Business Law Insolvency Law Committee

The United States District Court for the District of Connecticut recently reversed a Bankruptcy Court order dismissing the chapter 7 case of a former manufacturing company that had ceased operations in 2004 and sold its assets in 2008 but faced thousands of asbestos lawsuits arising from its operations. Read more

In a recent decision, the U.S. Bankruptcy Court for the District of Delaware ruled that a secured creditor did not have a perfected security interest in the proceeds from a court-approved settlement of litigation because those funds arose from the pursuit of commercial torts and the security agreement did not specifically describe that collateral as required by Article 9 of the Uniform Commercial Code (UCC). Read more

he United States District Court for the Southern District of Texas (the Court), ruling on a Bankruptcy Code § 523(a)(6) nondischargeability issue arising from a California judgment, agreed with bankruptcy courts in the Ninth Circuit that a jury finding that a plaintiff is entitled to punitive damages does not automatically mean the debt arose from willful and malicious conduct. Read more

The U.S. Bankruptcy Court for the Northern District of California held that a debtor’s pre-filing decision to return an $8.1 million PPP loan within a safe harbor period constituted a rescission of the PPP loan agreement. Read more

On October 21, 2022 the Bankruptcy Appellate Panel for the Ninth Circuit (“BAP”) addressed the issue of whether or not a chapter 13 debtor had an absolute right to dismiss his chapter 13 case. It found that the debtor’s right to do so was nearly absolute. Read more

The United States District Court for the Southern District of Texas (the Court), ruling on a Bankruptcy Code § 523(a)(6) nondischargeability issue arising from a California judgment, agreed with bankruptcy courts in the Ninth Circuit that a jury finding that a plaintiff is entitled to punitive damages does not automatically mean the debt arose from willful and malicious conduct. Mahadevan v Bikkina (In re Mahadevan), 2022 WL 2979726 (S.D. Tex. July 26, 2022). Read more

Two recent published decisions addressed the applicability of the economic loss rule to claims for damages, one in the California Court of Appeal, M & L Financial, Inc. v Sotheby’s, Inc., 2022 WL 2734399 (July 14, 2022), and the other in the 10th Circuit Court of Appeals arising out of a bankruptcy appeal, Glencove Holdings, LLC v. Bloom (In re Bloom), 2022 WL 2679049 (10th Cir. July 12, 2022). Read more

The United States Bankruptcy Court for the Southern District of Illinois (the Court) recently ruled that a chapter 11 debtor may sell all of its assets free and clear of successor liability claims relating to the debtor’s withdrawal from pension plans under the authority of Bankruptcy Code (Code) § 363(f)(5). In re Norrenberns Foods, Inc., 2022 WL 2657213 (Bankr. S.D. Ill. July 8, 2022). Read more

In JJ Cranston Construction Corp. v. The City of New York, ___ F. Supp.3d ___, 2022 WL 1289690 (E.D.N.Y. April 29, 2022) (“Cranston”), the United States District Court for the Eastern District of New York (the “District Court”) dismissed the debtor’s complaint without leave to amend but without prejudice because it sought damages for an alleged violation of the automatic stay and, under Second Circuit authority, the bankruptcy court had exclusive subject matter jurisdiction to address stay violations. Read more

In In re Censo, LLC, the U.S. Bankruptcy Appellate Panel for the Ninth Circuit held an order entered by United States District Court for the District of Nevada was entitled to preclusive effect as several exceptions applied to prevent the order from being considered void for violation of the automatic stay under 11 U.S.C. § 362(a)(1), (a)(3), (a)(4), or (a)(5) Read more