(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).
(United States Ninth Circuit) – In a bankruptcy action, the bankruptcy court’s determination that Eden Place, LLC violated the automatic stay provisions of the Bankruptcy Code by evicting debtor from a residential property is reversed where debtor had no legal or equitable interest in the property following an unlawful detainer judgment and writ of possession in state court.
(United States Second Circuit) – In a debt collection action arising from an underlying bankruptcy, the district court’s dismissal of plaintiff’s Fair Debt Collection Practices Act (FDCPA) claims is reversed where the Bankruptcy Code does not broadly repeal the FDCPA for purposes of FDCPA claims based on conduct that would constitute alleged violations of a discharge injunction.
(United States Second Circuit) – In a bankruptcy action, the bankruptcy court’s denial of appellant’s motion for reconsideration as to its claim against debtor is reversed and remanded with instructions to vacate the claim disallowance order and reinstate appellant claim.