Here’s the second installment of My Twitter Feeds for Restructuring Professionals from April 2018.  Part 1 is here.

APRIL 10-12, 2018

BK CASES:

  • B-SDNY: “The issue in chapter 15 cases then is whether to recognize and enforce the foreign court order based on comity. Well-settled case law in the UK expressly authorizes third-party releases in scheme proceedings, particularly the release of affiliate-guarantees. The UK Court sanctioned the Avanti Scheme, and the Court concludes that the Avanti Scheme should be recognized and enforced in the US. Although no objections . . . were filed–and Court has already entered an order enforcing the Avanti Scheme –the Court believes that an explanation of the reasons for its ruling is appropriate.” In re Avanti Communications Group PLC
  • B-PA finds LLC’s voluntary petition was ultra vires in violation of the operating agreement, and then appoints a chapter 11 trustee instead of dismissing the case. In re Advanced Vascular Resources of Johnstown LLC
  • B-DE orders Richard, Layton can keep $75K retainer for chapter 7 case post-sale of all assets since “even if returned, [it]would not be property of the estate pursuant to the APA & thus the Trustee does not have standing to pursue this cause of action” In re EP Liquidation LLC
  • B-NC: “Individual shared responsibility payment” imposed for failure to obtain health insurance under the Affordable Care Act, 26 U.S.C. § 5000 is a penalty, not a tax, for priority purposes under 11 U.S.C. § 507(a). In re Parrish
  • B-TX: Postpetition interest that accrues on DSO claims under applicable nonbankruptcy law must be paid through Chapter 13 plans. In re Randall
  • B-TN: Any back child support payable to debtor on date that her bankruptcy petition was filed was held by debtor in constructive trust for benefit of any minor children over whom she had custody.  In re Rush
  • B-MI: property deeded to debtor and her husband as tenants by the entirety did not provide trustee with longer one-year period for objecting to debtor’s claim of exemption in property as fraudulently asserted. In re Rosich
  • D-MN: US prop assessor’s opinion testimony re FMV in quiet title action was expert opinion, so US’s failure to disclose him as expert precluded Court’s consideration in action seeking to remove federal tax lien
  • D-MN examines when a default judgment should be given preclusive effect in a nondischargeability proceeding. Seibert v Cedar Rapids Lodge And Suites LLC
  • BAP-9Case of first impression for any appellate court regarding the application of Barnhill to Section 549(a) transfers, prompting the Court to say “[t]his case brings to mind the adage: “No good deed goes unpunished.” In re Cresta Technology Corporation
  • D-FL: “Many courts have held that service of a subpoena can be proper under Rule 45, absent personal service, because there is no explicit requirement in the rule itself on the method of delivery” In re MTS Bank
  • B-AL: Transferee’s mere conclusory statements that it continued providing services until the filing of the petition were insufficient to support “subsequent new vale defense” absent factual allegations that services had value to the debtor. In re SpecAlloy Corporation

Interesting Non-Bankruptcy Cases from Illinois Courts:

  • D-IL: Gross negligence is insufficient to support a finding of intent as required under Rule 37(e)(2), but the lesser sanction under Rule 37(e)(1) is appropriate. . . . To address the prejudice resulting from Defendant’s spoliation of evidence, the Ct recommends that the parties shall be allowed to present evidence to the jury regarding the spoliated evidence & the likely relevance of the lost information.” Schmalz v Village of North Riverside
  • D-IL: Court cannot conclude that Taylor’s possibly “heavy-handed” control of Root constituted impermissibly “oppressive” conduct warranting his removal as an officer [per ILCS §§ 5/12.56(a)(3), (4)].” Root Consulting Inc v Insull
  • D-IL: “A corporate officer who personally negotiated the terms of a contract that gave rise to a tortious interference claim had ‘participated’ in the claim” and so can be sued in his personal capacity. CSX Transportation Inc v Five Star Enterprise of Illinois Inc
  • 7th Cir: Central issue is whether Illinois or Missouri tort law offers a remedy to card-holders’ banks against a retail merchant who suffered a data breach, and beyond the remedies provided by the network of contracts that link merchants, card-processors, banks and card brands to enable electronic card payments. The plaintiff banks assert claims under the common law as well as Illinois consumer protection statutes. Our role as a federal court applying state law is to predict how the states’ supreme courts would likely resolve these issues. We predict that both states would reject the plaintiff banks’ search for a remedy beyond those established under the applicable networks of contracts. Accordingly, we affirm the district court’s dismissal of the banks’ complaint. Community Bank of Trenton v Schnuck Markets Inc

ARTICLES:

NEWS:

LIFE:

Thanks for reading!

©2018, Steve Jakubowski