A debtor that converts to Chapter 7 from Chapter 13 is entitled to return of any postpetition wages held by the Chapter 13 trustee at the time of conversion.
When used as an affirmative defense, overhead expenses in construction contracts are dischargeable under 11 U.S.C. § 523(a).
The Fifth Circuit will find subject matter jurisdiction over a civil proceedings if any conceivable set of facts can relate it as to having an effect on the outcome of a bankruptcy proceeding.
Puerto Rico does not constitute a state which can authorize a municipality to seek relief under Chapter 9, but it does constitute a state in that it cannot enact its own municipal bankruptcy system.
Proceeds remain exempt by homestead exemption even if only partially reinvested after six months in a Chapter 7 case when the trustee does not timely object to the homestead and when the debtor shows substantial steps taken to reinvest proceeds into homestead.
Even if attorney fees are disproportionate to economic damages, courts will award high damage amounts to ensure compliance with a discharge injunction.
First-priority liens can survive an avoidance motion for preferential transfer under the abbreviated test despite being transferred to a lockbox under certain circumstances.
As long as debtors make good faith efforts to repay their debts, the courts will protect them from involuntary conversion.
A debtor can use applicable bankruptcy statutes to “strip off” a judicial lien that is unsupported by equity in real property.
Texas Bankruptcy court finds proceeds from a post-petition sale of a homestead not reinvested within six months are not subject to the Texas Proceeds Rule.
Debtor, the owner of a trucking company, filed a total of three petitions seeking bankruptcy relief under chapter 13. The first two petitions failed and the debtor then filed an emergency motion for the automatic stay to be imposed. The court denied the emergency motion on grounds of bad faith, mainly because the debtor copied the plan from the previous petitions despite changes to the debtor's financial situations.
Creditors of the debtor sought damages for negligence and negligent misrepresentation in state court while the debtor was in bankruptcy. The settlement happened outside of the bankruptcy court, which violated the automatic stay, and the trustee sought damages. Since the creditors attempted to comply with the bankruptcy court’s orders, the trustee could only receive actual damages for the estate.
“Approximately five years after forfeiture, the debtor filed for bankruptcy and a creditor appealed, claiming the debtor did not qualify as a person under the Bankruptcy Code because it no longer held a corporate charter. The bankruptcy court dismissed the case after determining the debtor was not a person. The debtor appealed, but it did not file a brief. The bankruptcy court dismissed the case, and the district court affirmed.”
Following the death of her father, the debtor and her siblings each inherited an interest in three properties. The debtor transferred her interests in two of the properties. After obtaining advice from her attorney, the debtor filed for Chapter 7. The trustee attempted to recover the transferred property of the debtor for the estate.
The debtor filed for bankruptcy, the investor alleged that the debtor solicited investments through fraudulent means and was therefore liable for a nondischargeable debt. The investor specifically claimed that the business plan used to solicit his investment misrepresented the business’s mining rights, misrepresented the promise of royalty payments and the return on investment after its sale, and concealed the business’s financial condition.
Baker Botts, L.L.P. v. ASARCO, LLC., raised the question of attorney's fees for defense-of-fee litigation. The case rose to the Supreme Court and ultimately the court found these fees to be against the best interest of the estate and declined to allow compensation for defense-of-fee litigation costs.
Both debtors had houses with value less than the amount owed on the senior mortgage liens, making the junior mortgage liens wholly underwater. The debtors filed for Chapter 7 Bankruptcy and petitioned the court to strip off the junior mortgage liens. The Court found the claims were secured and could not be voided under § 506(d). Under this ruling, § 506(d)'s function is reduced to “voiding a lien whenever a claim secured by the lien itself has not been allowed.”
The Supreme Court of the United States granted writ of certiorari and held that allowing a party to consent to adjudication of non-core counterclaims in a bankruptcy proceeding does not violate Article III of the constitution. Sharif overruled Fifth Circuit precedent, and now litigants have more options when it comes to adjudicating non-core counterclaims that arise in a bankruptcy proceeding.