Case Roundup for Week Ended 3/18/2007

Bankruptcies may be down, but opinions sure seem to be up.  Lots of interesting cases reported as of late.  Here's a few recent cases, sorted by date, that I thought you'd find of interest:

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Court lacks subject matter jurisdiction over post-confirmation cause of action for aiding and abetting breaches of fiduciary duty, but claims reservation clause in plan was sufficient to retain other bankruptcy-related causes of actionCLC Creditors' Grantor Trust v. Sonnenschein Nath & Rosenthal LLP (In re Commercial Loan Corp.), Adv. No. 06-A-1530, 2007 WL 756382 (Bankr. N.D. Ill. 3/14/07) (Goldgar, J.).

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Court refuses to certify class
alleging wrongful deprivation of overtime pay and other benefits where the class certification motion was filed post-confirmation and not part of filed proofs of claimIn re Musicland Holding Corp., Adv. No. 06-10064, 2007 WL 748468 (Bankr. S.D.N.Y. 3/13/07) (Bernstein, J.).

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Another Court adopts a "law of unintended consequences" for BAPCPA's "hanging paragraph" (i.e., Code section 1325(a)(5)) and permits a chapter 13 debtor to surrender its car in full satisfaction of the auto lender's claim
In re Pinti, No. 06-35230 (Bankr. S.D.N.Y. 3/13/07) (Morris, J.).  

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Purchaser of a charged-off portfolio of credit card debt who inadvertently sent a "dunning letter" to a discharged debtor, but ceased collection efforts once it learns of the bankruptcy discharge, did not violate FDCPA (but allegations that FDCPA was violated skated dangerously close to frivolous the Court advised)
Ross v. RJM Acquisitions Funding LLC, No. 06-2059, 2007 WL 738949, (7th Cir. 3/13/07) (Posner, J.).

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Court finds that the affiliated debtors in the Kara Homes bankruptcy case fall within the definition of "single asset real estate" debtors under Code section 101(51B), thus subjecting the debtors to the expedited relief procedures of Code section 362(d)(3)
:   Kara Homes, Inc. v. National City Bank, Adv. No. 06-3101, 2007 WL 748470 (Bankr. D.N.J. 3/12/07) (Kaplan, J.).

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Transfer of property in a divorce settlement is held to be a fraudulent transferReisz v. Stinson (In re Stinson), Adv. No. 06-3050, 2007 WL 763709 (Bankr. W.D. Ky. 3/12/07) (Fulton, J.).

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Uncontested proof of claim is a final judgment on the merits giving rise to res judicataEDP Medical Computer Systems, Inc. v. United States, No. 06-0106, 2007 WL 706925 (2d Cir. 3/9/07) (Walker, Jr., J.).

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Court addresses motions in limine in fraudulent transfer case, granting motions to (i) preclude plaintiff from disputing defendant's right of setoff and (ii) preclude reference to liquidation value, but denying motions to (i) refer to the arbitration award favoring plaintiff, (ii) exclude claims that the debtor was insolvent, and (iii) preclude expert testimony on reasonably equivalent value
Valley City Steel, LLC v. Liverpool Coil Processing, Inc., No. 5:05-CV-1902, 2007 WL 756658 (Bankr. N.D. Ohio 3/8/07) (Adams, J.).

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Court grants motion in limine precluding use of a business plan containing "hoped for future earnings projections" as evidence of lost profit damages
McMahan Securities Co., L.P., v. FB Foods, Inc., No. 8:04-cv-1791, 2007 WL 704916 (M.D. Fla. 3/2/07).

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Battle of the solvency experts favors trustee in recovering certain lease payments, but securitization trust assets are held immune from recoveryDoctors Hospital of Hyde Park, Inc. v. Desnick (In re Doctors Hospital of Hyde Park, Inc.),  Adv. No. 02-A-363, 2007 WL 641399 (Bankr. N.D. Ill. 3/2/07) (Schmetterer, J.).

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District Court invokes Code section 525(a) to reverse Bankruptcy Court's order lifting the automatic stay in favor of Pittsburgh's Housing Authority to permit the commencement of state court eviction proceedings based upon the debtor-tenant's failure to pay rent and accumulated arrearageBiggs v. Housing Authority of the City of Pittsburgh, No. 07-CV-0007, 2007 WL 654247 (W.D. Pa. 2/28/07) (Schwab, J.).

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Court reaffirms holding that BAPCPA's "debt relief agent" speech restrictions in Code section  526(a)(4) are facially unconstitutional because they are not "is not sufficiently 'narrowly tailored to achieve the desired objective.'"  Court grants Plaintiff's summary judgment motion, but limits grant of injunctive relief to individual plaintiff only and not to the whole lot of "debt relief agents" in the jurisdiction
:   Zelotes v. Adams, No. 3:05-cv-1591, 2007 WL 638331 (D. Conn. 2/27/07) (Dorsey, J.).

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Critical vendor motion by construction company seeking payment of $130K in prepetition vendor bills is denied
In re Ronald Pugh Construction, Inc., No. BK 06-71769, 2007 WL 509225 (Bankr. S.D. Ala. 2./12/07) (Stilson, J.).


[NB:  Most links are to We$tlaw.  Those who don't have access to Westlaw may contact me directly if they would like to view a particular case, though all federal courts maintain their own websites where judicial opinions may be accessed by the public free of charge (e.g., Bankr. N.D. Ill. - Judge Wedoff opinions).  Navigate your way through the local court website, and you'll likely find a pdf version of the opinion.  Because each case cited identifies the deciding judge, you should be able to find the opinions online with minimal effort.  Good luck, and thanks for reading!]


Finally, the inset photograph is of the 9th Circuit Court of Appeals building in San Francisco, a 350,000 sq. ft. "beaux art" behemoth at 7th and Mission adorned with ornate marble floors and walls, carved mahogany and redwood finishes, marble mosaic ceilings and murals, and multi-colored skylights.  In June, 1994, the building was the largest in the world to be retrofitted with seismic isolators when 256 "friction pendulum seismic isolation bearings" were installed, as described here.  If I'm in SF next time there's an earthquake there, I sure hope I'm at the Court of Appeals, and not at the Warwick!

© Steve Jakubowski 2007

Written By:Susan Hemb On October 9, 2007 5:03 PM

Was there a recent ruling as to the need for a noticed motion on the issue of the debtor's converting from a Chapter 7 to a 13 petition?