California Lawyers Association

Business Law Insolvency Law Committee

Updates from the BLS Insolvency Law Committee

In Pancic v Lokan (In re Lokan), 2023 WL 401408 (9th Cir. BAP 6/14/2023) (unpublished), the Bankruptcy Appellate Panel for the Ninth Circuit ("BAP") held that the chapter 13 debtors converted their case to Chapter 7 in good faith and therefore a post-petition inheritance was not property of the chapter 7 estate. Read more
In Matter of Texxon Petrochemicals, L.L.C., 67 F.4th 259 (5th Cir. 2023), a case perhaps more interesting for what it analyzed but didn’t decide than what it did, the United States Court of Appeals for the Fifth Circuit (the “Fifth Circuit”) discussed the application of equitable mootness in regard to a proceeding on appeal after the bankruptcy case was dismissed but no plan had been confirmed.  Read more
On April 27, 2023, the U.S. Court of Appeals for the Seventh Circuit issued an opinion adopting the preponderance-of-the-evidence standard for turnover actions under Bankruptcy Code § 542.  In re Dordevic, 67 F.4th 372 (7th Cir. 2023). Read more
The Bankruptcy Court for the Eastern District of California recently issued a decision analyzing the implications of using DocuSign and other electronic methods of signing affidavits and other documents, ultimately sustaining evidentiary objections to trial declarations for improper presentation of sworn written testimony. Read more
The Bankruptcy Court for the Eastern District of Michigan (the Court) denied chapter 7 debtors’ discharge under Bankruptcy Code § 727 (a)(2)(B) when it concluded after trial that the debtors’ election to apply expected tax refunds based on 2019 returns, filed post petition, toward 2020 tax liabilities was a transfer of property made with intent to hinder the chapter 7 trustee.  Read more
In a case which signals the death of the “person aggrieved” test for standing for bankruptcy appeals, the Ninth Circuit Court of Appeals (the Court) ruled that a large unsecured creditor lacked Article III standing to appeal the bankruptcy court’s enhanced fee award to the Chapter 11 trustee.  Matter of E. Coast Foods, Inc., 66 F.4th 1214 (9th Cir. 2023). Read more
The Bankruptcy Court for the Western District of Tennessee (the Court) utilized the doctrine of quasi-estoppel to prevent the Internal Revenue Service from asserting that certain tax debts of chapter 7 debtors were nondischargeable.  In re Anderson, 650 B.R. 510 (Bankr. W.D. Tenn. 2023). Read more
When is a foreclosure final for purposes of determining if it occurred pre-petition or post-petition? The Bankruptcy Court for the Eastern District of California (the “Court”) recently denied a motion by a buyer at a nonjudicial foreclosure sale to annul the automatic stay to validate his purchase of the property and to allow him to evict the debtor who owned and resided in the property. Read more
The Bankruptcy Appellate Panel (“BAP”) for the Ninth Circuit reversed a Nevada bankruptcy court’s decision to dismiss an involuntary chapter 7 bankruptcy case for lack of subject matter jurisdiction. Read more
In Masingale v. Munding (In re Masingale), 644 B.R. 530 (9th Cir. BAP 2022), the Bankruptcy Appellate Panel for the Ninth Circuit Court of Appeal (the “BAP”) held that an asset was fully exempt where chapter 11 debtors listed the value of their claimed exemption as “100% of FMV” and no objection to the exemption was filed.  Read more

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