Showing 21 posts in U.S. Supreme Court.
Supreme Court Holds that “Mere Retention” of Estate Property After Bankruptcy Filing Doesn't Violate the Automatic Stay
On January 14, 2021, the U.S. Supreme Court decided City of Chicago, Illinois v. Fulton (Case No. 19-357, Jan. 14, 2021), a case which examined whether merely retaining estate property after a bankruptcy filing violates the automatic stay provided for by §362(a) of the Bankruptcy Code. The Court overruled the bankruptcy court and U.S. Court of Appeals for the Seventh Circuit in deciding that mere retention of property does not violate the automatic stay.
Case Background
The City of Chicago (the “City”) impounded respondents’ vehicles for failure to pay fines for motor vehicle infractions. Thereafter, each respondent filed a Chapter 13 bankruptcy petition and requested the return of their vehicle. The City refused to return the vehicles, and the bankruptcy court in each case found the City’s refusal to be a violation of automatic stay. The Seventh Circuit affirmed, concluding that by retaining possession of the debtors’ vehicles after they declared bankruptcy, the City had acted “to exercise control over” the debtors’ property in violation of the automatic stay. Read More ›
Categories: Case Law Updates, Chapter 13, U.S. Supreme Court
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U.S. Supreme Court Rules that Order Granting or Denying Request for Relief from Automatic Stay is Final Order that is Immediately Appealable
A party who believes that a bankruptcy court erred in either granting or denying relief from the automatic stay needs to act fast to appeal such a decision. In the recently decided case of Ritzen Group, Inc. v. Jackson Masonry, LLC, the U.S. Supreme Court held that: “[A]djudication of a motion for relief from the automatic stay forms a discrete procedural unit within the embracive bankruptcy case” which “yields a final, appealable order when the bankruptcy court unreservedly grants or denies relief.” Read More ›
Categories: Chapter 11, Collections, U.S. Supreme Court
Supreme Court Decides that Law Firms Engaged in Non-Judicial Foreclosure Proceedings are Not Debt Collectors Under the FDCPA
For many, the term “debt collection” calls to mind threatening letters and harassing, late-night phone calls. There’s no doubt that many debt collection practices involve aggressive and unseemly tactics used to collect credit card and other unpaid debts, and, as a result, Congress stepped in to curb these practices by passing the Fair Debt Collection Practices Act (“FDCPA”). Read More ›
Categories: Collections, Financing, U.S. Supreme Court
U.S. Supreme Court Holds that Debtor’s False Oral Statement Concerning Single Asset Does not Provide Basis for Non-dischargeability Action
On June 4, 2018, the U.S. Supreme Court decided the case of Lamar, Archer & Cofrin, LLP v. Appling, No. 16-1215, which dealt with the dischargeability of debt in bankruptcy proceedings. The Court held that a statement about a single asset can be a “statement respecting the debtor’s financial condition” under section 523(a)(2) of the Bankruptcy Code. Read More ›
Categories: Chapter 7, U.S. Supreme Court
Can Same-Sex Couples Own Real Property as Tenants by the Entirety in Michigan?
Two years have passed since the United States Supreme Court passed down a 5-4 decision in Obergefell v. Hodges which held that same-sex couples have a fundamental right to marry under both the Due Process and Equal Protection Clauses of the Fourteenth Amendment. Read More ›
Categories: U.S. Supreme Court, Zoning & Land Use
Supreme Court to Address Circuit Split Regarding Debt Re-Characterization Claims
On June 26, 2017, the Supreme Court granted certiorari in PEM Entities v. Levin to decide whether bankruptcy courts should apply a federal multi-factor test or an underlying state law when deciding whether to re-characterize a debt claim as equity. The Court’s decision to grant cert in this case should resolve a circuit split and clarify the law as it relates to re-characterizing corporate debt as equity. Read More ›
Categories: 6th Circuit Court of Appeals, Chapter 11, U.S. Supreme Court
Supreme Court Rules that Debt Collector’s Attempt to Collect Time Barred Claim in Chapter 13 Bankruptcy Case Does not Violate Fair Debt Collection Practices Act
What happens in a Chapter 13 bankruptcy case when a creditor files a proof of claim involving a debt for which the statute of limitations to collect the debt has run? More specifically, does the filing of such a claim violate the Fair Debt Collection Practices Act (the “Act”)? That’s the issue considered by the U.S. Supreme Court in its recent decision in the case of Midland Funding, LLC v. Johnson. 1 Read More ›
Categories: Chapter 13, U.S. Supreme Court
Supreme Court Adopts a Broad Reading of “Actual Fraud” Under the Bankruptcy Code
On May 16, the U.S. Supreme Court decided Husky International Electronics, Inc. v. Ritz[1], ruling that the term “actual fraud” in section 523(a)(2)(A) of the Bankruptcy Code includes forms of fraud that do not involve a fraudulent misrepresentation.
In this case, Husky International Electronics, Inc. sold products to and was owed money by Chrysalis Manufacturing Corporation. Daniel Ritz, one of the owners of Chrysalis, transferred money from Chrysalis to other entities that he owned, draining Chrysalis of its assets and making it impossible for Chrysalis to pay its debts owed to Husky and other creditors. Read More ›
Categories: Chapter 7, U.S. Supreme Court
Supreme Court Refuses to Review Student Loan Bankruptcy Case
Students have taken on more than $1 trillion in debt to pay for the relentlessly rising costs of higher education. With that much debt outstanding, it’s no surprise that there are increasing numbers of borrowers defaulting on student loan debt, and seeking to discharge that debt by filing for bankruptcy protection. But, as a Wisconsin man recently learned, discharging student loan debt in bankruptcy is no easy feat. Read More ›
Categories: Chapter 7, U.S. Supreme Court
No Stripping Allowed: Supreme Court Rules that Chapter 7 Debtor Cannot Strip Off a Junior Lien
On June 1, 2015, the United States Supreme Court decided Bank of America v. Caulkett, No. 13-1421, together with Bank of America v. Toledo-Cardona, No. 14-163, holding unanimously that a Chapter 7 bankruptcy debtor cannot “strip off” a junior lien.
Lien stripping takes place when there are two or more liens on a property, and the senior lien is “underwater” in that the amount owed on the senior lien is greater than the value of the property. In a Chapter 13 case a property owner can strip off the junior lien, resulting in it being treated as unsecured debt in the bankruptcy.
In these cases, the Court held that a Chapter 7 debtor may not void a junior lien under 11 U.S.C. § 506(d) when the debt owed on a senior lien exceeds the current value of the collateral if the junior creditor’s claim is both secured by a lien and allowed under § 502 of the Bankruptcy Code. Read More ›
Categories: Chapter 13, Chapter 7, U.S. Supreme Court
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