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ABI Journal

1st Circuit

Middle Ground on the Circuit Split over Dismissal vs. Conversion in Chapter 13

Bankruptcy Judge Michael Fagone permits dismissal of a chapter 13 case, but with a bar to refiling within two years.

To Dismiss for ‘Loss or Diminution,’ the Focus Is on Losses After Filing, BAP Says

Losses before filing or during prior aborted reorganizations do not control dismissal of a new reorganization for ‘continuing loss or diminution,’ First Circuit BAP says.

Forcing Sale of a Debtor’s Milk Quota Is No Stay Violation, First Circuit Says, Reversing District Court

The First Circuit applied the ‘collateral order doctrine’ to allow an appeal by the government when a private party would be stuck with a nonappealable, interlocutory order.

On Conversion to ‘7,’ Admin Expenses in ‘13’ Must Be Paid, Harris Notwithstanding

When chapter 13 cases are converted to chapter 7 before confirmation, bankruptcy courts are split on whether the broad language in Harris v. Viegelahn bars chapter 13 trustees from paying administrative expenses incurred before conversion.

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.

Chapter 13 Debtors Keep Property that Was Unintentionally Undisclosed

Revesting allowed chapter 13 debtors to retain property that was innocently undisclosed.

Circuit Says Retaining Jurisdiction Not Required to Impose Fees Under Section 303(i)

Motions for fees must be made within 14 days of the entry of judgment.

On a Circuit Split, First Circuit BAP Enforces Deadlines for Joining Involuntary Petitions

The circuits are split on whether a creditor has an ‘unfettered’ right to join as an involuntary petitioner.

Recoupment of Social Security Benefit Overpayments Is Barred as a Setoff

Medicaid overpayments may be recovered as ‘recoupment’ while Social Security overpayments are attempted setoffs barred by discharge, Bankruptcy Judge Harwood says.

Another Court Holds that PACA Trusts Do Not Give Rise to Nondischargeable Debts

Violating a PACA trust does not result in ‘defalcation while acting in a fiduciary capacity’ that makes a debt nondischargeable, Bankruptcy Judge Panos says, taking sides with the Eleventh Circuit.