Business Law Insolvency Law Committee

In NetJets Sales, Inc. v. RS Air, LLC (In re RS Air, LLC),, 2022 WL 1284012 (9th Cir. BAP 2022,) (“NetJets”), in an unpublished decision, the United States Bankruptcy Appellate Panel for the Ninth Circuit (the “BAP”) reversed the Bankruptcy Court’s ruling that the appellant’s motion for creditor standing to bring a claim on behalf of the estate failed to state a claim because the action was unlikely to succeed since the Bankruptcy Court applied the incorrect standard for resolution of the motion. Read more

In a recent published opinion, the Second Circuit Court of Appeals (the Court) held that a debtor who successfully defends an appeal of an order finding a creditor in contempt for violation of the discharge injunction is entitled to an award of appellate attorney’s fees as part of the sanctions which are available for such a finding. Read more

In a recent published opinion, the U.S. Bankruptcy Appellate Panel for the Ninth Circuit (the “BAP”) clarifies how bankruptcy courts may set the commitment period for payments of disposable income, or its value, under subchapter V of the Bankruptcy Code.  Read more

In a recently published opinion, the Ninth Circuit Court of Appeals (the Court) reversed a district court’s summary judgment in favor of CitiMortgage, Inc. Read more

Debtors Ascena Retail Group, Inc. (“Ascena”) and its 63 affiliates (collectively, “Debtors”) proposed a chapter 11 plan (“Plan”) that contained third-party releases and an exculpation clause. Read more

A bankruptcy court in the Eastern District of Michigan (the Court) ruled that a state court judgment for foreclosure of tax claims and the subsequent sale of the debtor’s residence were not fraudulent transfers under Bankruptcy Code § 548. Read more

In a recent nonprecedential disposition, the Ninth Circuit (the Court) denied a prevailing debtor’s right to attorney’s fees arising from a nondischargeability adversary because the proceeding was not an action “on a contract” under California Civil Code § 1717. Read more

In a ruling that affirmed the confirmation of subchapter V Chapter 11 plan, the Bankruptcy Appellate Panel for the Ninth Circuit (the BAP) made two significant rulings: (1) that a profit motive is not required to satisfy the requirement of Bankruptcy Code § 1182(1)(A) that a debtor must be “engaged in commercial or business activities” on the petition date to be eligible for subchapter V; and (2) that the burden is on the debtor to prove subchapter V eligibility. Read more

In a recent published opinion, the Fourth Circuit Court of Appeals (the Court) ruled that the defense of in pari delicto is applicable against a bankruptcy trustee pursuing litigation on behalf of the estate, whether the trustee is standing in the shoes of the debtor or in the shoes of a hypothetical lien creditor. Read more

The Bankruptcy Court for the Western District of New York (the “Court”) recently denied confirmation of a Subchapter V plan and dismissed three consolidated Subchapter V cases for cause on motions by the Office for the U.S. Trustee (“UST”), exercising discretion not to convert to Chapter 7. In re MCM Natural Stone, 2022 WL 1074065, 2022 Bankr. LEXIS 987 (Bankr. W.D.N.Y. April 8, 2022) Read more