2002, 28 U.S.C. 1927, 3017(d), 342, 362(c)(3)(A), 362(c)(3)(B), 362(c)(4)(A)(i), 363, 451, 188.8.131.52, 502(b)(6), 510, 521, 522, 523, 526(a), 527(a)(2), 528(a), 528(a)(4), 528(b)(2)(B), 547(b), 550, 550(a), 707, 727, 9019, 9023, 9037, adequate protection, adversary, amendment, appellate court, assets, attorneys, audit, automatic stay, automobile, avoidance, bad faith, bank, bankruptcy, Bankruptcy Rules, BAPCPA, blogging, blogs, bubble, business, business filings, call, case update, cash collateral, ch 13, ch 7, cir 7, consumer, current-events, IL, individual, ND, small business
Tagged Bankruptcy, Commercial Law, Criminal Law, law, Lawyers and Law Firms, Services, United States, United States bankruptcy court
Ransom v. FIA Card Services, N.A., f/k/a MBNA America Bank, N.A.
Certiorari from the U.S. Court of Appeals for the 9th Cir., Case 09–907
Argued October 4, 2010—Decided January 11, 2011
The Issue: Here the question was whether a Chapter 13 debtor could deduct the allowable auto payment from his monthly budget even though he did not have a car payment (i.e the vehicle was paid for). Put another way, is it fair for all debtors to be entitled to the maximum allowable deduction from their monthly disposable income, or must debtors establish what they actually pay?
The Answer: The Court ruled 8 to 1 (Scalia J. dissenting) that if a debtor makes more than the median income for his State then he must establish that he incurrs the amounts deducted from his monthly living expenses. No more automatic deductions if debtor cannot prove what he pays.
The Gist: To determine “disposable income” BAPCPA gave us the Means Test, which starts with gross monthly income then deducts living expenses – i.e. “amounts reasonably necessary for maintenance or support” of the debtor. In a Chapter 13 case the expenses considered “reasonably necessary” are identified in 11 U.S.C. §1325(b)(2)(A)(i) and include “applicable monthly expense amounts” as specified in National and Local IRS standards. Since BAPCPA was adopted, it has become common practice to include expenses at the maximum allowable level even if the debtor does not have, or pay for, that type of asset. This case appears to say that the party is over for Chapter 13 debtors.
See Also: this post from Chicago Attorney Steve Jacobowski on the Bankruptcy Litigation Blog regarding the Scalia dissent.
Posted in 101, 109(h), 11 U.S.C. § 707(b)(3), 11 U.S.C. section 365(a), 1112(b), 1307, 1308, 1322(b)(11), 1325(a)(5), 1325(a)(9), 1326(a)(1)(C), 1328, 15 USC 1692k(c), 28 U.S.C. 1927, 362(c)(3)(A), 362(c)(3)(B), 362(c)(4)(A)(i), 363, 451, 502(b)(6), 510, 521, 522, 523, 526(a), 527(a)(2), 528(a), 528(a)(4), 528(b)(2)(B), 547(b), 550, 550(a), 707, 727, 9019, 9023, 9037, adequate protection, administrative, Administrative Office of the Courts, amendment, appellate court, Bankruptcy Rules, BAPCPA, ch 13, cir 9, confirmed plan, Congress, consumer, conversion, cramdown, credit, credit card, credit cards, credit counseling, creditor, current affairs, current-events, data, debt, docket, economics, economy, Executive Office of the UST, fair credit reporting act, FDCPA, Fed. R. Bankr. Proc., Fed. R. Civ. P., individual, interest, legislation, means test, median income, memorandum opinion, Middle class, modification, opinion, research
Tagged BAPCPA, disposable income, IRS, J, Kagan, means test, Scalia, SCotUS
Last week, the U.S. Supreme Court heard oral arguments on a case with the potential to radically change current bankruptcy law. At issue are three provisions of the 2005 amendments to the Code.
Petitioner, Milavetz, Gallop & Milavetz, alleges that an attorney is not a “debt-relief agency” and therefore §526(a), which prohibits attorneys from encouraging clients considering filing bankruptcy to take on more debt, is a violation of free speech. Petitioners claim that §528(a)(4) and §528(b)(2)(B), which require attorneys to make certain disclosures when advertising, also violate the 1st Amendment.
The Justices are set to make their decision in about 90 days.
Posted in 526(a), 528(a), 528(a)(4), 528(b)(2)(B), amendment, attorneys, Bankrupt, bankruptcy, ch 13, code, debt relief agency, discharge, disclosure, first amendment, free speech, judge, supreme ct, u.s. constitution
Windt v. Qwest Communications, 06-4662, 06-4808 [June 10, 2008]
In a lawsuit brought by bankruptcy trustees of a Dutch company asserting various claims against defendants who were allegedly responsible for the company’s insolvency, judgment dismissing trustee-plaintiff’s complaint on forum non-conveniens grounds is affirmed where the district court did not abuse its discretion in: 1) affording low deference to plaintiffs’ choice of forum in view of Netherlands’ substantial interest in resolving a dispute concerning alleged mismanagement of a Dutch company by board members and officers of that Dutch company; 2) concluding that avoiding problems in the application of foreign law favored dismissal; 3) balancing the public and private interest factors implicated in the case; and 4) determining that the convenience of litigating the dispute in New Jersey was outweighed by the oppressive or vexatious effect on defendants.
US v. Mitchell, 07-3136 [June 10, 2008]
Conviction upon defendant’s retrial for knowingly and fraudulently making a false statement under penalty of perjury in a bankruptcy case is affirmed where the circuit court declines to revisit a double jeopardy issue, and there was sufficient evidence to sustain his conviction.
ND IL ED
In re Weadley, 06-1854
Bibby Financial v. Weadley, 07-683
Issued June 11, 2008
Judge A. Benjamin Goldgar
Posted in 101, 109(h), 1307, 1308, 1322(b)(11), 1325(a)(5), 1325(a)(9), 1326(a)(1)(C), 1328, 15 USC 1692k(c), 342, 362(c)(3)(A), 362(c)(3)(B), 362(c)(4)(A)(i), 363, 184.108.40.206, 502(b)(6), 510, 521, 523, 527(a)(2), 528(a), 550, 707, 727, 9019, 9023, accounts receivable, adequate protection, administrative, Administrative Office of the Courts, adversary, aoc, appellate court, article, assets, audit, automatic stay, automobile, bad faith, Bankrupt, BAPCPA, black, blogging, Blogroll, blogs, bubble, business filings, CA, call, careers, case update, cash collateral, Census Bureau, ch 11, ch 13, ch 7, chapter 7, cir 1, cir 10, cir 11, cir 2, cir 3, cir 4, cir 5, cir 6, cir 7, cir 8, cir 9, civility, claim preclusion, code, collateral estoppel, Congress, consumer, conversion, county, cox, cramdown, credit, credit counseling, creditor, current affairs, current-events, data, debt, debt relief agency, depreciation, discharge, dismissal, disposable, divorce, doyle, e-discovery, economy, ED, elderly, empty-nest, ESI, estate, estate planning, Executive Office of the UST, fair credit reporting act, FDCPA, Fed. R. Bankr. Proc., fees, filings, FL, FLA, flipping, foreclosure, forms, fraud, fraudulent transfers, goldgar, government unit, grochocinski, hollis, IL, income, IND, individual, interest, investments, IRS, issue preclusion, jobs, joint, judge, lake, landlord/tenant, legislation, leibowitz, liability, lists, means test, median income, Middle class, mortgage, ND, non-debtor spouse, notice, opinion, pay advices, pay.gov, plan, pmsi-nonpossessory, pmsi-possessory, property, reaffirmation, real property, Uncategorized
Courtesy of King Bankruptcy Media
In re Robinson, 06-10618-SSM (Bankr. E.D.Va. 2007)
Fees Reduced: Failure to Provide ‘Clear’ Fee Agreement
Citing §528(a)’s ‘requirements for debt relief agencies’ the bankruptcy court severely reduced a chapter 13 attorney’s fees because his fee agreement, while ‘detailed and comprehensive’ was apparently too dense and hard to read (visually dense, small type, disorganized). The court basically held that if a consumer didn’t know what to expect they would probably think that the $3,000 fee prominently displayed in the document was all they would ever have to pay.
In re Gutierrez, 356 B.R. 496 (Bkrtcy.N.D.Cal. 2006)
Fees Disgorged: Failure to Follow BAPCPA Disclosure or Written Fee Agreement
Bankruptcy Court found that debtor’s attorney failed to provide ‘Bankruptcy Truthfulness Notice’ prescribed by §527(a)(2) within 3 business days of the first offer of bankruptcy assistance. Court ordered $700 retainer disgorged plus $675 in legal fees. Debtor’s attorney was also accused of failing to provide the disclosure required by §342(b)(1) (describing the difference between various chapters) within 3 days of first offering assistance, but the court ruled that disclosure was adequate as long as it was given prior to the filing. Finally, Court held that attorney failed to provide written fee agreement within 5 business days of first consulting with the client as required by §528(a)(1).
In re Ott, 343 B.R. 264 (Bkrtcy.D.Colo. 2006)
Case Dismissed Due to Attorney’s Failure to File Payment Advices
Debtor failed to file ‘payment advices’ within 45 days of filing the petition as required by per §§521(a)(1)(B)(iv) and 521(i). Debtor’s counsel informed court he may have inadvertently failed to inform debtors of the requirement. Case was nonetheless automatically dismissed (as required by the BAPCPA). Debtor moved for relief based on counsel’s mistake. The Court observed that by passing the BAPCPA Congress had determined that debtors in bankruptcy were “the moral equivalent of shoplifters” so the Court could not extend the 45-day deadline (See Judge Keith Lundin’s treatise on Chapter 13 — dismissal is automatic and requires no action).
In re Ginsberg, 354 B.R. 644 (Bkrtcy.E.D.NY 2006)
Case Dismissed Due to Attorney’s Failure to Order Credit Counseling
Debtor filed a Chapter 7 case but was not advised by Counsel to complete credit counseling as required by §109(h) or, in the alternative, to file a certificate of exigent circumstances to extend the time in which to get counseling or seek a permanent exemption based on disability, etc. On the date the Court issued an order to show cause why case should not be dismissed, the Debtor completed credit counseling and filed a certificate. The Court nonetheless dismissed the case and promptly hung the Attorney out to dry, noting that: “… if a debtor suffers adverse legal consequences as a result of attorney error the debtor’s recourse is against the attorney …” Ouch.
In re Nichols, 2007 WL 456635 (Bkrtcy.S.D.N.Y.)
Debtor Not Punished For Attorney Failure to Seek Waiver of Credit Counseling Requirement
Attorney filed debtor’s petition using outdated forms and failed to indicate that debtor had completed pre-petition credit counseling; attorney then failed to seek extension to complete counseling. Trustee moved to dismiss. Court said that it construed §109(h) to provide that credit counseling must be completed and submitted within 45 days of filing and debtors had reasonably relied on their counsel (which had misconstrued the provision).
Posted in 109(h), 342, 521, 527(a)(2), 528(a), BAPCPA, ch 13, ch 7, chapter 7, credit counseling, debt relief agency, fees, pay advices