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Supreme Court Upholds Constitutionality of Debt Relief Agency Provisions

by admin | Mon, 03/08/2010 - 11:55

A unanimous Supreme Court has ruled that attorneys are "debt relief agencies" and that the provisions prohibiting debt relief agencies to advise debtors to incur debt in contemplation of bankruptcy and the mandatory disclosures required are constitutional. United States v. Milavetz, Gallop & Milavetz, P.A., No. 08-1119 (3/8/10). However, in doing so, the Court adopted a narrow reading of the speech restriction, finding that it did not apply to advice to incur debt for a permissible purpose.

District Court Reverses Sanctions Ruling in Legal Technology Case

by admin | Tue, 03/02/2010 - 10:03

A U.S. District Judge found that it was an abuse of discretion for a bankruptcy court to award sanctions against two attorneys and a law firm in a case involving the NewTrak legal technology system. In re Taylor, No. 09-cv-2479-JF (E.D. Pa. 2/18/10). The opinion can be found here.

Sixth Circuit Releases Remarkable Opinion on Debt Buyers, Mootness and Sanctions

by admin | Sat, 01/30/2010 - 18:03

Unsecured claims held by credit card companies, and in particular by debt buyers, have kept bankruptcy judges and appellate courts busy recently. In the typical case, a credit card company or debt buyer files a claim which contains a summary listing the original creditor, the last four digits of the account number and the amount of the claim. The debtor objects on the basis that the claim is not supported by the documents establishing the claims and/or that the debtor does not know who the debt buyer is.

Court of Appeals Wades Through Mootness Maze

by admin | Tue, 01/12/2010 - 18:40

You know that an opinion is going to be challenging when the first sentence reads:The procedural background is a bit of a maze, but it is a facet of the appeal that we need to keep straight in our minds. Opinion, p. 1. Thus begins the Fifth Circuit's recent opinion on equitable mootness and section 1127(b). In re Blast Energy Services, Inc., No. 08-20702 (5th Cir. 1/7/10). The Procedural Maze

Just How Far Does "Related-To" Jurisdiction Go?

by admin | Tue, 01/12/2010 - 17:59

The Fifth Circuit has a new opinion in which it finds that a dispute between two non-bankrupt parties fell within "related-to" jurisdiction based upon a contractual indemnification clause. Lone Star Fund V (US), LP v. Barclays Bank, PLC, No. 08-11038 (5th Cir. 1/11/10).

Contempt Upheld for Injunction Not Yet Reduced to Writing

by admin | Thu, 12/31/2009 - 17:28

In one more chapter of the Gary Bradley bankruptcy, the Fifth Circuit Court of Appeals upheld a finding of contempt against the Lazarus Exempt Trust based upon conduct occurring between the court's oral pronouncement of an injunction and its reduction to writing. Matter of Gary Bradley, No. 08-50587 (5th Cir. 11/11/09).

Dispute Between Partners Leads to Mandatory Subordination

by admin | Thu, 12/31/2009 - 16:35

In Matter of Seaquest Diving, L.P., No. 08-20516 (5th Cir. 8/12/09), the Fifth Circuit considered whether a state court judgment based on a dispute between partners was subject to mandatory subordination under 11 U.S.C. Sec. 510(b) because it arose from the recission of a purchase or sale of a security of the debtor. The court found that mandatory subordination applied.

Judges Examine the Murky Standing of MERS

by admin | Wed, 12/30/2009 - 19:14

This year we have learned a lot about the mortgage industry. We have learned about mortgage securitization trusts who couldn't find the note. There have been more cases about debtors emerging from chapter 13 only to be hit with years of undisclosed fees and charges. Earlier this year, I wrote about the problems faced by a firm who claimed that their legal technology system would not let them speak directly to their client. However, one of the big trends this year was courts asking "Who is MERS and why are they filing motions for relief from the automatic stay?"

Interesting Opinion on Privilege and Work Product

by admin | Mon, 12/21/2009 - 18:50

Most bankruptcy lawyers abhor discovery disputes, both because they consume valuable time and because of the fear of offending the court. As a result, it is easy to get rusty on some of the finer points of privilege and work product law. An interesting opinion from Judge Leif Clark provides a good primer on how those concepts apply in bankruptcy court. Osherow v. Vann, Adv. No. 08-5006 (Bankr. W.D.Tex. 4/10/09).

Case Makes Good Point About State Turnover Receivers

by admin | Mon, 12/21/2009 - 18:14

An opinion from Judge Craig Gargotta reaches the rather unremarkable conclusion that it was appropriate to dismiss a chapter 7 case filed for a corporation which had no assets and only one significant creditor. In re Gaston Premier Homes, Ltd., No. 09-11903 (Bankr. W.D. Tex. 11/18/09).