No Sales Free and Clear of a Lien on a Nondebtor Co-owner’s Interest
Although a court may sell a nondebtor’s interest in jointly owned property, the Ninth Circuit BAP won’t permit selling free and clear of lien on the nondebtor’s interest in the property being sold.
Two Opinions on Disallowance of Compensation After Appointment of a Trustee
‘Conflict preemption’ bars retaliation by a professional whose fees are disputed.
A Bankruptcy Petition Automatically Stays the Filing of an Appeal or a Cross Appeal
When the debtor files bankruptcy before the time has elapsed for a creditor to file a cross appeal, the cross appeal is deemed timely when filed within 30 days after the stay terminated, the Tenth Circuit held.
IRS Has No Sovereign Immunity to Bar a Fraudulent Transfer Suit Under Section 544(b)
The circuits are now split 3/1, with the majority finding a waiver of sovereign immunity under Section 544(b)(1) for lawsuits by a trustee based on claims that an actual creditor could not have brought outside of bankruptcy.
If There’s No Diminution of the Estate, There’s No Preference or Fraudulent Transfer
Just because the debtor orchestrated a fraudulent transfer, the Seventh Circuit tells us there’s nothing for a trustee recover if there was no diminution of the estate.
Eligibility for Subchapter V Is Liberal, but Not Wide Open
Courts are split on whether the debt providing eligibility for Sub V must have arisen from a business that was active on the filing date.
Three Circuits Now Require Refunds for Overpayment of U.S. Trustee Fees
The government has filed a petition for certiorari raising the question of whether refunds are the proper remedy following the Supreme Court’s Siegel decision finding that the 2018 increase in U.S. Trustee fees was unconstitutional.
A Supreme Court Arbitration Opinion Could Disrupt Bankruptcies
Split 5/4, the Supreme Court rules that denial of a motion to compel arbitration automatically imposes a stay pending appeal.
Sixth Circuit Staunches the Spread of Equitable Mootness to Chapter 7
Two judges on the Sixth Circuit cast doubt on the validity of the doctrine of equitable mootness, even in chapter 11 reorganizations.
A Fourth Circuit Dissenter Opposes Mass-Tort Injunctions Protecting Non-Debtors
The Fourth Circuit majority upheld a preliminary injunction barring tort suits against a debtor’s nonbankrupt affiliates following a Texas divisional merger.