Case Updates

A bankruptcy court in Delaware has held that the "waterfall" provisions contained in an intercreditor agreement barred all distributions to a group of junior lienholders in a Chapter 11 case until the senior lender had been paid in full. [In re La Paloma Generating Co., 2018 Westlaw 6022271 (Bankr. D. Del.).] Read more

A bankruptcy court in New York has held that a note and mortgage were unenforceable because the alleged assignee failed to show that it was the holder of the note, despite an endorsement in blank, a corporate assignment, and physical possession of the note. [In re Pinnock, 2018 Westlaw 5794442 (Bankr. S.D.N.Y.).] Read more

MICRA notice of intent to sue does not toll Government Claims Act deadlines. Plaintiff Jamie Harper was allegedly injured during a surgery at the Modoc Medical Center, a public entity. Almost a year later, her counsel sent Modoc notice of intent to sue, as required by MICRA. (See Code Civ. Proc., § 364.) Modoc treated the notice as a government claim, and rejected it as untimely. (See Gov. Code, § 911.2, subd. (a) [notice of claim must be submitted within 6 months after the cause of action accrues].) Read more

The Sixth Circuit has held that even though the statute of limitations applicable to a mortgage reseller's repurchase claim against the seller had run, the reseller's claim for indemnification was not time-barred. [Franklin American Mortgage Co. vs. University National Bank of Lawrence, 2018 Westlaw 6377719 (6th Cir.).] Read more

A bankruptcy court in Ohio, applying Alabama law, has held that a trustee could not qualify as a hypothetical bona fide purchaser of a bankrupt's real property because a recorded power of attorney did not expressly authorize the daughter to convey her mother's real property to herself. [In re Shelton, 2018 Westlaw 5098814 (Bankr. N.D. Ohio).] Read more

The Fifth Circuit has held that the applicable state statute of limitations governing secured creditors' deficiency suits did not begin to run until the creditor has sold all of the items covered by a cross-collateralization clause contained in the parties’ agreements. [Volvo Financial Services vs. Williamson, 2018 Westlaw 6333781 (5th Cir.).] Read more

A monthly publication of the Litigation Section of the California Lawyers Association. Read more

Summary: On January 16, 2019, the California Supreme Court granted the request of the U.S. Court of Appeals for the Ninth Circuit to decide questions of California law relevant to the Ninth Circuit’s determination of Brace v. Speier (In re Brace), No. 17-60032 (9th Cir.). The question presented by the Ninth Circuit is whether the “form of title” presumption in California Evidence Code section 662 overcomes the presumption in California Family Code section 760 that all property acquired by a married person during marriage is community property. Read more

Summary: In Klein v. ODS Technologies, LP (In re J & J Chemical, Inc.), Adv. No. 18-08029-JDP (Bankr. D. Idaho Jan. 11, 2019), a U.S. Bankruptcy Court for the District of Idaho (the “Court”) held that the court in which a bankruptcy case is pending is a proper venue for a fraudulent transfer action brought under sections 544(b) or 548 of the Bankruptcy Code, regardless of the amount at issue or the residence of the defendant. The Court also held that even if 28 U.S.C. § 1409(b) applies to such an action, the court is a proper venue if the value of the property to be recovered is at least $1,300, and the higher $12,850 threshold for actions against a non-insider to recover “a debt” does not apply. If the Court’s analysis is correct, either (a) there is no monetary threshold for filing preference actions in the plaintiff’s home court against non-resident defendants, or (b) the monetary threshold is only $1,300. Read more

Summary: In re: Larissa Anatolia Kenney, Case No. 1:10-bk-11635-GM (Bankr. C.D. Cal. November 16, 2018), the United States Bankruptcy Court for the Central District of California denied a debtor’s motion to avoid a creditor’s lien under 11 U.S.C. § 522(f) because, among other reasons, there was no valid lien to avoid where a lien did not attach to property the debtor acquired after discharge of her debt in a Chapter 7 bankruptcy case. Read more