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October 30, 2010

Tribune Investors Sue Banks That Arranged Financing

"A group of investors in bankrupt Tribune Co (TRBCQ.PK) sued JPMorgan, Merrill Lynch, Citicorp and Bank of America, claiming the banks arranged $3.7 billion in loans in 2007 they knew the company could never repay."

Read the article here.

October 30, 2010 in Current Affairs | Permalink | Comments (0) | TrackBack

October 29, 2010

Philadelphia Firms in Running to Represent Harrisburg in Bankruptcy

“This is a complicated matter and somewhat novel...I can’t remember a city of this size formally filing for bankruptcy."

Read the article here.

October 29, 2010 in Current Affairs | Permalink | Comments (0) | TrackBack

October 28, 2010

Judge Geraldine Mund to Stay on for a While



On February 9, 2011, Judge Mund will be changing her status from that of an active bankruptcy judge to a recalled bankruptcy judge.  She will continue to receive new San Fernando Valley Division cases for several months.  When her replacement has been appointed, she will no longer be assigned new cases, but will continue to handle cases already assigned to her. Judge Mund will continue to be located in the San Fernando Valley Division.

Please note that additional changes for bankruptcy judges in the Los Angeles Division and San Fernando Valley Division will be provided in the future by Public Notice.


October 28, 2010 in Judicial Announcements | Permalink | Comments (1) | TrackBack

ABA Letter re Bankruptcy Technical Amendments (93 pages!)

From: American Bar Association [mailto:Frisbyr@staff.abanet.org]
Sent: Thursday, October 28, 2010 12:17 PM
To: abanet_list@mailmanager.net
Subject: Proposed Technical Amendments to the Bankruptcy Code Regarding BAPCPA
Section of Business Law
321 North Clark Street
Chicago, IL 60654

October 28, 2010
The Honorable Patrick J. Leahy                                          The Honorable Jeff Sessions
Chairman                                                                             Ranking Minority Member
Committee on the Judiciary                                                   Committee on the Judiciary
224 Dirksen Senate Office Building                                   152 Dirksen Senate Office Building
United States Senate                                                           United States Senate
Washington, D.C. 20510                                                     Washington, D.C. 20510

The Honorable John Conyers, Jr.                                         The Honorable Lamar Smith
Chairman                                                                              Ranking Minority Member
Committee on the Judiciary                                                   Committee on the Judiciary
2138 Rayburn House Office Building                                 2142 Rayburn House Office Building
U.S. House of Representatives                                             U.S. House of Representatives
Washington, D.C. 20515                                                      Washington, D.C. 20515
Re: Proposed Technical Amendments to the Bankruptcy Code Regarding BAPCPA


The American Bar Association Section of Business Law (the "Section") is pleased to submit the enclosed comments to the Senate and House Judiciary Committees regarding proposed technical amendments to the Bankruptcy Code to correct certain errors contained in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA"). Although we understand that the House recently passed a more limited bankruptcy technical corrections bill, H.R. 6198, in late September, we encourage you to consider including the additional technical corrections outlined in the enclosed comments in the final version of any legislation that Congress may decide to enact in this area.

Please Read the Full Letter


Lynne B. Barr
Chair, ABA Section of Business Law
For any questions or problems regarding the transmission of this letter please contact:

R. Larson Frisby
Senior Legislative Counsel
American Bar Association
Governmental Affairs Office
740 15th Street, N.W.
Washington, D.C. 20005
(202) 662-1098 (telephone) ~ (202) 662-1762 (fax)
email: frisbyr@staff.abanet.org

October 28, 2010 in Current Affairs | Permalink | Comments (0) | TrackBack

Resolution Rules and Bankruptcy Reality

"The Federal Deposit Insurance Corporation is moving to exercise its newly granted authority under the Dodd-Frank Wall Street Reform and Consumer Protection Act to become both the trustee and bankruptcy court for future distressed financial firms. Earlier this month the agency issued proposed regulations to structure resolution proceedings under the new law. Unfortunately, most of these regulations are little more than a grand exercise in reinventing the wheel."

Read the article here.

October 28, 2010 in Current Affairs | Permalink | Comments (1) | TrackBack

October 27, 2010

Former Edmonton Oilers owner gets home detention in Southern California perjury case

Former Edmonton Oilers owner Peter Pocklington has been sentenced to six months of home detention for making false statements in his Southern California bankruptcy case.

Read the article here.

October 27, 2010 in Current Affairs | Permalink | Comments (0) | TrackBack

October 26, 2010

Passing of the Gavel, Central District of California

Passing of the Gavel
from the
Honorable Vincent P. Zurzolo
to the
Honorable Peter H. Carroll
at the
U.S. Court of Appeals
Pasadena, California
January 25, 2011
4:00 p.m.
Further details to follow

October 26, 2010 in Judicial Announcements | Permalink | Comments (0) | TrackBack

Movie Gallery, Hollywood Video, Game Crazy brands up for sale as bankruptcy proceeds

Read the article here.

October 26, 2010 in Current Affairs | Permalink | Comments (0) | TrackBack

Station Casinos wants 'breathing room' from employee wage suit

Station Casinos Inc. of Las Vegas wants a lawsuit over employee wages to be put on hold, saying it's entitled to some "breathing room" from such litigation during its bankruptcy proceedings.

Read the article here.

October 26, 2010 in Current Affairs | Permalink | Comments (0) | TrackBack

October 25, 2010

Fixed Income & Credit Card Debt: Why Retirees Are Declaring Bankruptcy

Read the article here.

October 25, 2010 in Current Affairs | Permalink | Comments (0) | TrackBack

9th Circuit Rules Alter Ego Cannot be Prosecuted by Trustee, at Least in California

AHCOM v. Smeding, --- F. 3d ---  (9th Cir. October, 2010)

Issue:   May a creditor bring an action to pierce the corporate veil without bankruptcy court approval? 
Holding:   Yes.   

appeal from District Court

Judge J. Clifford Wallace,

AHCOM was a creditor of Nuttery Farms, Inc. (“NFI”)  NFI filed chapter 11.  The creditor ignored the bankruptcy and sued NFI’s shareholders in district court under an alter ego theory.  The district court dismissed the case saying that alter ego as alleged in the complaint was a “claim that harms not just Ahcom but all creditors and thus this claim is exclusively the property of the trustee.”

The 9th Circuit reversed.  “The trustee may assert only claims belonging to the debtor corporation and ‘has no standing generally to sue third parties on behalf of the estate's creditors.’”  “When the trustee does have standing to assert a debtor's claim, that standing is exclusive and divests all creditors of the power to bring the claim.”  But under California law, “a trustee ‘cannot maintain an action against defendants on an alter ego theory absent some allegation of injury to the corporation giving rise to a right of action in it against defendants,’ without which ‘the asserted cause of action belongs to each creditor individually, and [the trustee] is not the real party in interest.’”

The opinion explained that the Davey Roofing and Folks rulings that a trustee can seek to pierce the corporate veil where “all creditors are affected” are wrong.  “[We] conclude that California law does not recognize an alter ego claim or cause of action that will allow a corporation and its shareholders to be treated as alter egos for purposes of all the corporation's debts.”    

October 25, 2010 in 9th Circuit Briefs | Permalink | Comments (0) | TrackBack

October 24, 2010

Circuit Court of Appeals Cases from Last Week

United States First Circuit, 10/22/2010
In re Handy, --- F.3d --- (1st Cir. 2010)
Motion for relief from stay against a debtor to bring action under the Uniform Fraudulent Transfer Act (UFTA) denied where: 1) plaintiff has not stated a claim in rem; 2) plaintiff's claim that he may purse his fraudulent conveyance claim post-discharge is rejected; and 3) that plaintiff was obliged to object to debtor's claim of a homestead exemption is not properly before the court.

United States Fifth Circuit, 10/20/2010
In re SCOPAC, --- F.3d --- (5th Cir. 2010) 
Bankruptcy court erred in denying creditor's "superpriority" administrative claim

United States Seventh Circuit, 10/18/2010
Costello v. Grundon, --- F.3d --- (7th Cir. 2010) 
1) district court's grant of summary judgment in favor of the trustee affirmed where borrowers' lacked standing to assert the alleged violations of Regulations G and U as affirmative defenses; 2) district court's grant of trustee's MSJ vacated with respect to the affirmative defenses of illegality under section 10(b) and SEC Rule 10b-5, illegality under section 17(a) of the Securities Act of 1933, set off for fraud, set-off for negligent misrepresentation, and excuse-of-nonperformance; and 3) given the disposition of the appeals from the grants of summary judgment, the appeals from the Amended Judgments are dismissed as moot.

United States Seventh Circuit, 10/20/2010
Redmond v. Fifth Third Bank, --- F.3d --- (7th Cir. 2010) 
Debtor's motion to reopen his bankruptcy case, claiming that a bank's foreclosure suit was in violation of the bankruptcy court's ordersdenied where: 1) the motion to reopen was untimely; 2) the state court was an appropriate forum to litigate debtor's potential claims, and his bankruptcy arguments were, in any event, meritless; and 3) the debtor was not denied a fair hearing.

United States Ninth Circuit, 10/21/2010
Ahcom, Ltd. v. Smeding, --- F.3d --- (9th Cir. 2010) 
Creditor of a corporation in bankruptcy has standing to assert a claim against the corporation's sole shareholders on an alter ego theory.

Thanks to Findlaw.com

October 24, 2010 in Other Circuit Briefs | Permalink | Comments (1) | TrackBack