Justia Bankruptcy Opinion Summaries

The primary issue in this Chapter 7 bankruptcy case was whether the United States Bankruptcy Appellate Panel for the Tenth Circuit had jurisdiction to review on "order for relief" entered by a bankruptcy judge for the District of Delaware. The Delaware judge entered the order after venue was transferred to the District of Colorado. The parties agreed that the order should be vacated on the ground that it is void because it was issued after the transfer was complete. However, the Tenth Circuit Bankruptcy Appellate Panel concluded that it did not have jurisdiction because the governing statute provides that an appeal of a decision by a bankruptcy judge "shall only be taken only to the district court for the judicial district in which the bankruptcy judge is serving." Upon review, the Tenth Circuit Court of Appeals agreed with the Tenth Circuit Bankruptcy Appellate Panel and affirmed its decision.

"The Dawses' struggle with the IRS has a lengthy provenance." Decades ago, Donald and Phyllis Dawes pled guilty for failing to file their 1981 through 1983 tax returns. They also failed to pay their taxes from 1986 through 1988, and 1990. All this led to the IRS to seek and win a declaratory judgment that the Dawses fraudulently conveyed certain assets in an effort to avoid their creditors and that those conveyances were null and void. The IRS proceeded to execute this judgment to take possession of these assets, but before it could do so, the Dawses filed for Chapter 12 bankruptcy protection. "And that brings us to the latest installment of this epic": with permission of the bankruptcy court, the Dawses sold several tracts of land. The sale created income tax liabilities. The Dawses submitted a bankruptcy reorganization plan in which they proposed to treat their newly incurred tax liabilities as general unsecured claims. The IRS opposed the plan "vigorously" but was unsuccessful at the bankruptcy and federal district court. The IRS brought its complaint to the Tenth Circuit, asking to "undo its earlier losses." Upon careful consideration of the lengthy record below, the Tenth Circuit found that the taxes at issue here were incurred by the Dawses after they petitioned for bankruptcy. "So it is that the Dawses must pay the tax collector his due." The post-petition income tax liabilities at issue were not eligible for treatment as unsecured claims under the Bankruptcy Code. The Tenth Circuit reversed the lower courts’ decisions and remanded the case for further proceedings.

This appeal asks whether the bankruptcy court correctly determined that an operating agreement between the Debtor C.W. Mining Company (CWM) and Appellant C.O.P. Coal Development Company (COP) was property of the debtor's bankruptcy estate, and could therefore be sold off by the trustee. Appellant claims that the agreement automatically terminated shortly after the bankruptcy petition was filed, and that the bankruptcy court erred in including it. The terms of the operating agreement provided that it should cancel should CWM default on its payments to COP before the close of business on January 8, 2008. On that day, at 3:36PM, an involuntary bankruptcy petition was filed against CWM in bankruptcy court. CWM argued to the bankruptcy court that the operating agreement automatically terminated with the filing of the bankruptcy petition, but the court disagreed. The trustee assumed the operating agreement and sold mine assets. This Court affirmed the lower court's decision, finding that the operating agreement did not automatically terminate, and could be sold by the bankruptcy trustee.

Plaintiff-Appellant Mauerhan and the Chapter 7 Bankruptcy Trustee brought suit against Mauerhan's former employer Defendant-Appellee Wagner Corporation alleging a violation of the Americans with Disabilities Act (ADA). The lower court granted Defendant's motion for summary judgment, and Plaintiffs appealed. Mauerhan had tested positive for drug use and was fired from Defendant's employ, but was told he may return if he was able to complete a rehabilitation program. Mauerhan completed the program, but Defendant's job duties and compensation would be less than what it previously had been. Mauerhan declined Defendant's offer. Later that year, Mauerhan filed for Chapter 7 bankruptcy, and received a discharge of his debts by the end of the year. After filing for bankruptcy, but before the case was closed, Mauerhan learned that he had a viable claim of discrimination against Defendant under the ADA, and filed it with the EEOC. The Bankruptcy Trustee learned of the claim, and moved to amend Mauerhan's bankruptcy petition to include the claim in the bankruptcy estate. The lower court found that Mauerhan had only abstained from drugs for one month, too short to receive protection from the ADA at the time Mauerhan asked to be rehired. On appeal, this Court upheld the lower court's grant of summary judgment.

The debtors obtained confirmation of a Chapter 13 plan. The trustee sought dismissal because of their recalcitrance; they willfully failed to comply with an order requiring monthly reporting of income. The debtors converted to Chapter 7. The bankruptcy court denied discharge. The district court and Tenth Circuit affirmed. A Chapter 13 confirmation order is a lawful order of a court and pre-conversion misconduct justifies denial of discharge. The court interpreted a statutory reference to "the case" as referring to both the pre- and post- conversion proceedings.