Justia Bankruptcy Opinion Summaries

Appellant and his children brought tort claims against Placid in connection with the allegedly asbestos-related illness and death of his wife. On appeal, appellants challenged the district court's affirmance of the bankruptcy court's grant of Placid's motion for summary judgment. The court affirmed, concluding that appellants were unknown creditors whose pre-petition claims were discharged by Placid's constructive notice and that Placid's notice was not substantively deficient. The court has never required bar date notices to contain information about specific potential claims and neither the Bankruptcy Court nor Rules require bar date notices to apprise creditors of potential claims. The court held that because a bar date notice need not inform unknown claimants of the nature of their potential claims, Placid's notices were substantively sufficient to satisfy due process.View "Williams, Sr., et al. v. Placid Oil Co." on Justia Law

In 2005, Debtor secured a loan with a mortgage on her home and stayed current on all mortgage payments on the property. Debtor’s bank, however, failed to record the mortgage with the appropriate registry. In 2011, Debtor filed a petition for Chapter 7 bankruptcy. Although Debtor’s home was subject to a homestead exemption, the Trustee of Debtor’s bankruptcy estate sought to sell the home as property of the bankruptcy estate. Accordingly, Trustee filed a complaint to avoid the unrecorded mortgage and to preserve it for the benefit of the estate. The bankruptcy court granted summary judgment for the Trustee, and the Bankruptcy Appellate Panel (BAP) affirmed. The First Circuit reversed, holding that the Trustee’s lien avoidance and preservation powers did not justify him in selling Debtor’s home as property of the bankruptcy estate.View "Degiacomo v. Traverse" on Justia Law

CSS, the debtor, filed a Chapter 11 bankruptcy petition in 2012. Acting as general contractor or as a first tier subcontractor, CSS placed orders with Subcontractors, the creditor. The court held that construction subcontractors entitled to a lien on funds under North Carolina law had an interest in property when the debtor contractor filed for bankruptcy, by which time the subcontractors had not yet served notice of, and thereby perfected, their liens. Because there is no dispute that the other criteria of the applicable bankruptcy stay exception have been met, the court held that the bankruptcy court and district court correctly allowed Subcontractors to serve notice of, and thereby perfect, their liens post-petition.View "Construction Supervision Svcs v. Branch Banking & Trust" on Justia Law

Debtor appealed the bankruptcy court's judgment excepting a debt owed to CFG from debtor's discharge under 11 U.S.C. 523(a)(2)(A). The court concluded that the bankruptcy court did not clearly err by finding that debtor made a misrepresentation to CFG regarding how the proceeds of the loan would be used and that CFG justifiably relied on the misrepresentation. The court concluded that the misrepresentation was made with the requisite knowledge and intent to deceive where the bankruptcy court found that the debtor knew the representation was false. Accordingly, the court affirmed the judgment of the bankruptcy court.View "Community Finance Group, Inc. v. Field" on Justia Law

The bankruptcy court held that real property transferred in error to the debtor by his father pre-petition was impressed with a constructive trust as a matter of law, and that the bankruptcy estate had no interest in the real property. The Sixth Circuit Bankruptcy Appellate Panel affirmed.View "In re: Thomas III" on Justia Law

The bankruptcy court voided the transfer of $74,102.60 to 1st National Cash Refund pursuant to 11 U.S.C. 549 and ordered recovery of transferred property from 1st National Cash Refund and Woodford pursuant to 11 U.S.C. 550. The Sixth Circuit Bankruptcy Appellate Panel affirmed, upholding determinations that the statutes of limitation found in sections 549 and 550 were equitably tolled and that the trustee had power to avoid and recover the transferred property. View "In re: Anderson" on Justia Law

Appellant-property owner filed a Chapter 13 petition for bankruptcy and subsequently filed a third amended reorganization plan proposing to bifurcate Appellee-mortgagee’s claim into secured and unsecured portions. The bankruptcy court denied confirmation of the plan and ordered Appellant to file an amended plan. Appellant appealed and also filed a motion for leave to appeal the bankruptcy court’s interlocutory order. The Bankruptcy Appellate Panel (BAP) granted the motion and affirmed the bankruptcy court’s denial of confirmation. Appellant subsequently filed a notice of appeal and motion for certification of the appeal, which the BAP denied. The First Circuit Court of Appeals issued an order to show cause why the case should not be dismissed for lack of jurisdiction because the BAP’s order affirming the denial of the confirmation did not appear to be a final order. The First Circuit dismissed Appellant’s appeal, holding (1) an intermediate appellate court’s affirmance of a bankruptcy court’s denial of confirmation of a reorganization plan is not a final order if the debtor may still propose an amended plan; and (2) therefore, the Court lacked jurisdiction to hear this appeal.View "Bullard v. Hyde Park Savings Bank" on Justia Law

Ice House manufactures ice-vending machines. Cardin’s machines generated about $264,000 in income in 2012. In 2004, Cardin also agreed to be the exclusive distributor of Ice House’s machines in Tennessee. Four years later Ice House sued for breach, obtaining judgments totaling $1,301,900, without interest. Cardin filed for bankruptcy as an individual debtor under Chapter 11. A Chapter 11 plan of reorganization must identify any claims it will “impair,” 11 U.S.C. 1123(a)(3). The bankruptcy court generally cannot confirm a plan if any impaired creditor votes to reject it. Section 1129(b) permits confirmation of nonconsensual plans (cramdown plan) if the plan is fair and equitable with respect to each class of claims or interests that is impaired and has not accepted the plan. To be “fair and equitable” a plan must satisfy the absolute-priority rule, which provides that every unsecured creditor must be paid in full before the debtor can retain “any property.” The rule was not satisfied with respect to Cardin. Cardin’s plan allowed him to retain several assets after paying off loans they secured, to make a single payment of $124,000 towards Ice House’s unsecured claim of $1.545 million, and to “remit” to Ice House any disposable income that he earns during the five years following confirmation. The bankruptcy court confirmed the plan, construing the 2005 Bankruptcy Code amendments to eliminate the absolute-priority rule for individual debtors. The Sixth Circuit reversed, agreeing with other circuits that the absolute priority rule continues to apply to pre-petition property of individual debtors in Chapter 11 cases.View "Ice House Am., LLC v. Cardin" on Justia Law

Plaintiffs filed suit against McCalla and Kondaur, claiming that they violated the automatic stay in plaintiff Kenneth Lodge's bankruptcy under 11 U.S.C. 362, and the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq. On appeal, plaintiffs challenged the district court's grant of summary judgment for defendants. Because plaintiffs failed to show an emotional injury sufficient to support a recovery of actual damages under section 362(k), the court concluded that the district court did not err in granting summary judgment as to the automatic stay claim. The court also affirmed the grant of summary judgment as to the FDCPA claim where plaintiffs failed to demonstrate that defendants were "debt collectors" because the district court was not required to take judicial notice of defendants' websites and the district court also did not abuse its discretion in declining to consider a document that listed foreclosure advertisements for properties unrelated to plaintiffs' properties. Accordingly, the court affirmed the judgment of the district court.View "Lodge, et al. v. Kondaur Capital Corp., et al." on Justia Law

These appeals concerned a suit filed under the False Claims Act (FCA), 31 U.S.C. 3729 et seq., and two bankruptcy proceedings. The district court concluded that the bankruptcy trustee had exclusive standing to assert the FCA claims at issue because those claims belonged to the bankruptcy estate. The court agreed with the district court that only the trustee had standing to prosecute the FCA lawsuit; affirmed the district court's dismissal under Rule 12(b)(6); and concluded that the district court did not abuse its discretion in denying the motion for reconsideration. View "Westbrook Navigator L.L.C., et al v. Navistar, Inc., et al." on Justia Law