Business Law Insolvency Law Committee

In a published opinion with a detailed description of the development abusind importance of California’s usury law, the California Court of Appeal (the Court) reversed a trial court ruling which reflected the lower court’s erroneous understanding that California’s complicated relationship with usury, with many exceptions, demonstrates that the prohibition of usury is not a fundamental public policy of the state. Read more

The allowed homestead exemption in Riverside County California, when Robert and Suzanne Reicher filed their chapter 7 petition, was roughly $456,000.  Read more

In an unpublished decision, the U.S. Bankruptcy Appellate Panel of the Ninth Circuit (the “BAP”) affirmed the bankruptcy court’s rulings denying a chapter 7 debtor’s motion to convert and motion for reconsideration, based on its determination that the bankruptcy court’s finding that the debtor had sought conversion in bad faith was not clearly erroneous.   Read more

The United States Bankruptcy Appellate Panel of the Ninth Circuit recently affirmed the bankruptcy court finding that a chapter 7 trustee may assert a fraudulent conveyance action that occurred within seven years of the bankruptcy petition provided that (1) either the fraudulent transfer occurred within four years of the bankruptcy petition or (2) a judgment (creating a creditor) is entered against a debtor within four years of the bankruptcy petition.  Weil v. Pyramid Center, Inc. (In re Momentum Dev. LLC), 649 B.R. 33 (B.A.P. 9th Cir. 2023). Read more

A bankruptcy court in the District of Idaho held that a Chapter 13 Debtor’s employer-paid medical and dental benefits shall be considered income for purposes of calculating “currently monthly income” (“CMI”) for Means Test purposes.  In re Clifford, No. 22-00129-NGH, 2022 WL 16727279, at *1 (Bankr. D. Idaho Nov. 4, 2022). Read more

In MOAC, the Supreme Court held that 11 U.S.C. § 363(m) of the Bankruptcy Code is not jurisdictional, reversing the Second Circuit Court of Appeals and resolving a Circuit split over whether section § 363(m) limits appellate jurisdiction over § 363 sale orders or instead just limits the appellant’s remedies on appeal in the event there is a sale or lease to a good-faith purchaser or lessee. Read more

In the most recent bankruptcy case dealing with the question of whether private student loans made by Navient Credit Finance Corporation (Navient) are nondischargeable under Bankruptcy Code § 523(a)(8), on cross summary judgment motions the Bankruptcy Court for the Northern District of New York (the Court) ruled (1) for the debtor that the loans were not “part of a program funded in part by the government” as required for nondischargeability under § 523(a)(8)(A)(i) but (2) for the creditor that the debtor’s loan was nondischargeable under § 523(a)(8)(B).  Mazloom v Navient Solutions, LLC (In re Mazloom), 648 B.R. 1 (Bankr. N.D.N.Y. 2023). Read more

In a recent published opinion, the Seventh Circuit Court of Appeals (the Court) reversed its own precedent in ruling that federal, not state law, defines the meaning of “transfer” in § 547 of the Bankruptcy Code, the statutory authority which allows a trustee to recover preferential transfers for the benefit of the estate.  Warsco v Creditmax Collection Agency, Inc., 56 F.4th 1134 (7th Cir. 2023). Read more

Answering a question that has been addressed by multiple bankruptcy courts with mixed results, the Bankruptcy Court for the Western District of Missouri (the Court) ruled that when debtors sell real property they own when a chapter 13 is filed, the proceeds from the sale are new property that replenishes the chapter 13 estate and may be available for distribution to creditors.  In re Marsh, 647 B.R. 725 (Bankr. W.D. Mo. 2023). Read more

Court) denied a debtor’s motion to abandon an exempt homestead, concluding that pending adversary proceedings which asserted claims that debts were excepted from discharge under 11 U.S.C. § 523(a)(2) and (4) could result in decisions which would limit the debtor’s homestead exemption under 11 U.S.C. § 522(q)(1)(B)(ii).  Therefore, abandonment was premature.  In re Oliver, ___ B.R. ___, 2023 WL 2620032 (Bankr. E.D. CA. 3/23/23).  Read more