Justia Bankruptcy Opinion Summaries

The Gartleys filed an adversary proceeding in bankruptcy court against their former business partner, debtor, and his wife, co-debtor. The court concluded that In re Strangel remained good law, and the failure to file a timely notice of appeal in the district court leaves the district court without jurisdiction to hear the appeal. Because the district court did not have jurisdiction to hear debtor's appeal, the court dismissed the appeal for lack of jurisdiction, vacated the decision of the district court, and remanded with instructions to dismiss the appeal. View "Smith v. Gartley" on Justia Law

The sole issue presented to the Tenth Circuit in this appeal stemmed on whether the bankruptcy trustee could avoid an entire annual transfer or only a portion exceeding 15% a restricted debtor's gross annual income to a religious or charitable organization. The bankruptcy court and Bankruptcy Court of Appeals (BAP) said circumstances here only permitted the trustee to avoid the portion of the transfer exceeding 15%. Because that result was contrary to the plain language of the statute, the Tenth Circuit reversed. View "Wadsworth v. The Word of Life Center" on Justia Law

Appellant obtained a loan from a Bank for a home equity line of credit secured by a second mortgage on her home in Rowley, Massachusetts. Appellant later sold her home but did not notify the Bank of the sale. Appellant later took advantage of a mistake made on the part of the Bank and obtained $124,200, the exact limit on the home equity line. After Appellant failed to pay back the $124,200 drawn from the home equity account, the Bank commenced foreclosure proceedings on the Rowley property. The new owners were insured by Old Republic National Title Insurance Company, which paid the debt, took an assignment of all of the Bank's rights against Appellant, and sued Appellant in state court. A default judgment was entered against Appellant. Thereafter, Appellant filed for bankruptcy. Old Republic sought a determination that its pre-petition judgment was excepted from discharge as a debt. The bankruptcy court determined that Appellant's debt was not dischargeable in bankruptcy because it was for money Appellant obtained by false pretenses and because it was a debt arising from willful and malicious injury. The First Circuit Court of Appeals affirmed, holding that the bankruptcy court was correct to find the debt to be non-dischargeable. View "Old Republic Nat'l Title Ins. Co. v. Levasseur" on Justia Law

Plaintiff appealed the bankruptcy court's denial of a motion for relief from judgment under Federal Rule of Bankruptcy Procedure 9024 and Federal Rule of Civil Procedure 60. The bankruptcy appellate panel concluded that plaintiff did not have standing to appeal the bankruptcy court's denial of the Rule 60 motion because he did not possess a financial stake in the bankruptcy court's order denying the motion. Therefore, the panel dismissed the appeal. View "Conway, et al. v. Heyl" on Justia Law

In 2009, Debtor had received an IRS Notice of Deficiency for tax year 2004, claiming additional taxes of $143,445.00, plus penalties of $28,689.00. Debtor filed a voluntary Chapter 7 petition in 2011. In 2011, Debtor received a Notice of Deficiency for tax years 2007 and 2008 claiming that $138,907.00 in additional taxes for 2007, plus penalties of $27,781.40, and an additional $109,648.00 in taxes for 2008, plus penalties of $21,929.60. Debtor challenged the notices. The Tax Court dismissed with respect to the notices for 2007-2008 because of the automatic stay. Post-petition, the Debtor received a $86,512.32 tax refund, based on his 2005 tax return. The Trustee claimed the refund, but Debtor returned the check to the IRS. The Trustee sought turnover of the refund; Debtor objected. The IRS tendered a check for $32,555.15 to Debtor, relating to 2005 taxes, which was received by the Trustee. Debtor sought a determination of tax liability pursuant to 11 U.S.C. 505(a)(1) and turnover of funds if the IRS’s claim was disallowed. The bankruptcy court held that the IRS’s claim of $226,142.85, pertaining to 2004 taxes, was nondischargeable and that the tax refund check for $86,512.32, which erroneously issued to the Debtor, was not property of the estate. The Sixth Circuit Bankruptcy Appellate Panel reversed as to priority and nondischargeability, because the lower court did not address the limitations period. View "In re: Winter" on Justia Law

Appellant was involved in two lawsuits with appellees and both lawsuits resulted in sanctions against him and an award of attorney's fees in favor of appellees. After appealing, appellant filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code. At issue was whether defensive appellate rights were considered property under Texas law. The court affirmed the district court's determination that defensive appellate rights were property under Texas law and saleable by the bankruptcy estate. View "Croft v. Lowry, et al." on Justia Law

Plaintiff filed suit against her employer, the Secretary of the Army, alleging that certain adverse employment actions resulted from discrimination. Plaintiff had filed for Chapter 7 bankruptcy protection but failed to list the action as an asset on her bankruptcy schedule. The district court held that no evidence suggested that plaintiff's original omission had been inadvertent or mistaken and that, weighing factors set forth in New Hampshire v. Maine, judicial estoppel barred the action. Plaintiff appealed. The court affirmed, concluding that this case was distinguishable from the court's holding in Ah Quin v. County of Kauai Department of Transportation, where plaintiff here filed false bankruptcy schedules and did not amend those schedules until defendant filed a motion to dismiss, suggesting that her omission had not been inadvertent. The court concluded that the district court did not abuse its discretion in its analysis under the New Hampshire factors. Accordingly, the court affirmed the judgment. View "Dzakula v. McHugh" on Justia Law

Drawbridge appealed from the bankruptcy court's order granting recognition of a foreign main proceeding. 11 U.S.C. 109(a) provides: "Notwithstanding any other provision of this section, only a person that resides or has a domicile, a place of business, or property in the United States, or a municipality, may be a debtor under this title." The court vacated and remanded, finding that section 109(a) applies to the debtor in a foreign main proceeding under Chapter 15 of the Bankruptcy Code. View "In re: Katherine Elizabeth Bar" on Justia Law

Cross-Appellee/Appellant Eloisa Taylor appealed a decision of the Bankruptcy Appellate Panel of the Tenth Circuit (BAP) that affirmed a United States Bankruptcy Court decision. The bankruptcy court granted summary judgment in favor of Eloisa’s former spouse, Matthew Taylor. The bankruptcy court determined that a $50,660.59 debt Eloisa owed to Matthew for overpayment of spousal support was nondischargeable because Eloisa incurred the debt “in connection with a separation agreement.” Matthew’s assertion that the debt was nondischargeable under 11 U.S.C. 523(a)(5) as a “domestic support obligation” was previously dismissed by the bankruptcy court for failure to state a claim. Matthew filed a cross appeal from that ruling and from the BAP’s ruling that neither it, nor the bankruptcy court, had authority under the parties’ divorce settlement agreement to award Matthew attorney fees that he incurred during the bankruptcy proceeding. The Tenth Circuit agreed with the bankruptcy court’s ruling that the debt was nondischargeable under section 523(a)(15). With regard to Matthew’s cross appeal, the Court affirmed both the bankruptcy court’s ruling that the debt was not excepted from discharge under 523(a)(5), and the BAP’s denial of Matthew’s request for attorney fees. View "Taylor v. Taylor" on Justia Law

The multinational telecommunications firm Nortel declared bankruptcy in 2009 and various debtors comprising the Nortel brand auctioned their business lines and intellectual property, raising $7.5 billion. The debtors subsequently disputed whether they had agreed to allocate the auction funds through arbitration. The Bankruptcy Court held that they had not agreed to arbitrate their disputes about allocation. The Third Circuit affirmed: the contract at issue does not reflect the debtors’ intent to arbitrate disputes about the auction funds. The court declined to consider the Joint Administrators’ related challenge to the Bankruptcy Court’s decision to allocate the contested funds, noting that the Bankruptcy Court has not yet held the hearing to allocate the funds, so that review would be premature. View "In Re: Nortel Networks, Inc." on Justia Law