Business Law Insolvency Law Committee

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

In Haynie v. Krystal (In re Haynie), 624 B.R. 872 (Bankr. 9th Cir. 2021) (“Haynie”), the Bankruptcy Appellate Panel of the Ninth Circuit (the “BAP”) held that the Bankruptcy Court correctly ruled that the later of two competing inconsistent “judgments” in the same case between the same parties in state court on the same dispute was entitled to preclusive effect in a nondischargeabilty adversary proceeding. Read more

The California Court of Appeal tackled the perplexing subject of sales and use tax by beginning its opinion acknowledging the complexity of the subject matter: “Albert Einstein reportedly said, ‘The hardest thing in the world to understand is the income tax.’ Read more

The Seventh Circuit Court of Appeals (the Court) recently ruled that a chapter 13 plan may be modified only if a statute, rule or the litigants’ consent provides authority for the modification. Read more

The debtor’s principal – also a potential target of the chapter 7 trustee’s avoiding powers action - lost his bid to stop a sale of the debtor’s remaining assets and the avoiding power action against him. Read more

In Censo, LLC v. New Rez, LLC, 2022 WL 1055936 (No. NV-21-1125-LTF) (9th Cir. BAP April 5, 2022)(“Censo”), the United States Bankruptcy Appellate Panel for the Ninth Circuit (the “BAP”) ruled that the post-petition entry of a judgment against the plaintiff debtor on a defendant’s counterclaims in a District Court quiet title claim action initiated by the debtor against the defendant did not violate the automatic stay. Read more

In yet another circuit court ruling on Article III standing to assert consumer claims under a federal statute, here the Fair Credit Reporting Act (FCRA), the Eighth Circuit Court of Appeals (the Court) denied standing to a prospective employee who was denied employment when a criminal background check showed an undisclosed felony on her record. Read more

The Bankruptcy Appellate Panel for the Sixth Circuit (the BAP) recently held that the “shared-responsibility payment” (SRP) assessed under the Affordable Care Act (ACA) for failure to purchase health insurance was a “tax” measured by income for priority purposes in a bankruptcy proceeding. In re Juntoff, 636 B.R. 868 (6th Cir. BAP March 21, 2022). Read more

Joining the litany of recent cases which address standing in Fair Debt Collection Practices Act (FDCPA) actions, the Seventh Circuit Court of Appeals (the Court) ruled that a consumer who received a dunning letter from a debt collector seeking to collect time-barred debt did not experience sufficient concrete injury to have Article III standing to assert the federal claims. Pierre v Midland Credit Management, Inc., 2022 WL 986441 (7th Cir. April 1, 2022). Read more