Archive for Bankruptcy – Page 2

8th Cir. Rules on Bankruptcy Trustee’s Ability to Recover Overdraft Covering Deposits

In a bankruptcy preferential transfer dispute, the U.S. Court of Appeals for the Eighth Circuit recently held that the bankruptcy trustee could recover true overdraft covering deposits, while deposits covering intra-day overdrafts were not recoverable. A copy of the opinion in Joseph Sarachek v. Luana Savings Bank is available at:  Link to Opinion. A company filed for

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SD Fla. Bankruptcy Court Refuses to Approve Bankruptcy Plan That Relied on Medical Marijuana Lease Proceeds

The U.S. Bankruptcy Court for the Southern District of Florida recently held that a bankruptcy debtor’s Chapter 11 proceeding should not be dismissed as filed in bad faith to delay or avoid foreclosure, but could not confirm the debtor’s proposed plan to lease its commercial property asset to a business that generates income from medical

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6th Cir. Holds Michigan Assignment of Rents Removes Rental Income from Bankruptcy Estate

The U.S. Court of Appeals for the Sixth Circuit recently concluded that Michigan’s assignment of rents statute sufficiently deprived the assignor of the ownership of the rents such that the rents could not be included in the assignor’s bankruptcy estate. The primary issue before the Court was whether Michigan’s assignment of rents statute allowed the

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2nd Cir. Upholds Dismissal of Supposed ‘LIBOR Fraud’ Claims

The U.S. Court of Appeals for the Second Circuit recently affirmed the dismissal of LIBOR-manipulation fraud claims brought by a group of hotel-related entities and their investor against a bank and two of its subsidiaries. In so ruling, the Second Circuit held that: (a) the borrower and related entities lacked standing to sue because they

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MD Ala. Holds Servicer Did Not Violate Discharge By Sending Periodic Statements, NOI, Delinquency Notices, Hazard Insurance Notices

The U.S. Bankruptcy Court for the Middle District of Alabama recently held that a mortgage servicer did not violate the discharge injunction in 11 U.S.C. § 524 by sending the discharged borrowers monthly mortgage statements, delinquency notices, notices concerning hazard insurance, and a notice of intent to foreclose. Moreover, because the borrowers based their claims

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U.S. Supreme Court Holds FDCPA Not Violated By Proof of Claim on Time-Barred Debt

In a 5-3 decision handed down on May 15, the Supreme Court of the United States held that the federal Fair Debt Collection Practices Act (FDCPA) is not violated when a debt collector files a proof of claim for a debt subject to the bar of an expired limitations period. The decision: held that the

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9th Cir. Applies Anti-Deficiency Protections to Debtors’ Bankruptcy Estate Where Property of Estate is Sold in Non-Judicial Foreclosure

The U.S. Court of Appeals for the Ninth Circuit recently affirmed the Bankruptcy Appellate Panel’s determination that a creditor’s pre-bankruptcy, non-recourse lien on two debtors’ real property is extinguished following a non-judicial foreclosure sale. A copy of the opinion in In re: Salamon is available at:  Link to Opinion. In April 2009, two debtors purchased

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11th Cir. Holds Post-Discharge Monthly Mortgage Statements Not Prohibited

The U.S. Court of Appeals for the Eleventh Circuit recently affirmed the dismissal of a mortgage loan borrower’s federal Fair Debt Collection Practices Act and related state law claims because the defendant mortgagee was not a “debt collector” as defined by the FDCPA. In so ruling, the Court also rejected the borrower’s allegations that the

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9th Cir. Holds Mortgagee’s ‘Sold Out Second’ Claim Not Barred by California’s 4-Year Statute of Limitations

The U.S. Court of Appeals for the Ninth Circuit recently reversed a ruling that disallowed an unsecured creditor’s claim filed in a California bankruptcy court based on the forum state’s statute of limitations. In so ruling, the Ninth Circuit held that, although courts typically apply the forum state’s statute of limitations if the contract is

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11th Cir. Holds Failure to File Proof of Claim in Receivership Does Not Extinguish Security Interest

The U.S. Court of Appeals for the Eleventh Circuit recently held that a court cannot extinguish a secured creditor’s state-law security interests for failure to file a proof of claim during the administration of an equity receivership over entities involved in a Ponzi scheme. A copy of the opinion in Securities and Exchange Commission v.

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Indiana Supreme Court Rejects Borrowers’ Argument Bankruptcy Discharge Wiped Out Mortgage Loan, Lien

The Supreme Court of Indiana recently confirmed a mortgagee’s ability to seek an in rem judgment against property for which there was an outstanding lien balance after the borrowers obtained a discharge of their Chapter 7 bankruptcy. In so ruling, the Court distinguished the difference between an in rem and in personam judgment, and rejected

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5th Cir. Holds Wage Garnishment Served More Than 90 Days Before Bankruptcy Is Avoidable Transfer

The U.S. Court of Appeals for the Fifth Circuit recently held that the collection of garnished wages earned during the 90 days prior to the filing of a bankruptcy petition is an avoidable transfer, even if the garnishment was served before the 90-day preference period. The ruling creates a potential split with the Second, Seventh,

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