May 19, 2021
West Virginia Judge Allows Conversion to Subchapter V After Deadlines Passed
When drafting a statute, Congress cannot ‘think of every single esoteric possibility,’ Judge Mignault says.
4th Circuit, West Virginia, West Virginia Southern DistrictMay 18, 2021
Courts Split on Whether Suits in Bankruptcy Court Can Violate the Automatic Stay
A minority of courts hold that a suit in bankruptcy court can violate the automatic stay if based on a claim that could have been brought before bankruptcy and did not arise under the Bankruptcy Code.
10th Circuit, New MexicoMay 17, 2021
Having Nondischargeable Debts Doesn’t Entitle a Chapter 7 Debtor to Object to Claims
Courts are split on whether having nondischargeable debts gives an individual chapter 7 debtor standing to object to claims.
6th Circuit, Tennessee, Tennessee Western DistrictMay 14, 2021
NRA’s Bankruptcy Dismissed as Being Filed for an Improper Purpose
Filing bankruptcy to gain a ‘litigation advantage’ in the N.Y. Attorney General’s dissolution action meant the chapter 11 petition was not filed in good faith and must be dismissed, Judge Harlan Hale rules.
5th Circuit, Texas, Texas Northern DistrictMay 13, 2021
PACA Violation Doesn’t Result in Nondischargeability for Defalcation, Tampa Judge Says
On an upcoming certified appeal, the Eleventh Circuit can decide whether violating a PACA trust is a ‘defalcation while acting in a fiduciary capacity’ that makes a debt nondischargeable.
11th Circuit, Florida, Florida Middle DistrictMay 12, 2021
Brooklyn Decision Shows Why Litigation Finance Is Risky if the Plaintiff Files Bankruptcy
At least in New York, a litigation finance agreement can’t be written to remove all of the lender’s exposure to the borrower’s bankruptcy.
2nd Circuit, New York, New York Eastern DistrictMay 11, 2021
Jevic Rises from the Dead to Bar Claims Brought Originally by the Creditors’ Committee
Not having challenged pre-petition liens on time, a chapter 7 trustee was barred from taking over an adversary proceeding initiated by a now-dissolved chapter 11 creditors’ committee.
3rd Circuit, DelawareMay 10, 2021
Subchapter V by Itself Doesn’t Bar Class Claims, Florida Judge Says
Judge Colton decided that class claims aren’t prohibited in Subchapter V cases but didn’t allow a class claim in the case before her.
11th Circuit, Florida, Florida Middle DistrictMay 07, 2021
Anonymous Messages Calling the Debtor a Philanderer Isn’t a Stay Violation
Harassing a former lover isn’t an automatic stay violation.
11th Circuit, Florida, Florida Middle DistrictMay 06, 2021
On Dismissal of a ‘13,’ Barton May (or May Not) Bar Garnishments
Section 1326(a)(2) by itself does not bar garnishment of funds held by a trustee on dismissal before confirmation.
10th Circuit