Case Updates

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

Summary: The Fifth Circuit has held that a key condition precedent to a debt buyer’s obligation to perform had not been satisfied, due to the seller’s breach of its representations and warranties; further, the buyer did not have to show that it was materially prejudiced by the seller’s breach. [Conn Credit I, L.P., vs. TF Loanco III, L.L.C., 2018 Westlaw 4292022 (5th Cir.).] Read more

Summary: A California appellate court has held that an award of attorney’s fees in favor of the prevailing defendants against a plaintiff borrower had to be added to the loan balance and should not have been entered as a separate award of damages. [Chacker vs. JPMorgan Chase Bank, N.A., 2018 Westlaw 4474732 (Cal. App.).] Read more

Summary: A district court in Hawai’i has held that the payment of a judgment in favor of an unsecured creditor was preferential because neither the filing of a lis pendens nor the creation of a consensual escrow had created a perfected lien in favor of the creditor. [In re Price, 2018 Westlaw 3213603 (D. Hawai’i.).] Read more

Summary: A district court in Illinois has held that although the interest rate in a commercial note was tied to the original lender’s internal index, an assignee of that note acquired the failed lender’s power to set the index. [Knezovic vs. Urban Partnership Bank, 2018 Westlaw 3022680 (N.D. Ill.).] Read more

Summary: A district court in New Jersey has held that the transfer of title to real property to a tax sale certificate holder constituted an avoidable preferential transfer, and the Supreme Court's holding in BFP was distinguishable because it dealt with fraudulent transfers, rather than preferences. [In re Hackler, 2018 Westlaw 1440326 (D. N.J.).] Read more

The Fifth Circuit has held that when a bankruptcy estate is subject to mass tort claims, the estate has an equitable interest in the insurance proceeds, thus precluding extrajudicial settlements by the tort victims. [In re OGA Charters, LLC, 2018 Westlaw 4057525 (5th Cir.).] Read more