Business Law Insolvency Law Committee

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

n a published opinion, the Second Circuit Court of Appeals (the Court) recently ruled that § 365(b)(1)(A) of the Bankruptcy Code does not provide an administrative priority claim to a creditor (here a general contractor) who seeks payment from a debtor under one contract but whose assertion of uncured default arises from a separate contract (here a ground lease) in which the creditor has no contractual right. Read more

In an unpublished but analytic opinion, the Sixth Circuit Court of Appeals (the Court) recently questioned prevailing precedent which requires an appellant of a Bankruptcy Court order to be a person aggrieved and provides that the person-aggrieved test represents a jurisdictional bar.  Read more

The Eleventh Circuit Court of Appeals (the Court), interpreting Florida’s Uniform Fraudulent Transfer Act (FUFTA), which is patterned after the Uniform Fraudulent Transfer Act (UFTA) approved by the national Uniform Law Commission, ruled that a creditor asserting a claim for either actual fraud or constructive fraudulent transfer is not entitled to obtain a money judgment for compensatory damages, punitive damages, or attorney’s fees against the transferor of property.  Read more

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