California Lawyers Association

Business Law Insolvency Law Committee

Updates from the BLS Insolvency Law Committee

Ruling in a patent case from the Northern District of California, the Federal Circuit affirmed the district court's denial of a motion to seal documents and a subsequent motion for reconsideration based on movant's failure to narrowly tailor the request to seal and a lack of a compelling reason for the court to do so. Read more
Court-appointed receiver for entities that operated a Ponzi scheme did not adequately allege fraudulent transfer claims where the complaint did not allege the transfer of funds to third parties. Read more
Court certified a direct appeal to the Third Circuit to resolve whether the bankruptcy court had subject matter jurisdiction over a lawsuit by the reorganization plan's buyer's financial advisor to enforce against the reorganized debtor the fee provision of a contract that was signed before the effective date by a person who became an officer of the reorganized debtor only on the effective date. Read more
Creditor, whose security interest lapsed prepetition when debtor changed its name, was unsecured because creditor failed to timely re-perfect its interest even though it had viable options to do so. Read more
Third Circuit certifies a critical question to the Pennsylvania Supreme Court: "Under Pennsylvania law, is an e-commerce business, like Amazon, strictly liable for a defective product that was purchased on its platform from a third-party vendor, where the product was neither possessed nor owned by the e-commerce business. Read more
A creditor cannot enforce an arbitration clause in a credit card agreement in a contempt proceeding the debtor brought against the creditor for violation of the discharge injunction. Read more
The Ninth Circuit Bankruptcy Appellate Panel recently ruled that issue preclusion was properly applied against a debtor in a nondischargeability action under ยง523(a)(6) based on a state court judgment notwithstanding that (1) the bankruptcy court failed to address the public policy element of issue preclusion and (2) the debtor was deprived of his opportunity to complete his appeal of the state court judgment when the chapter 7 trustee sold those appellate rights to the successor of the state court plaintiff. Read more
Owner of mortgaged property may not sue to stop foreclosure based on a claim that the trust deed was not properly assigned to the foreclosing beneficiary. Read more
Court was unwilling to expand the bank's duties to include investigating and disclosing possible fraudulent activity and found bank's nonsuit was properly granted. Read more
In calculating the deficiency amount of a judgment following a foreclosure sale, the court properly deducted from the amount due the greater of (a) the fair market value as of the date of the foreclosure sale or (b) the sale price of the property. Read more

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