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Category Archives: Bankruptcy

Landlords Are Entitled To Priority Treatment of Lease Payments Which First Come Due During the Gap Period of an Involuntary Bankruptcy

In a case of first impression, Judge Montali had to decide whether a landlord’s claim for payment of rent during the gap period of an involuntary bankruptcy is entitled to priority. Before delving into the facts of the case, a quick primer is appropriate. The treatment of a commercial landlord’s claims in bankruptcy is too […]

Is It Community Property Or Separate Property?

The 9th Circuit really confused a lot of people in 2003 when it incorrectly interpreted California community property laws. The confusion spread to California courts of appeal until finally corrected by the California Supreme Court in 2014! In Hanf v. Summers (In re Summers), 332 F.3d 1240 (9th Cir.2003), the pertinent facts are as follows: […]

Bankruptcy Judges Might Not Be Able to Remand Removed Cases!

This is a dangerous article to write but I am hoping the comments will be worth it. So the Wellness case came out and the Supreme Court seems to have taken a pragmatic view by allowing parties to consent (implied or explicit) to the jurisdiction of bankruptcy courts. Fine. But is there more to this […]

Not All Expenses Of A Professional May Be Compensable By The Estate, Even In The Face Of A Clear Retainer Agreement And An Approved Employment Application!

The facts of the situation are not in dispute. The Debtor in a Chapter 11 case needed to hire a forensic accountant. The Debtor applied for permission to hire the accountant under § 327(a) of the Bankruptcy Code. The employment application did not contain any special provisions but the engagement letter contained the following clause: […]

Judge Bauer Reversed, Trustee Clawback Power Strengthened

In this case, the sole shareholder, director and president of a company (all the same Individual) transferred about $8,000,000 into a secret bank account which he then used to pay personal debts. The question before the Court was whether the transfers to the bank account made the Individual, in his personal capacity, an initial transferee […]

9th Circuit BAP Opinion Allows For Stripping Wholly Unsecured Junior Liens in a Chapter 20

On June 9, 2015, the 9th Circuit Bankruptcy Appellate Panel held that a Debtor not eligible for a Chapter 13 discharge may strip off a wholly unsecured lien through a Chapter 13 Plan. You can find the case here. This is common practice in the Central District and I am happy the BAP went the […]

Postconfirmation Subject Matter Jurisdiction of Bankruptcy Courts

A trend among Chapter 11 practitioners over the last ten years has been to use general provisions in the Plans of Reorganization they draft. They copy and paste these provisions in all their Plans, close their eyes and hope for the best. One of those clauses is this “retention of jurisdiction” clause. Some practitioners have […]

Basic Introduction to Unsecured Creditors’ Committee

This article is a quick introduction to unsecured creditors’ committees. When an individual or company files bankruptcy, there are generally two routes it can take (for the purpose of this discussion, Chapter 13, a limited form of reorganization for individuals, is omitted.) The first route is Chapter 7 liquidation where assets are liquidated for payment […]

Tactical Use of Bankruptcy when a Lis Pendens is Recorded

On June 2, 2015, the California Court of Appeals issued a decision where it reversed the Superior Court’s decision to grant priority to a judgment lien recorded by a party after a lis pendens was recorded by a different party. While some nuances about the interaction of fraudulent transfer judgments and lis pendens were discussed, […]

Does an annuity inherited by a spouse constitute “retirement funds” within the meaning of § 522(b)(3)(C)?

For the purpose of this blog, I am going to assume that the annuity in question would be exempt had the decedent been alive. At first, I thought the answer was simple: Assuming the annuity was a retirement fund to begin with, the answer is yes, it continues to be a retirement fund because under […]