Business Law

Summary: In Hunsaker v. United States, 902 F.3d 963 (9th Cir. 2018), the United States Court of Appeals for the Ninth Circuit held that the sovereign immunity waiver of 11 U.S.C. § 106 does not preclude liability for emotional distress damages in connection with a willful violation of the automatic stay by the IRS. Read more

The U.S. Court of Appeals for the Ninth Circuit held that the value of a debtor’s homestead exemption is fixed at the date of the filing of the bankruptcy petition, regardless if the debtor was claiming federal or state law exemptions. Wilson v. Rigby (In re Wilson), 909 F.3d 306 (9th Cir. 2018). The Ninth Circuit affirmed rulings by the United States District Court and Bankruptcy Court for the District of Washington, both holding that the debtor’s exemption was limited to the amount she is entitled to under Washington state law as of the petition date. Read more

Summary: A Georgia appellate court has held that a recourse provision contained in a nonrecourse loan and guarantee agreement was not triggered by the lender's petition for an involuntary receivership, despite the guarantor's consent to the petition. [Bowers vs. Today’s Bank, 2018 Westlaw 4998236 (Ga. App.).] Read more

The Ninth Circuit recently decided Robles v. Domino’s Pizza, LLC, in which the Ninth Circuit ruled that imposing liability on Domino’s Pizza for its website under the Americans with Disabilities Act’s (ADA) accessibility requirements for public accommodation does not violate the website operator’s Fourteenth Amendment right to due process. The court expressly rejected Domino’s Pizza’s arguments, commonly asserted by defendants in similar ADA website accessibility cases around the country, that the lack of meaningful guidance from the Department of Justice for website accessibility requirements made the requirements impermissibly vague, and made enforcement of the ADA for websites a due process violation. Read more

Summary: A bankruptcy court in Delaware has held that a broadly-worded release contained in a confirmed Chapter 11 plan insulated a group of LBO participants from fraudulent transfer liability, since the potential defendants were not expressly carved out from the scope of the release. [In re Samson Resources Corp., 2018 Westlaw 4182447 (Bankr. D. Del.).] Read more

Summary: A bankruptcy court in Washington has held that after a creditor assisted a bankruptcy trustee's prosecution of a fraudulent transfer claim against a bank, the creditor was entitled to seek an award of administrative expenses for its "substantial contributions" to the Chapter 7 estate. [In re Maust Transport, Inc., 2018 Westlaw 4488712 (Bankr. W.D. Wash.).] Read more

Summary: A bankruptcy court in Texas has held that two individual refinancing lenders could not claim fire insurance proceeds stemming from the destruction of mortgage property because the trustee's status as a hypothetical bona fide purchaser defeated the refinancing lenders' unperfected deed of trust. [In re Dahlin, 2018 Westlaw 4154759 (Bankr. S.D. Tex.).] Read more

Summary: A district court in Delaware has held that disparate "gifts" from senior secured creditors to two different classes of unsecured creditors does not unfairly discriminate against the least-favored class and does not violate the "absolute priority" rule in a Chapter 11 reorganization. [In re Nuverra Environmental Solutions, Inc., 2018 Westlaw 3991471 (D. Del.).] Read more

Summary: A California appellate court has held that a reverse triangular merger did not violate an anti-assignment provision in a lease because the original corporate tenant still nominally retained the leasehold, even though control over the property had passed to the original tenant's new parent corporation. [North Valley Mall, LLC vs. Longs Drug Store S California, LLC, 2018 Westlaw 4579856 (Cal.App.).] Read more

Summary: A California appellate court has held that the language of a deed of trust did not authorize a separate award of attorney’s fee in favor of a prevailing lender, and the unsuccessful plaintiffs were not judicially estopped by their own prayer for fees. [Hart vs. Clear Recon Corp., 2018 Westlaw 4443242 (Cal.App.).] Read more