Business Law Insolvency Law Committee

In Faulkner v. Broadway Festivals, Inc. (In re Reagor-Dykes Motors, L.P.), ___ B.R. ___, 2022 WL 120199 (No. 20-0503) (Bank. N.D. Tex. January 12, 2022) (“Reagor-Dykes”), in a thoughtful decision on various aspects of preference law under Bankruptcy Code (the “Code”) § 547, the Bankruptcy Court for the Northern District of Texas (the “Court”) denied the plaintiff’s motion for summary judgment against defendant Broadway Festivals, Inc. (“Broadway”) on a preference claim by finding that Broadway established an ordinary course defense based on a single similar transaction with the debtor, even though the timing of the payments at issue in the two transactions was substantially different. Read more

The Eighth Circuit Court of Appeals (the Court) recently ruled that a judgment debtor who was mailed a copy of a garnishment summons which was served on his bank did not have standing to pursue a claim under the Fair Debt Collection Practices Act (FDCPA) because the mere receipt of a copy of the summons did not cause a concrete and particularized injury as required by Article III of the Constitution. Ojogwu v Rodenburg Law Firm, 2022 WL 433034 (8th Cir. 2/14/22). Read more

The Bankruptcy Appellate Panel of the 9th Circuit upheld the order of Eastern District Bankruptcy Judge Rene Lastreto, II, which granted a summary judgment of non- dischargeability based on a stipulated Judgment over the objection of the Debtor, who argued the stipulation did not contain sufficient stipulated facts to establish issue preclusion. Read more

The Fifth Circuit Court of Appeals (the Court), in a case arising from the failure to perform by the successful online bidder at a bankruptcy auction, reversed the district court’s admission of online documents which provided a monetary limit for the bidder’s liability. Deciding evidentiary issues which had not been adequately addressed by precedent in the circuit, the Court found the documents had not been properly authenticated and were not excepted from the hearsay rul Read more

In an unpublished disposition, the Ninth Circuit Court of Appeals (the Court) affirmed bankruptcy court and district court rulings that a debtor’s beneficial interest in real property owned by an irrevocable trust was a sufficient equitable interest to support an automatic homestead exemption under California law. Read more

Two recent opinions, one from the 11th Circuit in the case of Jackson v. Le Ctr. On Fourth, LLC (In re Le Ctr. On Fourth, LLC) 2021 U.S. App. LEXIS 33845 (11th Cir. 2021), and the second from the Eastern District of Virginia in the case of Patterson v. Mahwah Bergen Retail Grp. Inc. (2022 U.S. Dist. LEXIS 7431) (E.D. Va 2022), express opposite views of Chapter 11 third-party releases. Read more

The Bankruptcy Appellate Panel for the Ninth Circuit (“BAP”) affirmed the decision of the bankruptcy court for the Central District of California that entered a default judgment revoking the Debtor’s discharge after the Court had struck the Debtor’s answer as a terminating sanction. Read more

The Bankruptcy Court for the District of Puerto Rico (the “Court”) recently denied a creditor’s motion requesting the redesignation of a Subchapter V filing to a single asset real estate case and upheld the creditor’s 1111(b)(2) election. Read more

In Sienega v. California Franchise Tax Board (In re Sienega), 18 F.4th 1164 (9th Cir. 2021), the U.S. Court of Appeals for the Ninth Circuit (the “Court”) held that faxes sent by a debtor to the California Franchise Tax Board (the “FTB”), notifying the FTB of adjustments to the debtor’s federal tax liability, did not constitute “returns” within the meaning of section 523(a) of the Bankruptcy Code. Read more

In Citigroup, Inc. v. Bruce (In re Bruce), 2021 WL 6111925 (No. 21-CV-7455 (CV)) (S.D.N.Y. December 27, 2021) (“Bruce”), finding that there was no controlling authority in the Supreme Court or the Second Circuit, the United States District Court for the Southern District of New York (the “Court”) granted the appellant banks’ motion to certify for direct appeal to the Second Circuit Court of Appeals (the “Circuit Court”) the Bankruptcy Court’s order denying the banks’ motion to dismiss the debtor’s complaint asserting a nationwide class action against the banks seeking damages and contempt for violation of a discharge order and injunction. Read more