California Lawyers Association

Business Law Insolvency Law Committee

Updates from the BLS Insolvency Law Committee

The Fifth Circuit Court of Appeals (the Court) recently found that a lender to a developer which had accelerated its loan and then made a deal with the developer to transfer the property to the lender’s affiliate was entitled to make a credit bid for a sale free and clear of liens in the affiliate’s chapter 11 proceeding.  Read more
In In re Mariner Health Cent., Inc., 2023 Bankr. LEXIS 95 (Bankr. N.D. Cal. 2023) (Mariner), United States Bankruptcy Judge William J. Lafferty, III denied a motion to stay litigation filed in California state courts against non-debtor affiliates of debtors-in-possession Mariner Health Central, Inc. (“Mariner”), Parkview Operating Company, LP (“Parkview”), and Parkview Holding Company GP, LLP (“Parkview Holding”) (collectively, “Debtors”). Read more
The Nevada Supreme Court held that a fraudulent transfer claim seeking to avoid the transfer of real property supports the recording of a lis pendens. Tahican, LLC v. Eighth Judicial District, 523 P.3d 550 (Nev. S.Ct. February 2, 2023). Read more
Two different bankruptcy courts, one in the Northern District of California (the “CA Court”) and the other in the District of Nebraska (the “NE Court” and collectively “the Courts”) certified classes in class action cases against Navient Solutions, LLC and Navient Credit Finance Corporation for declaratory relief, injunctive relief, and possibly for damages for violating the discharge injunction of 11 U.S.C. § 524. Read more
The United States District Court for the Southern District of New York (the Court) reversed a bankruptcy court order which granted a chapter 13 trustee’s motion to compel a debtor to turn over the net proceeds from the sale of her real property.  Read more
The United States Bankruptcy Court for the Southern District of Illinois (the Court) recently ruled that a chapter 7 trustee could uses the strong arm powers conferred upon him by 11 U.S.C. § 544(b)(1) to avoid a disclaimed inheritance as a fraudulent transfer pursuant to the Federal Debt Collection Practices Act (FDCPA or “the Act”). Samson v. Spencer (In re Spencer), 2023 WL 2563751 (Bankr. S.D. Ill. 3/17/23).  Read more
On March 7, 2023, the Bankruptcy Appellate Panel of the Ninth Circuit (the “BAP”) issued its memorandum decision in the case of In re Mack, 2023 WL 2397345 (B.A.P. 9th Cir. Mar. 7, 2023), affirming the bankruptcy court’s dismissal of a complaint under 11 U.S.C. §523(a)(4) for failure to state a claim under Federal Rules of Civil Procedure (FRCP) 12(b)(6).  Read more
A bankruptcy court for the Eastern District of California, Hon. Christopher M. Klein, held that the student loan liability of a Chapter 7 debtor is discharged after satisfying, by the requisite preponderance of evidence standard, all three elements of the Brunner-Pena test for establishing undue hardship. Read more
A California bankruptcy court denied a motion to assume and assign a “garden-variety” discounted payment agreement that the debtor had entered into with the pension fund of its former union employees. Read more
The United States Bankruptcy Court for the Southern District of New York held that cryptocurrency assets held in accounts deposited with the debtors constituted assets of the debtors’ bankruptcy estates.  In re Celsius Network LLC, 647 B.R. 631 (Bankr. S.D.N.Y. 2023). Read more

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