Articles Posted in Bankruptcy

The Bankruptcy Appellate Panel affirmed the bankruptcy court's order granting the Chapter 13 trustee's motion to dismiss debtor's bankruptcy case. The panel held that the record supported the trustee's contention that debtor did not satisfy the requirements of 11 U.S.C. 109(h) and thus could not be a debtor under the bankruptcy code. In this case, despite checking the box on her petition to represent she had received credit counseling within the 180 days before she filed her petition, debtor did not claim–much less offer any proof–she actually received such counseling within the time allowed. Petitioner failed to submit the required certification to obtain a temporary waiver of the credit counseling requirement due to exigent circumstances, and did not file the required request that the bankruptcy court determine she was unable to complete credit counseling due to incapacity, disability, or active military duty in a military combat zone. Finally, the bankruptcy court did not abuse its discretion in barring debtor from refiling for 180 days. View "Marshall v. McCarty" on Justia Law

The Bankruptcy Appellate Panel affirmed the bankruptcy court's holding that 11 U.S.C. 1322(b)(2)'s anti-modification provision did not apply to the Paddock's claim in debtors' manufactured home. Debtors' plan proposed that The Paddock's secured claim in their manufactured home would be bifurcated into secured and unsecured parts. The panel held that the bankruptcy court did not clearly err in finding that the home did not meet Iowa's fixture test and was therefore not real property. In this case, the home sits on piers and blocks, and the bankruptcy court found nothing in the record to show The Paddock's intent to make the manufactured home a fixture. View "The Paddock, LLC v. Bennett" on Justia Law

The Eighth Circuit affirmed the Bankruptcy Appellate Panel's decision affirming the bankruptcy court's order holding that CRP has an unenforceable judicial lien against the real property of debtor and avoiding that lien under 11 U.S.C. 522(f)(1). The court held that, under Missouri law, CRP's notice of foreign judgment did not give rise to a lien on debtor's exempt homestead property because he owned it jointly with his spouse. The court held that the foreign judgment created a cloud on title under Missouri law sufficient to constitute a charge against or interest in debtor's property under the Bankruptcy Code. Therefore, the cloud on title created by CRP's recording of its judgment fastened an existing, but presently unenforceable lien on the property. Accordingly, the court held that application of section 522(f) would clear the cloud on title to debtor's property and thus the bankruptcy court properly granted debtor's motion to avoid the lien. View "CRP Holdings, A-1, LLC v. O'Sullivan" on Justia Law

The Eighth Circuit affirmed the district court's judgment affirming a bankruptcy court order holding the Bank and its president in contempt and sanctioning them for violating a final bankruptcy discharge injunction. The court noted that it employed a flexible and pragmatic approach when assessing the preclusive effect of a court's order and held that the bankruptcy court did not issue a ruling that would have preclusive effect. The court held that, while post-discharge forbearance may serve as consideration for a new commitment to repay the present value of a lien, no cases suggested that a lienholder could leverage a security interest to obtain a larger repayment commitment, much less a larger commitment representing a discharged personal debt. Therefore, the district court did not err in finding that the Bank and its president were in contempt for violating a final bankruptcy discharge injunction. View "First State Bank of Roscoe v. Stabler" on Justia Law

The Bankruptcy Appellate Panel affirmed the bankruptcy court's denial of debtor's motion to reconsider the order entered which indefinitely extended the deadlines for payment of the last two installments of her filing fee. The court held that debtor's briefs contained extensive and repetitive factual argument expressing frustration with the bankruptcy process but she failed to identify any clearly erroneous facts or an incorrect application of the law that would entitle her to relief under any of the circumstances identified in Rule 60(b). View "Curran v. Moon" on Justia Law

The Bankruptcy Appellate Panel dismissed debtor's appeal of the bankruptcy court's order granting a motion for relief from the automatic bankruptcy stay filed by Deutsche Bank. The panel held that a foreclosure and sale of the property at issue rendered the issues raised on appeal moot and therefore the panel lacked jurisdiction over the appeal. View "Marshall v. Deutsche Bank National Trust Co." on Justia Law

The class representative of federal securities class actions appealed the dismissal of the unsecured creditor claim and amended claim he filed in the pending Chapter 7 bankruptcy proceeding of lead class counsel, Green Jacobson, P.C. The Eighth Circuit held that the claim for the cy pres distribution was no longer an issue because the distribution had been returned by the charity and deposited with the district court clerk for ultimate distribution for the benefit of the NationsBank class; the negligent supervision claim was time-barred; the disgorgement claim was not time-barred by Missouri's five year statute of limitations; and the bankruptcy court did not err in disallowing the bankruptcy claim as premature and lacking in supporting foundation. Accordingly, the court affirmed in part, reversed in part, and remanded. View "Oetting v. Sosne" on Justia Law

The Bankruptcy Appellate Panel dismissed appellants' appeal of the bankruptcy court's denial of their "Amended Motion for Determination that Confirmation Order Does Not Bar a State Court Action Relating to the Springfield, Illinois Coal Contract." The panel held that the bankruptcy court's order was not final, and thus the panel did not have jurisdiction to review it. In this case, the bankruptcy court did not direct entry of a final judgment or expressly determine there was no just reason for delay in entering a final judgment. View "Frakes v. Arch Coal, Inc." on Justia Law

The Bankruptcy Appellate Panel reversed the district court's denial of debtor's motion for summary judgment seeking a discharge of her NCSLT debt under 11 U.S.C. 523(a)(8). The panel held that the district court made ample findings based on undisputed facts to support its conclusion that the loan was an educational loan within the meaning of section 523(a)(8)(A). However, the panel held that the bankruptcy court's inference in NCST's favor that TERI "funded" the loan was not reasonable because it was not supported by the evidence. Therefore, the panel remanded the issue regarding TERI's guarantee of the loan and funding of the program for further consideration. View "Page v. National Collegiate Student Loan Trust" on Justia Law

The bankruptcy trustee filed suit against Opportunity Finance and DZ Bank, seeking to avoid as fraudulent transfers under the Minnesota Uniform Fraudulent Transfer Act (MUFTA) over $250 million in loan payments made to PettersCB, prior to Thomas Petters's acquisition of Polaroid. A second amended complaint (SAC) alleged that PHC and PCE were the successors in interest to Petters CB. The Eighth Circuit affirmed the bankruptcy court's grant of defendants' motion to dismiss. The court held that the SAC failed to state a claim of actual or constructive fraudulent transfers under MUFTA. In this case, the trustee erred in failing to adequately plead claims under the MUFTA. Rather, the trustee relied on the ponzi scheme presumption rejected by Finn v. Alliance Bank, 860 N.W.2d 638, 645-53 (Minn. 2015). The court also held that the district court did not abuse its discretion in denying leave to file a third amended complaint. View "Stoebner v. Opportunity Finance, LLC" on Justia Law