(United States Ninth Circuit) – In a debtor’s motion to sanction Orange County for persisting post-discharge in its efforts to collect a debt arising from the debtor’s son’s involuntary juvenile detention, the Bankruptcy Appellate Panel’s affirmation of the bankruptcy court’s denial of the motion is reversed where the debtor’s liability for the costs of support of her son while in detention was not a ‘domestic support obligation’ and thus was not excepted from discharge in bankruptcy under 11 U.S.C. section 523(a)(5).
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(United States Ninth Circuit) – In a debtor’s adversary proceeding seeking a determination that his federal income tax liabilities were dischargeable in bankruptcy, the district court’s order reversing the bankruptcy court and entering summary judgment in favor of the IRS is affirmed where: 1) the debtor’s tax liabilities were non-dischargeable under 11 U.S.C. section 523(a)(1)(B)(i), which exempts from discharge any debt for a tax with respect to which a return was not filed; and 2) debtor’s late-filed Form 1040 did not represent an honest and reasonable attempt to satisfy the requirements of the tax law, and he therefore did not file a ‘return’ within the meaning of section 523(a)(1)(B)(i).
(United States Second Circuit) – In an appeal of a Bankruptcy Court judgment enforcing a ‘free and clear’ provision of a sale order to enjoin claims against a debtor’s successor corporation and concluding under the equitable mootness doctrine that assets of the debtor’s unsecured creditors’ trust would be protected from late‐filed claims, the Bankruptcy Court’s judgment is: 1) affirmed as the decision not to enforce the Sale Order as to the independent claims; 2) reversed insofar as it enforced the Sale Order to enjoin claims relating to the ignition switch defect; 3) vacated insofar as it enjoined claims based in non‐ignition switch defects; and 4) vacated as to the decision on equitable mootness as advisory.
(United States First Circuit) – In a bankruptcy case, the District Court’s affirmation of the Bankruptcy Court’s conversion of debtor’s Chapter 11 bankruptcy case to a case under Chapter 7 is affirmed where there was no error of law or abuse of discretion by the Bankruptcy Court in converting debtor’s Chapter 11 bankruptcy case to Chapter 7.
(United States First Circuit) – In an ethics action, the district court’s order of sanctions under Federal Rule of Bankruptcy Procedure 9011(b)(2) against debtor’s attorney, ordering him to enroll in a one-semester class on legal ethics or professional responsibility at an ABA accredited law school, is affirmed where it was not an abuse of discretion to order such a sanction following the attorney’s multiple misstatements of the law.
(United States Supreme Court) – In a suit to enjoin the Puerto Rico Public Corporation Debt Enforcement and Recovery Act, portions of which mirror Chapters 9 and 11 of the Federal Bankruptcy Code and enable Puerto Rico’s public utility corporations to restructure their climbing debt, the where section 903(1) of the Bankruptcy Code pre-empts Puerto Rico’s Recovery Act, the First Circuit’s affirmance of the District Court’s judgment enjoining the Act, on grounds that the Bankruptcy Code’s definition of “State” to include Puerto Rico, except for purposes of defining who may be a debtor under Chapter 9 section 101(52), did not remove Puerto Rico from the scope of the pre-emption provision, is affirmed where section 903(1) of the Bankruptcy Code pre-empts Puerto Rico’s Recovery Act.
(United States Ninth Circuit) – In a Chapter 7 bankruptcy creditor’s adversary proceeding seeking an exception to discharge on the basis of a fraudulent transfer of property under 11 U.S.C. section 727(a)(2), the Bankruptcy Appellate Panel’s decision affirming the bankruptcy court’s summary judgment in favor of debtor is affirmed where section 727(a)(2), which prevents the bankruptcy court from granting a debtor a discharge if the debtor improperly transferred property within one year before the date of the filing of the bankruptcy petition, is not subject to equitable tolling.
(United States Ninth Circuit) – In a bankruptcy case, in which the bankruptcy courted granted a party’s motion for relief from the automatic bankruptcy stay so that it could proceed with foreclosure sale, the debtors’ appeal to the District Court without seeking a stay of the bankruptcy court’s order pending appeal, allowing the foreclosures to occur, the debtors’ appeals are dismissed where they were constitutionally moot because there no longer was any case or controversy.
(United States Supreme Court) – In a case involving a dispute over whether a debt could be discharged by a Chapter 7 bankruptcy filing, the Fifth Circuit’s decision affirming the District Court’s judgment that defendant was personally liable under state law but that the debt was not “obtained by…actual fraud” under 11 U.S.C. section 523(a)(2)(A) and thus could be discharged in bankruptcy, is reversed where the term ‘actual fraud’ in section 523(a)(2)(A) encompasses fraudulent conveyance schemes, even when those schemes do not involve a false representation.