Debtors and Creditors

Court-ordered turnover is equitable remedy that may be invoked to assist judgment creditor to collect on his judgment. Attachment; execution; judgement debtor; levy; show cause order.

Sharp v. Dery

Post-petition income that is dependent upon continued services of debtor subsequent to petition does not constitute property of estate.

In re Shaw

Under the Bankruptcy Code, a Chapter 7 petition may be dismissed for substantial abuse. Chapter 13. Cramdown. Avoid foreclosure through bankruptcy. House underwater on mortgage. Avoid foreclosure.

In re Palidora

While child support payments held in trust for benefit of minor are exempt from attachment, wages earned by debtor are not exempt once paid by employer to debtor. Exempt property; garnishment of wages.

In re Robert W. McNamara, Debtor

When debtor fails to satisfactorily explain any loss of assets or deficiency of assets to meet debtor liabilities, discharge may be denied. Discharge in bankrupcy.

In re Gerhardt

Student loans may be discharged only if (1) debtor cannot maintain minimal standard of living, (2) additional circumstances indicate state is likely to persist for significant portion of repayment term (3) debtor has made good faith efforts to repay.

In re Patricia M. Miller, Debtor

Debtor may receive a partial discharge of student loan debt when, although she cannot make showing of undue hardship as to entirety of debt, circumstances exist that warrant some bankruptcy relief. Equitable.

In re Paglia, Debtor

Permitting debtor to voluntarily sign new note to cover pre-petition debt is not per se act to collect. annuity; coercion; promissory note; secured; security.

Tennessee Student Assistance Corporation, Petitioner v. Hood

Bankruptcy court exercise of its in rem jurisdiction to discharge debt does not infringe upon state sovereignty under Eleventh Amendment. ein personam jurisdiction; sovereign immunity.

Till v. SCS Credit Corporation

Rate of interest paid on secured claims in Chapter 13 plan will be set at national prime interest rate, adjusted to cover greater risk of nonpayment by bankrupt debtors. Prime rate.

In re Leone

Chapter 13 plans must be filed in good faith without unreasonably favoring secured creditors over unsecured creditors.

In re Huelbig

All contingent, liquidated unsecured debts must be considered in determining Chapter 13 eligibility. Contingency; nolo contendere; RICO.

In re SGL Carbon Corporation

Chapter 11 petitions must be filed in good faith and with valid reorganizational purpose. Chapter eleven.

In re Bowling

By his strong-arm powers under § 544(a)(3), bankruptcy trustee may avoid mortgage improperly executed under state law. Avoidance.

In re Denochick

Guarantor of debt is creditor as defined by Bankruptcy Code.

In re Stewart

Transfer within ninety-day preference period not preferential if for contemporaneous exchange for value, or to pay debt incurred in ordinary course of debtor business, and transfer was in ordinary course of debtor business or ordinary business terms.

In re Shreves

Transfer is not preference if parties intend transfer to be contemporaneous and transfer is in fact substantially contemporaneous. Perfect; purchase money security interest.

In re Epic Capital Corporation

Equitable subordinationof claim applies if (1) claimant engaged in some type of inequitable conduct, (2) misconduct resulted in injury to other creditors and conferred unfair advantage on claimant, and (3) not inconsistent with Bankruptcy Code.

In re Malkus, Inc., Debtor

Court should not confirm Chapter 11 reorganization plan if there is no reasonable likelihood that plan will succeed. Feasability standard.

In re Made in Detroit, Inc., Debtor

Conditional plans are not feasible and therefore ineligible for confirmation. Bankruptcy plan; feasibility standard.

SK-Palladin Partners, L.P., Plaintiff v. Platinum Entertainment, Inc.

Value of debtor assets must be properly supported by admissible evidence. Appraisal; foundation; hearsay.

In re Bernhard Steiner Pianos USA, Inc.

When good business reasons exist, court may allow separate classification of substantially similar creditors. Consignment; gerrymandering.

In re PPI Enterprises (U.S.), Inc.

Under Bankruptcy Code, claim is impaired unless plan leaves unaltered the legal, equitable, and contractual rights to which holder of such claim is entitled. Impairment.

In re MJ Metal Products, Inc.

Under § 1129(a), bankruptcy plan may be confirmed if each class of claims accepts plan or treatment of that class is unimpaired.

In re Channel Master Holdings, Inc.

Fees for professional services in Chapter 11 case will be reviewed to assure that services rendered were necessary and appropriate and that fees requested are reasonable.

In re Loral Space & Communications, Ltd.

Section 1104(c)(2) mandates the appointment of examiner at the request of party in interest if debtor qualifying debt exceeds five million dollars.

FCC v. Nextwave Personal Communications, Inc.

Governmental entities may not revoke debtor license solely because the debtor has failed to pay debts dischargeable in bankruptcy.

In re Howe

Two suits raise same claim for res judicata purposes if two claims are based on same nucleus of operative facts.

In re Bernhard Steiner Pianos USA, Inc.

Bankruptcy plan of reorganization cannot be confirmed if plan purports to release guarantors of debtor debts and creditor objects to release. Preliminary injunction; stay.

In re Enron Corp.

Venue of bankruptcy action will be changed only if party requesting such change can show, by preponderance of the evidence, that transfer of venue is in interest of justice, or for convenience of parties.

In re Board of Directors of Multicanal, S.A.

Comity. Bankruptcy court will recognize foreign proceedings only if they do not discriminate against U.S. creditors.

Car Expenses In Bankruptcy

In re Kimbro; Under the bankruptcy means test, a debtor may deduct an ownership expense for a vehicle, regardless of whether the debtor has a debt or lease payment on that vehicle.

Fraud In Bankruptcy

In re Sharpe; A discharge under § 727 does not discharge an individual debtor from any debt to the extent that such debt was obtained by false pretenses, false representations, or actual fraud, other than a statement of debtor's financial condition.

Sloppy Bank Practices Lead to Dischargeability of Mortgages

In re Hill; for creditor to establish a debt as nondischargeable, demonstrate that debtor made a knowing material written representation, with the intent to deceive, creditor relied, reliance reasonable, damage suffered proximately. Avoid foreclosure.

Voluntary Repayment Plans

In re Kagenveama; The term "applicable commitment period" as used in the Bankruptcy Code is relevant only with regard to the phrase "projected disposable income"; if none, the five-year minimum commitment period does not apply.

Rent Free Homes Are A Reasonable Expense

In re Farrar-Johnson; A bankruptcy trustee's objection to a claimed expense is limited to an argument that the expense does not comply with 11 U.S.C. § 1325(b), not that it is made in bad faith.

Judicial Liens May Be An Avoidable Preference

In re Pysz; A lien is an avoidable preference if for an antecedent debt, for the benefit of a creditor, filed within the ninety-day preference period, the debtor was insolvent, and the creditor would receive more from lien than a Chapter 7 liquidation.

Creditors May Not Use Earmarking For Refinancing Debt

Chase Manhattan Mortgage Corp. v. Shapiro; A creditor who refinances a debt owed to that creditor may not use the earmarking defense in an action to avoid a lien created by that debt as a preferential transfer; bona fide purchaser; earmark.

Increase In Debt Due to Interest and Late Fees

In re Qmect; Transfers to a secured creditor during the preference period are not avoidable if the value of the debt in relation to the value of the collateral increases due to interest or late fees; secured creditor; unsecured creditor.

Unrecorded Statutory Liens Are Avoidable

In re TWA Post Confirmation Estate; Statutory liens must be recorded in order to be perfected; perfect; bankruptcy.

Inequitable Conduct Leads to Claim Subordination

In re SI Restructuring; Claims will be subordinated through equitable subordination only to the extent that the debtor or other creditors were harmed by the inequitable conduct.

Claim Disclosure in Bankruptcy

In re Northwest Airlines Corp; The claims and interests of individual members of a group or committee of equity security holders must be disclosed, because the group represents the interests of its individual members.

Bonuses May Be Paid For Retention or Completion

In re Dana Corp; provision in compensation plan that calls for payment of bonus regardless of performance is retention bonus, and not completion bonus; business judgment rule; noncompetition agreement.

Bankruptcy Code Limits on Executive Compensation

In re Dana Corp; compensation plan that gives incentives to produce and increase value of estate does not violate Bankruptcy Code limitations on compensation.

CERCLA Claims Are Dischargeable In Bankruptcy

Signature Combs, Inc. v. United States; A CERCLA claim may be discharged in bankruptcy if it is based on pre-petition conduct that could fairly be contemplated at the time of the bankruptcy.

Nondebtor Releases Are Seldom Approved

In re Metromedia Fiber Network, Inc; Plan provisions that release nondebtors from claims by creditors should be approved only in rare cases in which the release plays an important part in the reorganization plan.

Undisclosed Conflicts Of Attorney

In re SONICblue, Inc; In order to serve as counsel for a debtor, an attorney must be free of all conflicting interests that might impair impartiality and neutral judgment; debenture.

Debtor's Registered Office Is Presumed COMI

In re Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd; There is a presumption that a debtor's center of main interests (COMI) has limited weight; may be rebutted by a showing debtor has stronger connections with United States.

Foreign Bankruptcy Proceedings Are Usually Recognized

In re Board of Directors of Telecom Argentina, S.A.; Comity is the main factor in deciding whether to grant recognition of a foreign proceeding, but it will not automatically override other concerns.

British Insolvency Act

McGrath v. Riddell; The authority of an English court to cooperate with a foreign court in an insolvency action comes from the grant of authority in the Insolvency Act, not from the inherent authority of the court.