Jul14

Holder of long-term debt dealt with under cure-and-maintenance plan did not have to give notice of postpetition legal fees.

by Admin on July 14th, 2008
Posted In: Uncategorized

A creditor holding long-term residential mortgage debt with which a Chapter 13 debtor proposed to deal under the cure-and-maintenance provision of the Code had no obligation to give the debtor notice, or to obtain court approval, of postpetition legal expenses to which it was allegedly entitled under an attorney fee provision in the mortgage document in order to collect such legal expenses not from the bankruptcy estate, but from the debtor after completion of her plan payments and entry of a discharge order. While imposition of such an obligation might make sense as a matter of policy, no such obligation was imposed by the Code provision dealing with the rights of oversecured creditors, by the cure-and-maintenance provision itself, or by Bankruptcy Rule 2016(a).

Jul06

Class certification was warranted in Chapter 7 debtor’s breach of contract and fraud action against mortgage servicing agent.

by Admin on July 6th, 2008
Posted In: Uncategorized

Class certification was warranted in a breach of contract and fraud action brought by a Chapter 7 debtor against a mortgage servicing agent on grounds that the common issues of law or fact would predominate and a class action was a superior method of adjudicating the dispute. The action, which arose from the agent’s alleged misrepresentations regarding the amount of its legal fees incurred in pursuing its stay relief motions, would produce a small monetary return for the individual class members of less than $100, the litigation had been pending before the bankruptcy court for several years, and a fair amount of discovery had already been completed. Litigation in the bankruptcy court was desirable, moreover, since the damages allegedly arose in bankruptcy cases during the resolution of stay relief motions. In addition, issues raised by the fraud claims, including reliance and damages, were determinable on a class-wide basis under Texas law.

Jul06

Right to petition for dissolution of LLC was noneconomic interest included in debtor-member’s Chapter 11 estate.

by Admin on July 6th, 2008
Posted In: Uncategorized

A clause in an operating agreement for a limited liability company (LLC), indicating that a member of the LLC would cease to be a member upon his or her filing of a voluntary dallas bankruptcy petition, did not serve to prevent a founding member of the LLC who subsequently filed for Chapter 11 relief from commencing a proceeding to compel the LLC’s dissolution, upon the theory that, having ceased to be a member with the filing of his Chapter 11 petition, he no longer had standing to seek the LLC’s dissolution. The debtor’s right to petition for dissolution was a noneconomic interest in the LLC, which members of the LLC, by inserting this clause in the operating agreement, could not prevent from being included in the “property of the estate.”

Jul06

Recorded mortgage whose acknowledgement failed to specify date was improperly recorded and provided no notice to trustee.

by Admin on July 6th, 2008
Posted In: Uncategorized

Under Kansas law as predicted by a bankruptcy court in Kansas, a notary’s acknowledgement of a Chapter 7 debtor’s signature on a mortgage that he had executed prepetition was patently defective and incomplete, and was not entitled to be recorded. The certificate of acknowledgement failed to state the date of the notarial act, but indicated only that the notary had affixed his seal on “the day and year last above written” in the mortgage foreclosure dallas, a date which happened to be the mortgage note’s maturity date, a date more than a decade into the future. Accordingly, the mortgage was not entitled to be recorded and was avoidable by the trustee in the exercise of the trustee’s strong-arm powers as a hypothetical lien creditor.

Jul06

Court determines debtors’ state law exemption rights by counting backward in calendar dates from filing of petition.

by Admin on July 6th, 2008
Posted In: Uncategorized

To determine whether Chapter 7 debtors were domiciled in Missouri for the entire 730-day period “immediately preceding the date of the filing” of their dallas bankruptcy lawyer petition, as required for them to claim state law exemptions under Missouri law, the court had to start with the petition date and count backwards, with the date immediately preceding the petition date constituting the first day of this 730-day period and so on. The court could not count backwards from the moment that the bankruptcy petition was filed, such that the 730-day period would extend backwards from the hour and minute that the petition was filed to a time exactly 17,520 (730 x 24) hours earlier, but had to use calendar dates. Such an approach was most consistent with the natural, ordinary meaning of the language of this exemption provision.