All posts in Case Briefs

Postconfirmation Subject Matter Jurisdiction of Bankruptcy Courts

A trend among Chapter 11 practitioners over the last ten years has been to use general provisions in the Plans of Reorganization they draft. They copy and paste these provisions in all their Plans, close their eyes and hope for the best.

One of those clauses is this “retention of jurisdiction” clause. Some practitioners have a bland one, “The Court shall retain jurisdiction to the maximum extent possible under the law.” To me, that means nothing. The problem is this clause is not helpful. It doesn’t tell the court specifically what it’s allowed to do and not allowed to do, inviting litigation over this issue before the merits are even considered!

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How Does the Sham Guarantor Defense Work?

Under California law, a lender may not pursue a deficiency judgment against a borrower where the sale of property securing a debt produces proceeds insufficient to cover the amount of the debt. Lenders may pursue deficiency judgments against guarantors, but only true guarantors. Where the borrower and the guarantor are the same, however, the guaranty is considered an unenforceable sham.

The first set of antideficiency laws were enacted during the Great Depression. They prohibited lenders from obtaining personal judgments against borrowers where the lender’s sale of real property security produces proceeds insufficient to cover the amount of the debt. These laws were expanded beginning on January 1, 2013 in response to the bursting of the housing market bubble.

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What’s Not a Claim In Bankruptcy?

Before joining his firm, I visited Professor Hayes’ Bankruptcy class which he teaches at the University of West Los Angeles. The topic of the day was “claims.”  As we parsed through the case law, I gave the students a hint, if there is any question whether something is a claim, it’s a claim! In fact, I couldn’t think of something that wasn’t a claim! Read more…

Great Quote from In re Sullivan, new 9th Circuit BAP Bad Faith Case

“Many are the judgment creditors who gnash their teeth (metaphorical or otherwise) in chagrin when their collection campaign is stayed by a bankruptcy filing.  Only slightly less frequent are the immediate post-filing threats that no quarter will be given.  Such jeremiads, however, are not a sufficient basis for a universal conclusion of plan futility.  And they certainly do not unequivocally establish the debtor’s bad faith.  Economic considerations and rationality often result in resolution.”

In re Sullivan, —BR —, (9th Cir BAP, Dec 2014)

In Sullivan, the bankruptcy court dismissed the filing as a two party dispute with no hope of ever getting a plan confirmed.  The BAP reversed.  Credit bankruptcy attorney Sean O’Keefe for the great work.

SFVBA October 16 Noontime Program on 9th Cir. Bankruptcy Opinions with counsel and Judge Ahart

SFVBA October 16 Noontime Program on 9th Cir. Bankruptcy Opinions with counsel and Judge Ahart

On Thursday, October 16, 2014, starting at 12 noon sharp, the Bankruptcy Section of the San Fernando Valley Bar Association will present a program on 9th Circuit bankruptcy opinions from the past year. The panelists are Judge Ahart, Ray Aver and Gregory Salvato.

The program is important because none of us can keep up with the opinions issued by the 9th Circuit. Many important opinions will be covered by the panelists. The program materials are substantial. As always, the panelists will take questions and comments during the program.

The program charge (which includes the program, the materials and lunch) is inexpensive:

Member $30.00

Non-Members $40.00

Member at Door $40.00

Non-Member at Door $50.00

Government rate – contact me. It’s real cheap.

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July 19, 2014 – CDCBAA – In re Bellingham

On July 19 the Central District Consumer Bankruptcy Attys (cdcbaa) will hold our First Annual James T. King Bankruptcy Symposium. The topic is In re Bellingham, the new Supreme Court case dealing with core/non-core distinctions and the power of Congress to give power to non-Article III Judges (as you all know).

The panel will be Judge Richard Paez who wrote the opinion for the 9th Circuit Court of Appeals that was appealed to the Supreme Court; Prof. John Pottow from the University of Michigan School of Law who argued the case successfully for the appellees at the Supreme Court. He is really a fun guy to listen to. And Judge Meredith Jury who sits on the BAP and follows these issues carefully. I will be the moderator and try to stay out of their way.

Besides Bellingham, there will be some discussion generally about appeals process. This is really an exceptional panel!

The program will be at Southwestern Law School on July 19 from 11am to 1pm and will be free to members of cdcbaa as always. We will permit non-members to attend for $95. We will invite the local judges as well.

ONE PROBLEM. The room holds only 130 persons and the law school is adamant that we not permit more than that many to attend.

So we are going to require RSVPs. There is a button on the cdcbaa website for the program to RSVP – www.bklawyers.org. We will cut it off when it gets to 130 persons. So please go to the website and RSVP if you want to attend. You can pay the $95 fee on that website as well. We will allow persons who have not been members of the cdcbaa for the past 3 years to join for the rest of the year 2014 now at the reduced price of $175.00 which includes the Ashland Dinner, this program and the two remaining programs for the year.

Our administrator is Linda Righi at cdcbaa@aol.com.

July 19, 2014 – First Annual James T. King Bankruptcy Symposium – In re Bellingham: From the Insiders

July 19, 2014
First Annual James T. King Bankruptcy Symposium 

In re Bellingham:  From the Insiders
Judge Richard Paez
9th Circuit Court of Appeals
(Wrote the 9th Circuit Opinion appealed to the Supreme Court)
Judge Meredith Jury
Bankruptcy Court – Riverside Division
Prof. John Pottow, University of Michigan
(Argued for the Appellees at the Supreme Court)
Moderated by M. Jonathan Hayes
Where:
Southwestern Law School
3050 Wilshire Boulevard
Westmoreland Building – 3rd Floor
Los Angeles, CA 90010  

Civil Conspiracy to Commit Fraud is Non-Dischargeable Fraud says 9th Cir BAP

In In re Brown, a state court found that one Diana Williams committed fraud and that the debtor “collaborated in a civil conspiracy and joint venture from which [the debtor] benefited at Plaintiff’s expense.”   Judge Barry Russell ruled that the state court judgment established non-dischargeable fraud against the debtor and the BAP, in an unpublished opinion, agreed.

The BAP said,

“[G]iven the findings in the State Court Judgment, an exception to discharge is appropriate based upon the imputation of Williams’ fraud to [the debtor] under the test announced in In re Huh.  In concluding that [the debtor] participated in a civil conspiracy under California law, the state court necessarily concluded that [the debtor] collaborated with Williams to defraud the Appellees and, thus, that [the debtor] ‘knew or should have known’ of Williams’ wrongdoings.”

An important side note is that Judge Russell told the debtor at the status conference that he was”bound” by the state court decision and essentially had no choice.  The BAP notes that collateral estoppel is not mandatory but says that Judge Russell’s comments did not really suggest that he believed he actually had no choice.

The link to the opinion is here.  

July 19, 2014 – In re Bellingham: From the Insiders

Cdcbaa Program July 19, 2014

First Annual James T. King Bankruptcy Symposium

In re Bellingham: From the Insiders

Judge Richard Paez
9th Circuit Court of Appeals
(Wrote the 9th Circuit Opinion appealed to the Supreme Court)

Judge Meredith Jury
Bankruptcy Court – Riverside Division

Prof. John Pottow, University of Michigan
(Argued for the Appellees at the Supreme Court)

Moderated by M. Jonathan Hayes

4/29/2014 – San Fernando Valley Bar Association – Section 523(a)(4) Bullock Update Program

In Bullock v. BankChampaign, N.A., 133 S. Ct. 1754 (2013), the Supreme Court resolved a split among the circuits concerning whether a “culpable state of mind” was required in order to come within the “defalcation” exception of § 523(a)(4) and whether such a state of mind was required in order to fall within the exception.

The San Fernando Valley Bar Association is presenting a panel discussion on §523(a)(4) and an update on the Supreme Court’s opinion in Bullock. You are invited to sign up and to attend the panel discussion.

As always, the discussion will be enlightening and informative.  One judge sitting at the Woodland Hills Bankruptcy Court has committed to attending the program, subject to unexpected calendar issues.

Here are the particulars for the program:

San Fernando Valley Bar Association
Attention: Linda Temkin
5567 Reseda Blvd., Ste 200
Tarzana, CA 91356
(101 Freeway at Reseda Blvd.)
Telephone (818) 227-0490 ext.105
Facsimile (818) 227-0499
E-mail: events@sfvba.org

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