Business Law Insolvency Law Committee

SUMMARY In Windmill Health Products, LLC v. Sensa Products (Assignment for the Benefit of Creditors), LLC, 2015 U.S. Dist. LEXIS 145685 (N.D. Cal., Oct. 27, 2015), the U.S. District Court for the Northern District of California held that the Ninth Circuit’s prior ruling that bankruptcy law pre-empted California’s statute permitting an assignee for the benefit of creditors to avoid a preference governed, even though subsequent state court decisions rejected that view. To read the full unpublished decision, click here. FACTS Windmill Health… Read more

SUMMARY In America’s Servicing Co. v. Schwartz-Tallard (In re Schwartz-Tallard), ___ F.3d ___, 2015 WL 5946342 (9th Cir. Oct. 14, 2015), the U.S. Court of Appeals for the Ninth Circuit (the “Ninth Circuit”), en banc, held that section 362(k) of the Bankruptcy Code authorizes an award of attorneys’ fees reasonably incurred in a debtor’s prosecution of a suit for damages to provide redress for a violation of the automatic stay.  In so holding, the Ninth Circuit overruled its prior decision in Sternberg v.… Read more

The following is the first in a new series of profiles of 9th Circuit bankruptcy judges. Judge Neil W. Bason and members of the Insolvency Law Committee met in his chambers and discussed his personal and professional background, transition to the bench and other issues of interest. Judge Bason was appointed to the bench in the Central District of California, Los Angeles Division, in October 2011. Prior to his appointment, he was special counsel at Duane Morris LLP and at… Read more

Dear constituency list members of the Insolvency Law Committee, the following is a case update analyzing a recent case of interest: SUMMARY In Shapiro v. Henson (9th Cir. January 9, 2014), in a published decision, the United States Court of Appeals for the Ninth Circuit reversed the district court’s ruling affirming the bankruptcy court’s denial of a trustee’s motion for turnover pursuant to 11 U.S.C. § 542(a).  The Ninth Circuit held that a trustee may seek recovery from entities having “possession, custody,… Read more

Dear constituency list members of the Insolvency Law Committee, The following is a case update analyzing a recent decision of interest: SUMMARY The United States Bankruptcy Appellate Panel of the Ninth Circuit (the “BAP”) has affirmed a bankruptcy court’s ruling that individual debtor’s chapter 11 post-petition earnings which are property of the estate under § 1115 revert to him or her upon a subsequent conversion to chapter 7.  Wu v. Markosian (In re Markosian) – 9th Cir. BAP (3/12/14).  Click HERE http://cdn.ca9.uscourts.gov/datastore/bap/2014/03/12/Markosian-13-1339.pdfto read… Read more

Dear constituency list members of the Insolvency Law Committee, the following is a recent case update:    SUMMARY On June 12, 2014, in Clark v. Rameker, the United States Supreme Court unanimously held that funds held in inherited IRAs are not “retirement funds” within the meaning of 11 U.S.C. §522(b)(3)(C) and are therefore not exempt property.  To read the full decision, click here:  http://www.supremecourt.gov/opinions/13pdf/13-299_6k4c.pdf FACTS In 2001, Heidi Heffron-Clark inherited an individual retirement account (“IRA”) worth roughly $450,000 from her mother’s estate.  Heffron-Clark… Read more

Dear constituency list members of the Insolvency Law Committee, the following is a case update analyzing a recent case of interest: SUMMARY On June 11, 2014, in Heller Ehrman LLP v. Davis, Wright, Tremaine, LLP, the United States District Court for the Northern District of California ruled that the trustee of the bankruptcy estate of the defunct law firm Heller Ehrman LLP (“Heller”) could not recover fees earned by other law firms on Heller matters that former Heller shareholders took with… Read more

Dear constituency list members of the Insolvency Law Committee, the following is a case update analyzing a recent case of interest: SUMMARY On June 9, 2014, in Executive Benefits Ins. Agency v. Arkison, the United States Supreme Court ruled that, pursuant to 28 U.S.C. § 157(c)(1), a bankruptcy court may make proposed findings of fact and conclusions of law in a Stern “core” proceeding subject to de novo review by an Article III court.    To read the full decision, click here: http://www.supremecourt.gov/opinions/13pdf/13-339_886a.pdf.  FACTS The Palavedas owned two companies… Read more

Dear constituency list members of the Insolvency Law Committee, the following is a case update on a recent decision of interest: SUMMARY The Supreme Court of the United States held that a bankruptcy court exceeded the limits of its authority by imposing a surcharge on a debtor’s homestead exemption to pay for a chapter 7 trustee’s litigation fees and costs incurred in avoiding a fraudulent lien against estate property created by the debtor.  In a unanimous opinion written by Justice… Read more

Dear constituency list members of the Insolvency Law Committee, the following is a case update analyzing a recent case of interest: SUMMARY In connection with the proposed sale of substantially all of the debtors’ assets free and clear of liens under Bankruptcy Code Section 363(k), the bankruptcy court for the District of Delaware found “cause” within the meaning of Section 363(k) to limit the senior secured creditor’s right to credit bid its secured claim to the discounted amount the secured… Read more