Justia Bankruptcy Opinion Summaries

In 2010, Hill, a principal of Meridian and the other principals sold Meridian to CMCO; the former Meridian principals were to work for CMCO. In 2012, Hill accepted employment with CMCO’s competitor, Peoples. CMCO filed suit, alleging that he breached his contract and shared trade secrets. CMCO settled its claims against Peoples. Hill proceeded pro se. Hill failed to attend a pretrial conference. The state court granted a default judgment. Hill also declined to appear for the damages trial. Hill asserts that he never received the order scheduling a pretrial conference but admits that he was initially aware of the date. Hill further acknowledged that he knew of the trial date because he spoke with the judge by phone and was warned that if he did not appear “adverse things [were] likely [to] happen.” He contends that a bankruptcy attorney he was consulting advised him that he need not participate because any judgments would “go away” in bankruptcy. The court granted CMCO judgment, finding Hill’s actions willful, intentional, in bad faith, egregious, and done with malice. The court awarded $3,417,477.Hill then filed his Chapter 7 bankruptcy petition. The bankruptcy court lifted the automatic stay, 11 U.S.C. 362(d), with respect to CMCO’s judgment.CMCO filed an adversary proceeding. The court found the damages judgment nondischargeable, 11 U.S.C. 523(a)(2)(A), (a)(4), (a)(6), applying collateral estoppel based on the state court finding that Hill’s actions caused “willful and malicious injury.” Hill unsuccessfully sought to vacate the state court judgment. The district and Sixth Circuit affirmed the bankruptcy court’s grant of summary judgment to CMCO. ” The state court damages judgment provided preclusive effect to the determination of the nondischargeability of Hill’s debt. View "In re: Hill" on Justia Law

The Eighth Circuit affirmed the bankruptcy court's determination that the interested parties were equitably estopped from asserting ownership of machinery and equipment in debtor's bankruptcy case. In this case, the interested parties allowed the misrepresentations concerning debtor's assets to continue throughout the bankruptcy case and now seek to protect their alleged pecuniary interests. The court found that the interested parties' arguments lacked merit and were not properly before the district court. The court also affirmed the bankruptcy court's denial of the interested parties' request for the bankruptcy court to alter or amend its ruling or for a new trial. View "Richards v. Rabo ArgiFinance, LLC" on Justia Law

Plaintiff filed suit alleging that DISH violated the Florida Consumer Collection Practices Act (FCCPA) in its attempts to collect debt it knew had been discharged in bankruptcy and in its direct contacts with plaintiff knowing she was represented by counsel. Plaintiff also alleged that DISH violated the Telephone Consumer Practices Act (TCPA) by contacting plaintiff about the debt with an automated dialing system after she revoked her consent to receive such calls.The Eleventh Circuit first determined that DISH's claim for the Pause debt was discharged. The court reversed the district court's grant of summary judgment as to the FCCPA claims. In this case, DISH attempted to collect debt it had no legal right to collect because the debt had been discharged in bankruptcy, and DISH directly contacted plaintiff after having received notice that she was represented by counsel. Accordingly, the court remanded on the FCCPA claims for the district court to consider whether DISH actually knew that the Pause charges were invalid and that plaintiff was represented by counsel with regard to the debt it was attempting to collect, and if so, whether such errors were unintentional and the result of bona fide error.The court affirmed the district court's grant of summary judgment as to the TCPA claim, holding that the TCPA does not allow unilateral revocation of consent given in a bargained-for contract. The court reasoned that, by permitting plaintiff to unilaterally revoke a mutually-agreed-upon term in a contract would run counter to black-letter contract law in effect at the time Congress enacted the TCPA. View "Medley v. Dish Network, LLC" on Justia Law

The Ninth Circuit affirmed the district court's judgment affirming the bankruptcy court's order granting a Chapter 7 trustee's motion to exercise management rights over Dillon and authorizing the trustee's assumption of the operating agreement with Dillon. Dillon is a limited liability company created to hold title to foreclosed property securing investments by private investors in Point Center Financial, and appellants are the former principal of Point Center Financial, the debtor, and members of Dillon.The panel held that the Harkey parties have standing to pursue this appeal; the bankruptcy court had subject matter jurisdiction to confirm the vote establishing the trustee as manager of Dillon and to hear the assumption motion; the bankruptcy court properly authorized the trustee to exercise management rights over Dillon after the majority of Dillon's members voted for the trustee to manage Dillon; the bankruptcy court properly extended its own deadline for assumption of the operating agreement pursuant to Fed. R. Bankr. P. 9006(b)(1)(2); and the panel need not reach the question of equitable mootness because it affirmed the district court on other grounds. View "In re: Point Center Financial, Inc." on Justia Law

The Bankruptcy Appellate Panel affirmed the bankruptcy court's order denying Murray's motion to enforce the order confirming debtors' third amended plan of reorganization and to enjoin parties from asserting claims barred by the third amended plan. Murray claimed that their purchase of debtors' assets "free and clear" under section 363, together with the release provision in the confirmed plan, precluded their liability for indemnification payments for litigation expenses accruing after the effective date of the plan. The bankruptcy court held that neither 11 U.S.C. 1141(d), Kentucky law, nor the language of the confirmed plan released Murray from its contractual or contingent indemnity obligations.The panel held that the bankruptcy court did not abuse its discretion in determining the confirmed plan requires Murray to comply with the contractual indemnity obligations. The court held that the bankruptcy court followed principles of contract assignment and interpretation in reaching its conclusions about which obligations Murray assumed and which were released, upholding the agreements and the confirmed plan as written, rather than as Murray wants to rewrite them. View "Murray Kentucky Energy, Inc. v. Ceralvo Holdings, LLC" on Justia Law

The Bankruptcy Appellate Panel dismissed debtor's Chapter 13 bankruptcy appeal, holding that it lacked jurisdiction. The panel held that debtor has not shown she is a person aggrieved by the bankruptcy court's order overruling her objection to the trustee's final report and thus does not have standing to appeal the bankruptcy court's order. In this case, although debtor questioned the accuracy of some of the information in the final report, she did not challenge in her objection, nor on appeal, the amount the trustee reported had been returned to her following dismissal of her case. View "Marshall v. McCarty" on Justia Law

In this case, a byproduct of litigation stemming from the derailment of a Montreal, Maine & Atlantic Railway, Ltd. (MMA) freight train carrying crude oil in Lac-Megantic, Quebec, the First Circuit affirmed the district court's entry of judgment in favor of Robert Keath, the estate representative of MMA, and against creditor Wheeling & Lake Erie Railway Company, holding that, giving due deference to the fact-finder's resolution of the burden of proof, the judgment must be affirmed.One month after the derailment, MMA filed a voluntary petition for protection under Chapter 11 of the Bankruptcy Code. Wheeling instituted an adversary proceeding in the bankruptcy court against MMA and the estate representative, seeking a declaratory judgment regarding the existence and priority of its security interest in certain property of the MMA estate. The case involved intricate questions concerning secured transactions, carriage of goods, and corporate reorganization. After a settlement, the bankruptcy court ruled in favor of the estate representative. The First Circuit affirmed, holding (1) ultimately, this case turned on principals relating to the allocation of the burden of proof and the deference due to the finder of fact; and (2) giving due deference to the fact-finder's resolution of the burden of proof issue, the district court's judgment must be affirmed. View "Wheeling & Lake Erie Railway Co. v. Keach" on Justia Law

Plaintiff filed suit against Bay Point in state court and added DCT as a plaintiff in an amended complaint, alleging that Bay Point's foreclosure of two properties caused him to lose the collateral's value exceeding the debt balance, and to suffer mental anguish. After Bay Point removed to bankruptcy court, the district court affirmed the bankruptcy court's order in favor of Bay Point. Plaintiff and DCT appealed, but then the district court granted DCT's motion to dismiss.The Eleventh Circuit held that plaintiff lacked Article III standing, because he failed to allege a particularized, actual injury. Furthermore, plaintiff was not a person aggrieved. Therefore, plaintiff may not appeal the district court's decision affirming the bankruptcy court's order. View "Thakkar v. Bay Point Capital Partners, LP" on Justia Law

After debtors filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code, the United States Trustee objected to the discharge in bankruptcy. The Bankruptcy Appellate Panel (BAP) affirmed the bankruptcy court's denial of discharge.The Eighth Circuit affirmed and agreed with the BAP that the bankruptcy court did not err in denying debtors a discharge in bankruptcy under 11 U.S.C. 727(a)(3) based on its findings that debtors unjustifiably failed to keep adequate records of financially significant watch and jewelry transactions. In a consumer bankruptcy, the debtor has a greater duty to keep records of a sudden and large dissipation of assets. In this case, debtors' return of twenty-seven valuable watches and the Kwait bridal collection ring to a judgment creditor was such a sudden and large dissipation of assets. View "Snyder v. Dykes" on Justia Law

David and his parents, Don and Martha, were named as defendants in an unfair competition lawsuit brought by MarketGraphics, a company with which Don had previously been associated. Before MarketGraphics could proceed to judgment, Don and Martha filed for Chapter 7 bankruptcy. When MarketGraphics obtained a judgment against David, he filed his own Chapter 7 proceedings. The MarketGraphics judgment included findings that the defendants “willfully or knowingly” violated the Tennessee Consumer Protection Act, willfully infringed upon MarketGraphics’s copyrighted works, acted in concert with Don to violate Don’s non-compete agreement with MarketGraphics, and wrongfully impaired goodwill among Memphis customers.In David’s bankruptcy proceeding, MarketGraphics initiated adversary proceedings, asserting that its claim should be exempted from discharge under 11 U.S.C. 523(a)(6), which prevents a debtor from discharging claims for injuries he willfully and maliciously caused. The bankruptcy court denied MarketGraphics’s request. The Sixth Circuit affirmed. Nothing in the record of these proceedings or the proceedings for the underlying judgment supports a finding that David acted with the requisite intent under section 523(a)(6) to harm MarketGraphics. The court rejected MarketGraphics’s contention that it was precluded from reviewing that issue in the first instance. Even assuming that the common law claims facially demonstrate “willful and malicious” injury, the underlying judgment is too vague to carry preclusive effect. View "MarketGraphics Research Group, Inc. v. Berge" on Justia Law