Illinois Bankruptcy Lawyer Blog

In re Diana and Dale Kasco, 06-16620

Issued November 08, 2007

Judge Pamela S. Hollis

Link to the opinion and download it in PDF format here.

In re Kenneth and Lisa Burmeister, 07 B 6868

Issued: November 16, 2007

Judge: A. Benjamin Goldgar

See and download the opinion as a PDF document here

In Illinois and a growing number of other states you can no longer just leave used electronics on the curb or in a dumpster. The issue is liability for environmental contamination. Then there is data disposal, and as we all know by now computer hard drives must be permanently and intentionally relieved of their data lest it fall into the wrong hands - a malpractice nightmare. In case you did not receive an email notice or just didn"t hear, November 15^th was America Recycles Day — a prime opportunity for individuals, firms, and businesses to go green and find out how to dispose of electronic equipment, computers, monitors, printers, routers, phones, PDA"s, etc. Of course the question of the hour is always"what is all this going to cost me/my firm/my client?" As a matter of fact recycling unwanted electronics often costs nothing — on the contrary, it can yield a tax break or even some money in your pocket. Well this is your lucky day because the bk blog is bringing the action to you; send us a list of your configured units, printers, monitors, routers, etc. or call 630-388-7057 to find out more about how the pm blog can help you stop procrastinating and put your assets in motion.

8^th cir

Bender v. Xcel Energy, Inc., No. 06-2634In an action brought by former executives who filed an ERISA action against the successor to their company's parent corporation claiming that it denied benefits due to them under certain plans, summary judgment for defendant is affirmed where: 1) the district court properly concluded that plaintiffs were not participants in a 2000 Statement and therefore could not maintain their action against defendant for deferred compensation benefits; and 2) the district court properly concluded that substitute releases certain plaintiffs provided for purposes of participating in a Severance Plan did not satisfy their obligations under that plan, and thus their claims for stock benefits failed.

9^th cir

Ellett v. Stanislaus, No. 05-16677The failure of a debtor to provide an accurate social security number to a creditor in the notice mailed to the creditor informing it of the first meeting convened under 11 U.S.C. section 341(a), does not place the creditor on sufficient notice to protect its rights in a Chapter 13 Bankruptcy proceeding despite the fact that the mailing otherwise contained the debtor's correct name and address.

In re: Wind N' Wave, No. 05-56254Creditors who receive compensation under Bankruptcy Code section 503(b)(4) should also be compensated for costs incurred in litigating a fee award, so long as the services meet the section 503(b)(4) requirements and the case "exemplifies a 'set of circumstances' where litigation was 'necessary'." In an appeal arising after creditors petitioned a bankruptcy court to recover legal fees incurred in connection with filing an involuntary Chapter 7 petition against the debtor, a bankruptcy appellate panel (BAP) decision reversing the denial of such fees but denying fees for the appeal itself is reversed as the BAP erred in summarily denying creditors compensation for services arising out of the successful appeal.

federal circuit

Digeo, Inc. v. Audible, Inc., No. 2007-1133

In a patent dispute arising in circumstances in which plaintiff purchased a patent at a bankruptcy estate sale but certain assignments turned out to be forgeries, denial of defendant's motion for attorney fees under 35 U.S.C. section 285 including its request for additional discovery to develop a section 285 claim is affirmed as: 1) there was no clear error in the district court's finding that the case was not exceptional; and 2) the court did not abuse its discretion in denying additional discovery.

3rd cir

In re: Seven Fields Dev. Corp., No. 06-3658

Following removal of a malpractice, negligence, and fraud suit brought in state court by creditors in a consolidated Chapter 11 bankruptcy proceeding against the accountants who performed work during the bankruptcy, a decision dismissing the matter is affirmed as: 1) the circuit court lacks jurisdiction to review the bankruptcy and district courts' decisions relating to alleged procedural defects in the removal process and mandatory or permissive abstention; and 2) the bankruptcy and district courts did not err with respect to claims relating to subject matter jurisdiction and the bankruptcy court's final adjudicative authority.

5th cir

In the Matter of: Dorsey, No. 07-30301

In a matter in which appellant-creditor brought an adversary complaint against a bankruptcy debtor seeking to deny the debtor's discharge or to hold the debtor's debt to it non-dischargeable, dismissal of the adversary complaint and an injunction against creditor is affirmed in part, vacated in part, and remanded where: 1) the bankruptcy court erred by holding that appellant lacked standing to file the adversary proceeding; 2) however, it did not err in denying appellant's objection to dischargeability of the debt under 11 U.S.C. section 523(a)(2); 3) an objection to discharge under 11 U.S.C. section 727 required reconsideration in light of the ruling on standing; and 4) due to the error on standing, an injunction prohibiting appellant from filing future complaints objecting to discharge or dischargeability without prior court approval is vacated.

7th cir

In Re: Boone County Utils., LLC, No. 06-3673

An order of the district court affirming the bankruptcy court's refusal to allow a corporation's claims against a bankruptcy estate is affirmed where: 1) three of the creditor's claims were contract claims based on a contract to which the debtor was not a party; and 2) proof of another claim was untimely filed and did not relate back to prior claims.

This story gives adequate protection a whole new meaning. FYI, adequate protection is bankruptcy-speak for the ability to lay your hands on property in case you don't get paid. Banks generally want to claim $2 worth of property for every $1 they lend; so being 'adequately secured' in a bankruptcy case makes their lawyers more nervous than cats in a room full of rocking chairs.

As the article recounts, a certain Judge Christopher Boyko of Ohio has thrown a monkey-wrench into the cozy relationship between mortgage lenders and bankruptcy courts by holding that Deutche Bank did notown the properties that they were claiming as security behind their loans. Or to be more specific, the Judge showed that when Deutche bought this particular batch of mortgage-backed securities they failed to ensure that they would be the 'owners' of the properties in the event of default. Whoops; after decadesof considering themselves entitled to the proceeds from their mortgage accounts as well as the houses that secured them, Judge Boyko's ruling might mean that mortgage companies technically haven't owned squat. Zip. Nada. Nothing. To quote the article

... as foreclosures have surged, the complex structure and disparate ownership of mortgage securities have made it harder for borrowers to work out troubled loans, in part because they cannot identify who holds the mortgage notes ... [n]ow ... the intricacies of the mortgage pools are starting to create problems for lenders as well. Lawyers for troubled homeowners are expected to seize upon the district judge"s opinion as a way to impede foreclosures across the country or force investors to settle with homeowners. And it may encourage judges in other courts to demand more documentation of ownership from lenders trying to foreclose.

Not that anyone expects judges in other parts of the country to rush into the gap identified by this ruling ... but it's an interesting chink in the armor of the seemingly invincible mortgage companies.

Reaffirmation Agreements

If debtor's attorney does not sign Part C of the reaffirmation agreement entitled certification in cases in which a presumption of undue hardship arises, the court will not determine whether the presumption has been rebutted, or whether the agreement should be set for hearing. View complete list of procedures here.

In re Pelham Enterprises, Inc., 07 B 01312

Issued October 15, 2007

By Judge John H. Squires

To receive a discharge in chapter 7 consumer debtors must complete both prepetition debt counseling and post-filing debtor education. In addition, debtor's counsel must file Official Form 23 Certification of Completion of Instructional Course Concerning Personal Financial Management within 45 days of the meeting of creditors. BR. 1007(c). The certificate number from the debtor education course must be placed on Form 23, or the certificate itself must be attached. Each debtor in a joint petition must complete and file a separate certification. Certificates from debtor education services that are filed without Form 23 will be rejected and Attorneys will be required to refile. If the form is still not filed the case will be closed without discharge and the Attorney will have to file a Motion to Reopen and pay a $260 fee to secure a discharge.

Note: do not use Official Form 23 to file the certificate given by the prepetition credit counseling provider and do not include it with the petition when filing a case.

Questions? Call ECF Help Desk at 312-408-7765.

8^th cir

Bender v. Xcel Energy, Inc., No. 06-2634In an action brought by former executives who filed an ERISA action against the successor to their company's parent corporation claiming that it denied benefits due to them under certain plans, summary judgment for defendant is affirmed where: 1) the district court properly concluded that plaintiffs were not participants in a 2000 Statement and therefore could not maintain their action against defendant for deferred compensation benefits; and 2) the district court properly concluded that substitute releases certain plaintiffs provided for purposes of participating in a Severance Plan did not satisfy their obligations under that plan, and thus their claims for stock benefits failed.

9^th cir

Ellett v. Stanislaus, No. 05-16677The failure of a debtor to provide an accurate social security number to a creditor in the notice mailed to the creditor informing it of the first meeting convened under 11 U.S.C. section 341(a), does not place the creditor on sufficient notice to protect its rights in a Chapter 13 Bankruptcy proceeding despite the fact that the mailing otherwise contained the debtor's correct name and address.

In re: Wind N' Wave, No. 05-56254Creditors who receive compensation under Bankruptcy Code section 503(b)(4) should also be compensated for costs incurred in litigating a fee award, so long as the services meet the section 503(b)(4) requirements and the case "exemplifies a 'set of circumstances' where litigation was 'necessary'." In an appeal arising after creditors petitioned a bankruptcy court to recover legal fees incurred in connection with filing an involuntary Chapter 7 petition against the debtor, a bankruptcy appellate panel (BAP) decision reversing the denial of such fees but denying fees for the appeal itself is reversed as the BAP erred in summarily denying creditors compensation for services arising out of the successful appeal. federal circuit

Digeo, Inc. v. Audible, Inc., No. 2007-1133In a patent dispute arising in circumstances in which plaintiff purchased a patent at a bankruptcy estate sale but certain assignments turned out to be forgeries, denial of defendant's motion for attorney fees under 35 U.S.C. section 285 including its request for additional discovery to develop a section 285 claim is affirmed as: 1) there was no clear error in the district court's finding that the case was not exceptional; and 2) the court did not abuse its discretion in denying additional discovery.