Justia Bankruptcy Opinion Summaries

Articles Posted in US Court of Appeals for the Eighth Circuit

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The Bankruptcy Appellate Panel reversed the bankruptcy court's grant of the Banks' motion for summary judgment challenging the validity of the other parties' liens and asserting the priority of its own lien in debtor's 2017 crops. In this case, it was difficult to determine from the record precisely what the bankruptcy court considered in reaching its conclusion that no genuine issues of material fact existed which would preclude it from granting the Bank's motion for summary judgment, or the analysis the bankruptcy court undertook. Accordingly, the panel remanded for further findings pursuant to Federal Rule of Civil Procedure 56(a)'s directive to specify the reasons for its ruling, or in the alternative, to reconsider the issue on the existence of the Solberg Farms partnership. View "Zaitz Trust, LLC v. Bremer Bank, NA" on Justia Law

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The Bankruptcy Appellate Panel affirmed the district court's dismissal of the Committee's appeal of the bankruptcy court's confirmation of debtors' voluntary reorganization plan. The panel held that the bankruptcy court did not err in determining that debtors' plan satisfied the equal-treatment rule and was proposed in good faith. In this case, the right to participate in the private placement was not "treatment for" a claim under 11 U.S.C. 1123(a)(4); the right to participate in the private placement was consideration for valuable new commitments; and thus the plan did not violate the equal-treatment rule. The panel also held that, despite any reservation the panel might have regarding the good faith question, it has not been left with a definite and firm conviction that a mistake has been committed. View "Ad Hoc Committee of Non-Consenting Creditors v. Peabody Energy Corp." on Justia Law

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The Bankruptcy Appellate Panel affirmed the bankruptcy court's entry of summary judgment in favor of the bankruptcy trustee. The Bank challenged whether the terms of the judgment were fulfilled in transferring debtor's ex-wife's interest to debtor. The panel held that there was no genuine issue of fact regarding debtor's divorce which resulted in the trustee's ability to rely upon the judgment as a purchaser for value. Even if the bank was successful on this point, it would not serve to repair the defect in its mortgage. In this case, the state court determined that debtor would retain the real estate that was already titled in his name, and the only interest the ex-wife held was her marital interest which vested upon dissolution of the marriage. View "Kunkel v. CUSB Bank" on Justia Law

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The bankruptcy trustee filed suit against parties involved in the sale of a bankruptcy estate's assets under 11 U.S.C. 363. The Eighth Circuit affirmed the bankruptcy appellate panel's decision affirming the bankruptcy court's dismissal of the trustee's claims and denial of leave to amend the second amended complaint (SAC). The court held that the trustee's claims were impermissible collateral attacks on an earlier order approving the sale in bankruptcy that was consummated under section 363. In the alternative, the trustee was not entitled to relief from the sale order, because the amended complaint failed to state a plausible claim for fraud on the court. The court also held that the trustee was not entitled to relief from the sale order under Federal Rule of Civil Procedure 60, and the district court properly denied leave to amend the complaint based on futility. View "Fulmer v. Fifth Third Equipment Finance Co." on Justia Law

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The Bankruptcy Appellate Panel affirmed the bankruptcy court's orders dismissing debtor's adversary proceeding and denying his post-dismissal motion. The panel held that the bankruptcy court properly dismissed debtor's adversary proceeding as a collateral attack on prior rulings. In this case, the post-dismissal motion repeated the same arguments already made by debtor. View "Raynor v. Walker" on Justia Law

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The Bankruptcy Appellate Panel affirmed the bankruptcy court's order directing the entry of judgment in favor of defendants on plaintiffs' complaint to determine the dischargeability of their claims against defendants. In this case, plaintiffs' appeal was premised on the bankruptcy court's perceived error in not giving preclusive effect to the state court default judgment. However, the court held that the issue was no longer before the bankruptcy court despite the bankruptcy court's passing reference to the state court default judgment. Therefore, the panel did not reach either of the issues raised by plaintiffs. The panel held that, by withdrawing their motion for partial summary judgment and submitting the matter to the bankruptcy court on an agreed record–without renewing their claim that the state court default judgment should be given preclusive effect–plaintiffs abandoned that claim. View "Abel v. Queen" on Justia Law

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The Bankruptcy Appellate Panel affirmed the bankruptcy court's judgment determining that SMC's claim against debtor was nondischargeable. The panel held that the bankruptcy court's finding that SMC was the proper party holding the claim against debtor was not clearly erroneous. In this case, the bankruptcy court permissibly viewed the evidence as demonstrating that Vinco was only acting on SMC's behalf and that SMC was the real party in interest. View "SMC Holdings v. McCann" on Justia Law

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The Bankruptcy Appellate Panel affirmed the bankruptcy court's grant of the city's motion for summary judgment and denial of debtor's motion for summary judgment in an adversary proceeding alleging that the city violated the automatic stay by refusing to release the warrant for her arrest and refusing to release her driver's license without payment of the fine. The panel held that debtor failed to identify any post-petition action by the city that would be in violation of the stay. The panel agreed with the bankruptcy court that the city was not required to issue a compliance letter regarding debtor's driver’s license. Therefore, debtor failed to show that the city's inaction regarding the compliance letter has somehow led to her inability to obtain a driver's license. Finally, the panel agreed with the city that the reference in the bankruptcy court's order to a driver's license being property of the estate was taken out of context by debtor and was not a factor in the bankruptcy court's decision. View "Edwards v. City of Ferguson" on Justia Law

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After debtor sought Chapter 7 discharge, the trustee requested and received an extension to file a complaint objecting to the discharge after the trustee became aware of debtor's ties to business entities that were under a Florida receivership due to allegations of fraud. The Eighth Circuit affirmed the district court's decision affirming the bankruptcy court's order granting the trustee's request for an extension of time and its judgment denying discharge. The court held that the bankruptcy court did not abuse its discretion by extending the deadline for the trustee to object to the discharge under Rule 4004(b)(2) without an evidentiary hearing. In this case, there was no clear error in its determination that six days would be insufficient for the trustee to investigate further and compose allegations with sufficient particularity to satisfy the applicable pleading standard. View "Hill v. Snyder" on Justia Law

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The Bankruptcy Appellate Panel affirmed the bankruptcy court's order granting the Chapter 13 trustee's motion to dismiss debtor's bankruptcy case. The panel held that the record supported the trustee's contention that debtor did not satisfy the requirements of 11 U.S.C. 109(h) and thus could not be a debtor under the bankruptcy code. In this case, despite checking the box on her petition to represent she had received credit counseling within the 180 days before she filed her petition, debtor did not claim–much less offer any proof–she actually received such counseling within the time allowed. Petitioner failed to submit the required certification to obtain a temporary waiver of the credit counseling requirement due to exigent circumstances, and did not file the required request that the bankruptcy court determine she was unable to complete credit counseling due to incapacity, disability, or active military duty in a military combat zone. Finally, the bankruptcy court did not abuse its discretion in barring debtor from refiling for 180 days. View "Marshall v. McCarty" on Justia Law