First State Bank of Roscoe v. Stabler

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The Eighth Circuit affirmed the district court's judgment affirming a bankruptcy court order holding the Bank and its president in contempt and sanctioning them for violating a final bankruptcy discharge injunction. The court noted that it employed a flexible and pragmatic approach when assessing the preclusive effect of a court's order and held that the bankruptcy court did not issue a ruling that would have preclusive effect. The court held that, while post-discharge forbearance may serve as consideration for a new commitment to repay the present value of a lien, no cases suggested that a lienholder could leverage a security interest to obtain a larger repayment commitment, much less a larger commitment representing a discharged personal debt. Therefore, the district court did not err in finding that the Bank and its president were in contempt for violating a final bankruptcy discharge injunction. View "First State Bank of Roscoe v. Stabler" on Justia Law