Business Law Insolvency Law Committee

In a chapter 13 case which pitted the antimodification provisions of § 1322(b)(2) of the Bankruptcy Code against the preclusive finality of a confirmed plan under § 1327(a), the Eleventh Circuit Court of Appeals (the Court) determined that the statutory mandate pertaining to antimodification prevails. Mortgage Corp. of the South v. Bozeman (In re Bozeman), 57 F.4th 895 (11th Cir Jan. 10, 2023). Read more

In a recent published opinion, the Eleventh Circuit Court of Appeals (the Court) ruled that if a modification of a proposed chapter 11 plan materially and adversely changed the way that equity holders were treated, they were entitled to a new disclosure statement and a second chance to cast ballots despite their failure to vote on the original plan.  Braun v America-CV Station Group, Inc., 56 F.4th 1302 (11th Cir. Jan. 5, 2023).  Read more

The Seventh Circuit Court of Appeals (the Court) recently held that an order, which arose from a workers’ compensation action, directing a debtor’s employer to deposit funds in debtor’s lawyer’s trust account for payments to medical creditors created an express trust such that the funds were excluded from the debtor’s chapter 7 bankruptcy estate and he was not entitled to claim an exemption in them.  Ryan v. Branko Prpa MD, LLC, 55 F.4th 1108 (7th Cir. 2022). Read more

In Bennetti et al. v. Oxford Restructuring Advisors LLC et al. (In re CPESAZ Liquidating, Inc.), No. CC-22-1090, 2022 WL 18067792 (B.A.P. 9th Cir. Dec. 29, 2022), the Ninth Circuit Bankruptcy Appellate Panel (the “BAP”) affirmed the bankruptcy court’s award of fees to the debtors’ law firm over the objection of certain participants in the debtors’ employee stock ownership plan (the “ESOP Participants”). Read more

In an unpublished decision, the Ninth Circuit Bankruptcy Appellate Panel (the “BAP”) addressed the standard for challenging a dismissal of a chapter 11 case when it affirmed dismissal of the debtor’s voluntary chapter 11 petition. Read more

The Seventh Circuit Court of Appeals (the Court) recently held that an order, which arose from a workers’ compensation action, directing a debtor’s employer to deposit funds in debtor’s lawyer’s trust account for payments to medical creditors created an express trust such that the funds were excluded from the debtor’s chapter 7 bankruptcy estate and he was not entitled to claim an exemption in them.  Ryan v. Branko Prpa MD, LLC, 55 F.4th 1108 (7th Cir. 2022). Read more

The United States District Court for the Southern District of Indiana (the Court) recently ruled that the bankruptcy removal statute did not permit taxpayers to remove the federal government’s suit seeking to reduce tax liabilities to judgment to the bankruptcy court, notwithstanding the debtors’ assertions that the tax liability was discharged in a prior chapter 7 case.  Read more

The Second Circuit Court of Appeals (the Court) held that when the question of whether student debt has been discharged in a prior bankruptcy is subject to a legal, not factual, dispute, a credit reporting agency that shows the debt as outstanding and past due on a credit report is not in violation of 15 U.S.C. § 1681e(b) of the Fair Credit Reporting Act (“FCRA). Mader v. Experian Info. Sols., Inc., 56 F.4th 264 (2d Cir. 2023). Read more

The Ninth Circuit Court of Appeals (the Court) recently ruled that a student financial aid advisor, who mailed solicitation packets to current and prospective college students pertaining to their ability to apply for scholarships and grants in aid, was a “covered person” subject to the Consumer Financial Protection Bureau’s (CPFB) civil enforcement authority and that the net impression of the solicitations was deceptive.  Consumer Fin. Prot. Bureau v. Aria, 54 F.4th 1168 (9th Cir. 2022). Read more

In Milestone Financial, LLC v. Moon, (In re Moon), 648 B.R. 73 (B.A.P. 9th Cir. 2023), the Bankruptcy Appellate Panel for the Ninth Circuit (“BAP”) recently affirmed a bankruptcy court decision which had concluded that: (1) a forbearance agreement was usurious and not exempted from usury just because the orginal loan might have been exempt and (2) the creditor was entitled to post-maturity interest on the loan under California law.  Read more