Justia Bankruptcy Opinion Summaries

In 2002 Glover entered into a mortgage with WaMu. After being injured Glover fell behind on her mortgage in 2005 and requested a work-out agreement to reduce her payments. WaMu initially threatened to foreclose, but subsequently agreed to postpone her payments until the request had been evaluated. Eventually, WaMu denied the request. Murray, an attorney with Udren Law Offices, called Glover and informed her that she owed WaMu missed payments, attorney’s fees and costs, totaling $3,397.28. WaMu then filed a foreclosure complaint. After communications between Glover and WaMu‘s assignee, Wells Fargo, Glover entered into a loan modification agreement with Wells Fargo. Glover filed a putative class-action against WaMu, Wells Fargo, and the Udren firm, alleging violations of the Pennsylvania Fair Credit Extension Uniformity Act, premised on violations of the Fair Debt Collection Practices Act, 15 U.S.C. 1692. The district court dismissed. The Third Circuit affirmed. An FDCPA claim was not timely because Glover’s amended pleadings did not provide the fair notice required for relatation back to her original filing View "Glover v. Fed. Deposit Ins. Corp." on Justia Law

Knight was owner and CEO of Knight Industries, which owned other companies. Bank had provided credit ($34 million) to the companies, which, in 2009, filed bankruptcy petitions. Chatz was appointed trustee and was authorized to retain the Freeborn law firm. Chatz and the Bank alleged that Knight had made fraudulent transfers, had breached duties of good faith and fair dealing and duties to creditors, had misappropriated corporate opportunities, had committed conversion, and had violated securities laws, and demanded $27 million for the companies and $34 million for the Bank. In 2010 Knight filed a chapter 7 petition, listing the claims, value “unknown.” Chatz, appointed as trustee, requested representation by the Freeborn law firm, without disclosing intent to pursue the claims against Knight. The bankruptcy court approved. Later, the Bank and Chatz asked to assign the companies’ claims to the Bank. Knight objected, arguing that approval of the law firm conflicted with the companies having viable claims against Knight. The bankruptcy court overruled Knight’s objection. The district court and Seventh Circuit affirmed. Failure to disclose intent to pursue the claims did not harm Knight, and other remedies are available. It would be inequitable to permit Knight to reap huge benefits from harmless omission.View "Knight v. Bank of America, N.A." on Justia Law

Stephanie and Kenneth Woolsey attempted to discharge a second mortgage on their home held by Citibank, N.A. through Chapter 13 bankruptcy. In their plan, they took the position that the bankruptcy code voided Citibank’s lien because it was unsupported by any current value in the home. The bank objected to the Woolseys’ plan and eventually persuaded the bankruptcy court to reject it. The district court affirmed the bankruptcy court, and the Woolseys appealed to the Tenth Circuit. In their argument on appeal, "[t]hey choose to pursue instead and exclusively a line of attack long foreclosed by Supreme Court precedent. To be sure, the Woolseys argue[d] vigorously and with some support that the Supreme Court ha[d] it wrong. But, as Justice Jackson reminds us, whether or not the Supreme Court is infallible, it is final." The Tenth Circuit was "obliged" to apply the Supreme Court's current case law and affirmed the district and bankruptcy court's decisions. View "Woolsey, et al v. Citibank, N.A." on Justia Law

Debtors proposed a three-year Chapter 13 plan of reorganization. The Trustee objected and argued that a five-year plan was required. At issue was whether, under 11 U.S.C. 1325(b), a debtor with no "projected disposable income" could confirm a plan that was shorter in duration than the "applicable commitment period" found in section 1325(b). The court concluded that the Trustee raised legitimate policy considerations as to why a mandated plan length might be desirable even though debtors have no projected disposable income. However, the court concluded that the bankruptcy court erred in disregarding the controlling precedent in Maney v. Kagenveama where Ninth Circuit precedent plainly allowed debtors to confirm a shorter plan under the facts of this case. View "Flores, et al. v. Danielson" on Justia Law

Following the bankruptcy court's confirmation of Charter's proposed plan of reorganization, LDT, as indenture trustee for certain notes issued by CCI, and a CCI shareholder, appealed the confirmation order to the district court. The court affirmed the district court's dismissal of the appeals as moot under the doctrine of equitable mootness. View "In re: Charter Communication" on Justia Law

Barbara, an analyst at the Cleveland Clinic, and Anthony, a stay-at-home father for two-year-old triplets and ten-year-old, filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code, 11 U.S.C. 701. On Schedule B listing assets, they included a joint interest in “Anticipated 2009 Income Tax Refund,” value “unknown.” On their joint returns for 2009, they listed: adjusted gross income: $59,402; total tax liability: $2,934; total credits: $2,934; payroll taxes withheld: $6,777; and total federal tax refund: $8,542. On line 51, “Tax and Credits,” they listed $2,903 for the Child Tax Credit (CTC). On line 65, “Payments,” they listed $1,097 for additional CTC. They amended Schedule B, changing the unknown value of their tax refund. They specified $4,000 as the portion of their refund due to the CTC and $4,542 for the portion not due to the CTC. They amended Schedule C of the bankruptcy petition, to list the $4,000 portion as exempt pursuant to Ohio Rev. Code 2329.66(A)(9)(g). The Trustee objected, arguing that $2,903 of the CTC, the so-called “non-refundable portion,” was not exempt. The bankruptcy court sustained the Trustee’s objection, reducing the exemption to $1,907. The Bankruptcy Appellate Panel affirmed. The Sixth Circuit affirmed View "Zingale v. Rabin" on Justia Law

The Property Appraiser and the Tax Collector appealed from an order of the district court affirming the final order of the bankruptcy court. The bankruptcy court held that debtor's request for the bankruptcy court to redetermine her ad valorem tax liability for the year 2009 was timely filed under 11 U.S.C. 108(a) and 505. The court concluded that the bankruptcy court erred in ruling that debtor's request was timely under section 108(a). The bankruptcy court's interpretation of the language in section 505(a)(2)(C) failed to give full effect to Congress's intent. Accordingly, the court reversed the judgment of the district court affirming the bankruptcy court's holding. View "Dubov, et al. v. Read" on Justia Law

Plaintiff commenced this action, on behalf of herself and the 181 other individuals in New York State who had received student loan collection letters from defendant. At issue was whether a debt collector's inaccurate representation to a debtor that her student loans were "ineligible" for bankruptcy discharge was a "false, misleading, or deceptive" debt collection practice, in violation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq. The court held that it was because the least sophisticated consumer would interpret defendant's letter as representing, incorrectly, that bankruptcy discharge of her loans was wholly unavailable to her. Accordingly, the court reversed and remanded. View "Easterling v. Collecto, Inc." on Justia Law

This case involved unanswered questions of Georgia law that are central to this appeal. Because these questions are determinative of the case and there are no controlling precedents from the Supreme Court of Georgia, the court respectfully certified the following questions for resolution: (1) Whether a security deed that lacks the signature of an unofficial witness should be considered "duly filed, recorded, and indexed" as required by O.C.G.A. 44-13-33, such that a subsequent hypothetical bona fide purchaser would have constructive notice when the deed incorporates the covenants, terms, and provisions of a rider that contains the attestations required by O.C.G.A. 44-13-33 and said rider was filed, recorded, and indexed with the security deed; and (2) If the answer to question one was in the negative, whether such a situation would nonetheless put a subsequent hypothetical bona fide purchaser on inquiry notice. View "Gordon v. Wells Fargo Bank, N.A." on Justia Law

At the behest of the Oklahoma Department of Securities, Oklahoma courts found early investors in a Ponzi scheme carried out by a third party to have been unjustly enriched and required disgorgement. Judgments were entered against those investors. The issue before the Tenth Circuit was whether the judgments entered against Robert Mathews, Marvin Wilcox, and Pamela Wilcox qualified as a nondischargeable debt under 11 U.S.C. 523(a)(19). The bankruptcy court decided the debts were nondischargeable because they were in violation of securities laws. The district court affirmed. Upon review, the Tenth Circuit reversed and remanded: "the Department's position conveniently serves its ends (and in the abstract) a public good. But the language of the statute cannot reasonably be stretched that far." View "Oklahoma Dept. of Securites v. Wilcox, et al" on Justia Law