California Lawyers Association

Business Law Insolvency Law Committee

Updates from the BLS Insolvency Law Committee

United States Supreme Court held that Congress unambiguously abrogated tribal sovereign immunity in the Bankruptcy Code because federally recognized Indian tribes are covered under the Code’s definition of a “governmental unit.”  Lac du Flambeau Band of Lake Superior Chippewa Indians v. Coughlin, 143 S. Ct. 1689 (2023). Read more
In a published opinion arising from a Ponzi scheme bankruptcy case, the Seventh Circuit Court of Appeals (the Court) ruled that a transaction whereby a second factor paid off the first factor and received the accounts which were the first factor’s collateral property was not avoidable as a preferential or fraudulent transfer because it was not a transfer of “an interest of the debtor in property.”  Read more
In Medley, the United States Bankruptcy Appellate Panel for the Ninth Circuit (“BAP”) affirmed the bankruptcy court’s decision that a factoring agreement created a loan in favor of Precision secured by the debtor’s real estate sales commissions, and that Precision was not a “factor” that owned the debtor’s right to receive the commission. Read more
The Ninth Circuit Bankruptcy Appellate Panel (“BAP”) affirmed a non-dischargeable judgment where the creditor did not receive notice of the bankruptcy in time to file a proof of claim in a chapter 7 asset case. Read more
In a split decision, the Fourth Circuit Court of Appeals (the Court) ruled that the bankruptcy court had related to jurisdiction to issue a preliminary injunction which prohibited asbestos claimants from pursuing non-bankruptcy court litigation against a non-debtor affiliate of the debtor.  Read more
In Coinbase, Inc. v. Bielski, 143 S. Ct. 1915 (2023) (“Coinbase”), the United States Supreme Court (the “Supreme Court”) reversed the rulings of the Ninth Circuit Court of Appeals (the “Ninth Circuit”) and District Court, holding that an interlocutory appeal of a ruling denying a motion for arbitration under § 16 of the Federal Arbitration Act (the “FAA”) stays the entire underlying litigation rather than being subject to the traditional federal discretionary stay analysis for appeals.  Read more
The Seventh Circuit Court of Appeals (the Court) reversed a district court decision which dismissed for lack of standing a purported class action lawsuit based on a violation of the Fair Debt Collection Practices Act (FDCPA). Read more
The Ninth Circuit Court of Appeals (Ninth Circuit) recently held that post-petition, pre-conversion appreciation in value of an asset belongs to the chapter 7 bankruptcy estate, not the debtors, following conversion from chapter 13 in good fait Read more
In Tahican, the Nevada Supreme Court held that a fraudulent transfer claim seeking avoidance of a transfer of real property affects title or possession of real property under NRS 14.010(1) and supports a lis pendens, regardless of whether the plaintiff claims title or possession of the property. Read more
The Bankruptcy Appellate Panel for the Ninth Circuit (the BAP) published a recent opinion to confirm that the discharge injunction does not protect a debtor’s alter egos.   Read more

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