Cases by Issue - Bankruptcy

Hamilton v. Lanning

jgoldman — Fri, 13 Nov 2009 01:44:12 +0000

Location

United States

39° 2' 54.0024" N, 95° 40' 40.9332" W

See map: Google Maps

Case Basics

Docket No.

08-998

Petitioner

Jan Hamilton, Chapter 13 Trustee

Petitioner Type

Petitioner

Respondent

Stephanie Kay Lanning

Respondent Type

Respondent

Decided By

Roberts Court (2009-2010)

Opinion

560 U.S. ___ (2010)

Granted

Monday, November 2, 2009

Argued

Monday, March 22, 2010

Decided

Monday, June 7, 2010

Advocates

Jan Hamilton (for the petitioner)

Thomas C. Goldstein (for the respondent)

Sarah E. Harrington (Assistant to the Solicitor General, Department of Justice, for the United States as amicus curiae, supporting the respondent)

Facts of the Case

A Kansas federal bankruptcy court denied objections to a Chapter 13 debtor's repayment plan. The Bankruptcy Appellate Panel of the Tenth Circuit affirmed the lower court's decision. On appeal, the U.S. Court of Appeals for the Tenth Circuit affirmed, holding that the starting point for calculating a Chapter 13 debtor's "projected disposable income" is presumed to be the debtor's current monthly income. However, the court stated that the calculation is subject to a showing that there is a substantial change in circumstances. The court remanded the case to the bankruptcy court to determine whether the debtor had shown there was a substantial change in her circumstances.

Question

In calculating a debtor's "projected disposable income," may the bankruptcy court consider evidence suggesting that the debtor's income or expenses during that period are likely to be different from the debtor's income or expenses during the pre-filing period?

Conclusion

Decision: 8 votes for Lanning, 1 vote(s) against
Legal provision: Bankruptcy Abuse Prevention and Consumer Protection Act of2005 (BAPCPA)

Yes. The Supreme Court affirmed the Tenth Circuit, holding that a bankruptcy court may account for changes in the debtor's income or expenses that are "known or virtually certain" at the time of confirmation when it calculates a debtor's projected disposable income. With Justice Samuel A. Alito writing for the majority, the Court reasoned that the plain meaning of "projected disposable income" within the statute supports the Court's holding.

Justice Antonin Scalia dissented. He disagreed with the majority's interpretation of the term "projected." He maintained that the term did allow for a bankruptcy court to depart from the "inflexible formula" provided by the statute.

Howard Delivery Service v. Zurich American Insurance Company

Mon, 05 Jan 2009 17:45:06 +0000

Case Basics

Docket No.

05-128

Petitioner

Howard Delivery Service, Inc., et al.

Petitioner Type

Petitioner

Respondent

Zurich American Insurance Company

Respondent Type

Respondent

Heard By

Roberts Court (2006-2009)

Decided By

Roberts Court (2006-2009)

Opinion

547 U.S. ___ (2006)

Granted

Monday, November 7, 2005

Argued

Tuesday, March 21, 2006

Decided

Thursday, June 15, 2006

Advocates

Donald B. Verrilli, Jr. (Attorneys for Respondent, Counsel of Record)

Donald B. Verrilli, Jr. (argued the cause for Respondent)

Paul Farrell Strain (Attorneys for Petitioners)

Paul Farrell Strain (argued the cause for Petitioners)

Facts of the Case

Under West Virginia law, employers are required to either participate in a state-run workers' compensation fund or demonstrate that they are financially capable of covering any workers' compensation claims that may arise. Howard Delivery service, a West Virginia freight carrier, chose to fulfill its obligation by purchasing insurance from Zurich American Insurance Company. In January of 2002, however, the company cancelled its policy (still owing thousands of dollars in unpaid premiums) and filed for bankruptcy.

Zurich filed for special status as a creditor, arguing that the money owed to them consisted of "contributions to an employee benefit plan arising from services rendered," and that under Chapter 11 of the Bankruptcy Code they should therefore be given priority in recovering the premiums. The bankruptcy court rejected Zurich's claims, however, finding that the provision did not apply to the workers compensation insurance premiums because they were not wage-substitute-type benefits for which the company could bargain (because Howard was required by law to have some form of insurance). A federal district court affirmed the decision, but a divided panel of the Fourth Circuit Court of Appeals reversed, holding that contributions to an employee benefit plan did not need to be voluntary to meet the Chapter 11 definition.

Question

May a creditor seek priority status in a bankruptcy case to recover unpaid premiums owed for legally-required workers' compensation insurance?

Conclusion

Decision: 6 votes for Howard Delivery Service, 3 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

No. In a 6-to-3 decision authored by Justice Ruth Bader Ginsburg, the Supreme Court held that the workers' compensation insurance was different from the sort of employee benefit programs for which creditors could be given priority under Chapter 11. The programs for which preferred status was authorized were those whose main beneficiaries were the employees, and which could be offered as an alternative to wage increases. The workers' compensation insurance mandated in this case, however, benefited the employer as much as the employees (because it protected them from liability) and were legally required, not given as part of employment negotiations. Justice Ginsburg wrote that, though the question was a close one, "we are guided in reaching our decision by the equal distribution objective underlying the Bankruptcy Code, and the corollary principle that provisions allowing preferences must be tightly construed."

Rousey v. Jacoway

Mon, 05 Jan 2009 17:47:14 +0000

Case Basics

Docket No.

03-1407

Petitioner

Richard Gerald Rousey, et ux.

Petitioner Type

Petitioner

Respondent

Jill R. Jacoway

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

544 U.S. 320 (2005)

Granted

Monday, June 7, 2004

Argued

Wednesday, December 1, 2004

Decided

Monday, April 4, 2005

Advocates

Pamela S. Karlan (argued the cause for Petitioners)

Colli C. McKiever (argued the cause for Respondent)

Facts of the Case

Richard and Betty Rousey filed bankruptcy and claimed their two Individual Retirement Accounts were exempt from the bankruptcy. Federal law exempted the following from bankruptcy: "a payment under a stock bonus, pension, profitsharing, annuity, or similar plan or contract." The exemption had to be "on account of illness, disability, death, age, or length of service, to the extent reasonable necessary for the support of the debtor...." The Rouseys said an IRA was a "similar plan or contract." The bankruptcy court and a bankruptcy appellate panel ruled an IRA not a "similar plan or contract." The Eighth Circuit Court of Appeals ruled that even if IRAs are "similar plans or contracts," the Rouseys' account withdrawals would not be "on account of illness, disability, death, age, or length of service." The Eighth Circuit's ruling conflicted with those of other circuits.

Question

Are individual retirement accounts (IRAs) exempt from bankruptcy estates?

Conclusion

Decision: 9 votes for Rousey, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

Yes. In a unanimous decision delivered by Justice Clarence Thomas, the Court held that the Rouseys could exempt IRA assets from their bankruptcy estate. IRAs met both federal requirements dealing with exemptions from bankruptcy: They were "similar plans or contracts" to the exemptions enumerated and they "conferred a right to receive payment on account of age."

Till v. SCS Credit Corp.

Mon, 05 Jan 2009 17:44:43 +0000

Case Basics

Docket No.

02-1016

Petitioner

Lee M. Till, et ux.

Petitioner Type

Petitioner

Respondent

SCS Credit Corporation

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

541 U.S. 465 (2004)

Granted

Monday, June 16, 2003

Argued

Tuesday, December 2, 2003

Decided

Monday, May 17, 2004

Advocates

G. Eric Brunstad, Jr. (argued the cause for Respondent)

David B. Salmons (argued the cause for Petitioners, on behalf of the United States, as amicus curiae)

Rebecca J. Harper (argued the cause for Petitioners)

Facts of the Case

Lee Till owed $4,000 in payments on his truck when he filed for Chapter 13 bankruptcy. Under the Bankruptcy Code, a Chapter 13 debtor must promise each creditor future payments "not less than the [claim's] allowed amount." When a repayment plan includes a series of payments (installments), as Till's did, the installments must equal the "total present value" of the amount owed. Till proposed that he make monthly payments on the truck to SCS Credit with a 9.5 percent yearly interest rate, which was slightly higher than the average loan rate to make up for the increased risk that Till would fail to make a payment (because he had already declared bankruptcy once). SCS, however, argued that it was entitled to 21 percent interest because that was how much it would have made if it had foreclosed on the loan, taken the truck, sold it, and reinvested the proceeds. SCS argued that this 21 percent plan was necessary to ensure that the payments were equal to the "total present value" or "not less than the [claim's] allowed amount." The bankruptcy court ruled for Till. The district court reversed, imposing SCS's 21 percent rate. A divided Seventh Circuit Court of Appeals panel modified that approach slightly, ruling that the 21 percent rate was probably correct but that the parties could introduce evidence that a higher or lower rate should apply.

Question

What is the proper interest rate when a bankruptcy filer seeks to reschedule his payments on a loan so that they are equal to the "total present value" of the loan?

Conclusion

Decision: 5 votes for Till, 4 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

In a decision that had no majority opinion, four justices held that the proper rate was the 9.5 percent one arrived at by modifying the average national loan rate to make up for the increased risk of non-payment. While this would not give the creditors the same amount of money that they might have gotten had they seized the collateral for the loan, it nevertheless met the statutory requirement that the repayments equal the "total present value." Justice Clarence Thomas, in a separate opinion that provided the fifth vote needed for judgment, found that the 9.5 percent rate was acceptable, but that it could be even lower because the Bankruptcy Code did not require the judge to accommodate for the risk of non-payment.

Kontrick v. Ryan

Mon, 05 Jan 2009 17:44:39 +0000

Case Basics

Docket No.

02-819

Petitioner

Andrew J. Kontrick

Petitioner Type

Petitioner

Respondent

Robert A. Ryan

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

540 U.S. 443 (2004)

Granted

Monday, April 28, 2003

Argued

Monday, November 3, 2003

Decided

Wednesday, January 14, 2004

Advocates

E. King Poor (argued the cause for Petitioner)

Kent L. Jones (argued the cause for Respondent, on behalf of the United States, as amicus curiae)

James R. Figliulo (argued the cause for Respondent)

Facts of the Case

Andrew Kontrick filed for bankruptcy after he and his partner, Robert Ryan, dissolved their plastic surgery practice. Ryan notified the court that Kontrick owed him money before the 60-day filing deadline set by Bankruptcy Rule 4004. More than three months later (after the deadline for filing had passed) Ryan filed an amended complaint charging that Kontrick was diverting paychecks into his wife's account so that he wouldn't have to pay Ryan. Ryan's attorneys claimed that they were not making a new claim - the diversion had been alluded to in other court documents - but that they were merely refocusing the judge's attention. Furthermore, they argued that the deadline for filing could be - and had been - waived by the judge. Kontrick's attorneys, on the other hand, argued that the amended complaint was a new filing and that the deadlines for filing could not be waived. The bankruptcy court ruled for Ryan. The district court and a Seventh Circuit Court of Appeals panel both affirmed, holding that the deadline was subject to waiver.

Question

Are the deadlines established by Bankruptcy Rule 4004 "jurisdictional" - that is, do they trump other considerations no matter when they are raised?

Conclusion

Decision: 9 votes for Ryan, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

No. In a unanimous opinion delivered by Justice Ruth Bader Ginsburg, the Court held that Kontrick lost the right to invoke Rule 4004's time limitation because he did so after the bankruptcy court reached the merits of Ryan's objection. The Court rejected Kontrick's claim that Rule 4004 is "jurisdictional" and that it trumps other considerations whenever raised in proceedings.

Archer v. Warner

Mon, 05 Jan 2009 17:48:05 +0000

Case Basics

Docket No.

01-1418

Petitioner

Archer

Petitioner Type

Petitioner

Respondent

Warner

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

538 U.S. 314 (2003)

Argued

Monday, January 13, 2003

Decided

Monday, March 31, 2003

Advocates

Lisa S. Blatt (Argued the cause for the United States, as amicus curiae, supporting the petitioners)

Craig Goldblatt (Argued on behalf of petitioners)

Donald B. Ayer (Argued on behalf of respondent)

Facts of the Case

In 1991, Leonard and Arlene Warner sold the Warner Manufacturing Company to Elliott and Carol Archer. Subsequently, the Archers sued the Warners for fraud connected with the sale. In settling the lawsuit, the Archers executed releases except for obligations under a $100,000 promissory note and then voluntarily dismissed the lawsuit. After the Warners failed to make the first payment on the promissory note, the Archers sued in state court. The Warners filed for bankruptcy, and the Bankruptcy Court ordered liquidation under Chapter 7. The Archers then brought a claim asking the Bankruptcy Court to find the $100,000 debt nondischargeable and to order the Warners to pay the sum. The Bankruptcy Code provides that a debt shall not be dischargeable in bankruptcy "to the extent" it is "for money...obtained by...false pretenses, a false representation, or actual fraud." The Bankruptcy Court denied the Archers' claim. The District Court and the Court of Appeals affirmed.

Question

Does the Bankruptcy Code cover a debt embodied in a settlement agreement that settled a creditor's earlier claim "for money...obtained by...fraud?"

Conclusion

Decision: 7 votes for Archer, 2 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

Yes. In a 7-2 opinion delivered by Justice Stephen G. Breyer, the Court held that a debt for money promised in a settlement agreement accompanied by the release of underlying tort claims can amount to a debt for money obtained by fraud, within the nondischargeability statute's terms. "We conclude that the Archers' settlement agreement and releases may have worked a kind of novation, but that fact does not bar the Archers from showing that the settlement debt arose out of 'false pretences, a false representation, or actual fraud,' and consequently is nondischargeable," wrote Justice Breyer. Justice Clarence Thomas, with whom Justice John Paul Stevens joined, dissented.

FCC v. Nextwave Communications, Inc.

Mon, 05 Jan 2009 17:48:37 +0000

Case Basics

Docket No.

01-653

Petitioner

Federal Communications Commission

Petitioner Type

Petitioner

Respondent

Nextwave Communications, Inc.

Respondent Type

Respondent

Consolidation

No. 01-657

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

537 U.S. 293 (2003)

Argued

Tuesday, October 8, 2002

Decided

Monday, January 27, 2003

Advocates

Paul D. Clement (Argued the cause on behalf of petitioner Federal Communications Commission)

Donald B. Verrilli, Jr. (Argued the cause for the respondents)

Laurence H. Tribe (Argued the cause on behalf of Creditors NextWave Communications, Inc., as amicus curiae)

Jonathan S. Franklin (Argued the cause on behalf of the petitioners Arctic Slope Regional Corp., et al)

Facts of the Case

After the Federal Communications Commission (FCC) auctioned off certain broadband personal communications services licenses to NextWave Personal Communications, Inc., Nextwave filed for Chapter 11 bankruptcy protection and suspended payments to all creditors, including the FCC. The FCC asserted that NextWave's licenses had been canceled automatically when the company missed its first payment-deadline and announced that NextWave's licenses were available for auction. Ultimately, when the FCC denied NextWave's petition for reconsideration of the license cancellation, the Court of Appeals for the D. C. Circuit held that the cancellation violated 11 USC section 525(a), which provides that a "governmental unit may not...revoke...a license...to...a debtor...solely because such...debtor...has not paid a debt that is dischargeable in the case." (Together with No. 01-657, Arctic Slope Regional Corp. et al. v. NextWave Personal Communications Inc. et al.)

Question

Does section 525 of the Bankruptcy Code prohibit the Federal Communications Commission from revoking licenses held by a debtor in bankruptcy upon the debtor's failure to make timely payments owed to the FCC for purchase of the licenses?

Conclusion

Decision: 8 votes for Nextwave Communications, Inc., 1 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

Yes. In an 8-1 opinion delivered by Justice Antonin Scalia, the Court held that the FCC's cancellations of the licenses violated section 525(a) as revocations of government licenses solely for nonpayment of the debtors' dischargeable debts. The Court rejected the FCC's argument that it did not revoke NextWave's licenses solely because of nonpayment and noted that the fact that the FCC had a valid regulatory motive for its action was irrelevant. Justice Scalia reasoned that, because the statute refers to failure to pay a debt as the sole cause of cancellation, it cannot reasonably be understood to include the governmental unit's motive in effecting the cancellation, since such a reading would deprive section 525 of force. Justice John Paul Stevens filed an opinion concurring in part and concurring in the judgment. Justice Stephen G. Breyer authored a dissenting opinion.

Young v. United States

Mon, 05 Jan 2009 17:46:46 +0000

Case Basics

Docket No.

00-1567

Petitioner

Young

Petitioner Type

Petitioner

Respondent

United States

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

535 U.S. 43 (2002)

Argued

Wednesday, January 9, 2002

Decided

Monday, March 4, 2002

Advocates

Grenville Clark, III (on behalf of the Petitioners)

Patricia A. Millett (Argued the cause for the United States)

Facts of the Case

Cornelius and Suzanne Young failed to include payment with their 1992 income tax return, which was due and filed on October 15, 1993. Subsequently, the Internal Revenue Service (IRS) assessed a tax liability against them. After filing a Chapter 13 petition, the Youngs ultimately filed a Chapter 7 petition and were granted a discharge, meaning that Youngs had no assets available to satisfy unsecured creditors, including the IRS. If the Internal Revenue Service (IRS) has a claim for certain taxes for which the return was due within three years before the individual taxpayer files a bankruptcy petition, its claim enjoys eighth priority under 11 USC section 507(a)(8)(A)(i), and is nondischargeable in bankruptcy under section 523(a)(1)(A). When the IRS subsequently demanded that they pay the tax debt, the Youngs asked the Bankruptcy Court to reopen the Chapter 7 case and declare the debt discharged under section 523(a)(1)(A), claiming that it fell outside section 507(a)(8)(A)(i)'s "three-year lookback period" because it pertained to a tax return due more than three years before their Chapter 7 filing. The District Court held that the "lookback period" is tolled during the pendency of a prior bankruptcy petition and concluded that the 1992 debt had not been discharged when the Youngs were granted a discharge under Chapter 7. The Court of Appeals affirmed.

Question

Is the Bankruptcy Code's "three-year lookback period," under which a discharge does not extinguish certain tax liabilities for which a return was due within three years before the filing of an individual debtor's petition, tolled during the pendency of a prior bankruptcy petition?

Conclusion

Decision: 9 votes for United States, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

Yes. In a unanimous opinion delivered by Justice Antonin Scalia, the Court held section 507(a)(8)(A)(i)'s lookback period is tolled during the pendency of a prior bankruptcy petition. The Court reasoned that the three-year lookback period is a limitations period subject to traditional principles of equitable tolling and that nothing in the Bankruptcy Code precluded the equitable tolling of the lookback period. The Court reject the Youngs' argument that the Bankruptcy Code permitted the filing of a Chapter 13 petition and the subsequent filing of a Chapter 7 petition after the lookback period has expired. Under such a loophole, certain unpaid taxes would be dischargeable.

Raleigh v. Illinois Dept. of Revenue

Mon, 05 Jan 2009 16:14:36 +0000

Case Basics

Docket No.

99-387

Petitioner

Raleigh

Petitioner Type

Petitioner

Respondent

Illinois Dept. of Revenue

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

530 U.S. 15 (2000)

Argued

Monday, April 17, 2000

Decided

Tuesday, May 30, 2000

Advocates

Robert Radasevich (Argued the cause for the petitioner)

A. Benjamin Goldgar (Argued the cause for the respondent)

Lawrence G. Wallace (Argued the cause for the United States, as amicus curiae, by special leave of court, supporting the respondent)

Facts of the Case

In 1998, William Stoecker formed Chandler Enterprises, Inc., which purchased a plane out of state and moved it to Illinois. By the time the Illinois Department of Revenue, having discovered that the corporation had failed to file a use tax return or pay the tax on the plane, issued a notice of tax liability against the corporation and a notice of penalty liability against the debtor in the District Court, the corporation was defunct and Stoecker was in bankruptcy. Under Illinois law, any corporate officer who is responsible for filing tax returns and making payments, and who "willfully" fails to do so, is personally liable for a penalty "equal to the total amount of tax unpaid by the corporation." There was no proof that Stoecker was responsible for payment of the tax and the court ruled that while Chandler owed taxes on the plane, Stoecker should not be penalized. However, Illinois law shifted the burden of proof, both on production and persuasion, to the purportedly responsible officer, the trustee in bankruptcy, Thomas Raleigh, once a notice of penalty liability was issued. The Court of Appeals ruled in favor of the Department, holding that the burden of proof remained with Raleigh, just as it would have been on Stoecker had the proceedings taken place outside of bankruptcy, and finding that Raleigh had not satisfied the burden of persuasion.

Question

Does the burden of proof on a tax claim in bankruptcy court remain with the trustee in a bankruptcy?

Conclusion

Decision: 9 votes for Illinois Dept. of Revenue, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

Yes. In a unanimous opinion delivered by Justice David H. Souter, the Court held that "[w]hen the substantive law creating a tax obligation puts the burden of proof on a taxpayer, the burden of proof on the tax claim in bankruptcy court remains where the substantive law put it (in this case, on the trustee in bankruptcy)." The Court concluded that the bankruptcy estate's obligation to the Department was established by the state's tax code and that the Bankruptcy Code made no provision for altering the burden on a tax claim, and its silence said that no change was intended.

Hartford Underwriters v. Union Planters Bank NA

Mon, 05 Jan 2009 16:14:39 +0000

Case Basics

Docket No.

99-409

Petitioner

Hartford Underwriters

Petitioner Type

Petitioner

Respondent

Union Planters Bank NA

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

530 U.S. 1 (2000)

Argued

Monday, March 20, 2000

Decided

Tuesday, May 30, 2000

Advocates

Robert H. Brownlee (Argued the cause for the respondent)

G. Eric Brunstad, Jr. (Argued the cause for the petitioner)

Facts of the Case

Hen House Interstate, Inc. filed for reorganization under Chapter 11 of the Bankruptcy Code. During the reorganization attempt, Hen House obtained workers' compensation insurance from Hartford Underwriters Insurance Company. Hen House repeatedly failed to make the monthly premium payments required by the policy. Ultimately, Hen House's reorganization failed and the court converted the case to a Chapter 7 liquidation proceeding and appointed a trustee. Hartford, learning of the bankruptcy proceedings, sought to recover its premiums as an administrative expense. Recognizing that the estate lacked unencumbered funds to pay the premiums, Hartford attempted to charge the premiums to Union Planters Bank, the secured creditor for all of the property of Hen House, by filing a claim with the Bankruptcy Court under 11 USC Section 506(c). The Bankruptcy Court ruled in favor of Hartford and the ruling was affirmed by the Court of Appeals. However, the Court of Appeals granted a rehearing en banc and reversed, on the ground that an administrative claimant could not invoke section 506(c).

Question

Does 11 USC Section 506(c) allow an administrative claimant in a bankruptcy case to seek payment of its administrative claim from the property of a bankrupt estate encumbered by a secured creditor's lien?

Conclusion

Decision: 9 votes for Union Planters Bank NA, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

No. In a unanimous opinion delivered by Justice Antonin Scalia, the Court held that "Section 506(c) does not provide an administrative claimant of a bankruptcy estate an independent right to seek payment of its claim from property encumbered by a secured creditor's lien, or subject to secured claims. Justice Scalia noted that plain meaning of the language in Section 506(c) and the "most natural reading" of the section persuaded the court that no one other than the trustee has an independent right to seek payment of administrative claim, like premiums from property secured by a creditor's lien, under the section.

Bank of America v. 203 North LaSalle Partnership

Mon, 05 Jan 2009 16:25:15 +0000

Case Basics

Docket No.

97-1418

Petitioner

Bank of America

Petitioner Type

Petitioner

Respondent

203 North LaSalle Partnership

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

526 U.S. 424 (1999)

Argued

Monday, November 2, 1998

Decided

Monday, May 3, 1999

Advocates

Roy T. Englert, Jr. (Argued the cause for the petitioner)

Richard M. Bendix, Jr. (Argued the cause for the respondent)

Patricia A. Millett (For the United States, as amicus curiae, supporting the petitioner)

Facts of the Case

Bank of America National Trust and Savings Association issued a $93 million loan to 203 North LaSalle Street Partnership. The loan was secured by a mortgage on the debtor's principal asset, part of a Chicago office building. When the debtor defaulted on the loan, the bank began foreclosure. LaSalle filed a petition for relief under Chapter 11 of the federal Bankruptcy Code. The debtor's purposed reorganization plan called for only previous equity holders to contribute new capital in exchange for the debtor's entire ownership of the reorganized entity. The Bank of America objected. The bank's objection prevented confirmation of the plan. LaSalle resorted to a judicial "cramdown" process for imposing the plan on Bank of America. The cramdown process requires a reorganization plan to be fair and equitable with respect to the creditors so a judge will authorize it. Bank of America argued the plan violated the cramdown's "absolute priority rule," which prevents debtor's equity holders from receiving ownership when claims will not be paid in full and, thus, the plan should have been denied. Nevertheless, the Bankruptcy Court approved the plan. The District Court and the Court of Appeals affirmed the decision.

Question

May a debtor's prebankruptcy equity holders contribute new capital and receive ownership in a reorganized entity when the creditor objected to the reorganization plan?

Conclusion

Decision: 8 votes for Bank of America, 1 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

No. In an 8-1 decision, announced by Justice David H. Souter, the Court ruled a debtor's prebankruptcy equity holders may not, over the objections of creditors, contribute new capital and receive ownership in the debtor's reorganized entity if no one else has been given a chance to come up with an alternative reorganization plan.

Kawaauhau v. Geiger

Mon, 05 Jan 2009 16:15:03 +0000

Case Basics

Docket No.

97-115

Petitioner

Kawaauhau

Petitioner Type

Petitioner

Respondent

Geiger

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

523 U.S. 57 (1998)

Argued

Wednesday, January 21, 1998

Decided

Tuesday, March 3, 1998

Advocates

Norman W. Pressman (Argued the cause for the petitioners)

Laura K. Grandy (Argued the cause for the respondent)

Facts of the Case

In 1983, Margaret Kawaauhau sought treatment from Dr. Paul Geiger for a foot injury. Later, Geiger cancelled Kawaauhau's transfer, by other physicians, to an infectious disease specialist. Ultimately, Kawaauhau required that her right leg be amputated below the knee. In the subsequently malpractice suit, a jury awarded Kawaauhau approximately $355,000 in damages. Geiger, who carried no malpractice insurance, ultimately filed for bankruptcy. Kawaauhau requested the Bankruptcy Court to hold the malpractice judgment nondischargeable under 11 USC section 523(a)(6), which provides that a "discharge [in bankruptcy]... does not discharge an individual debtor from any debt... for willful and malicious injury... to another." The court held the debt nondischargeable. The District Court affirmed. In reversing, the Court of Appeals held that section 523(a)(6)'s exemption from discharge is confined to debts for an intentional tort, so that a debt for malpractice remains dischargeable because it is based on negligent or reckless conduct.

Question

Does a debt arising from a medical malpractice judgment, attributable to negligent or reckless conduct, fall within section 523(a)(6) of the Bankruptcy Code, which provides that a debt "for willful and malicious injury by the debtor to another" is not dischargeable?

Conclusion

Decision: 9 votes for Geiger, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

No. In a unanimous opinion delivered by Justice Ruth Bader Ginsburg, the Court held that "debts arising from recklessly or negligently inflicted injuries do not fall within the compass of [section 523(a)(6)]." Therefore, the debt is dischargeable. Justice Ginsburg wore for the Court that "[t]he word 'willful' in [section 523(a)(6)] modifies the word 'injury,' indicating that nondischargeability takes a deliberate or intentional injury, not merely a deliberate or intentional act that leads to injury. Had Congress meant to exempt debts resulting from unintentionally inflicted injuries, it might have described instead 'willful acts that cause injury.' Or, Congress might have selected an additional word or words, i.e., 'reckless' or 'negligent,' to modify 'injury.'"

Cohen v. De La Cruz

Mon, 05 Jan 2009 16:15:05 +0000

Case Basics

Docket No.

96-1923

Petitioner

Cohen

Petitioner Type

Petitioner

Respondent

De La Cruz

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

523 U.S. 213 (1998)

Argued

Tuesday, January 20, 1998

Decided

Tuesday, March 24, 1998

Advocates

Gregory G. Diebold (Argued the cause for the respondents)

Jeffrey A. Lamken (On behalf of the United States, as amicus curiae supporting the respondents)

Donald B. Ayer (Argued the cause for the petitioner)

Facts of the Case

After the local rent control administrator ordered Edward S. Cohen to refund $31,382.50 in excessive rents he had charged Hilda de la Cruz and other tenants, Cohen sought to discharge his debts under Chapter 7 of the Bankruptcy Code. The tenants filed an adversary proceeding, arguing that the debt Cohen owed to them was nondischargeable under ?523(a)(2)(A) of the Code, which excepts from discharge "any debt ... for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by ... actual fraud." The tenants also sought treble damages, attorney's fees, and costs under the New Jersey Consumer Fraud Act. The Bankruptcy Court ruled in their favor, finding that Cohen had committed "actual fraud" within the meaning of ?523(a)(2)(A) of the Code and that his conduct violated the New Jersey law. The court, therefore, awarded the tenants treble damages totaling $94,147.50, plus attorney's fees and costs. The District Court affirmed, as did the Court of Appeals, which held that debts resulting from fraud are nondischargeable under ?523(a)(2)(A) of the Code, and that the award of treble damages (plus attorney's fees and costs) in this case was therefore nondischargeable.

Question

May individuals who commit fraud discharge their debts, including damages awarded to those who were defrauded, under the Bankruptcy Code?

Conclusion

Decision: 9 votes for De La Cruz, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

No. In a unanimous decision authored by Justice Sandra Day O'Connor, The Court ruled that because Section 523(a)(2)(A) of the Bankruptcy Code excepts from discharge all liability arising from fraud, treble damages (plus attorney's fees and costs) awarded on account of the debtor's fraud fall within the scope of the exception. Justice O'Connor wrote, "The bankruptcy code has long prohibited debtors from discharging liabilities incurred on account of their fraud, embodying a basic policy...of affording relief only to an honest but unfortunate debtor."

Fidelity Financial Services, Inc. v. Fink

Mon, 05 Jan 2009 16:14:44 +0000

Case Basics

Docket No.

96-1370

Petitioner

Fidelity Financial Services, Inc.

Petitioner Type

Petitioner

Respondent

Fink

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

522 U.S. 211 (1998)

Argued

Monday, November 3, 1997

Decided

Tuesday, January 13, 1998

Advocates

Richard V. Fink (Argued the cause for the respondent)

Michael P. Gaughan (Argued the cause for the petitioner)

Facts of the Case

After purchasing a car, Diane Beasley gave Fidelity Financial Services, Inc. a promissory note for the purchase price. The car secured the note. 21 days later, Fidelity mailed Beasley the application to perfect its security interest under Missouri law. After Beasley filed for bankruptcy, Richard V. Fink, the trustee of Beasley's bankruptcy estate, moved to set aside Fidelity's security interest on the ground that the lien was a voidable preference under federal law. 11 USC section 547(c)(3)(B) prohibits the avoidance of a security interest for a loan used to acquire property if, among other things, the security interest is "perfected on or before 20 days after the debtor receives possession of such property." Fink argued that this "enabling loan" exception was inapposite because Fidelity had not perfected its interest within the 20-day period. Affirming the Bankruptcy Court and the District Court, the Court of Appeals held a transfer to be perfected when the transferee takes the last step required by state law to perfect its security interest.

Question

May a creditor invoke 11 USC section 547(c)(3)(B)'s "enabling loan" exception if it performs the acts necessary to perfect its security interest more than 20 days after the debtor receives the property, but within a grace period provided by the otherwise applicable state law?

Conclusion

Decision: 9 votes for Fink, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

No. In a unanimous opinion delivered by Justice David H. Souter, the Court held that a transfer of a security interest is perfected under section 547(c)(3)(B) on the date that the secured party has completed the steps necessary to perfect its interest, so that a creditor may invoke the enabling loan exception only by satisfying state law perfection requirements within the 20-day period provided by the federal statute. The Court turned to the text, structure, and history of the preference provisions to determine that the federal enabling loan exception of twenty-days controlled over otherwise applicable state law.

Associates Commercial Corp. v. Rash

Mon, 05 Jan 2009 16:16:04 +0000

Case Basics

Docket No.

96-454

Petitioner

Associates Commercial Corp.

Petitioner Type

Petitioner

Respondent

Rash

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

520 U.S. 953 (1997)

Argued

Wednesday, April 16, 1997

Decided

Monday, June 16, 1997

Advocates

Carter G. Phillips (Argued the cause for the petitioner)

Kent L. Jones (Department of Justice, on behalf of the United States, as amicus curiae, supporting the petitioner)

John J. Durkay (Argued the cause for the respondents)

Facts of the Case

In 1992, Elray Rash filed a repayment plan under Chapter 13 of the Bankruptcy Code. Associates Commercial Corporation (ACC) was listed in the bankruptcy petition as a creditor holding a secured claim because it held a valid loan and lien on Rash's tractor truck. Ultimately to gain confirmation of his Chapter 13 plan and retain the truck, Rash invoked the "cram-down" provision of the Code. The cram-down provision allows a debtor to keep collateral over the objection of the creditor and requires the debtor to provide the creditor with payments that will total the present value of the collateral. At an evidentiary hearing, ACC maintained, under the "replacement-value" standard, that Rash would have to pay approximately $41,000 for a similar truck. Under the "foreclosure-value" standard, Rash maintained that the proper valuation was the net amount ACC would realize upon foreclosure and sale of the collateral, or approximately $31,875. The Bankruptcy Court adopted Rash's valuation figure and approved the plan. The District Court and the Court of Appeals affirmed.

Question

Is the value of collateral, under the "cram-down" provision of the Bankruptcy Code, section 1325(a)(5)(B), determined by the "foreclosure-value" standard, or what a secured creditor could obtain through a foreclosure sale of the property?

Conclusion

Decision: 8 votes for Associates Commercial Corp., 1 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

No. In an 8-1 opinion delivered by Justice Ruth Bader Ginsburg, the Court held that section 506(a) of the Bankruptcy Code, which governs the value of a secured claim, directs the application of the replacement-value standard when debtor, in a repayment plan under Chapter 13, has exercised the cram-down provision. Justice Ginsburg wrote that, "under [section 506(a)], the value of property retained because the debtor has exercised the [section 1325(a)(5)(B)] 'cram down' option is the cost the debtor would incur to obtain a like asset for the same 'proposed... use.'" Dissenting, Justice John Paul Stevens expressed the view that the text of 506(a) pointed to foreclosure as the proper method of valuation in the case at hand.

Citizens Bank Of Maryland v. Strumpf

Mon, 05 Jan 2009 16:24:33 +0000

Case Basics

Docket No.

94-1340

Petitioner

Citizens Bank Of Maryland

Petitioner Type

Petitioner

Respondent

Strumpf

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

516 U.S. 16 (1995)

Argued

Tuesday, October 3, 1995

Decided

Tuesday, October 31, 1995

Advocates

Miguel A. Estrada (on behalf of the United States, as amicus curiae, supporting the Petitioner)

Roger Schlossberg (on behalf of the Respondent)

Irving E. Walker (on behalf of the Petitioner)

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for Citizens Bank Of Maryland, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Field v. Mans

Mon, 05 Jan 2009 16:24:47 +0000

Case Basics

Docket No.

94-967

Petitioner

Field et al.

Petitioner Type

Petitioner

Respondent

Mans

Respondent Type

Respondent

Heard By

Rehnquist Court (1994-2005)

Decided By

Rehnquist Court (1994-2005)

Opinion

516 U.S. 59 (1995)

Argued

Monday, October 2, 1995

Decided

Tuesday, November 28, 1995

Advocates

Christopher J. Seufert (on behalf of the Petitioners)

Alan Jenkins (on behalf of the United States, as amicus curiae, supporting the Petitioners)

W. E. Whittington (on behalf of the Respondent)

Facts of the Case

None

Question

None

Conclusion

Decision: 7 votes for Field, 2 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

BFP v. Resolution Trust Corporation, As Receiver Of Imperial Federal Savings Association

Mon, 05 Jan 2009 16:23:54 +0000

Case Basics

Docket No.

92-1370

Petitioner

Bfp

Petitioner Type

Petitioner

Respondent

Resolution Trust Corporation, As Receiver Of Imperial Federal Savings Association, et al.

Respondent Type

Respondent

Heard By

Rehnquist Court (1993-1994)

Decided By

Rehnquist Court (1993-1994)

Opinion

511 U.S. 531 (1994)

Argued

Tuesday, December 7, 1993

Decided

Monday, May 23, 1994

Advocates

Ronald J. Mann (on behalf of the Federal Respondent)

Michael R. Sment (on behalf of the Respondents Paul Osborne, et al)

Roy B. Woolsey (on behalf of the Petitioner)

Facts of the Case

BFP, a partnership formed by two private investors, bought a home in Newport Beach, CA in 1987. BFP secured the property by obtaining a deed of trust from Imperial Savings Association (Imperial). Imperial owned the property until BFP could pay off the amount borrowed. BFP defaulted on loan repayment and Imperial proceeded to sell the property for $433,000 to settle the loan (foreclosure). Before the title of ownership transferred to the buyer, BFP filed for bankruptcy under Chapter 11 of the Bankruptcy Code. BFP asked bankruptcy court to nullify the original foreclosure sale because the home was valued at over $725,000. BFP argued that the low sales price constituted a fraudulent transfer under 11 U.S.C. Section 548(a)(2)(A), which guarantees that debtors receive "reasonably equivalent value" for property foreclosed. BFP claimed "reasonably equivalent value" was equal to the market value of the property in question. The bankruptcy court denied BFP's claim, and a District Court and the U.S. Court of Appeals for the Ninth Circuit affirmed.

Question

Does a property's fair market value determine whether the amount of debt settled by a foreclosure sale is "reasonably equivalent" to the property's worth, as required by U.S.C. Section 548(a)(2)(A)?

Conclusion

Decision: 5 votes for Resolution Trust Corporation, As Receiver Of Imperial Federal Savings Association, 4 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

No. In an opinion by Justice Antonin Scalia, The Court ruled 5-4 that the value received for a property at a foreclosure sale can be reasonable even if it is different from the "fair market value." A foreclosure sale alters market conditions and can lower a property's selling price. If a foreclosure sale is necessary to settle a debt, the price at which the property is sold is reasonable so long as "all the requirements of the State's foreclosure law have been complied with."

Nobelman Et Ux. v. American Savings Bank

Mon, 05 Jan 2009 16:00:54 +0000

Case Basics

Docket No.

92-641

Petitioner

Nobelman Et Ux.

Petitioner Type

Petitioner

Respondent

American Savings Bank et al.

Respondent Type

Respondent

Heard By

Rehnquist Court (1991-1993)

Decided By

Rehnquist Court (1991-1993)

Opinion

508 U.S. 324 (1993)

Argued

Monday, April 19, 1993

Decided

Tuesday, June 1, 1993

Advocates

Philip Palmer (on behalf of the Petitioners)

Michael J. Schroeder (on behalf of the Respondents)

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for American Savings Bank, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Rake v. Wade, Trustee

Mon, 05 Jan 2009 16:14:15 +0000

Case Basics

Docket No.

92-621

Petitioner

Rake et al.

Petitioner Type

Petitioner

Respondent

Wade, Trustee

Respondent Type

Respondent

Heard By

Rehnquist Court (1991-1993)

Decided By

Rehnquist Court (1991-1993)

Opinion

508 U.S. 464 (1993)

Argued

Monday, March 22, 1993

Decided

Monday, June 7, 1993

Advocates

David W. Carpenter (on behalf of the Petitioners)

Ronald J. Mann (as amicus curiae, supporting the Respondent)

Lawrence A.G. Johnson (on behalf of the Respondent)

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for Wade, Trustee, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Pioneer Investment Services Co. v. Brunswick Associates Limited Partnership

Mon, 05 Jan 2009 16:01:16 +0000

Case Basics

Docket No.

91-1695

Petitioner

Pioneer Investment Services Co.

Petitioner Type

Petitioner

Respondent

Brunswick Associates Limited Partnership et al.

Respondent Type

Respondent

Heard By

Rehnquist Court (1991-1993)

Decided By

Rehnquist Court (1991-1993)

Opinion

507 U.S. 380 (1993)

Argued

Monday, November 30, 1992

Decided

Wednesday, March 24, 1993

Advocates

Craig J. Donaldson (on behalf of the Petitioner)

John A. Lucas (on behalf of the Respondents)

Facts of the Case

None

Question

None

Conclusion

Decision: 5 votes for Brunswick Associates Limited Partnership, 4 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Patterson, Trustee v. Shumate

Mon, 05 Jan 2009 16:24:17 +0000

Case Basics

Docket No.

91-913

Petitioner

Patterson, Trustee

Petitioner Type

Petitioner

Respondent

Shumate

Respondent Type

Respondent

Heard By

Rehnquist Court (1991-1993)

Decided By

Rehnquist Court (1991-1993)

Opinion

504 U.S. 753 (1992)

Argued

Monday, April 20, 1992

Decided

Monday, June 15, 1992

Advocates

Kevin R. Huennekens (on behalf of the Respondent)

Christopher J. Wright (on behalf of the United States, as amicus curiae, supporting the Respondent)

G. Steven Agee (on behalf of the Petitioner)

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for Shumate, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Taylor v. Freeland & Kranz

Mon, 05 Jan 2009 16:24:19 +0000

Case Basics

Docket No.

91-571

Petitioner

Taylor

Petitioner Type

Petitioner

Respondent

Freeland & Kranz et al.

Respondent Type

Respondent

Heard By

Rehnquist Court (1991-1993)

Decided By

Rehnquist Court (1991-1993)

Opinion

503 U.S. 638 (1992)

Argued

Monday, March 2, 1992

Decided

Tuesday, April 21, 1992

Advocates

Phillip S. Simon (on behalf of the Respondents)

Timothy B. Dyk (on behalf of the Petitioner)

Facts of the Case

None

Question

None

Conclusion

Decision: 8 votes for Freeland & Kranz, 1 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Barnhill v. Johnson, Trustee

Mon, 05 Jan 2009 16:24:20 +0000

Case Basics

Docket No.

91-159

Petitioner

Barnhill

Petitioner Type

Petitioner

Respondent

Johnson, Trustee

Respondent Type

Respondent

Heard By

Rehnquist Court (1991-1993)

Decided By

Rehnquist Court (1991-1993)

Opinion

503 U.S. 393 (1992)

Argued

Tuesday, January 14, 1992

Decided

Wednesday, March 25, 1992

Advocates

Nancy S. Cusack (on behalf of the Respondent)

William J. Arland, III (on behalf of the Petitioner)

Facts of the Case

None

Question

None

Conclusion

Decision: 7 votes for Johnson, Trustee, 2 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

United States v. Nordic Village, Inc.

Mon, 05 Jan 2009 16:24:03 +0000

Case Basics

Docket No.

90-1629

Petitioner

United States

Petitioner Type

Petitioner

Respondent

Nordic Village, Inc.

Respondent Type

Respondent

Heard By

Rehnquist Court (1991-1993)

Decided By

Rehnquist Court (1991-1993)

Opinion

503 U.S. 30 (1992)

Argued

Monday, December 9, 1991

Decided

Tuesday, February 25, 1992

Advocates

Marvin A. Sicherman (on behalf of the Respondent)

Richard H. Seamon (on behalf of the Petitioner)

Facts of the Case

None

Question

None

Conclusion

Decision: 7 votes for United States, 2 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Union Bank v. Walas, Chapter 7 Trustee For The Estate Of Zzzz Best Co., Inc.

Mon, 05 Jan 2009 16:24:11 +0000

Case Basics

Docket No.

90-1491

Petitioner

Union Bank

Petitioner Type

Petitioner

Respondent

Walas, Chapter 7 Trustee For The Estate Of Zzzz Best Co., Inc.

Respondent Type

Respondent

Heard By

Rehnquist Court (1991-1993)

Decided By

Rehnquist Court (1991-1993)

Opinion

502 U.S. 151 (1991)

Argued

Tuesday, November 5, 1991

Decided

Wednesday, December 11, 1991

Advocates

John A. Graham (on behalf of the Petitioner)

Herbert Wolas (on behalf of the Respondent)

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for Union Bank, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Dewsnup v. Timm

Mon, 05 Jan 2009 16:24:14 +0000

Case Basics

Docket No.

90-741

Petitioner

Dewsnup

Petitioner Type

Petitioner

Respondent

Timm et al.

Respondent Type

Respondent

Heard By

Rehnquist Court (1991)

Decided By

Rehnquist Court (1991-1993)

Opinion

502 U.S. 410 (1992)

Argued

Tuesday, October 15, 1991

Decided

Wednesday, January 15, 1992

Advocates

Ronald J. Mann (as amicus curiae, supporting the Respondents)

Richard G. Taranto (on behalf of the Respondents)

Timothy B. Dyk (on behalf of the Petitioner)

Facts of the Case

None

Question

None

Conclusion

Decision: 6 votes for Timm, 2 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Toibb v. Radloff

Mon, 05 Jan 2009 16:16:43 +0000

Case Basics

Docket No.

90-368

Petitioner

Toibb

Petitioner Type

Petitioner

Respondent

Radloff

Respondent Type

Respondent

Heard By

Rehnquist Court (1990-1991)

Decided By

Rehnquist Court (1990-1991)

Opinion

501 U.S. 157 (1991)

Argued

Monday, April 22, 1991

Decided

Thursday, June 13, 1991

Advocates

Stephen J. Marzen (on behalf of the Respondent United States supporting the Petitioner)

James Hamilton (as amicus curiae in support of judgment below)

Peter M. Lieb (on behalf of the Petitioner)

Facts of the Case

None

Question

None

Conclusion

Decision: 8 votes for Toibb, 1 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Johnson v. Home State Bank

Mon, 05 Jan 2009 16:16:16 +0000

Case Basics

Docket No.

90-693

Petitioner

Johnson

Petitioner Type

Petitioner

Respondent

Home State Bank

Respondent Type

Respondent

Heard By

Rehnquist Court (1990-1991)

Decided By

Rehnquist Court (1990-1991)

Opinion

501 U.S. 78 (1991)

Argued

Tuesday, April 16, 1991

Decided

Monday, June 10, 1991

Advocates

Calvin Dee Rider (on behalf of the Respondent)

W. Thomas Gilman (on behalf of the Petitioner)

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for Johnson, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Farrey v. Sanderfoot

Mon, 05 Jan 2009 16:16:15 +0000

Case Basics

Docket No.

90-350

Petitioner

Farrey

Petitioner Type

Petitioner

Respondent

Sanderfoot

Respondent Type

Respondent

Heard By

Rehnquist Court (1990-1991)

Decided By

Rehnquist Court (1990-1991)

Opinion

500 U.S. 291 (1991)

Argued

Monday, March 25, 1991

Decided

Thursday, May 23, 1991

Advocates

Harvey G. Samson (on behalf of the Respondent)

Brady C. Williamson (on behalf of the Petitioner)

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for Farrey, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Owen v. Owen

Mon, 05 Jan 2009 16:16:39 +0000

Case Basics

Docket No.

89-1008

Petitioner

Owen

Petitioner Type

Petitioner

Respondent

Owen

Respondent Type

Respondent

Heard By

Rehnquist Court (1990-1991)

Decided By

Rehnquist Court (1990-1991)

Opinion

500 U.S. 305 (1991)

Argued

Monday, November 5, 1990

Decided

Thursday, May 23, 1991

Advocates

Robert L. Fishell (on behalf of the Petitioner)

Timothy B. Dyk (on behalf of the Respondent)

Facts of the Case

None

Question

None

Conclusion

Decision: 8 votes for Owen, 1 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Grogan v. Garner

Mon, 05 Jan 2009 16:16:19 +0000

Case Basics

Docket No.

89-1149

Petitioner

Grogan

Respondent

Garner

Heard By

Rehnquist Court (1990-1991)

Decided By

Rehnquist Court (1990-1991)

Opinion

498 U.S. 279 (1991)

Argued

Monday, October 29, 1990

Decided

Tuesday, January 15, 1991

Advocates

Michael J. Gallagher (Argued the case for the petitioners)

John G. Roberts, Jr. (Argued the case as amicus curiae urging reversal)

Timothy K. McNamara (Argued the case for the respondents)

Facts of the Case

Frank Garner was convicted of defrauding Coy Grogan and ordered to repay him. Garner then filed for Chapter 11 Bankruptcy, asking the Bankruptcy Court to discharge (that is, nullify) his court-ordered repayment to Grogan. Grogan argued that the debt should not be discharged because section 523(a) of the bankruptcy code exempts obligations for money obtained by "actual fraud." The Bankruptcy Court, based on portions of the fraud case, agreed and did not allow Garner to discharge the debt. The District Court affirmed, but the Eighth Circuit Court of Appeals reversed, finding that the standard of proof used in the original fraud case - the "preponderance of the evidence" standard - was lower than the standard of proof demanded under section 523(a) - a "clear and convincing evidence" standard. The Court found that most states used the "clear and convincing" standard in fraud cases and that Congress would have explicitly stated it if they used a different standard. Moreover, it argued that the intention of the bankruptcy code to provide a "fresh start" suggested that the standard most favorable to bankruptcy filers should be used (that is, the more demanding "clear and convincing" standard).

Question

What standard of evidence should bankruptcy courts apply in considering whether a debt was the result of "actual fraud" under section 523(a) of the Bankruptcy Code?

Conclusion

Decision: 9 votes for Grogan, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

Courts should apply the "preponderance of the evidence" standard. Justice John Paul Stevens, for a unanimous Supreme Court, wrote that the lack of a specified standard of evidence in section 523(a) implied that Congress had intended the preponderance of the evidence standard to be used. That lower standard was generally used in civil actions between private parties (including bankruptcy filings) unless particularly important interests were at stake. Protecting a bankruptcy filer who had previously been convicted of fraud was not sufficiently important to demand a higher level of evidence.

Stevens also wrote that the "fresh start" intention of the bankruptcy laws did not suggest a higher standard of evidence. "In the same breath that we have invoked this 'fresh start policy," he wrote, "we have been careful to explain that the Act limits the opportunity for a completely unencumbered new beginning to the 'honest but unfortunate debtor.'" A debtor previously convicted of fraud did not fit this description.

United States v. Energy Resource Co.

Mon, 05 Jan 2009 17:30:00 +0000

Case Basics

Docket No.

89-255

Petitioner

United States

Petitioner Type

Petitioner

Respondent

Energy Resource Co.

Respondent Type

Respondent

Heard By

Rehnquist Court (1988-1990)

Decided By

Rehnquist Court (1988-1990)

Opinion

495 U.S. 545 (1990)

Argued

Monday, March 19, 1990

Decided

Tuesday, May 29, 1990

Advocates

Guy B. Moss (on behalf of the Respondent)

Alan I. Horowitz (on behalf of the Petitioner)

Facts of the Case

None

Question

None

Conclusion

Decision: 8 votes for Energy Resource Co., 1 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Pennsylvania Public Welfare Dept. v. Davenport

Mon, 05 Jan 2009 17:30:04 +0000

Case Basics

Docket No.

89-156

Petitioner

Pennsylvania Public Welfare Dept.

Petitioner Type

Petitioner

Respondent

Davenport

Respondent Type

Respondent

Heard By

Rehnquist Court (1988-1990)

Decided By

Rehnquist Court (1988-1990)

Opinion

495 U.S. 552 (1990)

Argued

Tuesday, February 20, 1990

Decided

Tuesday, May 29, 1990

Advocates

Walter W. Cohen (on behalf of the Petitioners)

David A. Searles (on behalf of the Respondents)

Facts of the Case

None

Question

None

Conclusion

Decision: 7 votes for Davenport, 2 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Hoffman v. Connecticut Income Maint. Dept.

Mon, 05 Jan 2009 17:26:03 +0000

Case Basics

Docket No.

88-412

Petitioner

Hoffman

Petitioner Type

Petitioner

Respondent

Connecticut Income Maint. Dept.

Respondent Type

Respondent

Heard By

Rehnquist Court (1988-1990)

Decided By

Rehnquist Court (1988-1990)

Opinion

492 U.S. 96 (1989)

Argued

Wednesday, April 19, 1989

Decided

Friday, June 23, 1989

Advocates

Thomas W. Merrill (on behalf of the Federal Respondent)

Clarine Nardi Riddle (on behalf of the State Respondent)

Martin W. Hoffman (on behalf of the Petitioner)

Facts of the Case

None

Question

None

Conclusion

Decision: 5 votes for Connecticut Income Maint. Dept., 4 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Norwest Bank Worthington v. Ahlers

Mon, 05 Jan 2009 17:26:00 +0000

Case Basics

Docket No.

86-958

Petitioner

Norwest Bank Worthington

Petitioner Type

Petitioner

Respondent

Ahlers

Respondent Type

Respondent

Heard By

Rehnquist Court (1987-1988)

Decided By

Rehnquist Court (1988-1990)

Opinion

485 U.S. 197 (1988)

Argued

Tuesday, January 12, 1988

Decided

Monday, March 7, 1988

Advocates

Gordon B. Conn, Jr. (on behalf of the Petitioners)

William L. Needler (on behalf of the Respondents)

Facts of the Case

None

Question

None

Conclusion

Decision: 8 votes for Norwest Bank Worthington, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

United Savings Assn. v. Timbers Of Inwood Forest

Mon, 05 Jan 2009 17:25:28 +0000

Case Basics

Docket No.

86-1602

Petitioner

United Savings Assn.

Petitioner Type

Petitioner

Respondent

Timbers Of Inwood Forest

Respondent Type

Respondent

Heard By

Rehnquist Court (1987-1988)

Decided By

Rehnquist Court (1987-1988)

Opinion

484 U.S. 365 (1988)

Argued

Tuesday, December 1, 1987

Decided

Wednesday, January 20, 1988

Advocates

H. Miles Cohn (on behalf of the Petitioner)

Leonarad H. Simon (on behalf of the Respondent)

Facts of the Case

None

Question

None

Conclusion

Decision: 8 votes for Timbers Of Inwood Forest, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Kelly v. Robinson

Mon, 05 Jan 2009 17:33:59 +0000

Case Basics

Docket No.

85-1033

Petitioner

Kelly

Petitioner Type

Petitioner

Respondent

Robinson

Respondent Type

Respondent

Heard By

Rehnquist Court (1986-1987)

Decided By

Rehnquist Court (1986-1987)

Opinion

479 U.S. 36 (1986)

Argued

Wednesday, October 8, 1986

Decided

Wednesday, November 12, 1986

Advocates

Carl J. Schuman (on behalf of Petitioners)

Francis X. Dineen (on behalf of Respondent)

Facts of the Case

None

Question

None

Conclusion

Decision: 7 votes for Kelly, 2 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Midlantic Nat. Bank v. N. J. Dept. Of E. P.

Mon, 05 Jan 2009 17:27:09 +0000

Case Basics

Docket No.

84-801

Petitioner

Midlantic Nat. Bank

Petitioner Type

Petitioner

Respondent

N. J. Dept. Of E. P.

Respondent Type

Respondent

Consolidation

No. 84-805

Heard By

Burger Court (1981-1986)

Decided By

Burger Court (1981-1986)

Opinion

474 U.S. 494 (1986)

Argued

Wednesday, October 16, 1985

Decided

Monday, January 27, 1986

Advocates

William F. Mc Enroe (on behalf of the petitioner in No. 84-805)

A. Dennis Terrell (on behalf of the petitioner in No. 84-801)

Robert Hermann (on behalf of the respondents in No. 84-805)

Mary Carol Jacobson (on behalf of the respondent in No. 84-801)

Facts of the Case

None

Question

None

Conclusion

Decision: 5 votes for N. J. Dept. Of E. P., 4 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Commodity Futures Trading Commission v. Weintraub

Mon, 05 Jan 2009 17:25:19 +0000

Location

Commodity Futures Trading Commission

1155 21st Street, NW

Washington, DC 20036

United States

38° 54' 17.946" N, 77° 2' 47.4288" W

See map: Google Maps

Case Basics

Docket No.

84-261

Petitioner

Commodity Futures Trading Commission

Petitioner Type

Petitioner

Respondent

Gary Weintraub, Frank H. McGhee, Andrew McGhee

Respondent Type

Respondent

Heard By

Burger Court (1981-1986)

Decided By

Burger Court (1981-1986)

Opinion

471 U.S. 343 (1985)

Granted

Monday, October 29, 1984

Argued

Tuesday, March 19, 1985

Decided

Monday, April 29, 1985

Advocates

Bruce M. Kuhlik (for the petitioner)

David A. Epstein (for the respondent)

Facts of the Case

The Commodity Futures Trading Commission (the Commission) filed a complaint against the Chicago Discount Commodity Brokers (CDCB), alleging violations of the Commodity Exchange Act. CDCB was going through bankruptcy at the time and a trustee was appointed At a deposition related to the Commission’s lawsuit, Gary Weintraub, CDCB’s former counsel, refused to answer certain questions, citing attorney-client privilege. The Commission obtained a waiver of attorney-client privilege from the CDCB’s bankruptcy trustee. The district court directed Weintraub to answer the questions, but the U.S. Court of Appeals for the Seventh Circuit reversed, holding that a bankruptcy trustee does not have the power to waive attorney-client privilege for communications that occurred before the filing of the bankruptcy petition.

Question

Does the trustee of a corporation in bankruptcy have the power to waive that corporation's attorney-client privilege with respect to communications that took place before the bankruptcy petition was filed?

Conclusion

Decision: 8 votes for Commodity Futures Trading Comm'n, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

Justice Thurgood Marshall, writing for a unanimous court, reversed the Seventh Circuit. The Supreme Court held that a bankruptcy trustee does have the power to waive attorney client privilege for communications that occurred before filing the bankruptcy petition. This power is held by the management of a corporation, and a bankruptcy trustee is merely a new form of management. If the power to waive attorney-client privilege remained with the corporation’s directors, it would frustrate the goal of the trustee, to uncover fraud and misappropriated corporate assets. Justice Lewis F. Powell did not participate.

Ohio v. Kovacs

Mon, 05 Jan 2009 17:20:32 +0000

Case Basics

Docket No.

83-1020

Petitioner

Ohio

Petitioner Type

Petitioner

Respondent

Kovacs

Respondent Type

Respondent

Heard By

Burger Court (1981-1986)

Decided By

Burger Court (1981-1986)

Opinion

469 U.S. 274 (1985)

Argued

Wednesday, October 10, 1984

Decided

Wednesday, January 9, 1985

Advocates

David A. Caldwell (On behalf of the Respondents)

E. Dennis Muchnicki (on behalf of Petitioner)

Kathryn A. Oberly (On behalf of the United States Government as amicus curiae)

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for Kovacs, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

NLRB v. Bildisco & Bildisco

Mon, 05 Jan 2009 17:29:08 +0000

Case Basics

Docket No.

82-818

Petitioner

National Labor Relations Board

Petitioner Type

Petitioner

Respondent

Bildisco & Bildisco

Respondent Type

Respondent

Consolidation

No. 82-852

Heard By

Burger Court (1981-1986)

Decided By

Burger Court (1981-1986)

Opinion

465 U.S. 513 (1984)

Argued

Tuesday, October 11, 1983

Decided

Wednesday, February 22, 1984

Advocates

Jack M. Zackin (on behalf of Bildisco and Bildisco)

James R. Zazzali (on behalf of Local 408, IBT, etc)

Lawrence G. Wallace (on behalf of the NLRB)

Facts of the Case

None

Question

None

Conclusion

Decision: 5 votes for Bildisco & Bildisco, 4 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

United States v. Whiting Pools, Inc.

Mon, 05 Jan 2009 17:33:06 +0000

Case Basics

Docket No.

82-215

Petitioner

United States

Petitioner Type

Petitioner

Respondent

Whiting Pools, Inc.

Respondent Type

Respondent

Heard By

Burger Court (1981-1986)

Decided By

Burger Court (1981-1986)

Opinion

462 U.S. 198 (1983)

Argued

Tuesday, April 19, 1983

Decided

Wednesday, June 8, 1983

Advocates

Lloyd H. Relin (on behalf of the Respondent)

Stuart A. Smith (on behalf of the Petitioner)

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for Whiting Pools, Inc., 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

United States v. Security Industrial Bank

Mon, 05 Jan 2009 17:32:52 +0000

Case Basics

Docket No.

81-184

Appellee

Security Industrial Bank

Petitioner Type

Appellee

Appellant

United States

Respondent Type

Appellant

Heard By

Burger Court (1981-1986)

Decided By

Burger Court (1981-1986)

Opinion

459 U.S. 70 (1982)

Argued

Wednesday, October 6, 1982

Decided

Tuesday, November 30, 1982

Advocates

Alan I. Horowitz (on behalf of the Appellant)

Henry F. Field (on behalf of the Appellee)

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for Security Industrial Bank, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Railway Labor Executives' Assn. v. Gibbons

Mon, 05 Jan 2009 17:30:25 +0000

Case Basics

Docket No.

80-415

Appellee

Gibbons

Petitioner Type

Appellee

Appellant

Railway Labor Executives' Assn.

Respondent Type

Appellant

Consolidation

No. 80-1239

Heard By

Burger Court (1981-1986)

Decided By

Burger Court (1981-1986)

Opinion

455 U.S. 457 (1982)

Argued

Wednesday, December 2, 1981

Decided

Tuesday, March 2, 1982

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for Railway Labor Executives' Assn., 0 vote(s) against
Legal provision: Article 3, Section 2, Paragraph 1: Case or Controversy Requirement

None

Brown v. Felsen

Mon, 05 Jan 2009 17:11:58 +0000

Case Basics

Docket No.

78-58

Petitioner

Brown

Petitioner Type

Petitioner

Respondent

Felsen

Respondent Type

Respondent

Heard By

Burger Court (1975-1981)

Decided By

Burger Court (1975-1981)

Opinion

442 U.S. 127 (1979)

Argued

Wednesday, February 21, 1979

Decided

Monday, June 4, 1979

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for Brown, 0 vote(s) against
Legal provision: res judicata

None

Butner v. United States

Mon, 05 Jan 2009 17:11:59 +0000

Case Basics

Docket No.

77-1410

Petitioner

Butner

Petitioner Type

Petitioner

Respondent

United States

Respondent Type

Respondent

Heard By

Burger Court (1975-1981)

Decided By

Burger Court (1975-1981)

Opinion

440 U.S. 48 (1979)

Argued

Monday, November 27, 1978

Decided

Wednesday, February 21, 1979

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for United States, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Otte v. United States

Mon, 05 Jan 2009 16:33:37 +0000

Case Basics

Docket No.

73-375

Petitioner

Otte

Petitioner Type

Petitioner

Respondent

United States

Respondent Type

Respondent

Heard By

Burger Court (1972-1975)

Decided By

Burger Court (1972-1975)

Opinion

419 U.S. 43 (1974)

Argued

Tuesday, October 15, 1974

Decided

Tuesday, November 19, 1974

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for United States, 0 vote(s) against
Legal provision: Internal Revenue Code

None

Baker v. Gold Seal Liquors

Mon, 05 Jan 2009 16:34:28 +0000

Case Basics

Docket No.

73-804

Petitioner

Baker

Petitioner Type

Petitioner

Respondent

Gold Seal Liquors

Respondent Type

Respondent

Heard By

Burger Court (1972-1975)

Decided By

Burger Court (1972-1975)

Opinion

417 U.S. 467 (1974)

Argued

Tuesday, April 23, 1974

Decided

Monday, June 17, 1974

Facts of the Case

None

Question

None

Conclusion

Decision: 8 votes for Baker, 1 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None

Kokoszka v. Belford

Mon, 05 Jan 2009 16:34:41 +0000

Case Basics

Docket No.

73-5265

Petitioner

Kokoszka

Petitioner Type

Petitioner

Respondent

Belford

Respondent Type

Respondent

Heard By

Burger Court (1972-1975)

Decided By

Burger Court (1972-1975)

Opinion

417 U.S. 642 (1974)

Argued

Monday, April 22, 1974

Decided

Wednesday, June 19, 1974

Facts of the Case

None

Question

None

Conclusion

Decision: 9 votes for Belford, 0 vote(s) against
Legal provision: Bankruptcy Code, Bankruptcy Act or Rules, or Bankruptcy Reform Act of 1978

None