Justia Bankruptcy Opinion Summaries

In entertaining defendants' Fed. R. Civ. P. 50(b) motion for judgment as a matter of law after a jury trial, the district court applied the filing deadline found in the Federal Civil Rules and thus found the motion timely. The court disagreed and held that when trying a case arising under title 11 of the United States Code, a district court (just like a bankruptcy court) must apply the filing deadline found in the Federal Rules of Bankruptcy Procedure when addressing a Rule 50(b) motion. The court vacated the district court's order granting defendants relief and remanded with instructions to reinstate the jury's award because, under the Federal Bankruptcy Rules, defendants' Rule 50(b) post-trial motion was untimely. Fed. R. Bankr. P. 9015 requires that such motions be filed no later than 14 days after entry of judgment. In this case, defendants filed their renewed motion 28 days after the entry of judgment. View "Rosenberg v. DVI Receivables XIV, LLC" on Justia Law

Debtor declared bankruptcy in 2011 and sought to discharge his federal income tax liability for tax years 2000 through 2003. Debtor had filed Forms 1040 for those tax years many years late, and only after the IRS had issued notices of deficiency and had assessed the amount of taxes he owed. The bankruptcy court determined that debtor's tax debts were nondischargeable and granted the government's motion for summary judgment. The court assumed, without deciding, that Congress did not intend to include filing deadlines when it required, in the hanging paragraph, that tax returns comply with “applicable filing requirements.” Even making that assumption, however, the court held that debtor's late-filed Forms 1040 do not qualify as tax returns under the Beard test because they do not evince an honest and reasonable effort to comply with the tax law. Consequently, debtor's tax debts for tax years 2000 through 2003 are debts for tax obligations with respect to which no return was filed, and they are not dischargeable in bankruptcy pursuant to 11 U.S.C. 23(a)(1)(B)(i). Accordingly, the court affirmed the judgment. View "Justice v. United States" on Justia Law

Twenty-one months after plaintiff filed an employment discrimination case against US Steel, she filed a Chapter 7 bankruptcy petition. When U.S. Steel learned of the bankruptcy case - that plaintiff's Chapter 7 petition had not disclosed the employment-discrimination claims she was pursuing and that the Chapter 7 Trustee was treating the bankruptcy as a “no asset” case and had filed a Report of No Distribution with the bankruptcy court - it moved the district court alternatively to dismiss the case or for summary judgment. The district court concluded that the doctrine of judicial estoppel as formulated in Burnes v. Pemco Aeroplex, Inc., and Robinson v. Tyson Foods, Inc., controlled its decision. The court concluded that New Hampshire v. Maine did not govern the district court's application of judicial estoppel in this case. Therefore, the court rejected plaintiff's argument that the district court erred in failing to give the New Hampshire factors appropriate weight and concluded that the district court did not abuse its discretion in barring her claims on the basis of judicial estoppel. Further, the court concluded that the district court did not err in applying Eleventh Circuit precedent, namely Burnes and Robinson, where the bankruptcy court in those cases accepted the debtor's failure to disclose as property of the bankruptcy estate claims the debtor was litigating in federal district court. Accordingly, the court affirmed the judgment. View "Slater v. US Steel Corp." on Justia Law

This appeal concerns whether a Georgia statute exempts the assets in a health savings account (HSA) from inclusion in a bankruptcy estate. The court certified the following questions to the Supreme Court of Georgia: (1) Does a debtor’s health savings account constitute a right to receive a “disability, illness, or unemployment benefit” for the purposes of O.C.G.A. 44-13-100(a)(2)(C)? (2) Does a debtor’s health savings account constitute a right to receive a “payment under a pension, annuity, or similar plan or contract” for the purposes of O.C.G.A. 44-13-100(a)(2)(E)? (3) Is a debtor’s right to receive a payment from a health savings account “on account of illness [or] disability” for the purposes of O.C.G.A. 44-13-100(a)(2)(E)? View "Mooney v. Webster" on Justia Law

This case stems from claims arising out of a dispute over the limited assets that remain from a tilapia farm investment in Nicaragua. Nica, the debtor in the underlying bankruptcy, held stock in Nicanor, the Nicaraguan fish farm. Plaintiff and a Norwegian firm, Biotec, owned the remaining shares of Nicanor. Defendant was the assignee for Nica's Assignment for the Benefit of Creditors (ABC). Defendant filed a voluntary Chapter 7 bankruptcy petition on Nica's behalf and plaintiff opposed the bankruptcy. Plaintiff's Adversary Proceeding against defendant was taken over by the Trustee and settled. Defendant removed plaintiff's state court action to Bankruptcy Court; the Trustee claimed the Adversary Proceeding as an asset of the estate and intervened as sole plaintiff; and the Trustee moved to settle it. In this appeal, the court rejected the equitable mootness argument because the court found that relief is still possible. However, the court concluded that absent explicit and plain authorization by the assignor, a Florida ABC assignee cannot initiate Chapter 7 bankruptcy proceedings. In this case, Nica deliberately selected an ABC as its preferred mode of liquidation and executed an agreement manifesting that intent, consistent with Florida law. Defendant had no authority to terminate the ABC by purporting to send Nica into bankruptcy. Accordingly, the court reversed and remanded. View "Ullrich v. Welt" on Justia Law