Zazzali v. United States (In re DBSI, Inc.), 869 F.3d 1004 (9th Cir. 2017) –
A chapter 11 trustee sought to recover a debtor’s prepetition tax payments to the federal government on the grounds that they were fraudulent transfers. The government moved to dismiss based on an argument involving sovereign immunity. The bankruptcy court denied the government’s motion; the district court affirmed; and the IRS appealed to the Ninth Circuit. Continue reading
Dz Bank Ag Deutsche Zentral-Genossenschaft Bank v. Meyer, 869 F.3d 939 (9th Cir. 2017)–
The debtors caused assets to be transferred out of a closely-held corporation. A bank creditor alleged that the indirect transfer constituted a fraudulent transfer, and as a result the creditor’s debt was non-dischargeable. The bankruptcy court agreed but limited the amount of non-dischargeable debt to the value of assets attributable to the creditor’s security interest. The district court took a different approach that precluded consideration of assets titled in the corporation absent a showing that the corporation was an alter ego of the debtors. The creditor appealed to the 9th Circuit. Continue reading
A Chapter 11 debtor sought to avoid a county’s prepetition personal property tax liens pursuant to section 545 of the Bankruptcy Code. The bankruptcy court ruled in favor of the debtor; the Bankruptcy Appellate Panel (BAP) affirmed; and the county appealed to the Ninth Circuit. Continue reading
Cowin v. Countrywide Home Loans, Inc. (In re Cowin), 864 F.3d 344 (5th Cir. 2017) –
Deed of trust holders sought to except debts from discharge in a debtor’s individual chapter 11 case on the grounds of debtor’s larceny, embezzlement, or willful and malicious injury. This was based on an alleged conspiracy to (1) strip their liens from property through tax lien foreclosure sales and (2) misappropriate excess foreclosure sale proceeds. The bankruptcy court found in favor of the deed of trust holders; the district court affirmed; and the debtor appealed to the Fifth Circuit. Continue reading
Melikian Enterprises, LLLP v. McCormick, 863 F.3d 802 (8th Circuit 2017) –
Individual chapter 11 debtors objected to a proof of claim filed by a deed of trust creditor for the deficiency remaining after a trustee’s sale of their property. The debtors contended that the creditor was not entitled to a deficiency claim because it did not comply with state law, while the creditor argued that the state requirements were not applicable. The bankruptcy court sustained the debtors’ objection; the district court affirmed; and the creditor appealed to the Eighth Circuit. Continue reading
The buyer of substantially all of the debtor’s real and personal property moved for an order confirming that the sale was “free and clear” of all liens and encumbrances, specifically including restaurant and telecommunication leases. The bankruptcy court ruled in favor of the buyer; the district court affirmed; and the tenants appealed to the 9th Circuit. Continue reading
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