Bankruptcy

Mentioning an existing lawsuit in the debtor's statement of affairs is insufficient.  The claim must actually be listed as an asset in the debtor's schedules.  Otherwise, the claim is "unscheduled" and is not abandoned when the bankruptcy trustee decides it is a no asset estate and the bankruptcy court discharges the debtor and closes the case.  Accordingly, here, where plaintiff… Read More

In Law v. Siegel (2014) 571 U.S. 415, the US Supreme Court held that a bankruptcy court may not use its equitable powers under 11 USC 105 to contravene express provisions of the Bankruptcy Code.  Applying that reasoning, this decision departs from prior Ninth Circuit precedent, In re Rosson (9th Cir. 2008) 545 F.3d 764, and holds that a bankruptcy… Read More

Distinguishing In re Pecan Groves of America (9th Cir. 1991) 951 F.2d 242, this decision holds that a creditor with a security interest in the debtor's real property has standing to quiet title to the property based on the fact that the homeowners association foreclosed on the property while the automatic stay was in effect on the debtor's bankruptcy.  Under… Read More

The anti-suit and other injunctions entered when Castlepoint was placed in receivership under the California Insurance Commissioner did not prevent suit by shareholders of a related entity against other related entities and their controlling officers and directors on claims of breach of contract (to which Castlepoint was not a party), tortious interference with that same contract, and breach of fiduciary… Read More

Distinguishing Law v. Siegel (2014) 134 S.Ct. 1188, this decision holds that a bankruptcy court may apply claim and issue preclusion doctrines to bar later assertion of exemptions it has already denied.  Here, Albert claimed two exemptions when she originally filed her Chapter 13 petition.  A creditor objected, and the bankruptcy court denied the exemptions.  Albert failed to appeal.  Later,… Read More

11 USC 108(c) extends time limits (such as statutes of limitation) for actions against the debtor until 30  period after the automatic stay in bankruptcy is vacated.  This decision holds that 108(c) extends the 10-year period in which a judgment creditor may apply for renewal of the judgment under CCP 683.130.  The majority opinion also disagrees with In re Lobherr… Read More

A creditor or other holder of property of the bankrupt estate does not violate the automatic stay (11 USC 362(a)(3)) by merely continuing to hold that property after the debtor files a bankruptcy petition.  Instead, 11 USC 542 governs the circumstances under which the bankruptcy court can compel a holder of property of the bankrupt estate to turn the property… Read More

Debtor abusively filed an earlier bankruptcy on behalf of a business entity, voiding a nonjudicial foreclosure sale of the entity's real property held the same day.  In debtor's later personal bankruptcy, creditor filed a claim, contending it was entitled to damages from the debtor on state law claims for abuse of process and tortious interference with business relations based on… Read More

Applying the objective standard outlined in Taggart v. Lorenzen (2019) 139 S.Ct. 1795, this decision holds that the debtor's creditors cannot be held in civil contempt for violating the discharge injunction.  They had a reasonable believe that Taggart had "returned to the fray" and thus was liable for attorney fees the creditors incurred in defeating his state court suit. Read More

Ocwen, a mortgage loan servicer, periodically reviewed credit reports of borrowers who had received bankruptcy discharges of personal liabiity on debts secured deeds of trust on their homes.  This decision holds that Ocwen did not violate the Fair Credit Reporting Act by doing so.  Ocwen had a permissible pupose in trying to determine whether the borrowers qualified for an alternative… Read More

The Equal Access to Justice Act (28 U.S.C. § 2412(d)) does not authorize a fee award against the bankruptcy court that, sua sponte, refused to confirm movan't Chapter 13 plan because it did not state a definite end date for performance of the plan.  The EAJA does not treat courts as part of the "United States" for purposes of a… Read More

The bankruptcy court did not abuse its discretion in converting this Chapter 13 bankruptcy into a Chapter 7 bankruptcy despite the fact that the debtors had filed a motion to voluntarily dismiss their Chapter 13 case under 11 USC 1307(b).  That section gives the debtors an absolute right to leave Chapter 13, but not to leave the bankruptcy court.  And… Read More

A bankrupt may assume an existing lease of personal property (such as a car) under 11 USC 365(p).  This decision holds that the debtor may assume the lease, and the creditor may enforce it after the debtor is discharged without also complying with the rrequirements for reaffirming a debt under 11 USC 524(c). Read More

A trustee is not deemed to have abandoned property of the estate under 11 USC 554(c) on closure of a bankruptcy case unless that property has been scheduled.  Here, the bankrupt described his then-pending lawsuit against his home loan servicer in his statement of financial affairs and discussed the case with his bankruptcy trustee but did not list the lawsuit… Read More

A bankruptcy court may retroactively annul the automatic stay so as to validate actions taken before the order annulling the stay. This remains true even after Roman Catholic Archdiocese of San Juan, Puerto Rico v. Acevedo Feliciano (2020) 140 S. Ct. 696, which held that a federal district court could not retroactively remand a case to state court to validate… Read More

After a state court entered an $800,000 judgment against him for conversion, Delannoy filed a Chapter 7 petition.  The trustee in the bankruptcy case sold Delannoy's state court appeal rights to the state court plaintiff which then dismissed the appeal and asserted the state court judgment as issue preclusive in connection with its objection to discharge in the bankruptcy court. … Read More

If no objection is raised by the US Trustee or any creditor, it is permissible for a debtor to propose and obtain confirmation of a Chapter 13 plan with an estimated duration rather than a fixed term, so long as the plan duration does not exceed the statutory maximum of three or five years. Read More

A debtor is entitled to attorney fees on appeal under 11 USC 362(k) when the debtor appeals and obtains reversal of a fee award under that section. Read More

Husband's debt owed to a family partnership of which wife is a limited partner was non-dischargeable in husband's Chapter 11 bankruptcy, even though the debt was owed to the partnership, not wife directly. Read More

Statutory one-year lien on a judgment debtor’s personal property is tolled by 11 U.S.C. 108(c), which extends the time for commencing or continuing a civil action on a pre-petition claim against the debtor during the automatic bankruptcy stay. Read More