Business Law Insolvency Law Committee

Writing a month apart, two bankruptcy courts addressed the issue of whether the “Shared Responsibility Payment” (SRP), which citizens are required by the Internal Revenue Code (IRC) to pay if they do not maintain a minimal standard of health care insurance, is entitled to payment as a priority claim in a Chapter 13 case. Read more

In an unpublished disposition, the Ninth Circuit Court of Appeals (the “Court”) applied its precedent to rule that when a debtor with a homestead exemption in Idaho voluntarily sells the homestead while the bankruptcy is pending, he must reinvest the amount of the exemption in another homestead within one year, as required under Idaho law Read more

In Matter of LaHaye, ___ F.3d ___, 2021 WL 5276367 (5th Cir. 11/12/2021 (“LaHaye”), the United States Court of Appeals for the Fifth Circuit (the “Fifth Circuit”) held that the Chapter 11 plan of an LLC grocery business did not improperly discharge a portion of the debt of the LLC’s guarantors to the guaranty’s beneficiary by providing that upon confirmation of the plan the guarantors’ liability was reduced by the value of the LLC’s real property through either post-confirmation foreclosure by the beneficiary or transfer of the property to the beneficiary. Read more

A Bankruptcy Court in the Central District of California (the “Court”) recently denied a plaintiff’s Application for Issuance of an Order to Show Cause re Contempt against a defendant which had been ordered to pay attorney’s fees and costs Read more

A Bankruptcy Court in the Central District of California (the “Court”) recently ruled that the unfunded liability of a defined benefit pension plan was not an administrative priority expense of reorganized Chapter 11 debtors, but rather would be paid pro rata with other unsecured prepetition liabilities. Read more

The United States Bankruptcy Court for the Middle District of Pennsylvania (the “Court”) recently ruled that the failure of a judgment creditor to withdraw a pre-petition attachment lien on a debtor’s credit union account was not a violation of the automatic stay Read more

The United States District Court for the Western District of Michigan (the “Court”) recently affirmed a bankruptcy court’s decision that because a deed conveying an interest in commercial property was never “delivered” and therefore never “accepted” by the debtor, the property never became property of the debtor’s chapter 7 estate. Read more

The United States Court of Appeals for the Sixth Circuit (the “Court”), reversing the district court, recently ruled that a debtor who had discharged a mortgage loan had standing to assert a claim under the Fair Credit Reporting Act (FCRA or “the Act”) against a servicer who continued to report the discharged debt as past due, causing an artificially low credit score. Read more

The United States District Court for the District of Delaware has dismissed the post-foreclosure complaint of a secured lender on “D&O claims” allegedly acquired from a corporate borrower in a UCC foreclosure Read more

In NLG, LLC v. Horizon Hospitality Group, LLC (In re Hazan), ___ F.3d ___, 2021 WL 33907781 (11th Cir., Sept. 1, 2021) (“Hazan”), the United States Court of Appeals for the Eleventh Circuit (the “Court”) held the Bankruptcy Court’s judgment sustaining the adversary proceeding claims of the debtor Read more