Benchnotes

• Published in: American Bankruptcy Institute journal 2018-11, Vol.37 (11), p.6-71
• Main Authors: Hage, Paul R, Kaufman, Aaron M, Clisham, Patrick A
• Format: Article
• Language: English
• Subjects: Agreements; Agricultural commodities; Bankruptcy laws; Case law; Enforcement; Federal court decisions; Federal courts; Personal bankruptcy; Petitions; Retention; State court decisions; State laws
• ISSN: 1931-7522

[...]Circuit Affirms Dismissal of Involuntary Bankruptcy Involving Two-Party Dispute In In re Murray,1 the Second Circuit Court of Appeals affirmed the bankruptcy court's dismissal of a chapter 7 involuntary petition commenced by a judgment creditor against the debtor for "cause" under 707(a) after concluding that the petition was simply a judgment-enforcement tactic in a two-party dispute for which there were adequate remedies under state law. [...]the city's real goal was to enforce a money judgment against the debtor. Since enforcement of a money judgment is expressly carved out from 362(b)(4), the city's continued retention of the possession of the vehicle was likewise not shielded by that subsection. Aug. 7, 2018) (noting case law split, court held that liability owed by officer of produce wholesaler under Perishable Agricultural Commodities Act (PACA) is dischargeable in officer's individual bankruptcy case, notwithstanding 523(a)(4) of Bankruptcy Code, which excepts from discharge a debt "for fraud or defalcation while acting in a fiduciary capacity"; acknowledging that РАСА establishes trust in favor of produce suppliers and imposes fiduciary duties for officers of produce wholesalers, court held that РАСА trust does not satisfy requirements for finding "fiduciary capacity" for purposes of 523(a)(4) because statute does not automatically require segregation of assets and trust assets might be used for non-trust purposes); * Cybertron Int'l Inc. v. Capps, 2018 WF 3635708 (Bankr. July 17, 2018) (Third Circuit held that in context of assignment of lease agreement, lease provision that required tenant to give landlord 50 percent of any "net profit" if lease were assigned was unenforceable anti-assignment clause that runs afoul of ipso facto prohibition set forth in 365(f)(1) of Bankruptcy Code; "The plain language of section 365(f)(1) encompasses more than merely provisions that actually prohibit the assignment of an executory contract or unexpired lease"); and * Viegelahn v. Lopez (In re Lopez), 897 F.3d 663 (5th Cir. 2018) (after trustee moved to modify debtors' confirmed chapter 13 plan to compel debtors to turn over proceeds from post-petition sale of their exempt homestead (which proceeds were not promptly reinvested in another home), debtors moved to voluntarily dismiss their chapter 13 case; Fifth Circuit held that homestead proceeds lost their exempt nature but nevertheless must be returned to debtors upon dismissal of their bankruptcy case; no