January 05, 2024

U.S. Trustee Dodged Payment of Attorneys’ Fees Under the Equal Access to Justice Act

The Sixth Circuit holds that a debtor cannot recover attorneys’ fees from the U.S. Trustee under the EAJA in a contested matter, but leaves open the possibility of liability for counsel fees in a losing adversary proceeding.

6th Circuit

January 04, 2024

With Reservations, a Chapter 11 Debtor with No Financial Distress Avoids Dismissal

Bankruptcy Judge Whitley says that a no-opt-out plan for a solvent debtor might violate creditors’ due process and jury trial rights.

4th Circuit, North Carolina, North Carolina Western District

January 03, 2024

U.S. Trustee Rebuffed in Objecting to Rates Higher than Local Rates

‘National’ rates higher than ‘local’ rates can be locked in by retention orders under Section 328(a).

5th Circuit, Mississippi, Mississippi Northern District

December 27, 2023

No Condemnation When Government Takes Over Property to Prevent Public Injury

No reverse condemnation occurred when the state took over a debtor’s property to prevent an imminent threat to public health.

3rd Circuit, Delaware

December 26, 2023

Oil and Gas Royalties Never Become Estate Property in Colorado

The Third Circuit gave royalty owners a constructive trust over royalties improperly paid to secured creditors. The circuit court did not rule on remedy.

3rd Circuit

December 21, 2023

Whether a Fraudulent Transfer Claim Is ‘Direct’ or ‘Derivative’ Depends on Point of View

A D&O policy covering securities claims doesn’t provide coverage for a claim resulting from a fraudulent transfer, the Delaware Supreme Court rules.

3rd Circuit, Delaware

December 20, 2023

Judge Harner Gives Contours to the Amorphous Notion of ‘New Value’

The ‘new value’ offered by old equity in a chapter 11 plan was insufficient because it was only a small fraction of claims and because the dividend to creditors was also small.

4th Circuit, Maryland

December 18, 2023

Bankruptcy Code Overrides Contrary Delaware Corporate Law, Judge Lopez Says

Whether a creditor violated the automatic stay is not arbitrable in bankruptcy.

5th Circuit, Texas, Texas Southern District

December 11, 2023

Finality of a Contempt Order Drawn into Question in the Eleventh Circuit

Some authority from the Supreme Court suggests that a contempt order without imposition of attorneys’ fees would not be final in a bankruptcy case.

11th Circuit

December 08, 2023

Courts Are Split on Counting Future Rent Toward the $7.5 Million Debt Cap in Sub V

If future liability on unexpired leases and executory contracts is counted, many companies will be ineligible for Subchapter V of chapter 11.

2nd Circuit, New York, New York Southern District