‘Preserved’ Liens Can Sometimes Be Worthless, Ninth Circuit Says
When a lien is undersecured, the avoided portion of the lien takes nothing through preservation until the unavoidable portion of the lien is paid in full.
Chapter 11 Plan May Impair a Mortgage When the Debtor Is Not Liable on the Debt
A chapter 11 plan may not impair the rights of a mortgage lender against a co-owner who is not in bankruptcy.
Ninth Circuit BAP Jealously Protects a ‘13’ Debtor’s Right to Dismiss
Debtors paid a high price for their counsel’s inattention to their needs after plan confirmation.
Eighth Circuit Holds that § 303(i) Damages Are Available for § 305(a) Dismissal
Eighth Circuit panel disagrees about whether federal preemption bars state law claims for dismissal of an involuntary petition.
Second Circuit Allows Sale of ‘General’ Claims Subject to a Creditor’s Disputed Lien
Second Circuit leaves open the question of whether a trustee can sell a ‘general’ or ‘derivative’ claim that’s subject to a valid lien held by a creditor.
Upstate New York Bankruptcy Judge Nixes an ‘Opt-Out’ Plan with Nondebtor Releases
After Purdue, bankruptcy judges are now split on whether mass-tort plans are permissible if creditors must opt out.
Ninth Circuit Upholds the ‘Ponzi Scheme’ Presumption over a Dissent
A Ninth Circuit dissenter would require the trier of fact to make a finding that the fraudster acted with actual intent to defraud.
Circuits Are Split on the Extent to Which Bankruptcy Law Preempts State Law
The Ninth Circuit held that a debtor’s claim for malicious prosecution must be brought in bankruptcy court and may not be filed in state court.
Being Forced into Bankruptcy Can Be Irreparable Harm, Third Circuit Says
A noncompetition agreement that would preclude finding other sources of revenue can be the basis for showing irreparable harm and entitlement to a preliminary injunction.
Houston Judge Confirms an ‘Opt-Out’ Plan with Nondebtor Releases
In the first opinion on the issue after Purdue, Bankruptcy Judge Christopher Lopez holds that Purdue did not change Fifth Circuit law where ‘hundreds’ of ‘opt-out’ plans have been confirmed with nondebtor releases.