California Lawyers Association

Business Law Insolvency Law Committee

Updates from the BLS Insolvency Law Committee

An individual was eligible to be a debtor in a SBRA Subchapter V chapter 11 case despite the fact that he was a wage earning employee of a company that was unrelated to the debtor's failed corporate business on the petition date. Read more
An increase in equity in a chapter 13 debtor's home that occurred between the petition date and the post-confirmation conversion to chapter 7 inured to the debtor's benefit. Read more
In a preference action against an insurance company financier, the financier's lien on unearned premiums was perfected under Louisiana law and was sufficient to defeat a preference if the financier was fully perfected on the date of each transfer, even if not fully secured on the petition date. Read more
Court upheld several different release and exculpation clauses in confirming a chapter 11 plan over the objection of the U.S. Trustee. Read more
In a recent unpublished memorandum opinion, the United States Bankruptcy Appellate Panel of the Ninth Circuit (BAP) ruled that an interest of a debtor in a limited liability company which held title to the residence in which the debtor resided (the “Residence”) was not sufficient to support a homestead exemption in the Residence despite a state court ruling that the LLC was the reverse alter ego of the debtor. Read more
In People's Bail Bonds v. Dobos (In re Dobos), 830 F. App’x 928 (9th Cir. 2020) (unpublished), the United States Court of Appeals for the Ninth Circuit agreed with the Ninth Circuit Bankruptcy Appellate Panel’s affirmance of a bankruptcy court’s order dismissing a plaintiffs’ adversary complaint. Read more
In Williams v. 3620 102nd Street, Inc, 53 Cal. App. 5th 1087 (2020)(“Williams”), the California Court of Appeal ruled that an arbitration clause in a residential lease was unenforceable under Cal. Civ. Code § 1953(a)(4) and that the Federal Arbitration Act did not apply. Read more
In a lawsuit contesting the foreclosure of a borrower’s home, the California Court of Appeal held that defendants were entitled to their reasonable attorney’s fees and costs in successfully defending against the borrower’s tort claims pursuant to Civil Code § 1717. Yoon v. Cam IX Tr., 60 Cal.App.5th 388 (2021 Read more
In Guo v. Moorpark Recovery Serv., LLC, 60 Cal. App. 5th 745, 749-50 (2021), the California Court of Appeal, First Appellate District held that a judgment identifying a prevailing party and stating they were “entitled” to recover their costs of suit and attorney fees was sufficient to justify an award of post-judgment fees and costs under section 685.040 of California's Enforcement of Judgment Law (Cal. Code Civ. Proc. §§ 680.010-724.260), even where the judgment did not provide a specific amount for fees and costs. Read more
In In re Cuker Interactive, LLC, No. BR 18-7363-LA11, 2020 WL 7086066 (Bankr. S.D. Cal. Dec. 3, 2020), Judge Louise Adler of the Bankruptcy Court for the Southern District of California, addressing an issue where the courts nationwide are split, held that unsecured creditors of a solvent debtor in Chapter 11 are only entitled to postpetition interest at the federal judgment rate, rather than at the potentially higher contract rate or state judgment rate. Read more

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