Justia Bankruptcy Opinion Summaries

Three cases related to the Mexican reorganization of Vitro S.A.B. de C.V., a corporation organized under the laws of Mexico, were consolidated before the court. The Ad Hoc Group of Vitro Noteholders, a group of creditors holding a substantial amount of Vitro's debt, appealed from the district court's decision affirming the bankruptcy court's recognition of the Mexican reorganization proceeding and Vitro's appointed foreign representatives under Chapter 15 of the Bankruptcy Code. Vitro and one of its largest third-party creditors each appealed directly to the court the bankruptcy court's decision denying enforcement of the Mexican reorganization plan because the plan would extinguish the obligations of non-debtor guarantors. The court affirmed in all respects the judgment of the district court affirming the order of the bankruptcy court in No. 12-10542, and the court affirmed the order of the bankruptcy court in Nos. 12-0689 and 12-10750. The temporary restraining order originally entered by the bankruptcy court, the expiration of which was stayed by the court, was vacated, effective with the issuance of the court's mandate in Nos. 12-10689 and 12-10750. View "Ad Hoc Group of Vitro Noteholders v. Vitro S.A.B. de C.V." on Justia Law

This was a direct appeal from the bankruptcy court involving a dispute with contract vendors. The court held that the reservation language in the Reorganization Plan was sufficiently specific and unequivocal under In re United Operating, LLC. The court could not find, however, that the Litigation Trustee had standing to sue each of the appellees here. The Reservation Plan specifically carved out released claims. Accordingly, the Litigation Trustee lacked standing to bring, and the bankruptcy court was without jurisdiction to hear, any such claims. Therefore, the court vacated the bankruptcy court's order and remanded for further proceedings. View "Compton v. Aker Pusnes AS, et al" on Justia Law

Debtor executed a Balloon Note and Deed of Trust in favor of Wells Fargo for the purchase of a home and subsequently filed for bankruptcy. On appeal, Wells Fargo challenged the district court's amended order granting debtor's motion for summary judgment, finding that Wells Fargo was judicially estopped from filing a claim in the Second Bankruptcy for any amounts that could have been, but were not, claimed in the First Bankruptcy. Because the district court abused its discretion in finding that Wells Fargo adopted inconsistent positions in debtor's bankruptcy proceedings and that the bankruptcy court's acceptance of Wells Fargo's claims in the First Bankruptcy was not negated by debtor's dismissal without discharge, the application of judicial estoppel was not warranted. Accordingly, the court reversed and remanded. View "Wells Fargo Bank, N.A. v. Oparaji" on Justia Law

Countrywide appealed a class certification order of the bankruptcy court. Plaintiffs are former chapter 13 debtors with mortgages serviced by Countrywide. Plaintiffs claimed, among other things, that the fees Countrywide charged while plaintiffs' bankruptcy cases were still pending were unreasonable, unapproved, and undisclosed under Federal Rule of Bankruptcy Procedure 2016(a). Because the bankruptcy court's decision was not an abuse of discretion, the court affirmed its grant of class certification for plaintiff's injunctive relief claim. Because the court's precedence rejected the fail-safe class prohibition, the court concluded that the bankruptcy court did not abuse its discretion when it defined the class in the present case. Because the court concluded that Countrywide's Rule 59(e) motion for reconsideration was not based on newly discovered evidence, the court did not revisit the bankruptcy court's separate merits denial of the motion. View "Rodriguez, et al v. Countrywide Home Loans, Inc." on Justia Law

Debtor filed for bankruptcy under Chapter 13. After Debtor filed her petition and plan, the Trustee objected to confirmation of the plan, asserting that Debtor's petition and plan were not filed in good faith and that the amount of attorney's fees sought by Debtor was unreasonable. The bankruptcy court overruled the Trustee's objection and approved Debtor's Chapter 13 petition and plan and the requested legal fees and advanced legal costs. The district court reversed, finding that Debtor's plan was filed in bad faith. The Fifth Circuit Court of Appeals reversed the district court and affirmed the bankruptcy court, holding (1) it was not clearly erroneous for the bankruptcy court to find Debtor's plan was not an attempt to abuse Chapter 13 but rather a responsible decision given her particular circumstances, and thus, the district court erred when it reversed the bankruptcy court on the ground that Debtor's plan was filed in bad faith; and (2) the bankruptcy court did not abuse its discretion when it awarded $2,800 in attorney fees to Debtor's counsel. View "Sikes v. Crager" on Justia Law

At issue in this case was whether the Supreme Court's decision in Perdue v. Kenny A. ex rel Winn, which curtailed the authority of district courts to award fee enhancements in federal fee-shifting cases, unequivocally overruled the Fifth Circuit Court of Appeals' precedent in the bankruptcy arena. Here Debtors filed for chapter 11 bankruptcy protection. Debtors retained Appellee to assist in their restructuring process. After Debtors' bankruptcy plan was confirmed by the bankruptcy court, Appellee requested approval of a $1 million fee enhancement. The bankruptcy court denied the request because Appellee failed to satisfy the strict requirements of the Supreme Court's holding in Perdue. The district court reversed, holding that the bankruptcy court erred in treating the federal fee-shifting decision in Perdue as binding authority in a bankruptcy proceeding. On remand, the bankruptcy court awarded Appellee the $1 million fee enhancement. The Fifth Circuit Court of Appeals affirmed, holding that Perdue did not unequivocally, sub silentio overrule the Fifth Circuit's prior precedent. View "CRG Partners Group, LLC v. Neary" on Justia Law

The bankruptcy Trustee of MBS Management Services, Inc. (MBS), a management company for dozens of apartment complexes, appealed judgments rejecting his claim that payments made by the debtor to MXEnergy Electric, Inc (MX) to reimburse MX for supplying electricity to the complexes were avoidable preferences. The bankruptcy court and district court found that the payments were made on a "forward contract" expressly exempt from the Bankruptcy Code's preference provision. The Fifth Circuit Court of Appeals affirmed, holding that because the agreement was a forward contract within the meaning of 11 U.S.C. 546(e), and because expert testimony from the President and CEO of MX was admissible, the bankruptcy and district court's correctly rejected the Trustee's avoidance action. View "Lightfoot v. MXenergy Elec., Inc. " on Justia Law

Local telephone companies initiated twenty separate suits against Halo before ten state public utility commissions (PUCs) and Halo filed for bankruptcy as a result of this collective action. The telephone companies requested that the bankruptcy court determine that the various PUC actions were not subject to the automatic stay provided by the Bankruptcy Code at 11 U.S.C. 362(a), because they were excepted under section 362(b)(4), or that the bankruptcy court modify the automatic stay for cause, pursuant to section 362(d)(1). The court agreed with the bankruptcy court's holding that the exception to the automatic stay in section 362(b)(4) applied to the state commission proceedings, allowing the telephone companies to proceed with their litigation in the PUCs, but holding that the state adjudicative bodies could not issue any ruling or order to liquidate the amount of any claim against Halo, and that the bodies could not take any action that affected the debtor-creditor relationship between Halo and any creditor or potential creditor. View "Halo Wireless, Inc. v. Alenco Communications, Inc., et al." on Justia Law

Appellee commenced adversary proceedings against debtors, alleging that the debts owed to him were non-dischargeable pursuant to 11 U.S.C. 523(a)(2)(A) and (a)(2)(B). At issue was the proper construction of the phrase "respecting the debtor's...financial condition" as it appeared in sections 523(a)(2)(A) and (a)(2)(B). Because the court agreed with the bankruptcy court's interpretation and found no clear error in that court's determination that the debtors obtained an advance of money through actual fraud, the court affirmed the judgment. View "Bandi, et al. v. Becnel" on Justia Law

Plaintiff asserted federal claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq., and under 42 U.S.C. 1981, as well as a state-law claim for intentional infliction of emotional distress, asserting that his employer subjected him to racial discrimination. At the time plaintiff filed both his EEOC charge and his complaint initiating the instant case, plaintiff was a debtor in a Chapter 13 proceeding, having filed a petition for bankruptcy. The employer subsequently moved for summary judgment, arguing that plaintiff should be judicially estopped from pursuing his claims against the employer because he failed to disclose those claims to the bankruptcy court. The district court granted the motion, dismissing plaintiff's case, and plaintiff appealed. The court held that the district court did not abuse its discretion in applying judicial estoppel to plaintiff's claims after finding that plaintiff failed to create a fact issue regarding his purported inadvertence. Accordingly, the court affirmed the judgment. View "Love v. Tyson Foods, Inc." on Justia Law