Justia Bankruptcy Opinion Summaries

The claimant alleges that Father Hanser, a former pastor at a Catholic Parish in Brookfield,Wisconsin, sexually abused him in the late 1970s when he was seven years old. In 2007 the claimant participated in a voluntary mediation program conducted by the Archdiocese to address claims of sexual abuse by priests. The mediation produced a settlement. The Archdiocese paid the claimant $100,000, and he released the Archdiocese from all claims relating to abuse by Father Hanser. When the Archdiocese filed its Chapter 11 petition four years later, the claimant submitted a claim based on the same allegations of abuse by Father Hanser, claiming that an Archdiocesan representative had fraudulently induced him to settle by giving him inaccurate information about when the Archdiocese first received reports of abuse by Father Hanser. The bankruptcy judge refused to set the agreement aside because the claimant had not shown that but for the alleged misrepresentations, he would not have accepted the settlement. The district court and Seventh Circuit affirmed. The claimant failed to show that the alleged misrepresentations were a substantial factor in his decision to accept the settlement and never made an offer of proof explaining what an expanded record would show. View " Doe v. Archdiocese of Milwaukee" on Justia Law

The trustee filed an action to avoid and recover certain payments made by FMI to First Tennessee. The trustee alleged that the payments were fraudulent transfers under 11 U.S.C. 548, and were part of a fraudulent scheme. The court concluded that the bankruptcy court and the district court correctly applied the objective good-faith standard in determining that the bank employees' testimony provided competent objective evidence that satisfied the bank's burden of proving its affirmative defense under section 548(c). The court also concluded that the bankruptcy court did not clearly err in holding that the bank accepted the payments from FMI in good faith. Accordingly, the court affirmed the judgment of the district court. View "Taneja v. First Tennessee Bank NA" on Justia Law

In consolidated appeals from two Chapter 13 bankruptcy proceedings, the Debtors challenged the district court’s order reversing confirmation of their reorganization plans and remanding their cases to the bankruptcy court for further proceedings. Because the Tenth Circuit concluded it lacked jurisdiction to consider these appeals, the Court dismissed them. View "Gordon, et al v. Bank of America, N.A., et al" on Justia Law

Appellant First National Bank of Durango appealed the Bankruptcy Appellate Panel's (BAP's) decision to affirm the bankruptcy court's confirmation of the Chapter 12 bankruptcy plan of Appellees Reson and Shaun Woods. Although First National Bank raised several issues on appeal, the Tenth Circuit only reached the first: whether the Debtors were permitted to seek relief under Chapter 12 as "family farmers." The issue was one of first impression for the Tenth Circuit: when does a debt "for" a principal residence "arise[] out of a farming operation"? Upon review, the Court concluded that such a debt so arises if it is directly and substantially connected to any of the activities constituting a "farming operation" within the meaning of 11 U.S.C. 101(21). If the loan proceeds were used directly for or in a farming operation, the debt "arises out of" that farming operation. Because the Court concluded that the bankruptcy court did not apply the proper legal standard and test in its analysis of Debtors' eligibility for Chapter 12 relief, the Court remanded the case back to the bankruptcy court so that the correct law could be applied to the facts of this case. View "First National Bank of Durango, et al v. Woods, et al" on Justia Law

Plaintiff claimed that the judge who presided over the administration of the Yellowstone Mountain Club ski resort's bankruptcy was biased against him and should have recused himself. The bankruptcy judge denied the recusal motion and the district court affirmed. The court rejected plaintiff's claim that the judge made ex part communications; the rulings made by the judge purportedly denied plaintiff due process; and the judge made supposed biased statements during various proceedings. Plaintiff's claims were a transparent attempt to wriggle out of an unfavorable decision by smearing the reputation of the judge who made it. Accordingly, the court affirmed the denial of the recusal motion. View "Blixseth v. Yellowstone Mountain Club, LLC, et al." on Justia Law

Debtor filed a Chapter 13 petition, instead of a Chapter 7 petition, only so that his attorney could be paid in installments through the proposed Chapter 13 plan. The bankruptcy court found that debtor had not filed his petition or his proposed plan in "good faith," as required by 11 U.S.C. 1325(a)(3) and (a)(7). There was no evidence in this particular record revealing unique circumstances that would lead to the conclusion that it was in debtor's best interest to file under Chapter 13. After reviewing the record and the totality of the circumstances, the court could not say that the bankruptcy court's findings were clearly erroneous. Accordingly, the court affirmed the bankruptcy court's denial of confirmation of debtor's Chapter 13 bankruptcy plan. View "Brown v. Gore" on Justia Law

Debtor appealed the bankruptcy court's order dismissing his adversary complaint for failure to state a claim. The bankruptcy appellate panel concluded that the bankruptcy court correctly dismissed debtor's adversary complaint where he did not challenge the validity, priority, or extent of the government's lien on any grounds other than his contention that the government's criminal action violated the district court's stay of actions and proceedings against him; debtor did not specifically identify or quantity under 11 U.S.C. 362(k) any damages arising from the government's alleged violation of the automatic stay for the bankruptcy court to consider; and a bankruptcy proceeding may not be used as a forum to mount a collateral attack on a final criminal judgment. Accordingly, the panel affirmed the judgment. View "Behrens v. United States" on Justia Law

Alforookh manages and operates restaurants under franchise agreements with IHOP. He created companies to hold the franchises, including A&F. Alforookh and A&F are in Chapter 11 bankruptcy proceedings. Their primary assets are 17 IHOP franchise agreements and corresponding building and equipment leases. Generally, Chapter 11 debtors may assume or reject executory contracts any time before confirmation of a plan, 11 U.S.C. 365(d)(2). Unexpired leases of nonresidential real property, however, must be assumed within 120 days, subject to a 90-day extension. A&F did not assume the building leases within 120 days or seek an extension, so IHOP claims that those leases were rejected and that the franchise agreements and equipment leases expired. A&F argued that because the building leases are just one part of the larger franchise arrangement, section 365(d)(2)’s more generous time limit applies to the whole arrangement, including the building leases. The bankruptcy judge deemed the building leases rejected and the franchise agreements and equipment leases expired. A&F’s request for a stay pending appeal was rejected by the bankruptcy and district courts. The Seventh Circuit granted an emergency motion and issued a stay order freezing the status quo during the pendency of the appeal and subsequently held that a continued stay was warranted. View "A&F Enters., Inc. II v. IHOP Franchising, LLC" on Justia Law

Debtors filed for Chapter 7 bankruptcy and listed in their bankruptcy schedules a large volume of rice grain and farming equipment owned in connection with a joint venture. The Bank asserted a property interest and the trustee sought an injunction to prevent the Bank from exercising control over the rice and grain equipment. The court concluded that where a joint venture agreement exists, that document would be controlling as to the parties' intention. In this instance, Paragraph 13 of the joint venture agreement supported the bankruptcy court's determination that debtors had not intended to create a separate entity. Therefore, the rice grain was part of debtors' individual bankruptcy estate under 11 U.S.C. 541 and the bankruptcy court had jurisdiction to authorize the trustee to sell the rice grain. Accordingly, the court affirmed. View "Bank of England v. Rice" on Justia Law

The Trustee and Centris appealed the bankruptcy court's judgment to the extent that it determined certain funds were not property on the bankruptcy estate. Cross-claim Defendants appealed the same judgment to the extent it awarded the Trustee certain fees and expenses and surcharged those fees and expenses against the funds the bankruptcy court determined were not property of the bankruptcy estate. The bankruptcy appellate panel reversed and remanded, concluding that consideration of the issues was premature. The court believed the better course of action was to afford the bankruptcy court an opportunity to consider the arguments and explain its reasoning for accepting or rejecting them. View "Stalnaker v. Allison, et al." on Justia Law