Business Law Insolvency Law Committee

A Bankruptcy Court in the Eastern District of New York recently held that a litigation finance company did not hold an effective assignment of a debtor’s interest in settlement proceeds that did not exist on the petition date nor did it have a secured claim, even in funds subject to debtor’s exemption. Read more

Triangular arrangement which allowed for set-off of money the debtor owed to a company's affiliate against what the parent company owed the debtor was not allowed under Bankruptcy Code section 553 because the necessary mutuality was lacking, even though the set-off was allowed under applicable state law. Read more

Local bankruptcy rules permitting the grant of extensions of time to file objections to claimed exemptions and to file nondischargeability complaints contradicted the requirement of showing "cause" under the Federal Rules of Bankruptcy Procedure and, therefore, the local rules were required to be eliminated. Read more

Court awarded attorneys' fees to Chapter 11 debtor which prevailed on a motion to assume a commercial real property lease. Read more

Court denied enforcement of a clause limiting Amazon's liability under its service agreement, ruling that when the agreement was executed damages were not ascertainable and, thus, enforcing the clause would violate public policy. Read more

When a state court defendant has stipulated to facts supporting a state court fraud judgment, those same stipulated facts will support a nondischargeability judgment under Bankruptcy Code section 523(a)(2)(A) based on collateral estoppel. Read more

Trial court abused its discretion in appointing a receiver to aid in collecting a money judgment where there was no evidence showing the judgment debtor was frustrating efforts to collect the judgment. Read more

In Urbina v. Nat’l. Bus. Factors Inc. 979 F.3d 758 (9th Cir. 2020) (“Urbina”), the United States Court of Appeals for the Ninth Circuit held that a debt collector did not qualify for the bona fide error defense in 15 U.S.C. § 1692k(c) of the Fair Debt Collection Practices Act (“FDCPA”) by contractually obligating its creditor-clients to provide accurate information. Read more

In Lorenzen v. Taggart (In re Taggart), 2020 U.S. App. LEXIS 40787 (9th Cir., Dec. 30, 2020), the United States Court of Appeals for the Ninth Circuit denied a petition for rehearing of its decision in In re Taggart, 980 F.3d 1340 (9th Cir. 2020) (“Taggart 4”), on remand from the decision of the United States Supreme Court in Taggart v. Lorenzen, 139 S. Ct. 1795 (2019) (“Taggart 3”), which reversed Lorenzen v. Taggart (In re Taggart), 888 F.3d 438 (9th Cir. 2018) (“Taggart 2”). Read more

In Avery v. Leya Techs., LLC (In re Protoype Eng’g & Mfg.), 2020 Bankr. LEXIS 1775 (Bankr. C.D. Cal. 2020) (“Prototype”) (unpublished), the bankruptcy court ruled that a substantive consolidation claim against a non-debtor entity was a “real property claim” within the meaning of California’s lis pendens statute, Cal. Code Civ. Proc. §§ 405.1-405.61. Read more