Business Law Insolvency Law Committee

In Gwendolyn Washington v. Real Time Resolution, Inc. (In re Washington), 602 B.R. 710 (B.A.P. 9th Cir. 2019), the Bankruptcy Appellate Panel for the Ninth Circuit, resolving a split of authority, held that, in a “chapter 20” case, a prior chapter 7 discharge enjoins enforcement of an unsecured claim against the debtor personally, and such claim is not resurrected even after the underlying lien has been stripped and valued at zero in a subsequent chapter 13 case. Read more

In Waldron v. FDIC, 935 F.3d 844 (9th Cir. 2019), the U.S. Court of Appeals for the Ninth Circuit held that (a) the FDIC acting as a receiver for a failed bank is a “United States agency” under Rule 4 of the Federal Rules of Appellate Procedure and therefore has 60 days in which to file a notice of appeal, and (b) a bankruptcy court lacks subject matter jurisdiction over a preference action against the FDIC unless the preference is asserted solely as an affirmative defense to a claim by the FDIC against the bankruptcy estate. Read more

This program is presented jointly by the Insolvency Law Standing Committee of the Business Law Section of the California Lawyers Association and the San Diego Bankruptcy Forum. Read more

This program is presented jointly by the Insolvency Law Standing Committee of the Business Law Section of the California Lawyers Association and the San Diego Bankruptcy Forum. Read more

In Todeschi v. Juarez (In re Juarez), 603 B.R. 610 (9th Cir. BAP 2019), the United States Bankruptcy Appellate Panel for the Ninth Circuit, in a case of first impression in the circuit, affirmed the confirmation of the debtor’s chapter 11 plan and held that exempt property is not properly included within the phrase “any property” under the absolute priority rule, which generally prohibits a debtor from retaining “any property” under a plan that does not pay creditors in full. Accordingly, the debtor did not need to provide new value for the exempt property he was retaining in order to meet the requirements of Section 1129(b) for confirmation. Read more

The U.S. Court of Appeals for the Ninth Circuit held that a trustee’s lien avoidance power extends to unperfected proceeds of consigned goods. In re Pettit Oil Co., 917 F.3d 1130 (9th Cir. 2019). Read more

Addressing a possible conflict between state and federal precedents, the Bankruptcy Appellate Panel for the Ninth Circuit, in Highland Greens Homeowners Ass’n v. de Guillen (In re de Guillen), 604 B.R. 826 (9th Cir. BAP 2019), held that assessment liens of a homeowners association (“HOA”) are secured claims in bankruptcy only to the extent of the amount stated in the recorded lien. HOA liens are not continuing liens unless the CC&Rs so provide. Read more

hillips v. Gilman (In re Gilman), 603 B.R. 437 (9th Cir. BAP 2019), the U.S. Bankruptcy Appellate Panel of the Ninth Circuit ruled that following a bankruptcy filing, 11 U.S.C. § 108(c)(2) does not toll the two-year period for requesting postpetition, post-judgment fees and costs under California Code of Civil Procedure § 685.080. Read more

In United States Dep’t of Agriculture v. Hopper (In re Colusa Reg’l Med. Ctr.), 604 B.R. 839 (9th Cir. BAP 2019), the U.S. Bankruptcy Appellate Panel of the Ninth Circuit vacated a bankruptcy court's order surcharging a secured creditor for a substantial portion of the attorneys’ fees, and the entire statutory fee, of a chapter 7 trustee. The basis for the decision was that the bankruptcy court failed to correctly apply either the objective test for surcharge adopted by the Ninth Circuit (that the funds were expended directly, specifically and primarily for the benefit of the secured creditor) or the subjective test for surcharge (that the secured creditor consented to the expenditure). Read more

The following is a profile of the Honorable Margaret M. Mann, Chief Judge of the United States Bankruptcy Court for the Southern District of California. Read more