Justia U.S. 8th Circuit Court of Appeals Opinion Summaries

Articles Posted in Bankruptcy
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After Peabody was reorganized, three California municipalities filed suit against Peabody and more than thirty other energy companies for their alleged contributions to global warming. The bankruptcy court enjoined the municipalities from pursuing their claims against Peabody. The district court affirmed.The Eighth Circuit affirmed and held that all the claims in the complaint are directed at Peabody's pre-bankruptcy conduct and are barred. The court rejected the municipalities' claim that the Environmental Law provision exempted their claims from discharge. The court held that their common-law claims against Peabody are "state or local equivalents" of "statutes, regulations and ordinances concerning pollution," holding that the bankruptcy court reasonably concluded that when the definition of Environmental Law mentioned state or local equivalents, it was talking about equivalents to the ten federal statutes listed, not equivalents to statutes, regulations and ordinances concerning pollution. Furthermore, the municipalities have not demonstrated that their common law claims are equivalent to the listed federal statutes. The court also rejected a second provision that the municipalities rely on for the survival of their claims, which exempts from discharge a governmental claim brought "under any . . . applicable police or regulatory law." The court disagreed with the municipalities' contention that, since their representative public-nuisance claim entitles them only to the equitable remedy of abatement, it is not dischargeable in bankruptcy. View "County of San Mateo v. Peabody Energy Corporation" on Justia Law

Posted in: Bankruptcy
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The Eighth Circuit affirmed the bankruptcy court's determination that the interested parties were equitably estopped from asserting ownership of machinery and equipment in debtor's bankruptcy case. In this case, the interested parties allowed the misrepresentations concerning debtor's assets to continue throughout the bankruptcy case and now seek to protect their alleged pecuniary interests. The court found that the interested parties' arguments lacked merit and were not properly before the district court. The court also affirmed the bankruptcy court's denial of the interested parties' request for the bankruptcy court to alter or amend its ruling or for a new trial. View "Richards v. Rabo ArgiFinance, LLC" on Justia Law

Posted in: Bankruptcy
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The Bankruptcy Appellate Panel affirmed the bankruptcy court's order denying Murray's motion to enforce the order confirming debtors' third amended plan of reorganization and to enjoin parties from asserting claims barred by the third amended plan. Murray claimed that their purchase of debtors' assets "free and clear" under section 363, together with the release provision in the confirmed plan, precluded their liability for indemnification payments for litigation expenses accruing after the effective date of the plan. The bankruptcy court held that neither 11 U.S.C. 1141(d), Kentucky law, nor the language of the confirmed plan released Murray from its contractual or contingent indemnity obligations.The panel held that the bankruptcy court did not abuse its discretion in determining the confirmed plan requires Murray to comply with the contractual indemnity obligations. The court held that the bankruptcy court followed principles of contract assignment and interpretation in reaching its conclusions about which obligations Murray assumed and which were released, upholding the agreements and the confirmed plan as written, rather than as Murray wants to rewrite them. View "Murray Kentucky Energy, Inc. v. Ceralvo Holdings, LLC" on Justia Law

Posted in: Bankruptcy
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The Bankruptcy Appellate Panel dismissed debtor's Chapter 13 bankruptcy appeal, holding that it lacked jurisdiction. The panel held that debtor has not shown she is a person aggrieved by the bankruptcy court's order overruling her objection to the trustee's final report and thus does not have standing to appeal the bankruptcy court's order. In this case, although debtor questioned the accuracy of some of the information in the final report, she did not challenge in her objection, nor on appeal, the amount the trustee reported had been returned to her following dismissal of her case. View "Marshall v. McCarty" on Justia Law

Posted in: Bankruptcy
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After debtors filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code, the United States Trustee objected to the discharge in bankruptcy. The Bankruptcy Appellate Panel (BAP) affirmed the bankruptcy court's denial of discharge.The Eighth Circuit affirmed and agreed with the BAP that the bankruptcy court did not err in denying debtors a discharge in bankruptcy under 11 U.S.C. 727(a)(3) based on its findings that debtors unjustifiably failed to keep adequate records of financially significant watch and jewelry transactions. In a consumer bankruptcy, the debtor has a greater duty to keep records of a sudden and large dissipation of assets. In this case, debtors' return of twenty-seven valuable watches and the Kwait bridal collection ring to a judgment creditor was such a sudden and large dissipation of assets. View "Snyder v. Dykes" on Justia Law

Posted in: Bankruptcy
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The bankruptcy appellate panel affirmed the bankruptcy court's dismissal of appellants' adversary proceeding against appellees, individually and in their capacity as assignees of Beresford. The panel held that the bankruptcy court correctly determined that the North Dakota state courts possessed concurrent jurisdiction to decide appellants' quiet title action and interpret the Chapter 12 Plan, as well as the incorporated settlement agreement and Beresford Deed. The panel also held that the bankruptcy court properly determined that it must apply North Dakota law (including the parol evidence statute) to determine ownership of the farm, because property interests are created and defined by state law.Furthermore, because the state courts had jurisdiction and determined property interests in accordance with North Dakota law, and because the bankruptcy court properly decided that it would be constrained to follow that law, preemption under the United States Constitution or federal bankruptcy laws does not apply. Finally, the panel held that the Rooker-Feldman doctrine applies and the bankruptcy court correctly concluded that it lacked subject matter jurisdiction to review appellants' claim of ownership, and appellants' claims and causes of action were barred by the doctrine of res judicata. The panel rejected appellants' remaining claims as without merit. View "Finstad v. Gord" on Justia Law

Posted in: Bankruptcy
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The Bankruptcy Appellate Panel affirmed the bankruptcy court's orders dismissing debtors' individual chapter 13 cases with a bar to re-filing for 180 days. The panel held that the bankruptcy court did not abuse its discretion where debtors acted in bad faith. In this case, debtors have filed eight chapter 13 bankruptcy petitions between 2010 and 2018, and the bankruptcy court found that debtors' filings were part of a long-running scheme to manipulate and abuse the Bankruptcy Code and the bankruptcy system to the extreme detriment of their creditors, particularly Wilmington Savings. View "Steiner v. Wilmington Savings Fund Society" on Justia Law

Posted in: Bankruptcy
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The Bankruptcy Appellate Panel reversed the bankruptcy court's order denying BOM's motion under 11 U.S.C. 506(b) for allowance of postpetition default interest.The panel held that the bankruptcy court erred in applying a liquidated damages analysis and ruling the default interest rate was an unenforceable penalty under Missouri law; the panel made no decision as to whether and when the default interest rates under the notes at issue were triggered under the facts of this case, because such decisions are mixed questions of law and fact that are best left for the bankruptcy court to decide in the first instance; the panel endorsed the view that post-Ron Pair, the pre-confirmation interest rate to be applied under section 506(b) to an oversecured creditor whose claim is evidenced by a promissory note or similar loan agreement is the contract (both non-default and default) rate set forth in the note or loan agreement, to the extent enforceable under applicable law; the panel held that, absent state law to the contrary, a liquidated damages vs. penalty analysis is not applicable and should not be applied to a default interest rate set forth in a promissory note or similar loan agreement; and the panel followed the rule that equitable considerations should be used sparingly and only in exceptional circumstances. Accordingly, the panel remanded for further proceedings. View "The Bank of Missouri v. Family Pharmacy, Inc." on Justia Law

Posted in: Bankruptcy
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The Bankruptcy Appellate Panel affirmed the bankruptcy court's decision applying the contemporaneous exchange for new value preference defense under Bankruptcy Code 547(c)(1) to except payments by debtor to Wells Fargo from avoidance as preferences.The panel held that new value was provided by the release of Wells Fargo's junior liens where a senior lienholder voluntarily released its liens for less than full payment of its debt; Wells Fargo provided new value to debtor when the IRS, a secured creditor senior to Wells Fargo, was paid from the proceeds of a sale of debtor's assets and voluntarily released its liens; a $100,000 payment made by debtor to Wells Fargo one day before a sale closing was intended to be a contemporaneous exchange; and Wells Fargo's release of claims against Phillips 66 and KCRC resulted in new value to debtor intended by the parties to be a contemporaneous exchange. View "Lauter v. Wells Fargo Bank" on Justia Law

Posted in: Bankruptcy
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The Eighth Circuit reversed the Bankruptcy Appellate Panel's (BAP) conclusion that Lariat's claim against debtor no longer exists because her husband discharged his liabilities in an earlier bankruptcy. Rather, the court affirmed the bankruptcy court's allowance of Lariat's claim based on the fraudulent-transfer judgment. The court held that the husband's discharge did not extinguish debtor's liability because it did not cover all the money owed, and that Lariat's claim against debtor is capped under 11 U.S.C. 502(b)(6). View "Lariat Companies, Inc. v. Wigley" on Justia Law

Posted in: Bankruptcy