June 07, 2021
In ‘Related To’ Jurisdiction, District Court Applies the Bankruptcy Rules, Circuit Says
If the district court is adjudicating a suit with “related to” jurisdiction under 28 U.S.C. § 1334(b), the district court applies the Bankruptcy Rules, not the Federal Rules, the First Circuit says.
1st CircuitJune 04, 2021
Arbitration Clause Results in Temporary Stay of ‘Core’ Proceedings in Bankruptcy Court
Decision by Bankruptcy Judge Michelle Harner demonstrates the flaw in the Fourth Circuit’s rule requiring parallel proceedings in bankruptcy court and in arbitration when disputes are both core and non-core.
4th Circuit, MarylandJune 01, 2021
Debt from a Defunct Business Can Help to Qualify for Subchapter V
Part-time self-employment, coupled with debt from a defunct business, qualified the debtor for reorganization under Subchapter V of chapter 11.
4th Circuit, North Carolina, North Carolina Middle DistrictMay 28, 2021
Third Circuit Finds Broad Waiver of Sovereign Immunity for Suits Augmenting the Estate
Circuit Judge Ambro generously interprets Katz to mean that ratification of the Constitution waived state sovereign immunity broadly for suits to augment a bankrupt estate.
3rd CircuitMay 27, 2021
Circuits Are Now Split on the Constitutionality of the 2018 Increase in U.S. Trustee Fees
The Second Circuit split with the Fourth and Fifth Circuits by holding that the increase in fees for the U.S. Trustee system was unconstitutional because it was not imposed simultaneously in the two states with bankruptcy administrators.
2nd CircuitMay 26, 2021
Curing Defaults Isn’t Always Required Before Selling a Contract, Third Circuit Says
The ‘Countryman’ definition of an executory contract allows a debtor sell a contract without curing a default if the non-debtor counterparty has no further material, unperformed obligations.
3rd CircuitMay 20, 2021
U.S. Suit Dismissed After German Defendant Files Insolvency in Germany
Filing a chapter 15 petition wasn’t required for a U.S. district court to dismiss a civil action against a German company undergoing insolvency in Germany.
2nd Circuit, New York, New York Southern DistrictMay 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 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 District