Normal Chapter 11 priority rules apply to structured dismissals of Chapter 11 cases, so that in a structured dismissal, lower priority creditors may not be paid over the objection of higher priority creditors whose claims have not been fully satisfied. Read More
Bankruptcy trustee may recoup debtor’s mortgage payoff to lender, which was made less than 90 days before filing bankruptcy. Read More
The automatic stay in bankruptcy prevents a taxing authority from holding a tax sale of the debtor’s property after the bankruptcy petition is filed even if the tax lien redemption period expired before the petition was filed. Read More
Debtor who failed to appeal within the 14-day bankruptcy appeal deadline from an order denying his third motion to reconsider denial of motion for sanctions for violation of the automatic stay, could not cure the untimeliness of the appeal by use of a petition for writ of mandate. Read More
A bankruptcy debtor's acknowledgement in his schedules that he owes a debt to a creditor does not act as a substitute for that creditor’s timely proof of claim. Read More
Approval of Vallejo’s Chapter 9 plan did not discharge debts of the city’s non-bankrupt police officers or shield them from personal liability on a judgment for using excessive force to arrest the plaintiff, and since judgment was entered against the police officers after Vallejo’s plan was approved, the city must indemnify the officers as state law requires. Read More
Bankruptcy court properly denied a creditor’s claim for attorney fees incurred in successfully prosecuting a mechanics lien suit against debtor, since the Chapter 11 plan which allowed the creditor to proceed with the suit did not allow for recovery of attorney fees and the fees would have been fairly within creditor’s contemplation at the time the compromise Chapter 11 plan… Read More
A tax sale conducted in accordance with California law conclusively establishes that the price obtained at that sale was for reasonably equivalent value, so the sale cannot be set aside as a fraudulent transfer in bankruptcy. Read More
A bankruptcy’s order approving the trustee’s settlement of the estate’s claims against a defendant is a sale under 11 USC 363(m) and is unreviewable on appeal unless the bankruptcy court grants a stay pending appeal. Read More
A settlement payment that is clawed back in bankruptcy as a voidable preference does not count as performance of the settlement agreement, so the party entitled to payment can pursue the debtor’s guarantors for the clawed back amount. Read More
Former husband of bankrupt spouse could raise his homestead exemption to oppose the bankruptcy trustee's motion to sell the property free and clear, since the former husband resided in the home at the time the former wife filed her bankruptcy petition. Read More
A homeowners’ association was properly ordered to pay compensatory damages to the bankrupt for knowingly violating the bankruptcy discharge injunction by suing to quiet title, following non-judicial foreclosure of its lien on the bankrupt’s condo, based in part on pre-bankruptcy unpaid HOA dues. Read More
A bankruptcy trustee may reject as an executory contract a pre-bankruptcy retainer agreement the bankrupt entered into with a lawyer in contemplation of future non-dischargeability litigation—thereby recovering for the bankrupt estate the retainer the bankrupt paid before filing his bankruptcy petition. Read More
A settlement of claims brought by the liquidating trustee overseeing bankrupt corporation’s liquidating trust is properly approved if in entering into it the trustee has made a “good faith judgment in the best interests of the beneficiaries of the liquidating trust to maximize net recoveries”; the more demanding “fair and equitable” standard which is applied to settlements by regular bankruptcy… Read More
11 U.S.C. 727(a)(2)—which provides that a debt may be exempted from discharge if the debtor has, within one year before filing his bankruptcy petition, made a fraudulent transfer—is not a statute of limitations and is not subject to equitable tolling. Read More
“Actual fraud” for purposes of the 11 USC 523(a)(2)(A) exemption is construed broadly to encompass fraudulent transfers of property designed to hinder or delay creditors. Read More
The defendant’s jury demand in the bankruptcy trustee’s adversary proceeding did not deprive the bankruptcy court of jurisdiction to decide a non-merits issue, such as whether to compel arbitration, and arbitration was properly denied since, in claiming a fraudulent transfer, the trustee stepped into the shoes of a judgment creditor, not the debtor, which had signed the arbitration clause. Read More
Filing bankruptcy reinstates a lawyer’s license to practice by discharging her obligation to repay improperly collected attorney fees to her client. Read More
The bankruptcy court wrongly held a creditor in contempt where the creditor reasonably believed that its action in seeking an attorney fee award from the debtor in state court litigation did not violate the discharge injunction based on the Ybarra rule. Read More
Sums received in settlement of borrower’s claims for improper construction are subject to the lien of the deed of trust encumbering the improperly built property and so must be paid to the lender, not the borrower’s bankruptcy trustee. Read More
