Articles Posted in US Court of Appeals for the Tenth Circuit

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Gregory and Andrea Chernushin owned a second home in Colorado in joint tenancy with right of survivorship. Eventually, Mr. Chernushin (not Ms. Chernushin) filed for bankruptcy. During the bankruptcy proceedings, Mr. Chernushin died. The bankruptcy trustee, Robertson Cohen, then filed an adversary complaint against Ms. Chernushin, seeking to sell the home. Ms. Chernushin argued the bankruptcy estate no longer included any interest in the home because Mr. Chernushin’s joint tenancy interest ended at his death. The bankruptcy court agreed with Ms. Chernushin, as did the district court on appeal. The trustee appealed, but the Tenth Circuit concurred the bankruptcy estate had no more interest in the home than Mr. Chernushin and Mr. Chernushin’s interest extinguished when he died. View "Cohen v. Chernushin" on Justia Law

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Debtor Mark Taylor sought to avoid a set of liens that the William F. Sandoval Irrevocable Trust (the “Trust”) recorded on his home, which Taylor jointly owned with his former wife. The Bankruptcy Code provided that a debtor may avoid certain liens that impair an exemption, and set forth a formula to determine the extent to which an exemption is impaired. At issue before the Tenth Circuit Court of Appeals was how that formula applied to a homestead exemption when a home is jointly owned with a non-debtor. Based on the plain language of 11 U.S.C. 522(f) and the structure of the Bankruptcy Code as a whole, the Court concluded the impairment calculation had to use the value of other liens on the home corresponding to the debtor’s percentage of ownership, rather than the full amount of the liens. View "William F. Sandoval Trust v. Taylor" on Justia Law

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This appeal arose out of a bankruptcy adversary proceeding, and centered on the ownership of a federal tax refund. The tax refund was issued by the Internal Revenue Service (IRS) to United Western Bancorp, Inc. (UWBI), a thrift holding company that had, under the terms of a written “Tax Allocation Agreement,” filed consolidated returns on behalf of itself and several subsidiary corporations. The tax refund was the result, however, of net operating losses incurred by United Western Bank (the Bank), one of UWBI’s subsidiaries. Simon Rodriguez, in his capacity as the Chapter 7 Trustee for the bankruptcy estate of UWBI, initiated this adversary proceeding against the Federal Deposit Insurance Corporation (FDIC), as receiver for the Bank, alleging that the tax refund was owned by UWBI and was thus part of the bankruptcy estate. The bankruptcy court agreed and entered summary judgment in favor of the Trustee. The FDIC appealed to the district court, which reversed the decision of the bankruptcy court. The Trustee appealed the district court’s decision. The Tenth Circuit agreed with the district court that the tax refund belonged to the FDIC, as receiver for the Bank. Consequently, the Court affirmed the district court and remanded to the bankruptcy court for further proceedings. View "Rodriguez v. FDIC" on Justia Law

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This appeal arose out of a bankruptcy adversary proceeding, and centered on the ownership of a federal tax refund. The tax refund was issued by the Internal Revenue Service (IRS) to United Western Bancorp, Inc. (UWBI), a thrift holding company that had, under the terms of a written “Tax Allocation Agreement,” filed consolidated returns on behalf of itself and several subsidiary corporations. The tax refund was the result, however, of net operating losses incurred by United Western Bank (the Bank), one of UWBI’s subsidiaries. Simon Rodriguez, in his capacity as the Chapter 7 Trustee for the bankruptcy estate of UWBI, initiated this adversary proceeding against the Federal Deposit Insurance Corporation (FDIC), as receiver for the Bank, alleging that the tax refund was owned by UWBI and was thus part of the bankruptcy estate. The bankruptcy court agreed and entered summary judgment in favor of the Trustee. The FDIC appealed to the district court, which reversed the decision of the bankruptcy court. The Trustee appealed the district court’s decision. The Tenth Circuit agreed with the district court that the tax refund belonged to the FDIC, as receiver for the Bank. Consequently, the Court affirmed the district court and remanded to the bankruptcy court for further proceedings. View "Rodriguez v. FDIC" on Justia Law

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Plaintiffs Adrian and Angela Lee asked the bankruptcy court to declare that the automatic stay in Adam and Jennifer Peeples’ bankruptcy case applied to a separate lawsuit Adrian Lee filed in state court against defendant Scott McCardle. The Lees also asserted that the automatic stay prevented McCardle from collecting attorney’s fees levied against Adrian Lee in that state-court lawsuit. The Lees sought damages against McCardle for willfully violating the automatic stay. The bankruptcy court found, and the district court agreed, that the automatic stay didn’t apply to the state-court lawsuit, thus granting summary judgment to McCardle. The Lees appealed, arguing that the district court erred in ruling that the automatic stay didn’t apply. The Tenth Circuit did not reach that question; instead, the Court vacated the district court’s judgment against Angela Lee because she lacked Article III standing to bring this lawsuit, and affirm summary judgment against Adrian Lee because his claims didn’t fall within the Bankruptcy Code’s “zone of interests.” View "Lee v. McCardle" on Justia Law