Justia Bankruptcy Opinion Summaries

The trustee for PCI and eight associated special-purpose entities (SPEs) filed Chapter 11 bankruptcy petitions in the aftermath of Thomas Petters' Ponzi scheme. The bankruptcy court consolidated the bankruptcy estates of PCI and the SPEs “for all purposes substantive and administrative.” Lenders to PCI and the SPEs appealed. The district court dismissed, holding the Lenders did not have standing to appeal the consolidation order because they were not “persons aggrieved.” The court concluded that the district court did not abuse its discretion in declining to estop the trustee from asserting that the Lenders are not persons aggrieved; having held that the persons aggrieved doctrine survives the 1978 amendments to the Bankruptcy Code, the court declined to reconsider the doctrine; and the district court did not err in dismissing the Lenders under the persons aggrieved doctrine. In this case, the Lenders’ interests here are not central to the bankruptcy process, and allowing them to appeal the bankruptcy court’s order would completely undermine the rationale behind the standard and bring bankruptcy proceedings to a grinding halt. Accordingly, the court affirmed the judgment. View "Opportunity Finance, LLC v. Kelley" on Justia Law

Debtors Mathew and Marilynn held title to real property as joint tenants with Marilynn's parents. After debtors filed for bankruptcy, and Marilynn's parents died, the Trustee notified debtors that he intended to sell the real estate and a pickup truck Marilynn and her father owned as joint tenants. The Trustee maintained that the right of survivorship made the bankruptcy estate the sole owner. The court concluded that the Bankruptcy Appellate Panel did not err in affirming the sale of the real property and pickup because the joint tenancies remained intact through creation of the bankruptcy estate and therefore the bankruptcy estate included the joint tenancies. Accordingly, the court affirmed the judgment. View "Peet v. Checkett" on Justia Law

WEB2B filed for bankruptcy and turned over its balances to the Chapter 7 trustee. RAC filed suit claiming the balances of an express trust, resulting trust, or constructive trust. WEB2B provided automated clearinghouse and electronic-check conversion services to RAC. The bankruptcy court dismissed RAC's claims and granted summary judgment to the trustee. The court affirmed the district court's affirmance of the bankruptcy court's decision, concluding that the parties' processing agreement had no requirement to segregate RAC funds, nor a definite, unequivocal, explicit declaration of trust. Therefore, there was no express trust in this case. The district court did not err in concluding that the undisputed facts here do not show with reasonable certainty or beyond a reasonable doubt that a resulting trust exists. Finally, the district court properly concluded that RAC had identified no clear and convincing evidence of conversion sufficient to justify imposing a constructive trust on the remaining funds. View "Rent-A-Center East, Inc. v. Leonard" on Justia Law

Plaintiff filed suit against defendants, alleging employment discrimination and retaliation in violation of federal laws. The district court granted summary judgment in favor of defendants. The court agreed with the district court that plaintiff's failure to disclose her claims in her Chapter 13 bankruptcy proceedings judicially estopped her from pursuing them. Accordingly, the court affirmed the judgment. View "Van Horn v. Martin" on Justia Law

Debtors appealed the Bankruptcy Appellate Panel's (BAP) holding that Starion Financial is entitled to recover the attorney's fees it incurred while collecting on its secured debt in the course of debtors' proceedings. The BAP remanded to the bankruptcy court. The court dismissed the appeal for lack of jurisdiction because resolution of the timeliness and reasonableness of the fee application affect the merits of the underlying dispute over the fee request and thus the bankruptcy court on remand is left with more than a "purely mechanical or ministerial task." View "Starion Fin. v. McCormick" on Justia Law

Plaintiff filed suit against his employer, Bob Evans, alleging employment discrimination in violation of federal and Missouri law. The district court granted summary judgment in favor of Bob Evans. The court concluded that the district court did not abuse its discretion in applying judicial estoppel to bar plaintiff's claims where, pursuant to the New Hampshire v. Maine factors, plaintiff took inconsistent positions between his bankruptcy case and this case; the bankruptcy court, by discharging plaintiff's unsecured debts, adopted the position that his discrimination claims did not exist; and plaintiff could have derived an unfair advantage in the bankruptcy proceedings by concealing his claims. Accordingly, the court affirmed the judgment. View "Jones v. Bob Evans Farms, Inc." on Justia Law

O&S challenged the Bankruptcy Appellate Panel's (BAP) dismissal of its appeal after the bankruptcy court confirmed a reorganization plan proposed by O&S. The BAP concluded that O&S did not have standing to challenge the bankruptcy court’s order confirming its proposed plan. The court found that, in light of the strong policy favoring finality in bankruptcy proceedings, the language in the confirmed plan was not sufficient to reserve O&S’s right to appeal from the plan confirmation or to place the bankruptcy court and creditors on notice that O&S would seek such relief. Accordingly, the court concluded that the BAP correctly held that O&S failed to carry its burden to demonstrate standing. The court affirmed the judgment. View "O&S Trucking, Inc. v. Mercedes Benz Fin. Serv." on Justia Law

Creditor appealed the bankruptcy court's order granting debtor's motion to avoid its judgment lien. Creditor concedes that its judgment lien attached to the residence, but argues that its judgment lien did not fix upon debtor’s tenant by the entirety property interest in the residence, because debtor did not have an interest to which its judgment lien could fix. The panel concluded that, under Missouri law, even if it conceded that the residence was not subject to Creditor’s lien and that the lien was therefore unenforceable, the panel would still find that an unenforceable judgment lien arose, so that it is possible for debtor to avoid it under 11 U.S.C. 522(f). Further, even if the docketing and registration of Creditor’s judgment lien did not attach an enforceable judgment lien to the residence, at a minimum, the judgment lien creates a cloud on the title to the residence. View "CRP Holdings A-1, LLC v. O'Sullivan" on Justia Law

Debtor appealed the bankruptcy court's order denying her discharge for failure to list a number of assets and prepetition transfers in her bankruptcy schedules pursuant to 11 U.S.C. 727(a)(4)(A). The Bankruptcy Appellate Panel affirmed the bankruptcy court's judgment, concluding that the bankruptcy court did not clearly err in finding that debtor's omissions were made with reckless indifference to the truth and therefore were intentionally false and fraudulent. In this case, debtor, a bookkeeper for several businesses and nonprofits, failed to truthfully answer specific questions necessary to complete a picture of her assets and liabilities. View "Home Service Oil Co. v. Cecil" on Justia Law

Debtor appealed the bankruptcy court's decision finding that some, but not all, of her student loan obligations to NCT are nondischargeable. The court concluded that the bankruptcy court did not clearly err in its fact findings for the time period analyzed. In this case, the time period the bankruptcy court used was the most recent time period for which it had complete income and expense figures. Finally, the bankruptcy court did not abuse its discretion in denying debtor's motion to make additional findings and amended the judgment. Accordingly, the court affirmed the judgment. View "Conway v. National Collegiate Trust" on Justia Law