Claiming Insurance Proceeds: Watch for State Law Twists and Turns

Posted on November 1, 2017 by BankruptcyRealEstateInsights

Park Restoration, LLC v. Erie Insurance Exchange (In re Trustees of Conneaut Lake Park, Inc.), 855 F.3d 519 (3rd Cir. 2017) –

When the debtor’s property was destroyed by fire, the insurance company applied the insurance proceeds first to delinquent property taxes based on a state statute. The company that managed and insured the property objected on several grounds. The bankruptcy court ruled that the proceeds were properly applied to the delinquent taxes, and the management company (not the debtor) was entitled to the balance. The district court agreed that the management company was entitled to the insurance proceeds, but concluded no portion of the proceeds should be applied to the delinquent taxes. The tax authorities appealed to the Third Circuit. Continue reading →

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Stale Debt and the FDCPA: Unenforceable Does Not Necessarily Mean No Payment

Posted on October 25, 2017 by BankruptcyRealEstateInsights

Midland Funding, LLC v. Johnson, ___ U.S. ____, 137 S. Ct. 1407, 197 L. Ed. 2d 790 (2017) –

The question before the court was whether filing a bankruptcy proof of claim for a debt where the limitations period has run was a prohibited practice under the Fair Debt Collection Practices Act (FDCPA). Specifically, would the debt collector be making a “false, deceptive, or misleading representation,” or using an “unfair or unconscionable means” to collect the debt? Continue reading →

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Non-Recourse Loan Redux: Turning into Recourse and Back Again

Posted on October 18, 2017 by BankruptcyRealEstateInsights

Mastan v. Salamon (In re Salamon), 854 F.3d 632 (9th Cir. 2017) –

A deed of trust creditor filed a claim in a Chapter 11 case contending that its nonrecourse loan was entitled to treatment as a recourse loan under section 1111(b) of the Bankruptcy Code. The bankruptcy court ruled against the creditor, agreeing with the debtors that the claim was barred by a state anti-deficiency statute. The bankruptcy court decision was affirmed by the 9th Circuit Bankruptcy Appellate Panel (BAP), and the creditor appealed to the 9th Circuit. Continue reading →

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Automatic Stay: Beware State Specific Quirks When Filing Liens

Posted on October 11, 2017 by BankruptcyRealEstateInsights

In re Linear Electric Co., 852 F.3d 313 (3rd Cir. 2017) –

After a general contractor filed bankruptcy, two of its suppliers filed construction liens against property of owners who had contracts with the contractor. The debtor sought a determination that this violated the automatic stay. The bankruptcy court concluded that the stay was violated; the district court affirmed; and the suppliers appealed to the Third Circuit. Continue reading →

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Lease Claims: Exactly How Does the Cap Work?

Posted on October 4, 2017 by BankruptcyRealEstateInsights

Kupfer v. Salma (In re Kupfer), 852 F.3d 853 (9th Cir. 2016) –

The controversy before the 9th Circuit involved interpretation of the cap on landlord claims under section 502 of the Bankruptcy Code. Prior to bankruptcy the leases in question had been terminated and were the subject of arbitration. The debtors claimed that the arbitration fees and attorney fees awarded to the landlords were subject to the cap. The bankruptcy court, as affirmed by the district court, held that the fees were not capped.
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Post-Confirmation Bankruptcy Sale Matters: Will the Bankruptcy Court Be Willing and Able to Referee?

Posted on September 27, 2017 by BankruptcyRealEstateInsights

Emerald Capital Advisors v. Karma Automotive LLC (In re FAH Liquidating Corp.), 567 B.R. 464 (Bankr. D. Del. 2017) –

The trustee of a liquidating trust established under a plan of reorganization brought an action against a purchaser to enforce the terms of the plan and asset purchase agreement. The purchaser moved to dismiss on the basis that the bankruptcy court did not have continuing post-confirmation jurisdiction, or alternatively asked the court to abstain. Continue reading →

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