Justia Bankruptcy Opinion Summaries

Articles Posted in US Court of Appeals for the First Circuit
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The First Circuit affirmed the judgment of the bankruptcy court dismissing Appellant's voluntary petition for relief under title 11 of the United States Code, holding that the district court did not err in dismissing the petition on the ground that Appellant failed to serve certain quarterly reports on the United States Trustee pursuant to the Bankruptcy Court's confirmation order.The bankruptcy court dismissed Appellant's case on two grounds - that he failed to pay certain fees to the U.S. Trustee pursuant to 28 U.S.C. 1930(a)(6) and that he failed to serve the quarterly reports on the U.S. Trustee. The First Circuit affirmed on the second of the two grounds, holding that the bankruptcy court did not err by dismissing Appellant's case for failure to comply with the confirmation order because that order required that Appellant serve quarterly reports on the U.S. Trustee only while his case was "open." View "Brown v. Harrington" on Justia Law

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The First Circuit dismissed certain Credit Unions' challenge to the district court's rejection of their objections to the Modified Eighth Amended Title III Joint Plan of Adjustment of the Commonwealth of Puerto Rico, the Employees Retirement System of the Government of the Commonwealth of Puerto Rico, and the Puerto Rico Public Buildings Authority (the confirmation order) and the findings of fact and conclusions of law in connection with the confirmation order (the FF/CL), holding that dismissal was warranted.The final debt restructuring plan at issue in this appeal was the product of evolving plans about how to resolve the initial petition for debt restructuring filed by Puerto Rico's Financial Oversight and Management Board on behalf of the Commonwealth and several of its agencies and instrumentalities pursuant to Title III of the Puerto Rico Oversight, Management, and Stability Act. Six Credit Unions appealed to challenge the confirmation order and FF/CL. The First Circuit dismissed the Credit Unions' challenges, holding that because the Court has now affirmed the dismissal of the Credit Union' adversary claims, the appeal from the confirmation order and the FF/CL was moot. View "Financial Oversight & Management Bd. For Puerto Rico v. Cooperativa de Ahorro y Credito" on Justia Law

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The First Circuit affirmed the judgment of the district court dismissing the claims brought by six Credit Unions against the Commonwealth of Puerto Rico and several of its agencies and instrumentalities, holding that the district court properly dismissed the claims.In this adversary proceeding brought as part of broader proceedings underway to restructure the Commonwealth's debts under Title III of the Puerto Rico Oversight, Management, and Stability Act, the Credit Unions argued that Defendants induced and forced them to invest in worthless government-issued securities and that Defendants failed to disclosure their knowledge that these would be losing investments. The district court dismissed the claims. The First Circuit affirmed, holding that the Credit Unions' claims were properly dismissed. View "Cooperativa de Ahorro y Credito Abraham Rosa v. Financial Oversight & Management Bd. for Puerto Rico" on Justia Law

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The First Circuit affirmed the judgment of the district court affirming the ruling of the bankruptcy court that the tax liabilities relevant to this appeal had not been discharged, holding that, under the subjective version of the so-called "Beard test," Appellant never filed "returns" for the tax years at issue.The IRS assessed tax believed to be due from Appellant, including penalties and interest, for tax year 1997 in the amount of $30,568 and tax year 2000 in the amount of $46,344. Appellant did not pay the overdue taxes and later filed a chapter 13 petition for bankruptcy. In 2017, Appellant received a discharge. At issue was whether Appellant's discharge covered his debts to the IRS. The bankruptcy court concluded that the tax liabilities at issue had not been discharged. The district court affirmed. The First Circuit affirmed, holding that, applying the Beard test that Appellant urged the bankruptcy court to adopt, Appellant's filings did not represent "an honest and reasonable attempt to satisfy the requirements of the Federal income tax law." View "Kriss v. United States" on Justia Law

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In this installment of a series of cases before the Court regarding the Puerto Rico Oversight, Management, and Economic Stability Act, 48 U.S.C. 2101-2241, the First Circuit dismissed the appeal, holding that this Court lacked jurisdiction over the appeal.After the court overseeing Title III proceedings confirmed a plan of adjustment for the Commonwealth's debts, Appellants challenged the Title III court's findings of fact and conclusions of law, making arguments focused on obtaining retirement benefits that Appellants believed they were entitled to. The First Circuit dismissed the appeal, holding that the arguments offered by Appellant to support the First Circuit's jurisdiction in this appeal were unavailing. View "Financial Oversight & Management Bd. v. Cooperativa de Ahorro y Credito" on Justia Law

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In this bankruptcy action, the First Circuit vacated the judgment of the district court affirming the order of the bankruptcy court granting summary judgment against Oriental Bank on all of the claims asserted against it, holding that remand was required for further proceedings in which remaining issues could be addressed.Builders Holding Company filed for bankruptcy and then filed an adverse action against the Puerto Rico Infrastructure Financing Authority and Oriental Bank. Builders's surety intervened in the adverse action and filed claims against Oriental Bank. Oriental Bank, in turn, filed counterclaims. All claims in the adverse action pertained to funds that the Financing Authority had directly deposited in Builder's account with Oriental Bank that the bank had taken to set off a debt that Builders owed to it. The bankruptcy court granted summary judgment against Oriental Bank on all claims against it, and the district court affirmed. The First Circuit vacated and remanded the summary judgment against Oriental Bank as to all claims, holding that the bankruptcy court was wrong to find that Article 1795 of the Puerto Rico Civil Code compelled the return of funds Oriental Bank set off against Builders's debt to it. View "Oriental Bank v. Builders Holding Co., Corp." on Justia Law

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The First Circuit affirmed the order of the Title III court confirming a plan of adjustments for the debts of the Commonwealth and two of its instrumentalities in this action brought under the Title III of the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), holding that otherwise valid Fifth Amendment takings claims arising pre-petition cannot be discharged in Title III bankruptcy proceedings without payment of just compensation.After the court charged with overseeing Title III proceedings confirmed the plan of adjustment at issue several stakeholders brought appeals challenging aspects of the court's confirmation order. At issue was the appeal of the Financial Oversight and Management Board of Puerto Rico challenging the Title III court's conclusion that claimants owed just compensation for the taking of real property by debtors were entitled to receive satisfaction in full for on their claims. The First Circuit affirmed the Title III court's order confirming the plan, holding that discharging valid, pre-petition takings claims for less than just compensation would violate the Fifth Amendment and render a plan providing for such discharge unconfirmable under PROMESA. View "Financial Oversight & Management Board v. Cooperativa de Ahorro y Credito" on Justia Law

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The First Circuit reversed the bankruptcy court's dismissal of Debtor's motion to enforce an automatic stay as to a subsidiary of the Lac Du Flambeau Band of Lake Superior Chippewa Indians, holding that the Bankruptcy Code unequivocally strips tribes of their immunity,Debtor sought to enforce the Bankruptcy Code's automatic stay against one of his creditors, a subsidiary of the Lac Du Flambeau Band of Lake Superior Chippewa Indians (Band). Debtor sought an order prohibiting further collection efforts as well as damages and attorney fees. The Band and its affiliates moved to dismiss the enforcement proceeding, asserting tribal sovereign immunity. The bankruptcy court agreed and granted the motion to dismiss. The First Circuit reversed the decision of the bankruptcy court dismissing Debtor's motion to enforce the automatic stay, holding that tribes are governmental units and, thus, the Bankruptcy Code abrogates tribal sovereign immunity. View "Coughlin v. Lac du Flambeau Band of Lake Superior Chippewa Indians" on Justia Law

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In this appeal arising out of an adversary action filed in a Chapter 11 proceeding in the Bankruptcy Court for the District of Massachusetts the First Circuit affirmed the judgment of the bankruptcy court allowing the debtor to avoid a mortgage, holding that there was no error in the bankruptcy court's judgment.After Debtor filed for Chapter 11 bankruptcy Debtor commenced an adversary proceeding against U.S. Back seeking to "avoid" the mortgage because her name was missing from the certificate of acknowledgment. The district court granted Debtor's motion. The district court affirmed. The First Circuit affirmed, holding that summary judgment was properly granted for Debtor because the omission of Debtor's name from the certificate of acknowledgment was a material defect under Massachusetts law. View "U.S. Bank, N.A. v. Desmond" on Justia Law

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The First Circuit dismissed Appellant's appeal of an order issued by the Bankruptcy Appellate Panel for the First Circuit (BAP) that found Appellant, a Chapter 7 debtor, had no standing to appeal a bankruptcy court order overruling his objection to a proof of claim filed by Scotiabank de Puerto Rico, holding that this Court lacked jurisdiction.The BAP concluded that Appellant did not have appellate standing to challenge the subject order because he had failed to demonstrate that the order had directly or adversely affected his pecuniary interests. Accordingly, the BAP entered judgment dismissing the appeal. The First Circuit dismissed Appellant's appeal, holding that Appellant failed to establish that the challenged order had a direct and immediate impact on his pecuniary interests. View "Neira Rivera v. Scotiabank de Puerto Rico" on Justia Law