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The Bankruptcy Appellate Panel vacated the bankruptcy court's order allowing Lariat's claim against debtor in the reduced amount of $308,805.00. The panel held that Lariat's predicate claim had been satisfied and Lariat cannot recover any additional amount from debtor's spouse. In this case, there were no preexisting creditor rights left for MINN. STAT. 513.41-513.51 to protect. Therefore, the panel remanded for entry of an order disallowing Lariat's claim in its entirety. View "Lariat Companies, Inc. v. Wigley" on Justia Law

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The Ninth Circuit certified the following question of bankruptcy law to the Supreme Court of California: Does the form of title presumption set forth in section 662 of the California Evidence Code overcome the community property presumption set forth in section 760 of the California Family Code in Chapter 7 bankruptcy cases where: (1) the debtor husband and non-debtor wife acquire property from a third party as joint tenants; (2) the deed to that property conveys the property at issue to the debtor husband and non-debtor wife as joint tenants; and (3) the interests of the debtor and non-debtor spouse are aligned against the trustee of the bankruptcy estate? View "Brace v. Speier" on Justia Law

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In 2014, Lane sold her residence to the Deans. They subsequently discovered mold and sued her. The state court submitted the dispute to binding arbitration. The arbitrator awarded the Deans $126,895.57. A Kentucky court entered judgment on the award. The Deans filed their judgment lien against Lane’s current residence in May 2017. Lane filed a voluntary chapter 13 petition in July, proposing to avoid the Deans’ judgment lien as impairing her exemption rights. The Deans filed an Objection, asserting that the judgment lien was not avoidable under 11 U.S.C. 522(f) and that, under section 1322(b), Lane was not entitled to “modify” their rights as holders of a claim secured by her residence. The Bankruptcy Court overruled the Objection and confirmed the Debtor’s Plan. The Deans did not appeal. In November, the Deans, as pro se creditors, filed a dismissal motion, which the court denied. The Sixth Circuit Bankruptcy Appellate Panel dismissed an appeal. The order denying the Deans’ motion to dismiss is not a final order and the record presents no grounds for granting leave to appeal under well-settled Sixth Circuit case law, even treating the pro se notice of appeal as a motion for leave to appeal under Federal Rule of Bankruptcy Procedure 8004(d). View "In re: Lane" on Justia Law

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This appeal stemmed from RPD's purchase of a patent license from multiple debtors in bankruptcy sales of their estates. Tech Pharm alleged that RPD did not have rights under the license to Tech Pharm's patented invention. The bankruptcy court held that RPD did not have rights and the district court agreed. The Fifth Circuit affirmed the district court's judgment and held that the patent license was a rejected executory contract and could not have been transferred by the bankruptcy sales in question. In this case, because the license agreement was an executory contract deemed rejected by operation of law, RPD could not and did not acquire the license from any of the Grapevine, Western Pennsylvania, and Waco estates—and no bankruptcy court order held otherwise. Finally, the court held that the bankruptcy court did not exceed its authority in addressing RPD's rights through purchase of the OnSite machines, and did not err in reading the license agreement to require that third parties operate OnSite machines in the same locations where they were placed at the time of sale. View "RPD Holdings, LLC v. Tech Pharmacy Services" on Justia Law

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The Bankruptcy Appellate Panel affirmed the bankruptcy court's judgment denying debtors' discharge under Bankruptcy Code 727(a). The panel held that debtors failed to maintain and preserve adequate records, and such failure made it impossible to ascertain their financial condition and material business transactions. Therefore, the trustee met his burden of proving that debtors' discharge should be denied under section 727(a)(3). View "Snyder v. Dykes" on Justia Law

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The period in which a creditor may execute on a lien constitutes the continuation of the original action that resulted in the judgment and is thus tolled during the automatic stay. The Ninth Circuit affirmed the bankruptcy appellate panel's decision reversing the bankruptcy court's grant of summary judgment for the trustee in an adversary proceeding brought by a judgment creditor. Before debtor filed for bankruptcy, creditor obtained an Order of Appearance and Examination (ORAP) lien encumbering debtor's personal property under California law. In this case, the creditor was unable to execute on her lien and she failed to renew it under state law. View "Daff v. Good" on Justia Law

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The Bankruptcy Appellate Panel affirmed the bankruptcy court's order dismissing plaintiffs' adversary complaint and an order denying their motion to reconsider the dismissal order. The panel held that plaintiffs failed to state a claim upon which relief can be granted under 11 U.S.C. 523(a)(19). In this case, a prior Consent Order requiring debtor to pay a fine and costs did not result in a debt owed to plaintiffs. Plaintiffs were not a party to or a signatory on the Consent Order and the debt to plaintiffs did not result from the Consent Order. View "Conway v. Heyl" on Justia Law

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Ritzen Group contracted to buy a piece of property from Jackson Masonry. The sale never went through. Ritzen claimed Jackson breached by providing error-ridden documentation on the eve of the closing deadline, while Jackson claimed Ritzen breached by failing to secure funding by that deadline. After the deal failed, Ritzen sued Jackson for breach of contract in Tennessee state court. The case progressed for nearly a year-and-a-half until Jackson filed for bankruptcy. As a result of the bankruptcy, the litigation was automatically stayed. Ritzen moved to lift the stay, which the bankruptcy court denied. Ritzen did not appeal, instead, brought a claim against the bankruptcy estate. The bankruptcy court found that Ritzen, not Jackson, breached the contract. Ritzen subsequently filed two appeals to the district court. The first targeted the bankruptcy court’s order denying relief from the automatic stay. The second targeted the breach-of-contract determination. The district court found that the first appeal was untimely and rejected the second on the merits. Ritzen appealed again. Finding no reversible error in the district or bankruptcy courts' judgments, the Sixth Circuit affirmed. View "Ritzen Group, Inc. v. Jackson Masonry" on Justia Law

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The Bankruptcy Appellate Panel affirmed the bankruptcy court's order disallowing debtor's claimed exemptions in his ex-wife's Wells Fargo 401K and an IRA account. The panel held that any interest debtor held in the accounts resulted from nothing more than a property settlement and thus they were not retirement funds that qualified as exempt under federal law. View "Lerbakken v. Sieloff and Associates, PA" on Justia Law

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At issue in this bankruptcy case was whether a defaulting subcontractor who has no contractual right to compensation is nonetheless entitled to an equitable recovery if the general contractor has benefited at the subcontractor’s expense. Insite, a bankrupt subcontractor, filed an adversary proceeding against Walsh, a general contractor, in bankruptcy court claiming that Walsh improperly withheld payments belonging to its bankruptcy estate. The bankruptcy court found the doctrine announced in Pearlman v. Reliance Insurance Co., 371 U.S. 132, 141-42 (1962), prevented Insite from gaining a property interest in the funds withheld by Walsh. The district court affirmed. The First Circuit vacated the judgment below and remanded, holding (1) the Pearlman doctrine did not address the primary issue in this case; and (2) while Insite was not due funds under its contract with Walsh, the bankruptcy and district courts must consider whether Walsh was benefited by Insite’s post-default performance in such a way that Insite had an equitable claim under Puerto Rico law. View "Insite Corp. Inc. v. Walsh Construction Co. Puerto Rico" on Justia Law