Long Island’s Judge Grossman warns lawyers that they may be paid nothing if they file chapter 11 cases just to delay a secured creditor, with no legitimate strategy for selling the property, refinancing or confirming a plan.
A secured lender need not obtain a deficiency judgment to retain a claim against an insurer for a shortfall in a bankruptcy sale, Bankruptcy Judge Grossman says.
Damages for a constructively fraudulent transfer were the difference between what the buyer paid and what the business was really worth, based on accurate income and expenses.
Joining the majority of courts, Judge Grossman says that the debtor’s conduct, not the identity of the holder of the claim, determines nondischargeability.
A local government removed a lawsuit to bankruptcy court, but the bankruptcy judge turned around and slam-dunked the government for violating the plaintiff’s Fourteenth Amendment rights.
Judge Grossman didn’t abolish ‘chapter 20’ entirely. He required the debtor to treat the subordinate mortgage lender like all other unsecured creditors, even though the debtor’s personal liability to the lender had been discharged in the prior chapter 7 case.
Read Judge Grossman’s opinion as though it were a final exam question to see how many issues you spot and whether you come up with the correct answers.