Bankruptcy docket roundup – December 9, 2021

Apologies to my dear readers for falling behind on these posts! Will try to do better. Real life sometimes intrudes on my precious blogging time. Hope you’ve been doing well, or at least making do, without me.

Let’s start with an appeal to the Fourth Circuit. The panel looks into complex procedural issue related to a dispute over a condominium complex and, despite the condo association’s trial court loss for physical damages and Fair Housing Act issues, the association still wanted to collect its assessments against a condo owner. Clark v. Almy (19-2181) Judges Wilkinson, King, Diaz.

In the Central District of Illinois, there’s a cautionary case for practitioners to look into. Court grants US trustee’s request for attorney to disgorge $365 in filing fees over insufficient verification practices by the firm. In re Kincaid (19-70433), Judge Gorman.

In the District of Connecticut, section 523 defendant is a former financial advisor to the plaintiffs who lost a FINRA arbitration brought by the Ahuja’s based on negligent investment advice as a fiduciary. Summary judgement in favor of creditors because the debtor’s case falls under the securities subsection of 523(a)(19). Ahuja v. Fleming (19-51611), Judge Manning.

Staying in the cold country before moving south, in the Eastern District of Michigan, court sides with the debtor and dismisses a trustee’s 727 complaint because there was no allegation of fraud when the debtor transferred her exempt home six months after discharge. However, there is more to the case that may give the trustee avenues to move against the debtor. Lim v. Stewart (20-48595), Judge Tucker.

Moving down to sunnier and warmer District of Southern Florida, order granting motion to avoid liens under 522(f)(1)(A) over creditor’s objection that its lien does not actually “impair” the debtor’s exemption. Pretty interesting case in the context of Florida’s broad homestead exemptions and a split in the state on whether unenforceable recorded judgment liens impair the exemption. In re Pettengill (21-11326), Judge Russin.

Given how far Judge Russin dives into the nature or liens, I’d love to cover this one on the next podcast.

Jacobson Lives! $100k cash lost to the trustee in Idaho

Idaho. Debtors sell house while they’re in bankruptcy, but fail to follow the Idaho exemption regime which required them to reinvest the money in a new homestead within a year. Trustee comes calling, a few appeals later, and we end up with McAllister v. Wells in the Ninth Circuit.  Even the panel notes just how controversial this is.


The Bankruptcy Opinions Podcast

Subscribe to the Bankruptcy Opinions Podcast wherever you get your podcasts.

Listen to the Bankruptcy Opinions Podcast on Apple Podcasts
Listen to the Bankruptcy Opinions Podcast on Spotify
Listen to the Bankruptcy Opinions Podcast on Google Podcasts
Listen to the Bankruptcy Opinions Podcast on Stitcher

Subchapter 5 saves the Harbor Rose!

Long Island, New York. On the eve of a creditor’s confirmation hearing, the Small Business Reorganization Act became effective. In this groundbreaking case, Judge Grossman grapples with complex first impression issues and comes up with a new test for modifying loans on properties that debtors live in (that’s a big deal!).


The Bankruptcy Opinions Podcast

Subscribe to the Bankruptcy Opinions Podcast wherever you get your podcasts.

Listen to the Bankruptcy Opinions Podcast on Apple Podcasts
Listen to the Bankruptcy Opinions Podcast on Spotify
Listen to the Bankruptcy Opinions Podcast on Google Podcasts
Listen to the Bankruptcy Opinions Podcast on Stitcher