Chapter 7 Discharge: When Is In Rem Not In Rem?

In re Jackson 554 B.R. 156 (BAP 6th Cir. 2016)

At the request of a chapter 7 debtor, the bankruptcy court reopened his case and sanctioned the debtor’s condominium association for violating his discharge. On appeal the Bankruptcy Appellate Panel (BAP) reversed, finding an abuse of discretion. Continue reading

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Authorizing a Bankruptcy: When Is a Vote Not Really a Vote?

In re Intervention Energy Holdings, LLC, 553 B.R. 258 (Bankr. D. Del. 2016)

A creditor objected to the bankruptcy filing of a limited liability company on the basis that the filing was unauthorized. Specifically, under the LLC’s operating agreement unanimous approval of the common members was required and the vote was not unanimous. Continue reading

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Bankruptcy Sales: “Free and Clear” Is Not Necessarily a Free Pass

Encanto Restaurants, Inc. v. Luis S Aquino Vidal (In Re Cousins Int’l. Food Corp.), 553 B.R. 197 (Bankr. D. Puerto Rico 2016)) –

A Chapter 11 debtor sold two restaurants under a bankruptcy sale order that provided that the sale would be “free and clear” of interests. Subsequently judgment creditors sued the purchaser asserting successor liability for labor claims against the debtor arising in connection with the restaurant business. The purchaser and the debtor sought to enforce the sale order and enjoin the judgment creditors. Continue reading

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Ordinary Course Preference Defense: How Hard Can You Push to Get Paid?

Satija v. C-T Plaster, Inc. (In re Sterry Industries, Inc.), 553 B.R. 96 (Bankr. W.D. Tex.. 2016)

“Summers are hot in Texas, so pools are a hot item. But not hot enough to help a pool installer named Sterry avoid bankruptcy.” After the debtor filed bankruptcy, the chapter 7 trustee sought to recover payments made to a subcontractor shortly before bankruptcy as a preference. The subcontractor raised an “ordinary course” defense. Continue reading

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Bankruptcy Sales: Free and Clear Could Be Clearer

In re Love, 553 B.R. 54 (Bankr. D. S.C. 2016)

Chapter 13 debtors filed a motion seeking authority to sell 5 acres of real property free and clear of a mortgage covering the property. The mortgagee objected. Continue reading

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Subrogation: A Mortgagee May Be Able to Obtain Priority for Future Advances, But Don’t Count on It

Trampush v. United FCS (In re Trampush), 552 B.R. 817 (Bankr. W.D. Wisc. 2016)

Chapter 13 debtors sought a determination of the priority of two mortgages. A successor to the first mortgagee argued that the entire balance owed to it should be subrogated to the priority position of the first mortgage. Continue reading

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Foreclosure: Failure to Timely Record Sale Deed (Oops)

Cornell v Envoy Mortgage, Ltd. (In re Hosch), 551 B.R. 696 (Bankr. D. N.H. 2016)

A foreclosing mortgagee that was the successful bidder at the foreclosure sale delayed recording the sale deed. A chapter 7 trustee claimed that as a result lien rights asserted using his “strong-arm” powers had priority over any interests held by the mortgagee. Continue reading

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