(United States Fourth Circuit) – In a lender liability action, brought by plaintiff against defendant Wells Fargo following default on an interest-rate-swap transaction previously satisfied in Chapter 11 bankruptcy proceedings, the district court’s dismissal is affirmed where the prior bankruptcy proceedings preclude the present suit on res judicata grounds.
(United States First Circuit) – In an involuntary bankruptcy proceeding, the bankruptcy court’s decision, which found defendant qualified to join with two other creditors also holding non-contingent, undisputed claims to force plaintiff into an involuntary bankruptcy proceeding, is affirmed where a claim to payment defendant holds against plaintiff “is not contingent as to liability or the subject of a bona fide dispute as to liability or amount” within the meaning of section 303(b)(1) of the Bankruptcy Code, 11 U.S.C. section 303(b)(1).
(United States Second Circuit) – In a commercial action concerning payment for purchased fuel bunkers for plaintiff’s ships, the district court’s preliminary injunction, barring suit against plaintiffs to enforce maritime liens and attach the three vessel at issue, is affirmed in part and reversed in part where: 1) the district court possessed subject matter jurisdiction over the dispute; but 2) the preliminary injunction is overbroad and is remanded for a determination of the proper scope.
(United States First Circuit) – In a suit alleging contract claims under Article 1061 of the Puerto Rico Civil Code, 31 L.P.R.A. section 3025, the district court’s affirmance of the bankruptcy court’s award of prejudgment interest to plaintiff is vacated and remanded for recalculation of section 1961 interest and, to prevent double recovery, a recalculation of Article 1061 interest where: 1) debtor did not forfeit its claim to prejudgment interest under Article 1061; and 2) 28 U.S.C. section 1961 exclusively controls awards of postjudgment interest in federal court.
(United States Ninth Circuit) – In a bankruptcy action, the Bankruptcy Appellate Panel’s decision that Robert Rabkin was not a statutory insider for the purposes of voting to accept a Chapter 11 bankruptcy plan is affirmed where a creditor does not become an insider simply by receiving a claim from a statutory insider, but must have a close relationship with the debtor and negotiate the relevant transaction at less than arm’s length.
(California Court of Appeal) – In a case brought by a bankruptcy trustee against a former attorney of the debtor company, claiming he helped the managers of the debtor company perpetrate a fraud, trial court grant of the attorney’s demurrer without leave to amend, finding the Trustee’s claims barred by the in pari delicto doctrine, is affirmed where: 1) Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP (2005) 133 Cal.App.4th 658, was correctly decided and holds that if this doctrine would have barred claims if asserted by a company prior to bankruptcy, the doctrine also bars them when asserted by the bankruptcy trustee suing on behalf of the company’s bankruptcy estate; and 2) trustee’s Civil Code section 2306 does not defeat the in pari delicto defense.
(United States Ninth Circuit) – In a bankruptcy action, the bankruptcy court’s order sustaining California Bank’s objection to the debtor’s reorganization plan is affirmed where the absolute priority rule contained in 11 U.S.C. section 1129(b)(2)(B)(ii) continues to apply in individual chapter 11 reorganizations following the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
(United States First Circuit) – In chapter 7 proceedings, the bankruptcy court’s denial of a discharge for the debtor is affirmed where the debtor’s lack of documentation was “shocking and disturbing” and he had not satisfactorily explained the disposition of his assets.
(United States Third Circuit) – In a bankruptcy action, the Bankruptcy Court’s grant of debtor’s motion to reject its collective bargaining agreement (CBA) with UNITE HERE Local 54 is affirmed. The court held that a Chapter 11 debtor-employer can reject the continuing terms and conditions of a CBA under 11 U.S.C. section 1113, despite the National Labor Relations Act’s prohibition on employers unilaterally changing the terms and conditions of a CBA after expiration under 29 U.S.C. section 158(a)(5).
(United States Ninth Circuit) – In a bankruptcy action, the district court’s order is affirmed where the debtor’s interests in the term life insurance policies, including their secondary market value and resulting life settlements, constitute a recoverable interest of the debtor in property under 11 U.S.C. section 548(a)(1).