Articles Posted in US Court of Appeals for the Fifth Circuit

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Debtors claimed an exemption for funds held in an individual retirement account (IRA). The Fifth Circuit upheld the bankruptcy court's holding that the funds had lost their exempt status because Texas law provides that funds withdrawn from a retirement account remain exempt only if rolled over into another retirement account within sixty days. In this case, debtors subsequently withdrew the funds from the IRA and did not roll them over into another IRA. Accordingly, the court affirmed the judgment. View "Hawk v. Engelhart" on Justia Law

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The Fifth Circuit affirmed the bankruptcy courts' findings that debtor was involved in a scheme designed to deprive mortgage holders of foreclosure sale proceeds, and that the damages flowing from this scheme were nondischargeable debts pursuant to 11 U.S.C. 523(a)(4) and 523(a)(6). The court held that debtor's debts to the Countrywide Plaintiffs (and Bank of America) "arise" from larceny and were nondischargeable in bankruptcy. The court also held that debtor failed to demonstrate that he was prejudiced by the bankruptcy court entering the Countrywide Adversary Judgment without lifting the automatic stay in his Chapter 7 case. View "Cowin v. Countrywide Home Loans, Inc." on Justia Law

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ASARCO filed suit against MRI, challenging MRI's refusal to bring ASARCO back into a partnership in a Montana copper mine. MRI argued that ASARCO's decisions during its Chapter 11 bankruptcy filing prevent it from suing for reinstatement. The Fifth Circuit affirmed the district court's denial of MRI's motion for summary judgment on preclusion and estoppel grounds. The court held that the district court correctly determined that ASARCO was not precluded from bringing its breach of contract claim and the claim was not barred by res judicata. The court explained that the claim was contingent on future events and thus ASARCO could not have brought it during the adversary proceeding. The court also held that ASARCO's disclosure of the right to reinstate, though scant, was sufficient. Finally, the court left it to the district court to decide in the first instance the nature of the provision and whether, if it is executory, the ride-through doctrine applies. View "ASARCO v. Montana Resources" on Justia Law