Delinquent Property Tax Procedures: To Stay or Not to Stay

In re Administrative Order Regarding Sale of Tax Certificates by Florida Tax Collectors, FLMB 2018-1, 583 B.R. 794 (Bankr. M.D. Fla. 2018) –

In response to repeated requests for comfort orders, a bankruptcy court issued a district wide administrative order confirming that the automatic stay did not apply to the post-petition sale of tax certificates for delinquent property taxes owed on property owned by a debtor in bankruptcy. Continue reading

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Preferences: Judgment Creditors May Find Themselves Exposed Given the Nature of Judgment Liens

Karim v. Bayview Loan Servicing, LLC (In re Karim), 582 B.R. 193 (Bankr. N.D. Ill. 2018) –

Chapter 11 debtors sought to avoid prepetition transfers to a judgment creditor as preferences. The debtors received a check in connection with the sale of real estate. The judgment creditor asserted a statutory lien and then obtained a state court order requiring the debtors to turn over the check to the creditor. Continue reading

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Who Gets to Keep the Money: Sometimes Procedural Arguments Can Matter as Much as Substantive Arguments

Allison v. Centris Fed. Credit Union (In re Tri-State Financial, LLC), 885 F.3d 528 (8th Cir. 2018) –

A Chapter 11 trustee brought a proceeding to determine ownership of ~$1.2 million. Initially the bankruptcy court held that the funds were not property of the bankruptcy estate. After an appeal, a remand, a change in judges, a new opinion, and further appeals, the case ended up before the Eighth Circuit. In addition to the substantive issue, the procedural issues relating to the extent to which a judge may revisit decisions made earlier in the case became a focal point. Continue reading

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Bad Faith Filing: A Debtor’s “Business” Must Consist of More Than Litigating with the Mortgagee

In re Encore Prop. Mgmt. of Western N.Y., LLC, 585 B.R. 22 (Bankr. W.D. N.Y. 2018) –

A mortgage lender moved to dismiss a chapter 11 case on the grounds that it was filed in bad faith. This was the second time the debtor filed bankruptcy on the eve of a foreclosure sale. The mortgagee was previously successful in moving for dismissal of the first case for bad faith. Continue reading

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Covenants Running with the Land: To Be or Not to Be a Claim

American Std. Energy, Corp. v. Geronimo Holding Corp. (In re Geronimo Holding Corp.), 585 B.R. 138 (Bankr. W.D. Tex. 2017) –

An assignment of a group of oil and gas leases required the debtor to reconvey the leases upon termination of the assignment. Shortly after a plan of reorganization was confirmed the assignor sued the debtor in state court for a declaratory judgment regarding the leases. In response the debtor filed an adversary proceeding in bankruptcy court contending that it owned the leases and the assignor violated a discharge injunction by filing the state court action. Continue reading

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Defective Mortgages: Variations on a Theme

Harker v. PNC Mtg. Co. (In re Oakes), 581 B.R. 500 (6th Cir. B.A.P. 2018) –

A chapter 7 trustee sought to avoid a recorded mortgage with a defective acknowledgment using his strong arm powers. The bankruptcy court ruled in favor of the trustee, and the mortgagee appealed to the Bankruptcy Appellate Panel (BAP). Continue reading

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Interests Held by the Bankruptcy Estate: Can Contingent Interests Go Poof?

Reinbold v. Thorpe (In re Thorpe), 881 F.3d 536 (7th Cir. 2018) –

A chapter 7 trustee sought to avoid the interest of a debtor’s wife in property that was awarded to her in a state court divorce proceeding. This decision turned on the nature of the interest that became part of the bankruptcy estate. Continue reading

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