First Circuit: Puerto Rico Elec. Power Auth. v. Ad Hoc Group-PREPA Bondholders

In a municipal bankruptcy action, the court can issue relief from the stay for cause.

The Code's grant of exclusive jurisdiction over property does not prevent the Title III court from issuing relief from the stay so that a creditor can appoint a receiver in another forum.

http://media.ca1.uscourts.gov/pdf.opinions/17-2079P-01A.pdf

First Circuit: Peaje Investments LLC v. PR Highways and Transportation

Where plaintiff is asserting a lien interest claimed to be a statutory lien, court can strike claims arising from a lien that was perfected as a secured interest, so long as the claims are revisited if the lien is held to be non-statutory.

The creditor's interest, which arises under a resolution of the public utility authority pursuant to its organic act, is not a statutory lien, as the claim does not originate in an act of the legislature.

http://media.ca1.uscourts.gov/pdf.opinions/17-2165P-01A.pdf

Sixth Circuit: Linda Isaacs v. DBI-ASG Coinvestor Fund, III, LLC

Federal court cannot revisit state court foreclosure ruling holding that a facially problematic lien in fact attached, since vindicating the lien isn't barred by the shield of bankruptcy discharge; the discharge only protects from claims against the person.  Further, Rooker-Feldman prohibits lower federal courts from hearing a state-adjudicated claim even where there is explicit statutory jurisdiction.

As state law holds that a mortgage is valid even absent perfection, a claim that the lien was perfected in violation of the stay can provide grounds for subsequent avoidance, since a federal court's determination that the interest wasn't perfected does not contradict the state court's holding that the mortgage was valid.

Statutorily, the second trustee acquired the necessary powers; equitably, the debtor's ex post acquisition of the derivative powers of the second trustee was an appropriate flexible remedy.

Amicus had another idea, but the parties didn't raise it, so it wasn't considered.

http://www.opn.ca6.uscourts.gov/opinions.pdf/18a0145p-06.pdf

First Circuit: Fustolo v. The Patriot Group LLC

Deft was not put sufficiently on notice by allegation of discovery misconduct and issues during the trial to permit a post-trial amendment of the claim to include a misconduct penalty that would result in a partial denial of discharge.

http://media.ca1.uscourts.gov/pdf.opinions/17-1984P-01A.pdf

Ninth Circuit: Goudelock v. Sixty-01 Ass'n

Chapter 13 of the Act does not provide an exception to discharge for post-petition associational assessments.

http://cdn.ca9.uscourts.gov/datastore/opinions/2018/07/10/16-35384.pdf

Seventh Circuit: Illinois Department of Revenue v. First Community Financial Bank

Bankruptcy court did not err in valuing the state revenue department's lien against post-petition bulk sales by the executor at zero, as the amount is, in practice, subject to negotiation, and a foreclosure would void the interest.

http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2018/D07-09/C:17-2004:J:Rovner:aut:T:fnOp:N:2183203:S:0

Sixth Circuit: In re Chenault

Fact of sentence to parole doesn't state a claim of sufficient hardship for student loan debt discharge in bankruptcy.

http://www.opn.ca6.uscourts.gov/opinions.pdf/18b0010p-06.pdf

Eighth Circuit: Stephen McCormick v. Starion Financial

State judgments did not merge earlier secured claims; the provision for costs and fees in the precipitating liens therefore survived the reduction to the judgment, despite being barred under state law from inclusion in the judgments.

http://media.ca8.uscourts.gov/opndir/18/07/172192P.pdf

Fifth Circuit: Fallon Family, L.P. v. Goodrich Petroleum Corp.

Under state law, where a continuing contractual scheme of payments for a mineral lease is not reflected in the property's recordation, a party to the contract cannot exercise the power of dissolution against the debtor-in-possession counterparty otherwise liable for the pre-petition payments, as the latter has acquired the status of bona fide puchaser for value.

http://www.ca5.uscourts.gov/opinions/pub/17/17-20278-CV0.pdf

Fifth Circuit: Robert Furlough v. Lowell Cage

Owner of debtor corporation who was joined to a pendent civil suit does not have standing to challenge engagement of special counsel as veil-piercing expert in the bankruptcy suit on the basis that the appointee is affiliated with one of the creditors and would act in a manner adverse to the estate.

Standing is determined at the time of filing -- an after-acquired interest in the estate does not convert the plaintiff's interest to that of a creditor for purposes of standing.

[caveat -- quick work.  as always, entertainment purposes only.]

http://www.ca5.uscourts.gov/opinions/pub/17/17-20603-CV0.pdf

Tenth Circuit: Rodriguez v. FDIC

As now-bankrupt bank's contractual agreement with its now-bankrupt affiliated group is incredibly complex and ambiguous, the provision of the agreement mandating that any ambiguities be construed in favor of the bank means that there was only an agency relationship between the bank and the organization and the latter has no equitable title to the tax refund due the affiliated organization; the refund now belongs to the bank's FDIC receiver.

https://www.ca10.uscourts.gov/opinions/17/17-1281.pdf

Fifth Circuit: Franchise Svc of North America v. United States Trustee

As shareholder rights under the corporate charter are a matter of state law and the power of a corporation to invoke bankruptcy protection arises from local law, the federal public policy interest in assuring the bankruptcy proceeding does not preclude a shareholder from blocking the bankruptcy filing where that shareholder is also a creditor, so long as there is no evidence of bad faith in the acquisition of the blocking shareholder rights.

Whether the acquisition of such rights under the charter violates state law is not before the court, as the parties don't raise it here.

Simple acquisition of a controlling interest in a stock class is insufficient proof of corporate control for purposes of judging breach of fiduciary duty; blocking the filing is not per se proof of such control.

http://www.ca5.uscourts.gov/opinions/pub/18/18-60093-CV0.pdf

Eleventh Circuit: Sandra Slater v. U.S. Steel Corporation

Maintenance of inconsistent positions in civil litigation (e.g., not disclosing a suit for damages in a bankruptcy litigation) is not in itself making a sham of the judicial system; the court, when making such a determination, must consider the plaintiff/petitioner's sophistication and the conduct of the suit.

11.uscourts.gov/opinions/pub/files/201215548.op2.pdf

First Circuit: IRS v. Murphy

There is no good faith exception for willful violations of a bankruptcy stay; it suffices that the IRS knew of the stay and intentionally violated it.

With regard to the protection against willful violation, a stay offers the same protections as a discharge order.

This standard was contemplated at enactment, so the implied waiver of sovereign immunity is exactly parallel.

Dissent: presumption is against the waiver of sovereign immunity.  As "willful" modifies "violation," IRS must knowingly violate a valid stay or discharge.

http://media.ca1.uscourts.gov/pdf.opinions/17-1601P-01A.pdf

Seventh Circuit: USA v. Charlise Williams

No constitutional error where a court limits cross-examination on a peripheral issue designed to suggest bias and motive to lie, so long as the theory of the attack is made plain. 

No clear error in sentencing calculation of loss amounts that didn't take into account the lawfulness of claims asserted in the debt incurred during the fraud.

No error in sentencing calculation of number of victims by totalling the number of creditors stayed by each fraudulent petition.

http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2018/D06-06/C:17-2244:J:Flaum:aut:T:fnOp:N:2166680:S:0

Sixth Circuit: In re Blasingame

Trustee's sale of claim to a creditor operated as an assignment of claim under all theories of the claim; this removed the claim from the jurisdiction of the bankruptcy action.

A bankruptcy court's interpretation of its order assigning a claim to a creditor in exchange for value to the trustee is not a contract but an order, and is reviewed for abuse of discretion and not subject to clarification by extrinsic evidence.

http://www.opn.ca6.uscourts.gov/opinions.pdf/18b0009p-06.pdf

Ninth Circuit: Pacific-Western Bank v. Fagerdala

Purchase of a subset of claims in a class is not per se proof of bad faith; bankruptcy court must consider whether there is either an ulterior motive or a plan to injure the other creditors beyond enlightened self interest.


http://cdn.ca9.uscourts.gov/datastore/opinions/2018/06/04/16-35430.pdf

Eighth Circuit: Mary Hurst v. Southern Arkansas University

Bankruptcy


As payments can be made while maintaining a minimal standard of living, no discharge of student loan debt.

Dissent: Undue hardship under totality.


Mary Hurst  v.  Southern Arkansas University

DC Circuit: Sandra Marshall v. Honeywell Technology Systems

FRCP, Estoppel, Bankruptcy


District court summary judgments based in judicial estoppel are reviewed for abuse of discretion.

Here, as there little risk that the contradictory representations arose from inadvertence or mistake, there was no abuse of discretion.

Circuit split flagged on related question.


Sandra Marshall v. Honeywell Technology Systems

Ninth Circuit: MARTIN SMITH V. IRS

Bankruptcy, Taxes


Post-assessment tax form filing was insufficiently honest and reasonable to allow tax debt to be discharged in bankruptcy.


 MARTIN SMITH V. IRS