Articles Posted in Bankruptcy

by
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

Posted in: Bankruptcy

by
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

by
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

Posted in: Bankruptcy

by
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

Posted in: Bankruptcy

by
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

Posted in: Bankruptcy

by
The Bankruptcy Appellate Panel vacated the bankruptcy court's order allowing Lariat's claim against debtor in the reduced amount of $308,805.00. The panel held that Lariat's predicate claim had been satisfied and Lariat cannot recover any additional amount from debtor's spouse. In this case, there were no preexisting creditor rights left for MINN. STAT. 513.41-513.51 to protect. Therefore, the panel remanded for entry of an order disallowing Lariat's claim in its entirety. View "Lariat Companies, Inc. v. Wigley" on Justia Law

Posted in: Bankruptcy

by
The Bankruptcy Appellate Panel affirmed the bankruptcy court's judgment denying debtors' discharge under Bankruptcy Code 727(a). The panel held that debtors failed to maintain and preserve adequate records, and such failure made it impossible to ascertain their financial condition and material business transactions. Therefore, the trustee met his burden of proving that debtors' discharge should be denied under section 727(a)(3). View "Snyder v. Dykes" on Justia Law

Posted in: Bankruptcy

by
The Bankruptcy Appellate Panel affirmed the bankruptcy court's order dismissing plaintiffs' adversary complaint and an order denying their motion to reconsider the dismissal order. The panel held that plaintiffs failed to state a claim upon which relief can be granted under 11 U.S.C. 523(a)(19). In this case, a prior Consent Order requiring debtor to pay a fine and costs did not result in a debt owed to plaintiffs. Plaintiffs were not a party to or a signatory on the Consent Order and the debt to plaintiffs did not result from the Consent Order. View "Conway v. Heyl" on Justia Law

Posted in: Bankruptcy

by
The Bankruptcy Appellate Panel affirmed the bankruptcy court's order disallowing debtor's claimed exemptions in his ex-wife's Wells Fargo 401K and an IRA account. The panel held that any interest debtor held in the accounts resulted from nothing more than a property settlement and thus they were not retirement funds that qualified as exempt under federal law. View "Lerbakken v. Sieloff and Associates, PA" on Justia Law

Posted in: Bankruptcy

by
The Bankruptcy Appellate Panel vacated the bankruptcy court's decision concerning injunctive and declaratory relief, holding that the bankruptcy court lacked jurisdiction to entertain the claim at issue. In this case, the bankruptcy court held that a debt to AY was not dischargeable due to debtor's fraud and defalcation while he was a director at AY. The panel explained that the outcome of AY's claim for injunctive and declaratory relief could have no effect on debtor or the bankruptcy estate; the relief for the contract claim only affected AY; and the claim involved distributions from two spendthrift trusts, which were not property of the estate. Therefore, the contract claims for injunctive and declaratory relief were neither core proceedings nor non-core related to proceedings. View "AY McDonald Industries Inc. v. McDonald" on Justia Law

Posted in: Bankruptcy