Seventh Circuit Tells Lower Courts to Duck State Law Foreclosure Issues
State courts should rule on state law issues, says circuit panel including Richard Posner.
Judge Name - Do not use it.
Kenneth F. Ripple
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KaloBios Bankruptcy Loans Could Cut Shkreli's Holdings
KaloBios Pharmaceuticals Inc. has lined up $14 million in loans to see it through and out of bankruptcy, financing that could be paid off in the form of bargain-priced stock that would water down the holdings of Martin Shkreli, Dow Jones Daily Bankruptcy Review reported today. Nomis Bay Ltd. has joined Black Horse Capital LP in offering loans designed to fund a deal to get KaloBios back on its feet and soothe a sore spot — the company's association with Shkreli, who attained notoriety for hiking the price of a vital drug by 5,000 percent last year. KaloBios was on the point of being liquidated last November when Shkreli took control of it, driving up the stock price. About a month later, he was pushed out of KaloBios after his arrest on fraud charges unrelated to KaloBios. He remains one of the company's largest shareholders.
Settlement Proposed in Gallup Diocese Bankruptcy Case
Attorneys for a New Mexico diocese have submitted a proposed settlement for a bankruptcy case that has spanned more than two years, the Associated Press reported yesterday. Attorneys for the Diocese of Gallup filed a reorganization plan yesterday that would use cash contributions of $21 million from nearly a dozen sources to settle claims filed by 57 alleged victims of clerical sexual abuse. Bankruptcy Judge David Thuma will consider the proposal at a hearing next month. The plan must also be approved by the claimants. An attorney for the claimants says some terms are still being negotiated, including policies to protect children. The diocese filed for chapter 11 protection in November 2013. Read more.
To read more about litigation or liquidation trusts in bankruptcy, be sure to pick up a copy of ABI’s A Practitioner's Guide to Liquidation and Litigation Trusts.
Fraud Isn’t the Only Ground for Revoking Chapter 13 Confirmation
Court in the Ninth Circuit takes more flexible approach to revoking confirmation.
Judge Name - Do not use it.
Ann Aiken
Judge Writes a Treatise on Provisional Overdrafts and Preferences
No debt, and thus no preference, arises until after the midnight deadline.
Judge Name - Do not use it.
Linda R. Reade
Rule 9(b) Fraud Pleading Standards Don’t Apply to an FDCPA Complaint
Willfulness is not required by the FDCPA when pleading an automatic stay violation.
Judge Name - Do not use it.
J. Phil Gilbert
Dischargeability Judgment Must Not Lower Interest on a Creditor’s Judgment
Abuse of discretion automatically results if a judgment harms a defrauded creditor.
Judge Name - Do not use it.
Marco A. Hernandez
Madoff Investor’s Suspicion of Fraud Does Not Generate Greater Liability
The right paper trail helps avoid liability for profiting from a Ponzi scheme.
Judge Name - Do not use it.
Stuart M. Bernstein
Mistress Got Millions Meant for Rescue Dogs, Life Partners Trustee Says
Homeless dogs were among the victims of Life Partners Holdings Inc.’s former chief executive, who, after being accused of cheating investors out of $1.3 billion, must now fight claims he used an animal shelter to funnel money to his mistress, Bloomberg News reported yesterday. Happy Endings Dog Rescue, allegedly started to help large canines in need of homes, instead left many uncared for as it helped Life Partners’ then-CEO Brian Pardo evade taxes, according to the suit, filed in Texas court as part of the company’s bankruptcy. The operation took about $16 million out of the hands of investors, who are estimated by a bankruptcy trustee to have suffered steep losses as part of Texas’s biggest fraud. Pardo is fighting the trustee’s claims. Instead of going into the charity, millions of dollars a year went for the personal use of Pardo’s mistress, who founded the rescue in 2005, the lawsuit alleges.