Recent Bankruptcy Law Decisions

In Chapter 7 bankruptcy proceedings, district court's judgment in favor of the trustee, who had filed an adversary action against the defendants claiming fraudulent conveyance under the section 4(a)(2) of the Uniform Fraudulent Transfer Act, is affirmed in part and reversed in part where: 1) bankruptcy court did not commit clear error in finding that statutory condition for a fraudulent conveyance was satisfied; and 2) district court's ruling with respect to the dividend is reversed as the trustee is entitled to the dividend because it was an integral part of the leveraged buy-out.   

Read Boyer v. Crown Stock Distrib., Inc. , No. 09-1699

Appellate Information

Appeal from the United States District Court for the Northern District of Indiana, Fort Wayne Division

Decided November 18, 2009

Judges

Before:  Posner, Rovner, and Williams, Circuit Judges

Opinion by Posner, Circuit Judge

In Mercantile National Bank of Indiana's claim under Indiana's Crime Victims' Compensation Act (CVCA) against its debtor, which allows a person who suffers pecuniary loss as a result of certain property crimes to seek treble damages and attorneys' fees, district court's judgment affirming the bankruptcy court's dismissal of the CVCA claim is reversed as Mercantile properly commenced its CVCA claim within the statute of limitations where it was not filed to enforce the previous judgment but rather to seek damages based on a new cause of action.   

Read Rose v. Mercantile Nat'l Bank of Indiana, No. 08-3431

Appeals from the United States District Court for the Central District of Illinois

Argued February 19, 2009
Decided October 7, 2009

Judges

Before:  Flaum and Williams, Circuit Judges, and Kapala, District Judge

Opinion by Williams, Circuit Judge

Conviction of defendant and his wife for bankruptcy fraud and related crimes is affirmed where: 1) wife's conviction is supported by sufficient evidence; 2) defendant's constitutional claims are without merit as district court's conclusion that the marital agreements were fraudulent was well-founded; 3) defendant lacks standing to raise a Sixth Amendment ineffective assistance of counsel claim on behalf of his wife; and 4) district court did not err in using defendant's prior state court judgment to increase his base offense level.   

Read US v. Arthur, No. 07-1052

Appellate Information

Appeals from the United States District Court for the Eastern District of Wisconsin.

Argued May 26, 2009
Decided September 17, 2009

Judges

Before Easterbrook, Chief Judge, and Bauer and Posner, Circuit Judges

Opinion by Bauer, Circuit Judge

District court's dismissal for failure to state a claim is affirmed where defendants had no duty to tell plaintiff that defendants' employer was about to declare bankruptcy, and none of the their actions were actionable as fraud. 

Read Smith v. Duffey, No. 08-2804

Appellate Information
Appeal from the United States District Court for the Northern District of Illinois, Eastern Division.
Argued May 11, 2009
Decided August 3, 2009

Judges
Before CUDAHY, POSNER and KANNE, Circuit Judges.
Opinion by POSNER Circuit Judge.

Bankruptcy court order denying the petitioner's former wife's proof of claim for slander of title is affirmed where: 1) petitioner did not commit slander of title by improperly filing a lis pendens notice as even assuming the notice of lis pendens was filed in error, petitioner acted in good faith and there was no showing of malice on his part; and 2) the bankruptcy court properly granted petitioner's motion for turnover as his former wife failed to establish that the bankruptcy court had any obligation to ensure her ability to pay the judgment before granting the turnover motion. 

Read In re Gallo, No. 08-1315

Appellate Information
Appeal from the United States District Court for the Central District of Illinois.
Argued April 7, 2009
Decided July 20, 2009

Judges
Before POSNER, RIPPLE and WOOD, Circuit Judges.
Opinion by RIPPLE Circuit Judge.

Bankruptcy court order rejecting bankruptcy trustee's objection to Chapter 13 petitioner's deduction of monthly mortgage payments from his disposable income is reversed where the deduction of mortgage expenses from the Chapter 13 debtor's disposable income is not intended to enrich the debtor at the expense of his unsecured creditors but is intended to adjust the respective rights of the mortgagee and the unsecured creditors, and petitioner cannot use a phantom deduction to reduce the recovery by his unsecured creditors without benefiting any other creditor.    

Read In re Turner, No. 08-2163

Appellate Information
Appeal from the United States Bankruptcy Court for the Southern District of Indiana, Indianapolis Division.
Argued May 12, 2009
Decided July 20, 2009

Judges
Before POSNER and SYKES, Circuit Judges, and VAN BOKKELEN, District Judge.
Opinion by POSNER, Circuit Judge.
VAN BOKKELEN, District Judge, concurring in part and concurring in the judgment.
SYKES, Circuit Judge, dissenting.

Bankruptcy court judgment sustaining the objection to creditor Avnet, Inc.'s untimely claim against the estate of MarchFIRST in a bankruptcy proceeding is affirmed where: 1) the court properly rejected Avnet's argument that MarchFIRST should have accepted the faxed submission of its proof of claim forms, as the bankruptcy notice was sufficiently clear that submission by mail or by hand were the only permissible methods of transmittal; and 2) the court did not abuse its discretion in declining to deem Avnet's claim timely under Federal Rules of Bankruptcy Procedure 5005(c), as Avnet did not offer convincing justification or explanation for its untimely filing.    

Read In re MarchFIRST, Inc., No. 06-2738

Appellate Information
Appeal from the United States United States District Court for the Northern District of Illinois, Eastern Division.
Heard October 21, 2008
Decided July 17, 2009

Judges
Before RIPPLE, EVANS, and SYKES, Circuit Judges.
Opinion by SYKES, Circuit Judge.

In an appeal from the Bankruptcy Court's order allowing Creditors' claims against Debtors based on gambling debts, the order is affirmed where: 1) Wisconsin courts, applying their forum's choice-of-law analysis, would apply Nevada law to govern the claims; and 2) the claims were enforceable under Nevada law.

Read the full decision in Jafari v. Wynn Las Vegas, LLC.

Appellate Information:

Appeal from the United States Bankruptcy Court for the Western District of Wisconsin.
No. 06-10155-11 - Thomas S. Utschig, Judge.
ARGUED on APRIL 17, 2009
DECIDED on JUNE 17, 2009

Judges:

Before FLAUM, EVANS, and WILLIAMS, Circuit Judges.

Opinion by FLAUM, Circuit Judge.