Catching up on things.  Lots of tweets, but no blog posts. Below are more twitter posts since my last post of July 17 with 50 BK cases and commentary and 6 other items of general interest.  RSS Feeds are also available.  All my twitter posts are here.

With hurricane season upon us, I thought some would like the inset infographic, taken from an 8/2/11 post entitled Rock me like a hurricane.

Bankruptcy Cases and Topics

  • 10th BAP bars review of order under "law of the case" doctrine bec. 3 narrow grounds for departing from rule are absent. http://t.co/7knf9h6
  • D-TX: Dbtr’s deposit to secure performance obligs didnt create an express, resulting or constr. trust favoring creditor. http://t.co/Tqc5iIu
  • D-MA: Fee-only Ch 13 plans designed mainly to pay the filing atty’s fees over time per se violates the good faith reqt. http://t.co/pPU96Wi
  • 11th-1st Impression: Order affirming BK Ct merits decision was final & appealable despite undecided issue of atty fees. t.co/RF9Qqjw
  • 9th: Estate prop. revests in Ch 13 dbtr at confirm., so postpet. taxes can attach to revested prop. & not violate stay. t.co/KCl63eO
  • B-NEB: Restrictive covenants requiring ch 11 developer to build certain prefab units in exchange for $1M not executory. t.co/P2hQYbA
  • B-MN: Snapshot in Polaroid preference case (that incl. trustee counterclaim) of constit convolutions caused by Marshall. t.co/BEt2N52
  • ED-WI reviews law in 7th Circuit on the requirement that a purchaser act in "good faith" in the context of §363 sales. t.co/drmlnyn
  • ED-WI: Issue of good faith can be considered at the motion to dismiss stage in an unstayed appeal of a §363 asset sale. t.co/drmlnyn
  • B-MO: Stay extended to all Def. in B/D arbitration actions on "control person" issue only based on identity of interest. t.co/D4pfYWI
  • D-LA: §362’s automatic stay doesn’t apply to actions against a nondebtor corporation that is wholly owned by the debtor. t.co/pFFjPPW
  • 7th Cir. again defers foraging into the debate whether actions filed in violation of the stay are void or just voidable. t.co/7ixmIx8
  • 7th reminds that §108(c) & IL law provide basis to proceed vs. debtor on claims that become time-barred during the stay. t.co/7ixmIx8
  • 7th invokes judicial estoppel beyond normal uses to stop gamesmanship in pursuing contradictory positions in 7th & D-Ct. t.co/7ixmIx8
  • 7th reviews certifying for appeal as a final jdgmt a dismissal of claims vs. nondbtr despite pending stay vs. BK co-def. t.co/7ixmIx8
  • B-NH: In pari delicto defense doesn’t apply to avoidance actions brought under Chapter 5 of the Bankruptcy Code. t.co/0PqhsW4
  • B-DE wont dismiss cplt to recharacterize debt where contribs. were pro rata / subord unsec. & int. deferred / below-mkt. t.co/alSCfte
  • B-FL: Atty depositing postdated retainer checks postpet. violates stay & creates impermissible adverse rel. w/client. t.co/fcc78sD
  • D-IN: No abuse of discr. in sua sponte dismissal of adv. cplt w/out much notice or opport. to cure failure to prosecute. t.co/xtAB7gD
  • 8th BAP: Trustee didn’t meet burden that benefit to estate from property sale outweighed harm to co-owner under §363(h). t.co/gLPYNSz
  • 7th excludes municipal utility charges from stay exceptions of §§362(b)(3),(9),(18) bec. not a tax or spec. assessment. t.co/Kkc8SVq
  • B-IL: Non-waiver clause in LLC operating agreement limits the risk that the waiver doctrine can be applied against you. t.co/UUxZWZM
  • D-OH: Using "10b size category in assess[ing] small stock premium for [valuation] calculations" beats Daubert challenge. http://t.co/AmIXSlf
  • BK-TX reviews tension between amending pleading under FRCP 9(b) & FRBP 4004(a)’s mandatory deadline for nondisch. cplts. t.co/52bTQ66
  • 6th BAP remands on BK order to disgorg prepet. retainer in converted ch 11 case to determine if valid atty lien existed. t.co/Is6ypWx
  • BK-NC: CIT properly exercised recoupment right postpetition to min. commission fee payable under factoring agreement. t.co/AuZbPvV
  • B-NH: Ttee’s fraudulent transfer cplt survives dismissal w/out identifying actual creditor providing § 544(b) standing. t.co/EEgsgfd
  • D-CA wont preclude appeal of trustee’s settlement transferring litigation claims to 3d party under eq mootness doctrine. t.co/JEKwv69
  • D-CA won’t apply §363(m) mootness to an order approving a settlement even if the order accomplishes nearly same result. t.co/JEKwv69
  • B-DE: Faltering co. defense to WARN Act inapplic. bec notices didnt provide suff. facts justifying lesser notice period. t.co/KVJFvnE
  • B-DE concludes in class action BK adversary that grandparent mgmt co. is co-liable w/BK debtor for WARN act violations. t.co/KVJFvnE
  • B-DE disagrees with per se rule that grandparent corps can’t share common ownership of distant indirect subsidiaries. t.co/KVJFvnE
  • B-SDNY notes its disapproval of plan releases by BK estates when the requisite supporting due diligence hadnt been done. t.co/DBE3x51
  • B-SDNY reflects on its disapproval of releases by 3d parties when they don’t satisfy 2d Cir.’s Metromedia requirements. t.co/DBE3x51
  • B-SDNY, post-Marshall, requires change to term of confirmed plan requiring claims ag. ex-D&Os be brought in BK Ct only. t.co/DBE3x51
  • B-SDNY notes as an aside that it has sustained objections to broad plan releases for former D&Os in 4 identified areas. t.co/DBE3x51
  • B-SC interprets when "cause" exists under §363(k) to grant or deny a disputed lender the right to credit bid in a sale. http://t.co/zXNGkks
  • B-CA: Ch. 20 Debtors still can’t "permanently" strip off unsecured junior lien w/out either a discharge payment in full. t.co/OMMXo7G
  • B-OH: US Trustee can take 2004 exam re Wells Fargo’s standing to file proof of claim in ch 13 case & re claim’s validity. t.co/ImXj2Rl
  • D-MI reviews how interrelated creditors/claims can be before they are ineligible to serve as separate §303 petitioners. t.co/C6Ccmf6
  • B-SDNY thoroughly reviews competing interests of FRCP 15(a) & 16(b): freely amend pleadings or hold to scheduling order. t.co/UQIWdET
  • B-SDNY:Waiting 4 yrs to amend affirm def to add §546(e) safe harbor, thinking it can be raised at leisure, is offensive t.co/UQIWdET
  • B-TN: Ponzi scheme fraudulent tsf. case law is clear: investors may keep their returned principal, but not any profits. http://t.co/9ETm6Xd
  • B-DE: Recharacterization cplt .survives Twiqbal; 7 factors favor rechar. as equity, 3 favor debt, and 2 favor neither. t.co/Xuh4Udc
  • D-FL excludes testimony per Daubert of accounting expert who tries to apply AICPA auditing stds. to non-auditing work. t.co/aoIrzS1
  • D-MN: Circuits are split re right to jury trial on liability/dgs once debt found nondischargeable, but waiver found here. t.co/mcTuKpP
  • Good review of brief seeking JD-based dismissal of pref cplt based on reading of Marshall/Langenkamp/Granfinanciera. bit.ly/qk5zzu
  • B-MT approves 9019 stip for 1st Lender’s creative financing of ch 7 Ttee’s continuing hotel ops. to preserve sale value. t.co/OuRtVMO
  • B-AL denies plan provision giving plan cmmttee right to bring claim, financed by estate, that plan trustee won’t pursue. t.co/Z9MAf0x

 Topics of General Interest

  • Extremely sad news re ex-K&E BK partner (and my first boss/mentor). Our heartfelt prayers to Ted & his family. t.co/4iACSMb
  • And here I thought I overate yesterday! Guess it’s all relative. t.co/lFNtSEu
  • The Head Of The World’s Biggest Hedge Fund Sees "Economic Collapse" Due To Money Printing By Early 2013
  • 22000 digitized photos (1898-46) of Jerusalem & ME donated to Lib. of Cong by members of the Amer. Colony in Jerusalem. t.co/WzOJ04e

 Thanks for reading!

© Steve Jakubowski 2011

 

Below are more twitter posts since my last post of July 4 with 47 BK cases and commentary and 15 other items of general interest.  RSS Feeds are also available.  All my twitter posts are here.The insert graphic contains a recent chart from Nate’s Market Analysis Blog entitled Greece is the Word.

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Bankruptcy Cases and Topics

  • Bob Eisenbach post with links to Judge Novack’s update to Judge Newsome’s bankruptcy research binder (thru BR vol 436). http://t.co/8sbesVh
  • B-OH: Robins "unusual circ" test to extend stay to nondbtrs relevant only re if irrep harm exists warranting prelim inj. http://t.co/QGA5izc
  • BK-HI: 2 year limitations period of §548 is a substantive element of the trustee’s claim that can’t be equitably tolled. http://t.co/Wcetd0d
  • BK-HI: Limitations pd. for §544 avoidance action runs from when last cr. cd reas. have discov. the fraudulent transfer. http://t.co/Wcetd0d
  • B-PA: Entry of no asset report divests BK Ct of "related to" jurisdiction, but effect on §523 proceedings is unclear. http://t.co/CCG219b
  • B-KS-Above median income Dbtr on BK filing, whose income later is under, CAN’T modify plan to reduce applic. cmmtmt. pd. http://t.co/ipBocpP
  • CWT’s Mintz, NP’s Berman, & SASMF’s Butler provide in-depth analysis on municipal BKs & the inadequacies of Chapter 9.  http://t.co/MLtgKyN
  • Read "Treatment of Interest on Nondischargeable Debts" by Nicholas Ortiz, citing 1st Cir case that interest does accrue. http://t.co/EpUyakW
  • 4th-Severance comp earned post-firing entirely payable per §507(a)(4); no proration to amt attrib to 180 days prefiling. http://t.co/NgQsaA8
  • D-MD: 363 Sale limits successor’s environ liab per debtor’s 1997 EPA Consent Decree to post-363 sale hazardous release. http://t.co/ASjLJy1
  • 5th grants direct appeal of op. denying stdg of postconfirm trust bec. plan didnt specifically/unequiv. preserve claim. http://t.co/pMrJz9V
  • D-TX won’t stay case after completion of fact discovery pending 5th Cir ruling on postconfirm. standing in MPF Holdings. http://t.co/VTrxMIF
  • B-PA annuls stay where foreclosure sale occurred w/in minutes after (& w/out notice of) BK filing & no reorg. possible. http://t.co/4J9UL65
  • B-NE lifts stay to all Insurer’s prepet DJ action over interp. of prof. liab. policy to continue in NY instead of BK Ct. http://t.co/fWBqiwm
  • B-KS: Conting. reversionary int in prepet bond to stay jdgmt worth 0 bec bond was forfeited postpet after jdgmt was final. http://t.co/Kh1wzpA
  • B-IL: Shareholder deriv. claim not discharged per §523(a)(4) but amt reserved pending review of Stern v Marshall effect. http://t.co/BpQVBR9
  • B-MA: HSBC acquired mortgage on debtors’ property by valid assignment from MERS & so is entitled to stay relief. http://t.co/5qfmzeW
  • B-PA: §105 injunction granted per Monroe Well test bec "unusual circumstances" exist to restrain actions ag non-debtors. http://t.co/hAETexu
  • B-PA: Most courts consider §105 as the authority to fashion injunctive relief restraining prosecution of 3d-party litig. http://t.co/hAETexu
  • B-EDNY: Well cited opinion allows bank’s claim for default interest but denies make-whole claim for prepayment penalty. http://t.co/NmbKX46
  • B-MT: Legit. justification exists for separate plan classification based on anticipated future aid of crs. in one class. http://t.co/zJZXuj8
  • B-IL: Pre-Stern, 7th Cir allowed BK Ct to fix nondisch. debt amt., but constitutional authority to do so not clear now. http://t.co/BpQVBR9
  • 3d-Obligations of umbrella insurer exclude duty to defend & not otherwise triggered until underlying policies exhausted. http://t.co/IThdzzc
  • B-FL: Conclusory constr. fr. tsf charge of not being made for reas. equiv. value dismissed absent more re nature of tsf. http://t.co/j2tWCXp
  • B-DE: FRCP 9(b) reqts relaxed & interpreted liberally when BK Trustee asserts fraudulent transfer/breach of duty claims. http://t.co/2BUowz2
  • B-OR: §547(a)(2)’s exclusion of substitute obligations from "new value" excludes forbearance from new value defense. http://t.co/qvSmuc7
  • BK-NM reviews preference law’s "ordinary course of business" defense as applied to "first-time transactions." http://t.co/J3Zyrsf
  • B-DE: Not def’s fraudulent intent that must be pled w/particularity per FRCP 9(b) but circumstances constituting fraud. http://t.co/2BUowz2
  • B-CO rejects investor argument they had no valid contract to purchase stock & thus had unsecured debt not w/in §510(b). http://t.co/RvgLduA
  • B-CO reviews policies behind & broad interp of §510(b) mandatory subord. of claims from purchase & sale of securities. http://t.co/RvgLduA
  • B-FL: Trustee’s actual fraudulent transfer claims survive dismissal by plausibly asserting tsf to further Ponzi scheme. http://t.co/j2tWCXp
  • B-FL reviews Ransom, Lanning & earlier cases in overruling UST obj. to including op. exp. for 3 cars in means test calc. http://t.co/SEGMbcI
  • B-CO: Statutory cap of §502(b)(6)(A) equally applies to claims against guarantors of leases that are in bankruptcy. http://t.co/fNbqPw7
  • BK-DE dismisses pref. complaint that doesnt give Def. adequate notice to ascertain which tsfs are at issue is dismissed. http://t.co/ESw1vd3
  • B-IL: Pre-Stern, 7th Cir allowed BK Ct to fix nondisch. debt amt., but constitutional authority to do so not clear now. http://t.co/BpQVBR9
  • D-IL imposes §1927 ag, Ch 7 Trustee’s atty not for crummy legal mal case v. Mayer Brown but for unprof. conduct in depo. http://t.co/P5jWWsT
  • B-NJ denies postconfirm trustee mot. to disgorge fees of admin. insolv. estate bec consent order award was final award. http://t.co/PDRHRKE
  • D-CA affirms BK Ct’s expunging of class claim for unpaid wages against Ch 13 owners of parking lots. http://t.co/mnAfii7
  • D-CA reviews lack of policy factors supporting class claims in BK, incl. ease of filing claims & efficiency of process. http://t.co/mnAfii7
  • D-CA: Failure of class claimants to file Rule 9014 motion for application of Rule 23 is dispositive in favor of denial. http://t.co/mnAfii7
  • BK-AL: 363 sale of golf course prop. not free & clear of implied restrictive covenant for use of prop.as a golf course. http://t.co/AlPmMSd
  • B-MI approves BK settlement & provides extensive review (after 65 trial days) of the history behind soft body armor. http://t.co/Sr9XmWb
  • B-FL: Defendant’s failure to produce expert to refute Trustee’s insolvency expert dooms its fraudulent transfer defense. http://t.co/aNh8bLB
  • B-DE: Cplt dismissed per Twiqbal that sets forth only conclusory allegations parroting Section 547’s statutory language. http://t.co/TtUQra0
  • B-DE: Preference cplt doesn’t require attached copies of invoices, bills, canceled checks etc., to satisfy Twiqbal stds. http://t.co/TtUQra0
  • B-DE: To satisfy Twiqbal in preference cplt, details of antecedent debt req’d & merely reciting §547 stds insufficient. http://t.co/TtUQra0
  • B-DE: Twiqbal in §547 cplt requires evid. of preexisting dbtr/cr. rel. (like contract details & goods/servs. provided). http://t.co/TtUQra0

 Topics of General Interest

  • Excellent interview by David Lat of Jeh Johnson, ex-Paul Weiss partner, & now General Counsel of the Defense Department. http://t.co/vEKbyUX
  • The future of jury trials? Watch Michigan’s experiment in adopting rules to significantly enhance juror involvement. http://t.co/Bz7t5uD
  • RT @DouglasMintz: Good piece on the next financial crisis (whenever it should arise. http://t.co/a1pe2cf
  • Casey Anthony defense’s use of social media to refine its theories of the case as the trial progressed discussed here: http://t.co/GVagBrk
  • WWII in photos: A continuing 20 part photo-narrative retrospective sponsored by The Atlantic: http://t.co/rS0hW7b

 Thanks for reading!

© Steve Jakubowski 2011

 

Below are my twitter posts since my last post of June 27 of 41 recent posts of bankruptcy cases and commentary, along with 6 other items of general interest.  RSS Feeds are also available.

The insert graphic contains corporate high-tech organizational charts from Bonkers World.

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Bankruptcy Cases

  • New Bankruptcy Litigation Blog Post: 44 BK Tweets of June 20-26 & Links to Howard Marks’ book, The Most Important Thing. http://t.co/dYnmbjp
  • B-MS-"2 working principles" of Twiqbal-plausible claims & rule that all allegations are true doesnt apply to legal concl. http://t.co/E4pARJg
  • B-CO: B of A involuntary dismissed; mere taxpayers lack standing to file §303 involuntary under "Gov’t of People" theory. http://t.co/oIlTJwr
  • BK-CO reviews circuit split on whether §109 ineligibility as a debtor deprives a BK Ct of subject-matter jurisdiction. http://t.co/oIlTJwr
  • 6th: Debtors’ assertion on record of abandonment of claims ineffective absent notice & hearing per Rule 6007 & §554(a). http://t.co/ZJYc1m6
  • 2d: 1st impression-§546(e) protects as "settlement payments" issuer’s payments to redeem commercial paper pre-maturity. http://t.co/aubIIcs
  • Strong dissent on 2d Cir. op. extending the §546(e) exemption to all comm. paper redemptions pre-maturity using the customary DTC mechanism. http://t.co/aubIIcs
  • 7th: Motion to deny bank right to credit-bid @ plan auction "lacks crucial check ag. undervaluation" & rightly rejected. http://t.co/hicC1QY
  • B-FL: Motions in limine are disfavored & if evidence isnt clearly inadmissible then rulings shd be deferred until trial. http://t.co/IzGrgU4
  • BK-PA: Legal error, if not challenged per Rule 59, is w/in the province of appeals & cant be addressed under Rule 60(b). http://t.co/x0uEP9s
  • BK-KY: Mandatory abstention inapplicable to core proceedings (i.e., "arising under" the Code or "arising in" a BK case). http://t.co/alDX1zg
  • B-Utah reminds only ch 7 trustee in corp case can represent dbtr once trustee appointed bec agent req’d for corp action. http://t.co/UFP71kP
  • B-TX rules it has authority to enter ch 15 pre-recognition prelim inj to protect non-debtor guarantor subs ag. US suits. http://t.co/Nqkqnvp
  • BK-IL reminds: marriage dissolution & prop. settlement can create constructive trust removing property from the estate. http://t.co/Nqkqnvp
  • B-IL: Lien attaching in preference period to debtor’s equitable interests in another’s property rights is preferential. http://t.co/Nqkqnvp
  • Ungaretti & Harris George Mesires reviews 7th Cir op. that a secured cr. can credit bid its claim in a reorg plan sale. http://t.co/G64MMxY
  • SDNY: PA cts recognize aiding & abetting a breach of fiduciary duty; constructive knowledge is the proper knowledge std. http://t.co/fplsa3R
  • SDNY: Ct-appointed appraiser akin to a BK Trustee and liability limited to intentional or grossly negligent misconduct. http://t.co/VBSL00U
  • B-MD reviews splits re interplay bet. §542(a) & §549 turnover actions, holding §542 inapplicable to postpet. transfers. http://t.co/ywiVihm
  • B-TX: BK Venue ok in Houston TX where LLC’s sole member makes decisions even if assets, domicile, & residence are in SC. http://t.co/SIBZWCe
  • B-NY reviews §511 special BAPCPA tax claim provisions & inapplic. of Till in ch. 13 plan to lower statutory int. rate. http://t.co/EdRspBj
  • B-SDNY-Investors in Madoff feeder funds aren’t "customers" under SIPA based solely on their ownership int. in the funds. http://t.co/mFQCtNh
  • EDNY reviews dearth of authority for fed. ct. sitting in equity to authorize Receiver’s Certificates w/priming lien rts. http://t.co/hrrM9f7
  • D-NV: 2 alternative tests in 9th to see if action is an exercise of police power: "pecuniary purpose" & "public policy". http://t.co/W8NTE42
  • D-NV: CA enforcement action for bribes, unlic. sec. sales & unfair competition exempted as police powers per §362(b)(4). http://t.co/W8NTE42
  • 7th: With 2 exceptions, agreements in IL to indemnify against intentional misconduct are void as against public policy. http://t.co/l48bdYv
  • ED-MI: Isolated & contradictory response in ans. to adv. cplt isn’t binding jud. adm. to material fact in underlying BK. http://t.co/FqouF2O
  • B-CA allows 13% of expert’s fees for going beyond facts re interest rates & for condescending lecture of Ct. re feasib. http://t.co/z8DGQKq
  • B-CA: Oversecured creditor not entitled to interest at default rate where its claim is paid in full under a ch. 11 plan. http://t.co/z8DGQKq
  • B-CA: Bank atty fees of $300K are in line w/fees of debtor’s counsel & reasonable for protecting a $16MM secured claim. http://t.co/z8DGQKq
  • B-TN: Agr.’s not prohibiting Debtor from commingling clients’ funds doesn’t mean commingled funds are prop. of estate. http://t.co/1fqAv0u
  • B-NE: Labor secy’s enforcing wage & labor stds exempt from stay per §362(b)(4) if only fixing-not enforcing-money jdgmt. http://t.co/QH4ZhIT
  • BK-TX: Per 5th, Ct should consider prospective & retrospective views re benefits to estate for allowing fees under §330. http://t.co/4qqnVo2
  • BK-IL examines in well-cited opinion the "frivolous" and "improper purpose" prongs of a successful Rule 9011(b) claim. http://t.co/fZZ2zzN
  • B-FL: Ponzi scheme presumption of fraudulent intent only arises when transfer was made "in furtherance of" Ponzi scheme. http://t.co/RSCG1sr
  • B-FL: Ponzi scheme operation is-by definition-insolvent & operating w/unreasonably small capital in fraudulent tsf case. http://t.co/RSCG1sr
  • B-OR: Per §365(d)(5), administrative claim given to postpetition commercial rent claims regardless of benefit to estate. http://t.co/qm48fmX
  • D-IL reviews jud. estoppel & standing of dismissed ch 13 dbtr to prosecute pers. inj. claim not disclosed in schedules. http://t.co/vSdRwiV
  • B-AZ reviews diversity citizenship of postconfirm liq. trust: based on the trustee alone & doesnt include beneficiaries. http://t.co/hslbyJM
  • B-AZ: Post-confirm JD exists bec the plan contemplates claim pursuit by liq trust; thus it’s integral to plan execution. http://t.co/hslbyJM
  • B-AZ: Equitable remand per 28 USC §1452(b) doesn’t apply to claims removed on diversity JD grounds under 28 USC §1441. http://t.co/hslbyJM

 Topics of General Interest 

  • Put this in the "there but for the grace of G-d go I" department — In re: The passing of a Skadden associate:  http://t.co/YjGrt6p
  • Read Legal Theory Blog’s Lexicon on "Principles in Constitutional Theory." http://t.co/VTg1oaW
  • Read Justice Ginsburg’s sharp comments on her good friend (politics & con. law aside) Justice Scalia & his recent term. http://t.co/mw8Q4iS
  • The effectiveness of QE2 reviewed at the Econobrowser, which concludes: "the Fed did avoid making our problems worse." http://t.co/egNDHhh
  • WAPO article on problems in the commercial RE mkt: securitized loan delinquencies near 10% & $350 billion in distress. http://t.co/IgVXfmY

Thanks for reading!

© Steve Jakubowski 2011

First, many thanks to the 1,700 unique visitors who viewed 3,000 web pages this past week (mostly my two posts on Stern v. Marshall).  According to my Google Analytics and Lexblog stats packages, visitors included the Supreme Court itself (10 times), courts from every federal circuit and several states, many from the AmLaw 200, and several academic and governmental organizations.  Such overwhelming support is what keeps me motivated to find something interesting to say

 

–relatively free of typos and run-ons–at 4:30 a.m., and I’m grateful for it.

Back now to the meat and potatoes (or macaroni and cheese) of a bankruptcy lawyer’s existence.  Below are my twitter posts since my last post of June 19 of 41 recent bankruptcy cases and commentary and 3 news items that might interest you.  RSS Feeds are also available.

The cover image is from Howard Marks’ first book, published in May by Columbia University Press, entitled The Most Important Thing.  It’s a favorite of the Distressed Debt Investing blog, and you can learn more from it by reading this book review from a seasoned pro and this book review from an unseasoned one.  You also can view excerpts from it on Amazon.com’s website.  Alternatively, take Warren Buffett’s word for it; who said: “When I see memos from Howard Marks in my mail, they’re the first thing I open and read.  I always learn something, and that goes double for his book.”

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Bankruptcy Cases

  • Read my latest BK Lit. Blog post-US Supreme Court Bankruptcy Watch: Readying for Stern v. Marshall-A Bombshell or a Dud? http://t.co/HtezHKd
  • Tom Goldstein predicts Breyer op. & SCOTUS reversal for Anna Nicole. I agree, with a remand on 157(b)(5) issue (Tr.). http://t.co/BM8xMx
  • B-TX: Equity dilution & exprop. of value from equity for benefit of controlling SH may be direct, not derivative, claim. http://t.co/Pg1r0gg
  • B-FL: Dbtr cant shorten ch 13 plan term below applic. commitment pd. if ttee objects unless all unsec claims fully paid. http://t.co/A2NNMRq
  • BK-SDNY: Cr.entitled to postpetition default interest ag. solvent debtor even though plan reinstated its loan per §1124. http://t.co/ole3uy9
  • BK-PA: Pitt Corning plan not confirmed bec channelling injunction covers indep non-deriv claims & plan not ins. neutral. http://t.co/jgcjOCc
  • D-DC: Phillipine Airlines is stingy, w/shifty explanations for not paying Sununu’s fees, but it has no contract liability. http://t.co/JXPvwhF
  • B-IL: Motion to dismiss granted on §523(a)(4) cplt ag. D&O under 2011 7-Cir precedent that a corp. fiduc. ≠ a 523 fiduc. http://t.co/i4lqGZH
  • See “A Cram Session on Cramdown Interest Rates” by Adam Strochak on the Weil Bankruptcy Blog, w/ chart of 28 key cases. http://t.co/3rN4v4j
  • BK-KS: Well-cited op. reviews relation back doctrine & stds for amending a cplt under FRCP 15(c) in an avoidance action. http://t.co/9JGaXBV
  • 5-4 in Stern v. Marshall AFFIRMING 9th cir. Complete victory for Pierce Marshall. Roberts op./Breyer dissent. Op here: http://t.co/ZGmnm1X
  • EDNY w/draws ref of atty mal case so Ct can get familiar w/facts & law before trial & benefit of Magistrate involvement. http://t.co/ffMKUMX
  • BK-SDNY approves WARN class action certif & settlement @ 17% of pot. liab. in postpet adv. for prepetition layoffs. http://t.co/DmYCpkM
  • BK-UT compares & contrasts each element of the “good faith” purchaser / transferee defense under §§ 549(c) & 550(b). http://t.co/HacsSla
  • B-MN reminds: A party isnt an initial transferee per §550 if it’s an agent lacking authority over the principal re funds. http://t.co/JFw37mq
  • Best summary I’ve seen analyzing Stern v. Marshall on Steve Sather’s Texas Bankruptcy Lawyers’ Blog: http://t.co/jMZO21y
  • Blog post-SCOTUS’s Bombshell Op. in Stern v. Marshall Draws the Line Ag. Incremental Erosion of Art. III Judicial Power. http://t.co/GyKP9HO
  • Weil Bankruptcy Blog examines the admissibility of an examiner’s report under federal evidence rules and specific cases. http://t.co/eNml8KT
  • BK-DE rejects dismissal motion in preference case for lack of personal jurisdiction based on hardship & inconvenience. http://t.co/UohJEhc
  • B-IL: No sov. immunity to IRS in §544(b)(1) action on theory that IL law doesn’t allow unsec creditor to sue US for same. http://t.co/Fyz0lhw
  • D-NJ: Junior out-of-the-money lien is not rendered void under §506(d) as long as the underlying claim itself is allowed. http://t.co/Jmcohdq
  • BK-PA: 30-day time limit in §362(e) doesn’t also encompass the time for the Court to reconsider its lift stay decision. http://t.co/5IvsVCa
  • B-GA reviews split re docs req’d for assignee of large #s of credit card debts to support debt claimed in proof of claim. http://t.co/2t44vRV
  • 1st: Unsecured senior debt holders have no priority over juniors on postpetition interest accruals disallowed by BK law. http://t.co/acrCYER
  • B-IL: Def. in post-confirmation action who’s not a creditor lacks standing to challenge Plan’s not reserving the action. http://t.co/zT4JvTc
  • BK-KY: Focus under a Rule 60(b)(1) analysis of “excusable neglect” is the movant’s conduct, not the opposing party’s. http://t.co/QflX4M2
  • B-TX:Attorneys signing proofs of claim for clients put themselves @ risk of disqualification by becoming a fact witness. http://t.co/BXc4VyU
  • BK-IL: Because 3d mortgage lien is wholly unsecured, it should be disallowed as a secured claim & may be stripped off. http://t.co/gM7WWYF
  • D-GA: Notifying ins co, bank & Ch 13 trustee of postpet fire loss overcomes jud. estop. for excluding loss from BK sched. http://t.co/fE6g6hC
  • B-IL:Reservation of preference action need not be specific & unequivocal to be preserved, but type or category required. http://t.co/zT4JvTc
  • D-OH denies w/drawal of ref. over D&O claims after case pending for 1.5 yrs in BK, expressing concern re forum-shopping. http://t.co/ngq0Kzm
  • B-PA sua sponte equitably remands adversary ag. non-debtors from which debtor was dismissed to state ct. per §1452(b). http://t.co/5IGISQw
  • B-TN: Late payments arent ordinary per §547(c)(2) bec pre-existing relationship is short & most payments made in pref pd. http://t.co/Si4RBjc
  • B-TX queries if treating a sec. tax claim per §1129(a)(9)(D) can create an impaired accepting class for lender cramdown. http://t.co/CZ6NCPX
  • B-SDNY recognizes circuit split re 15% calculation of “rent reserved” per §502(b)(6), but in SDNY it’s 15% of total due. http://t.co/irkhJTq
  • B-SDNY analyzes complicated damages for commercial lease per §502(b)(6), incl atty fees, fair rental value, addit. rent. http://t.co/irkhJTq
  • B-MT reviews dismissal when financially viable dbtr filed ch 11 to prevent entry of jdgmt & having to post appeal bond. http://t.co/t5Z7rhh
  • BK-IL: Broad reservation in Plan for so-called “Litigation Claims” really only reserved so-called “Avoidance Actions”. http://t.co/zT4JvTc
  • BK-IL: Not including §544 claims in Plan’s definition of “Avoidance Actions” barred their assertion post-confirmation. http://t.co/zT4JvTc
  • BK-IL: Qualification as a contingent creditor alone does not make one a party to the bankruptcy for standing purposes. http://t.co/zT4JvTc
 Topics of General Interest
  • Listen to Peggy Noonan’s insightful early handicapping of the Republican presidential candidate hopefuls: http://t.co/PbzofoO

Thanks for reading!

© Steve Jakubowski 2011

In my last post, I wondered whether the Court’s decision in Stern v. Marshall (pdf) (WL) would be a bombshell or a dud.  It certainly was no dud.  And after reading the 5-4 opinion, I’d say that it’s a bombshell in several respects, both from a bankruptcy and constitutional perspective.  Here’s four reasons why:

  • First, Justice Roberts’ masterfully written majority opinion (joined by Justices Scalia, Kennedy, Scalia, Thomas, and Alito) declared Pierce Marshall’s estate the final victor and blew poor Anna Nicole Smith’s estate completely out of the water.  The fact that this litigation is finally over is itself cause for celebration everywhere, except among Anna Nicole’s heirs.
  • Second, bankruptcy courts will no longer be able to enter final judgments "on a common law cause of action, when the action neither derives from nor depends upon any agency regulatory regime … [and] is not resolved in the process of ruling on a creditor’s proof of claim."  (Op. at 29, 38.)  This holding will likely be applauded―at least in part―by Bankruptcy Court judges, who already are severely overworked by a bloated chapter 7 and 13 individual debtor docket.  (One Chicago judge recently commented at the end of a day’s hearing that he was retiring to his chambers to review the 546 motions in individual chapter 7 and 13 cases set for status the next day.)  Being a nearly zero-sum game, however, District Court judges are equally likely to be distraught by the prospect of now having to hear innumerable counterclaims (and corresponding creditor claims that should accompany them as a matter of judicial economy) commenced by zealous debtors and trustees (who themselves can’t relish the prospect of losing their perceived "home-court" advantage).  Expect to see a flurry of motions filed in the coming days, weeks, months, and years attempting to establish (perhaps through a game of judicial "hot potato") the appropriate timing, protocol, and venue for these newly minted "non-core" proceedings.
  • Third, as WilmerHale’s Craig Goldblatt (who was on the merits brief for Pierce’s estate) noted to me, the Court’s opinion at pages 33-34 makes pretty clear that Section 157(b)(2)(H)―which provides that fraudulent conveyance actions are "core proceedings"―is also unconstitutional.  ("We see no reason to treat Vickie’s counterclaim any differently from the fraudulent conveyance action in Granfinanciera.")  This will mandate a sea-change in current litigation practice along the lines discussed above, though I expect many Bankruptcy Judges will long for the "good old days" when they could enter final judgments in these more interesting proceedings.
  • Fourth, Chief Justice Roberts assembled a majority that firmly rejected the creeping erosion of Article III judicial power advocated by the dissent and reflected in Thomas v. Union Carbide Agr. Prods. Co., 473 U.S. 568 (1985) and Commodity Futures Trading Comm’n v. Schor, 478 U.S. 833 (1986).  In fact, it was the Court’s factor-based rulings in Thomas and Schor that led Professor Erwin Chemerinsky in 1991 to argue that if Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982) had been decided 10 years later, the case would have been decided differently and the authority of Bankruptcy Court judges to enter final judgments would not have been limited to just "core" matters.  Professor Chemerinsky wrote:

The test used in Schor cannot sustain the result in Northern Pipeline.  In fact, the test seems identical to the approach urged by Justice White in [the Northern Pipeline] dissent.  The Court in Schor said that in evaluating Article I courts it looks to fairness to the litigants and the degree of intrusion into separation of powers.  However, there were no allegations before the Court in Northern Pipeline that bankruptcy courts under the 1978 amendments were unfair to litigants.  Nor was there any indication that Congress used Article I bankruptcy courts to gain any institutional advantage at the expense of the judiciary.  In short, in assessing the effects of Article I bankruptcy courts, “the magnitude of any intrusion on the Judicial Branch can only be termed de minimis.”

Therefore, if Northern Pipeline were decided today, there is every reason to believe that it would be resolved differently.  The approach endorsed in Schor indicates a strong likelihood that Justice White’s opinion might attract a majority of the Court.  Additionally, it should be noted that the Court’s composition has changed substantially since Northern Pipeline, and even since Schor. It is unclear how Justices Scalia, Kennedy, and Souter will vote on these questions. 

Chemerinsky, Ending The Marathon: It Is Time to Overrule Northern Pipeline, 65 Am. Bankr. L. J. 311, 320 (1991).

Well, we now know that Justices Scalia and Kennedy would have supported an impassioned defense―like that delivered in Justice Roberts’ majority opinion―against incremental encroachments of Article III judicial power and the view that Thomas and Schor are "controlling precedent" that require a "pragmatic … examination of relevant factors [in determining] whether [congressional] delegation [of adjudicatory authority to a non-Article III judge] constitutes a significant encroachment by the Legislative or Executive Branches … upon the realm of authority that Article III reserves for exercise by the Judicial Branch…."  (Dissent at 9.)  Expounding on this position, Justice Roberts wrote:

What is plain here is that this case involves the most prototypical exercise of judicial power: the entry of a final, binding judgment by a court with broad substantive jurisdiction, on a common law cause of action, when the action neither derives from nor depends upon any agency regulatory regime.  If such an exercise of judicial power may nonetheless be taken from the Article III Judiciary simply by deeming it part of some amorphous “public right,” then Article III would be transformed from the guardian of individual liberty and separation of powers we have long recognized into mere wishful thinking….

We do not think the removal of counterclaims such as Vickie’s from core bankruptcy jurisdiction meaningfully changes the division of labor in the current statute; we agree with the United States that the question presented here is a “narrow” one.  Brief for the United States as Amicus Curiae 23.  If our decision today does not change all that much, then why the fuss?  Is there really a threat to the separation of powers where Congress has conferred the judicial power outside Article III only over certain counterclaims in bankruptcy?  The short but emphatic answer is yes.  A statute may no more lawfully chip away at the authority of the Judicial Branch than it may eliminate it entirely. “Slight encroachments create new boundaries from which legions of power can seek new territory to capture.”  Reid v. Covert, 354 U.S. 1, 39 (1957) (plurality opinion).  Although “[i]t may be that it is the obnoxious thing in its mildest and least repulsive form,” we cannot overlook the intrusion: “illegitimate and unconstitutional practices get their first footing in that way, namely, by silent approaches and slight deviations from legal modes of procedure.”  Boyd v. United States, 116 U.S. 616 (1886).  We cannot compromise the integrity of the system of separated powers and the role of the Judiciary in that system, even with respect to challenges that may seem innocuous at first blush.

(Op. at 29, 37-38.)

Much more will be written and discussed regarding the meaning, implications, and fallout of the Court’s decision, but hopefully this provides some early grist for the mill.

For good summaries of the decision itself, read Steve Sather’s Texas Bankruptcy Lawyers’ Blog and Lyle Dennison’s write-up on SCOTUSblog.

Thanks for reading!

© Steve Jakubowski 2011

6/24/11 Update:  Here’s my blog post providing an early analysis of the Court’s decision, entitled US Supreme Court’s Bombshell Opinion in Stern v. Marshall Draws the Line Against Incremental Erosion of Article III Judicial Power.

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6/23/11 Update:  5-4 decision delivered affirming 9th Circuit’s ruling and handing Pierce Marshall’s estate a complete and final victory.  Justice Roberts with an extremely well written opinion; Justice Breyer dissenting. Opinion here.  Nice summary here.

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Three or four more opinion days before the United States Supreme Court’s term closes.  Sixteen opinions have yet to be delivered.  But if a lifelong, diehard, Bronx-born Yankee fan, Justice Sotomayor (who some say saved baseball), is willing to sport a CUBS jersey while throwing out the ceremonial first pitch in Saturday’s Yankee-Cubs game (I can’t imagine a White Sox fan ever doing that!), then I think it’s fair to say the remaining cases of this term on which she’s working are confusing to the core.

For bankruptcy lawyers, the Court’s forthcoming opinion in Stern v. Marshall represents either the most important decision on bankruptcy court jurisdiction since 1982 (Northern Pipeline v. Marathon) or the biggest dud in bankruptcy history (with the Court avoiding tackling the tough constitutional questions in favor of a finding that Anna’s counterclaim against Pierce was a tort claim covered by 28 U.S.C. § 157(b)(5) that all concede the bankruptcy court could not decide with finality).

As we await the ruling, and assuming it’s not a big dud, here are key background materials you need to be armed with to better understand the opinion once it’s delivered and the issues and cases it will navigate through:

  • First, it’s always good to understand the factual background to the case.  And, as in all cases, there’s the record, and the far more interesting stuff off the record (as reported early this month in the New York Magazine article, Paw Paw and Lady Love, by far the best I’ve read on the personal dynamics that drove the parties to act as they did).
  • Second, there’s the Supreme Court’s decision on May 1, 2006, which I blogged about extensively both before and after (including here and here).
  • Third, there’s the Ninth Circuit opinion of March 19, 2010, which is the opinion being appealed to the Supreme Court.  The Ninth Circuit held that Anna Nicole Smith’s counterclaim against Pierce Marshall is not a “core” proceeding but, at most, “related to” her bankruptcy case.  As a result, the earlier judgment entered in her favor by the bankruptcy court was not final at the time that the Texas Probate Court entered its judgment in favor of Pierce, and so the Texas Probate Court judgment was the earliest final judgment that precludes all of Anna’s claims.  Marshall v. Stern (In re Marshall), 600 F.3d 1037 (9th Cir. 2010) (pdf).
  • Fourth, there’s the briefs submitted to the Court:

The Merits Briefs

Brief for Petitioner Howard K. Stern, Executor of the Estate of Vicki Lynn Marshall

Brief for Respondent Elaine T. Marshall, Executrix of the Estate of E. Pierce Marshall

Reply Brief for Petitioner Howard K. Stern, Executor of the Estate of Vicki Lynn Marshall

The Amicus Briefs:

Brief for the United States in Support of Petitioner

Brief for National Association of Bankruptcy Trustees in Support of Petitioner

Brief for Professors Richard Aaron, Laura Bartell, Jagdeep S. Bhandari, Susan Block-Lieb, Robert D’Agostino, Jackie Gardina, Ingrid Hillinger, George W. Kuney, Lois Lupica, C. Scott Pryor, Keith Sharfman, Michael D. Sousa, and Robert M. Zinman in Support of Petitioner

Brief for Law Professors S. Todd Brown, G. Marcus Cole, Ronald D. Rotunda, and Todd J. Zywicki in Support of Respondent

Brief for the Washington Legal Foundation in Support of Respondent

Brief for the National Black Chamber of Commerce and the American Board of Trial Advocates in Support of Respondent

Brief for the Center for the Rule of Law in Support of Respondent

  • Fifth, there’s the oral argument.  Listen to it on Oyez, and pay particular attention to the argument of Roy T. Englert, Jr., which is about as good as oral advocacy gets at this level.  (Transcript PDF)
  • Finally, the key precedential decisions that provide the legal backdrop to the case:

One can’t predict on which of the next two Mondays and Thursdays the Court will issue the opinion, but I sure hope it’s not next Monday when I’ll be traveling!

Thanks for reading!

© Steve Jakubowski 2011

Below are my twitter posts since my last post of June 18 of 52 recent bankruptcy cases and commentary and 10 retweets, news items, and entertaining videos that might be of interest to you. RSS Feeds are also available.

The chart is from the June 18 posting from Business Insider’s article entitled About that Gigantic Fall in Junk Bond ETF’s, which offers the following explanation to that huge price drop:

One possibility put forth: ETFs like JNK are much more liquid than actual junk bonds, and so this huge selling actually represents junk bond investors selling the ETFs by proxy, because they can’t get a decent bid on what they’re holding.  If you buy the idea that credit markets are somehow "smarter" than other markets, and you believe that real money credit holders are rushing for the doors with these ETF shorts, watch out.

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Bankruptcy Cases

  • BK-IL: Bank req’d under Ill. Mortgage Act to release mortgage after loan payoff despite risk of future BK adversary lit.
  • BK-MS: Plan wiped out lien of creditor who slept on rights & didn’t object to plan despite requisite due process notice.
  • BK-MS: §1127(b) is the sole means for modifying reorganization plan after confirmation; BK rules 9023/9024 inapplicable.
  • D-IL: CIT loses appeal seeking priority over hog sellers who got trust protection under the Packers & Stockyard Act.
  • BK-KY: Debtor received reas. equiv. value from fees paid to lawyers though advice benefitted individuals besides debtor.
  • BK-TX: Promises of future performance can be material misrepsentations for fraud purposes if made w/intent not to perform.
  • SD-FL: No §507(a)(4) priority for attys’ fees incurred while litigating unpaid wage claims under Fair Labor Standards Act.
  • BK-DE: Recoupment applies where parties intend to apply credits against diff. product purchases in long-term bus. rel.
  • BK-DE: Sr. exec. "top hat" plans must be unfunded, so no constructive trust can be imposed to protect plan participants.
  • BK-AZ: SCOTUS requires showing of irreparable injury for stay pending appeal be "the more probable or likely outcome."
  • BK-NV: Cts consider trustee’s competency & experience when weighing the degree of deference to afford trustee’s judgment.
  • BK-FL: Fact of Ponzi scheme-w/o tying transfers to furtherance of scheme-wont implicate presumption of fraudulent intent.
  • BK-CA: Defense of Marriage Act unconstitutionally denies equal prot. to gay couples if they cant file joint BK petition.
  • Good review of opinion by 20 BK-CA judges denying UST motion to dismiss joint BK filing by same-sex couple as unconstit.
  • Extended Stay Trustee’s 179 pg complaint vs. Blackstone et al for breach of fiduciary duty & illegal div in June 07 LBO.
  • Extended Stay Trustee’s 107 pg complaint vs. sellers, buyer, lenders & advisors for avoidable transfers in June 07 LBO.
  • BK-CA: Claim obj. under §502(d), w/out seeking recovery of underlying transfer, doesn’t violate Lehman’s automatic stay.
  • BK-FL cites to "bird in the hand is worth two in the bush" as authority to approve Ch 13 dbtr’s motion for early payoff.
  • BK-CA: Section 502(d) can be purely defensive & doesn’t require initiation of avoidance adversary to recover transfer.
  • BK-OH: Well cited op. denies dismissal, transfer, abstention & remand of avoidance actions ag. insiders & affiliates.
  • D-CA rejects Clear Channel’s holding that §363(m) stay doesnt apply to "free and clear" aspects of a sale under §363(f).
  • D-CA rejects Clear Channel’s holding that the §363(m) stay allows for review of lien stripping under §363(f).
  • ReedSmith: SD-IL-‘All Value’ Must be Considered in Determining ‘Reasonably Equivalent Value’ in Fraudulent Transfer Case. http://t.co/tfW3yMM
  • ReedSmith: 3d – DCF is a ‘Commercially Reasonable Determinant of Value’ re Repurchase Agreement Acceleration under §562. http://t.co/TIWFNQb
  • ReedSmith: TX – Court Grants Parent Cos. Standing To Sue Lender as 3d-Party Beneficiaries of Loan Commitment Agreements. http://t.co/uf4Kg1D
  • ReedSmith: BK-NY Vacates Foreclosure Sale Finding Bank Violated Stay by Proceeding w/Sale Where Debtor Guaranteed Loan. http://t.co/Y1NirwW 
  • Weil Bankruptcy Blog asks: What Happens When a Debtor Seeks to Reject a Right of First Refusal? http://t.co/tZLzhrg
  • 7th Cir.: Collateral-Order Doctrine Used in a Case of 1st Impression; Ct. Affirms Broad Equitable Powers of a Receiver. http://t.co/n1XKGGG
  • Blakemore & Martin – BK Strategist: Using 552(a) to Invalidate a Bank’s Security Interest in Proceeds of an FCC License. http://t.co/qeq8eLN
  • 3d Cir: § 1112(b) creates no statutory bar to considering a motion to dismiss the BK case during the exclusivity period. http://t.co/F2v5y7P
  • 5th-Minority LLC member’s tsf. of real prop to self is void ab initio & not voidable subject to intervening rts. of BFP. http://t.co/bk8PXKW
  • EDNY: FTC action to enjoin alleged fraud in marketing medical discount plans is exempted from stay under § 362(b)(4). http://t.co/8Ubsnjy
  • BK-PA: PhillyNews defamation action case excluded under APA & enjoined under Plan release for lack of willful misconduc. http://t.co/1OlOiRh
  • BK-MT cites Colliers in reviewing & applying BAPCPA’s change in §1112(b)’s stds for conversion or dismissal "for cause." http://t.co/dhRiBnv
  • BK-TX: Debtor isnt a "single asset real estate" because income is generated from interest on notes, not property itself. http://t.co/igyoMts
  • 5th: Unopposed plan release & exculp. provisions essential to reorg, w/ parties rep’d by good attys, bars fraud claims. http://t.co/pVsdh8d
  • 3d: MPPAA withdrawal liability can be apportioned between pre- and post-petition periods, with the latter an admin. exp. http://t.co/cLtuz5V
  • BK-SDNY: §548(a)(1)(A) claim stated under "Ponzi scheme presumption" for Dreier’s payments on forged client prom. notes. http://t.co/vrWFYAK
  • BK-NY: Dreier Ponzi payments not constr. fraud. tsf under NY law or BK Code, except for net winnings over principal inv. http://t.co/vrWFYAK
  • BK-SDNY: Under NY fraudulent transfer law, "good faith" isn’t an issue where the tsf satisfied a valid antecedent debt. http://t.co/vrWFYAK
  • BK-NY: In Dreier avoidance action involving commingled accounts, Def. has burden to prove debtor held bare legal title. http://t.co/A8qkEgR
  • BK-NY: Dreier Ponzi payments not constr fraudulent tsf under NY law or BK Code to "net losers" receiving < principal inv. http://t.co/WBaIsTJ
  • BK-SDNY: To establish subseq. transferee liab. per §550, complaint must allege "the who, when, & how much" of the tsfs. http://t.co/XCXjS6u
  • BK-NY: Under §550, complaint must allege "direct, ascertainable & quantifiable" benefit commensurate w/prop. transfered. http://t.co/XCXjS6u
  • 11th-Impaired creditor need not object at confirmation to preserve on appeal whether absolute priority rule was violated http://t.co/QiuM1Jz
  • SD-AL: Indiv. ch 11 plan violates absolute priority rule by contributing no new value and retaining title to property. http://t.co/QiuM1Jz
  • BK-KS: Mechanic’s lien fails if contractor’s bill isnt reasonably itemized to know whether lienable items were furnished. http://t.co/Q93qGM7
  • D-TN: Each estate creditor is 3d party benefic. of tolling agr. between creditors comm & accts. accused of malpractice. http://t.co/KyBdcU0
  • SDNY: Advantage in BK to lender of including a penalty/premium upon acceleration clause in a promissory note discussed. http://t.co/nvnn6Z9
  • B-DE: Twiqbal increases pleading stds for preference cmplts., requiring identity of transferor & stated antecedent debt. http://t.co/np8qL8z

Topics of General Interest

  • Retweet – Bryan A. Garner: The Totenburg piece on my SCOTUS interviews: . Is www.lawprose.org really an "obscure webiste"? Would that it weren’t!
  • Retweet – Adam Liptak: Very smart Justin Driver piece on how Tribe and Sunstein influenced Obama’s views on the court. http://t.co/l9iqgv8
  • Jarring story about China’s "ghost cities." Skyscrapers, schools, & residential developments with nary a soul in sight. http://t.co/Jl0rijb
  • Stranger than Fiction-15 SCOTUS ops. to go & lifelong Yankee fan, Sotomayor, J, dons a CUBS jersey to throw first pitch! http://t.co/Bva90sh
  • Not a Biblical or Roman holiday, nor one celebrated by the framers in 1787. Ever wonder who invented Father’s Day? http://t.co/AczcRSm
  • The irony of the world’s being slowly irradiated from Japanese soil using US technology is frighteningly apparent. http://t.co/scxCmok

Thanks for following!

© Steve Jakubowski 2011

Below are my twitter posts since my last post of June 12 of 24 recent cases (and one very amusing video) that might be of interest to you. RSS Feeds are also available.

This "Risk Map" is from SocGen and highlights the "Black Swan and White Swan" risks to the economy.  It was posted today on the Business Insider website.

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  • 1st: Mass. req’t to record routine extension to prevent mortgage’s becoming obsolete tolled by §108(c) until stay ends.
  • 4th-noting difficulty of issue-says §550(b) is a defense to an avoidance action that the defendant has burden to prove.
  • 4th Cir sets objective & subjective standards applicable to knowledge and good faith prongs of §550 transferee defenses.
  • BK-AZ: "Indubitable equivalence": must show "no reasonable doubt" that creditor gets full value of what it bargained for.
  • D-NJ: "Strip-Offs" & "Strip Downs" under §506(d) reveiwed: ch 7 lien not void if junior to lien exceeding appraised value
  • D-DE: Appeal of claims estimation & confirm. orders & rejection of admin priority rts. equitably moot under 3d Cir stds.
  • D-MD: Absolute priority rule requires market valuation, so exclusivity shd be terminated for filing of competing plan.
  • D-IL: §362(d) allows BK Ct to retroactively annul the automatic stay to validate a technically voided foreclosure sale.
  • D-RI: Per §105 BK Ct can sua sponte appoint ch 11 trustee despite limits of §1104(a), but std of proof required unclear.
  • D-MA: Town’s demolition costs to clear unsafe bldg / nuisance from Debtor’s property are admin expenses per Midlantic.
  • BK-IL: Plan cant be funded w/rents after stay lifted & bank enforces rts to rents to extinguish debtor’s interest therein.
  • BK-WVA: Bk Ct asserts related-to jurisdiction over bank’s adversary ag. non-debtor guarantors bec. of subrogation rights
  • BK-VT: DIP may use cash collateral for atty fees if services benefited secured cr. under §506(c); decision here deferred
  • BK-NE:Best interest of creditors test-§1129(a)(7)-requires non-consenting crs. get interest before shareholders recover.
  • BK-NJ: Bad faith invol. petition 4 factors: contingent claim; inadeq. due diligence; 2 party dispute; litigation tactic.
  • BK-PA: Of "paramount importance" in cramdown property appraisal under SCOTUS Rash is "intended use approach to valuation"
  • BK-IL: Actual & constr. fraudulent tsf. suit for worthless ins. premiums paid in Lancelot ponzi scheme survives Twiqbal.
  • BK-PA: When 1 estate is indebted to another, an actual conflict prohibits dual representation of both debtors by counsel.
  • BK-IL reviews what "specific identification" of a cause of action is req’d in a plan to preserve the action postconfirm.
  • BK-IL strikes preference complaint under Twiqbal as not plausible bec. tsf. not on account of debtor’s antecedent debt.
  • BAP-9: Wells Fargo lacks standing to seek relief from stay lacking evidence it’s a person entitled to enforce its note.
  • BK-OH: "The court’s disquiet is the increasing amount of professional fees in a small, local business case" Size matters!
  • BK-SDNY: Abandonment doesn’t revest the debtor with the ability to relitigate issues settled or released by the trustee.
  • BAP-9: Mortgage servicer lacks standing to file claim unless it shows it’s an agent of one entitled to enforce the note.
  • BK-TX: Comm. RE debtor near foreclosure given 2d chance on tight leash shortly after BK-TX dismissal for bad faith filing.
  • 2d Cir: Madoff ancillary litigation – Banks generally owe no duty to protect one customer from another customer’s fraud.
  • 2d Cir: Madoff litigation-Exception to bank exculpation if cust has trust funds in fiduc acct w/clear evid of misapprop.
  • BK-DE: Insuff. record to decide if publication notice in WSJ was "reas. calculated" to give notice to consumer mortgagor.
  • D-NJ: Subseq. transferee per §550(a)(2) cant be the entity for whose benefit the initial transfer was made per §550(a)(1).
  • BK-OR: Stipulated Inventory Order essential to precluding 363 sale from including commingled assets the debtor didnt own.

Thanks for following!

© Steve Jakubowski 2011

Below are my twitter posts since my last post of June 1 of recent cases that might be of interest to you. RSS Feeds are also available.

The infographic, titled The Resurgence of the American Automotive Industry, is from the White House Blog and was released to correspond with Pres. Obama’s visit to a JEEP manufacturing plant in Toledo.

  • Good analysis on Weil BK Blog of 5th Cir case-cited here on 5/6/11-re inability to assume incurably defaulted contract.

 

  • D-NJ: Withdrawal of reference & abstention from unliq. personal inj. claims is ok, but not of dischargeability adversary.

 

  • BK-ID: Court rejects use of "advance payment retainer" to cover postpetition attorneys’ fees w/out complying w/§§330,331.

 

  • BK-SDNY: No post-conf. JD here bec (1) no "close nexus" to some aspect of plan & (2) plan doesn’t retain JD over dispute.

 

  • BK-LA: Withdrawal of reference appropriate in fraudulent transfer case to which defendant is entitled to a jury trial.

 

  • BK-IL: Uncertainly re whether filing of Tax Deed Petition is required to protect or perfect rights in Illinois examined.
  • BK-NE: Mand. & perm. withdrawal of ref. req’d. in Bank Holding Co Trustee’s suit ag FDIC re refunds under tax alloc. agr.
  • D-PA: BK Ct. rules state ct complaint ok against Trustee bec. Barton Doctrine is antiquated & not the rule in the 3d cir.
  • Fishman, et al revisit the "indubitable equivalent" std., saying some cts have used it inappropriately to confirm plans.
  • BK-SDNY :Ref. of 21 count "clawback" & aid/abet complaint ag. JPM withdrawn bec Trustee’s standing at issue under fed law.
  • BK-IL: Internal work re whether law firm is disinterested under Code §327 provides no estate benefit & isn’t compensable.
  • BK-WA: Financial advisor who joins group to buy out debtor is disqualified but entitled to fees through time of conflict.
  • BK-NJ: Ct reviews factors re whether there’s cause under §303(e) for petitioning creditors to post a bond in an invol BK.
  • BK-SDNY: Ct permiss. abstains from postconfirm suit to apply CA anti-forfeiture law to lease held terminated prepetition.
  • BK-VA: Former dirs. dont satisfy reqts for deriv stdg in suit ag current dirs: no debtor consent or unreas refusal to sue.
  • BAP-8: 2 ways to contest arbitration agr. validity: challenge validity of arbitration clause or the contract as a whole. http://t.co/CcC5qIj
  • BK-OK: Fraudulent tsf. & constructive trust claims are core; §541 breach of fiduciary duty claims are only "related to". http://t.co/CcC5qIj
  • BK-SDNY: Committee objection to Borders’ exclusivity extension denied bec. objection not supported with "any evidence." http://t.co/hJaFQYy
  • BK-OK: Fraudulent tsf. & constructive trust claims are core; §541 breach of fiduciary duty claims are only "related to". http://t.co/CcC5qIj
  • BK-SDNY: Committee objection to Borders’ exclusivity extension denied bec. objection not supported with "any evidence." http://t.co/hJaFQYy
  • BK-IL: Actual & constr. fraudulent tsf. suit for worthless ins. premiums paid in Lancelot ponzi scheme survives Twiqbal. http://t.co/clmjaeW
  • D-IL: PACA claims disallowed when invoices don’t disclose 30-day payment terms that differ from std.10-day PACA terms. http://t.co/SOZ3eF9
  • BK-MI: Expert’s income approach to hotel valuation preferred over sales comps., but bank still not adequately protected. http://t.co/UbsDAgb
  • BK-TX: Reorg plan impairs by requiring dismissal of separate guaranty & precluding recovery of default interest rate. http://t.co/XJZbeoU

 

Thanks for following!

© Steve Jakubowski 2011

Below are my twitter posts since my last post of May 29 of recent cases that might be of interest to you. RSS Feeds are also available. 

 

This graphic, Facts About the Internet, is from the Infographics website:

 

  •  BK-SDNY: Time spent by Deloitte in preparing billing & fee apps unreasonable at 8% of total time billed; Ct. awards 4%.

 

  • BK-MD:Ct lacks "related-to" jd. if tort claimants seek recovery only from ins. proceeds & not from reorg debtor’s assets.

 

  • ND-TX:No action ag. 1 syndicate bank for failing to fund bec fin agr breached when other banks didnt get unanim. consent.

 

  • BK-OR:No summ jdgmt on whether "swing-load" arrangements in nat gas industry are ordinary comm. transactions & not swaps.

 

  • D-LA: TX Bk Ct has JD over state court DJ action re if O&G lease was terminated before being sold to buyer in 363 sale.

 

  • D-CA: Exculpation & reimb. language in post-confirm. liquidating trust doc inapplicable given trustee’s gross negligence.

 

  • BK-DE:Parent’s agent’s grant of security interest in sub’s assets is enforceable if it otherwise satisfies UCC Article 9.

 

  • BK-CT: Neither comfort order nor §363(b) provide basis for retaining environ. consultant in ord. course, but §1108 does.

 

  • BK-AL: Colonial Bk Plan violates "best interest" test by paying expenses of plan committee in addition to plan trustee’s.

 

  • BK-PA:Secured creditor’s plan not fair & equitable if proposed sale of debtor’s property post-confirm. won’t realize FMV.

 

  • 9th: Attorney’s sanctions upheld for filing notice of removal frivolously & in bad faith to delay state ct. proceedings.

 

  • D-LA:Payments on electricity requirements contract not preferential bec payments were settlements under forward contract.

 

  • BK-NJ:"Collapsing doctrine" inapplicable to avoid mortgage that cashed out founder where no pre-existing creditors exist.

 

  • BK-SDNY: §108 tolling provisions automatically apply in Ch. 15 cases under straightforward statutory reading of §103(a).

 

  • BK-NC: Well cited opinion analyzes issues of core/noncore, mandatory & permissive abstention, jury trial rts, eq. remand.

 

  • BK-SDNY:Fairfield Sentry (Madoff feeder) foreign liquidators allowed to bring foreign avoidance claims in Ch 15 BK cases.

 

  • SDNY reverses §524(g) injunction favoring Pfizer in Quigley BK, holding product liab. claims aren’t based on ownership.

 

Thanks for following!

 

© Steve Jakubowski 2011