Benchnotes

• Published in: American Bankruptcy Institute journal 2018-12, Vol.37 (12), p.8-9
• Main Authors: Kaufman, Aaron M, Hage, Paul R, Clisham, Patrick A
• Format: Article
• Language: English
• Subjects: Bankruptcy; Bankruptcy laws; Bankruptcy reorganization; Breach of contract; Deadlines; Expert witness testimony; Federal court decisions; Insolvency; Litigation; Masonry; Petitions; Settlements & damages; Solvency; State court decisions; Tax refunds; Testimony
• ISSN: 1931-7522

The bankruptcy court found this evidence more credible than the trustee's expert testimony. Since the trustee's expert conceded that those contracts could have had independent value and presented no opinion of value for those contracts, the bankruptcy court concluded that the trustee did not carry its burden of proving the debtor's insolvency. [...]the court of appeals affirmed the judgment in favor of the defendants. Aug. 27, 2018) (Ninth Circuit held that bankruptcy court did not err in dismissing a chapter 11 case filed by former board members of debtor who had previously been removed by receiver due to their lack of standing; appellate court rejected argument that dismissal violated public policy against restraints on filing bankruptcy; "No matter the equitable considerations, state law dictates which persons may file a bankruptcy petition on behalf of a debtor corporation"); * U.S. v. Daley (In re Daley), 315 F. Supp. 3d 679 (D. Mass. 2018) (chapter 13 debtors objected to priority claim filed by IRS for 10 percent penalty imposed on early withdrawal of funds from qualified retirement plan; noting that lower courts should not place any weight on "tax" label in statute in ruling on priority of claims, district court held that purpose of penalty was to deter unwanted conduct, not generate revenue or compensate government for pecuniary loss; thus, claim was not tax claim entitled to priority under 508(a)(8)); * 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; noting that chapter 13 is voluntary, court rejected trustee's argument that cause existed under 349(b) to modify effect of dismissal by allowing her to distribute funds to unsecured creditors); and * United States v. Copley, - B.R. -, 2018 U.S. Dist. Sept. 10, 2018) (in lengthy and thoughtful analysis of wide-ranging issues such as exemptions, setoff, turnover and congressional abrogation of sovereign immunity, district court affirmed bankruptcy court's judgment in favor of debtors, requiring IRS to return $3,208 tax refund that IRS had tried to apply toward deb