Justia Bankruptcy Opinion Summaries

Debtor appealed from the bankruptcy court's order denying sanctions against the Bank. Although the evidence suggested that the Bank could have been aware of debtor's personal bankruptcy filing, there was no evidence that the Bank had knowledge of the Assignment and the purported transfer of the LLC's assets to him. The replevin action filed by the Bank did not name debtor, individually, and sought only to repossess equipment owned by the LLC in which the Bank had a properly perfected security interest. Consequently, there could be no knowing or deliberate conduct attributed to the Bank in its conduct to enforce its lien against the collateral it believed was owned by the LLC. Absent a showing that the Bank was aware of the Assignment, a willful stay violation could not be found. Because a finding that there has been a willful violation of the automatic stay was a prerequisite to an award of sanctions, the court affirmed the bankruptcy court's denial of sanctions. View "Carter, Jr., et al. v. First National Bank of Crosset" on Justia Law

Qimonda, a German corporation that manufactured semiconductor devices, filed for insolvency in Munich, Germany. Plaintiff, the insolvency administratort, filed an application in the United States Bankruptcy Court under Chapter 15 of the Bankruptcy Code, petitioning the U.S. court to recognize the German insolvency proceeding as a "foreign main proceeding" in order to obtain privileges available under Chapter 15. At issue before the court was how to mediate between the United States' interests in recognizing and cooperating with the foreign insolvency proceeding and its interests in protecting creditors of Qimonda with respect to U.S. assets, as provided by 11 U.S.C. 1521 and 1522. The court concluded that the bankruptcy court properly recognized that plaintiff's request for discretionary relief under section 1521(a) required it to consider the interest of the creditors and other interested parties, including the debtor under section 1522(a) and that it properly construed section 1522(a) as requiring the application of a balancing test. The court also concluded that the bankruptcy court reasonably exercised its discretion in balancing the interest of the licensees against the interests of the debtor and finding that application of 11 U.S.C. 365(n) was necessary to ensure the licensees under Qimonda's U.S. patents were sufficiently protected. Accordingly, the court affirmed the judgment of the district court. View "Dr. Michael Jaffe v. Samsung Electronics Co." on Justia Law

Appellant filed a chapter 7 bankruptcy petition and subsequent to the entry of the discharge order of appellant's debts, the trustee learned that appellant had misrepresented the value or existence of a number of assets in the schedules he had filed and in the testimony he gave during the creditors meeting. Finding that the misrepresentations amounted to a violation of 11 U.S.C. 727(a)(4)(A), the bankruptcy court granted the trustee's motion to revoke appellant's discharge under section 727(d)(1). Appellant appealed. The court adopted the reasoning of the Bankruptcy Appellate Panel and its sister circuits in holding that a material fraud, which would have resulted in the denial of a Chapter 7 discharge had it been known at the time of such discharge, could justify revocation of that discharge under section 727(d)(1). Accordingly, the court affirmed the judgment of the district court affirming the bankruptcy court's decision. View "Jones v. US Trustee" on Justia Law

Debtor appealed from the bankruptcy court's order granting creditor relief from the automatic stay to complete its foreclosure proceeding without a further hearing in debtor's case. The bankruptcy appellate panel concluded that the bankruptcy court correctly applied 11 U.S.C. 362(d)(4)(B) with respect to the property at issue to creditor as a creditor whose claim was secured by an interest in the real property. Likewise, the panel did not second guess the bankruptcy court's determination that debtor's bankruptcy filing was part of a scheme to hinder or delay creditors, and that such scheme was one involving multiple bankruptcy filings that affected the property. Accordingly, the panel held that the bankruptcy court's grant of relief from the automatic stay to creditor was proper. View "Behrens v. U.S. Bank N.A." on Justia Law

Attorney Stilp represented Miller in claims concerning the construction of Miller’s house by contractor Herman. The district court dismissed. Stilp recommended that Miller terminate the action based on state law. Miller told Stilp that needed time to consider whether to refile., Herman filed a Chapter 7 bankruptcy petition. Herman’s bankruptcy attorney, Jones, prepared schedules listing the addresses of all creditors. Miller was listed as a creditor on the bankruptcy schedules and creditor matrix, but his address was listed as “c/o Thomas Stilp, Attorney” at Stilp’s office address. Notice of the bankruptcy was delivered to Stilp’s office but was routed to another attorney. Neither Stilp nor Miller was informed of the notice. Miller subsequently informed Stilp that he wanted to refile his complaint against Herman. Stilp then discovered that Herman had filed for bankruptcy protection. Miller did not take immediate action and, about a month later, the bankruptcy court entered a discharge order. About 13 months after he learned of Herman’s bankruptcy petition, Miller moved to reopen the case (11 U.S.C. 727(a)(4)(A)). The bankruptcy court denied the motion. The district court and Seventh Circuit affirmed, finding that Miller had been properly served when notice was delivered to Stilp’s firm.View "Miller v. Herman" on Justia Law

In this bankruptcy proceeding involving a turnover action and a revocation action, the bankruptcy court ruled (1) Debtor failed to maintain his profit-sharing plan in substantial compliance with applicable tax laws, which meant that assets in the profit-sharing plan and two IRAs funded with the plan assets were part of the bankruptcy estate; and (2) Debtor intentionally failed to disclose the existence of the two IRAs into which he had transferred assets from his profit-sharing plan, which ruling provided alternative grounds for treating the IRAs as nonexempt and provided the basis for the bankruptcy court to revoke Debtor's discharge. The First Circuit Court of Appeals affirmed both rulings, holding (1) the plan assets were not exempt from the bankruptcy estate; (2) Debtor indisputably demonstrated a reckless indifference to the truth of material information during his bankruptcy proceedings; (3) the bankruptcy court did not abuse its discretion in denying Debtor's Fed. R. Civ. P. 60(b) motion for relief on the turnover judgment on the basis of newly discovered evidence and excusable neglect; and (4) the bankruptcy court did not err in granting summary judgment to the U.S. Trustee in the revocation action. View "Daniels v. Agin" on Justia Law

Ute Mesa, a Colorado real estate developer, received a multi-million dollar loan to construct a single family home on property it owned in Aspen. To secure the loan, United Western Bank prepared a deed of trust incorrectly identifying Ute Mesa's sole member as the owner rather than Ute Mesa. The Bank filed suit seeking a reformation of the deed of trust and a declaration that it had a first priority lien on the property. Days later, the Bank filed notice of lis pendens in the county real property records. Ute Mesa filed for Chapter 11 bankruptcy relief, and continued as debtor-in-possession of the property. Ute Mesa then filed an adversary proceeding against the Bank to avoid the lis pendens as a preferential transfer. The bankruptcy court granted the Bank's motion to dismiss, and the federal district court affirmed. Ute Mesa argued on appeal that a "transfer of an interest in property" occurs when a bona fide purchaser cannot acquire an interest superior to that of a creditor. According to Ute Mesa, because the lis pendens prevented a bona fide purchaser from acquiring an interest in the property superior to the Bank’s interest, the lis pendens qualified as a transfer of an interest in the property. The Tenth Circuit affirmed the district court's decision, finding that a lis pendens is "merely a notice" and does not constitute a lien, therefore, no transfer occurred. View "Ute Mesa Lot 1, LLC v. First Citizens Bank & Trust, et al" on Justia Law

Debtors owed delinquent real estate taxes to Summit County, Ohio, which sells outstanding tax obligations to investors as tax lien certificates. An investor purchasing such a certificate obtains a lien against the property and the right to pursue the taxpayer for the unpaid taxes, O.R.C. 5721.30-43. Plymouth filed a certificate showing its purchase of the Debtors’ tax obligation for $4,083.73 with a negotiated interest rate of 0.25%, “offered, sold, and delivered on November 3, 2010.” On October 3, 2011, Plymouth filed a second certificate, with a price of $2,045.44 and a negotiated interest rate of 18.00%. On April 17, 2012, Summit County filed a tax lien foreclosure complaint against the Debtors pursuant to pursuant to Plymouth's request for foreclosure. In May, 2012, the Debtors filed a chapter 13 plan and petition, proposing to pay interest on the tax certificates at the interest rates listed on the certificates. Plymouth filed a proof of claim based on both certificates in the amount of $10,521.46, including $2,120.00 in fees and the principal balance of $7,781.19 plus 18% interest from June 1, 2012 on both certificates. The Bankruptcy Court held that under Ohio law the appropriate interest rate for Plymouth’s tax claim was 0.25%. The Bankruptcy Appellate Panel affirmed. View "In re: Bowers" on Justia Law

Because Munce's Superior Petroleum Products, Inc. (MSPP) failed to comply with a state court order compelling it to bring its facilities into compliance with New Hampshire environmental law, $194,220 in contempt fines was levied against MSPP. The state court orders were issued after MSPP filed a Chapter 11 bankruptcy petition, although the violations of New Hampshire law began before MSPP filed its Chapter 11 petition. The New Hampshire Department of Environmental Services filed a motion to give the fines administrative expense priority, which the bankruptcy court granted. The district court affirmed. The First Circuit Court of Appeals affirmed, holding that, under the circumstances of this case, the post-petition contempt fine assessed by the New Hampshire state court against MSPP, a debtor-in-possession, was entitled to administrative expense priority. View "Munce's Superior Petroleum Prods., Inc. v. N.H. Dep't of Envtl. Servs." on Justia Law

Debtors filed a motion requesting findings of contempt against Great Western. The bankruptcy court denied debtors' motion, concluding that there was no time frame within which the bank was required to file an amended UCC financing statement. The bankruptcy appellate panel affirmed the bankruptcy court's denial of the motion because the order approving the stipulation was not clear, unambiguous or certain. View "Fischer, et al. v. Great Western Bank" on Justia Law