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Bankruptcy Law

[09/03] Official Comm. of Unsecured Creditors v. Anderson Senior Living Prop., LLC.
In an appeal from the Bankruptcy Appellate Panel's (BAP) grant of debtors' motion to dismiss as moot pursuant to 11 U.S.C. section 363(m), plaintiffs' appeal of the bankruptcy court's authorization of the sale of debtors' interests in seven co-owned properties as well as the undivided interests of the tenants in common (TIC), is affirmed as the BAP properly determined that section 363(m) moots the appeal because, even though the bankruptcy court approved the sale of the TIC property interests pursuant to section 363(h), the debtors ultimately sold the properties pursuant to section 363(b) and that sale was never stayed.

[09/02] US v. Ritchie Special Cred. Invs., Ltd.
In intervenor's application to intervene in an adversary proceeding initiated by the government pursuant to 18 U.S.C. section 1345 against the alleged author of a Ponzi scheme, the denial of the application is affirmed where: 1) the litigation progressed substantially between the initiation of these proceedings and intervenor's second motion to intervene; and 2) intervenor had knowledge of all the facts surrounding the district court's injunction, and failed to take issue with it when first presented with an opportunity to do so.

[09/02] Ritchie Special Cred. Invs., Ltd. v. US Trustee
In a creditor's objection to the appointment of a bankruptcy trustee, arguing that the trustee did not qualify as a “disinterested person� as required by 11 U.S.C. section 1104(d), the denial of the objection is affirmed where: 1) the bankruptcy court did not abuse its discretion in concluding that the trustee's role and interests as a receiver did not predispose him towards forfeiture or amount to a disqualifying material adverse interest; and 2) there was no abuse of discretion in the bankruptcy court’s determination that creditor failed to show that it would be prejudiced by the trustee's appointment as trustee in the jointly administered estates.

[08/27] Paloian v. Lasalle Bank, N.A.
In a debtor-hospital's trustee's action to recover, as fraudulent conveyances, some loan payments made during the last years before hospital entered bankruptcy, judgment of the district court is vacated and remanded where: 1) LaSalle Bank is an "initial transferee" as an entity that receives funds for use in paying down a loan, or passing money to investors in a pool, is an "initial transferee" even though the recipient is obliged by contract to apply the funds according to a formula; 2) because the hospital was solvent in August 1997, the ensuing months' debt service cannot be recaptured as a fraudulent conveyance; and 3) on remand, the bankruptcy court is instructed to determine whether the transfer of the accounts receivable to MMA Funding was a true sale, such that MMA Funding served as the bankruptcy-proofing intermediary that the lenders desired.

[08/26] In re: Zarnel
In an appeal from a district court's order dismissing a bankruptcy trustee's appeal for lack of standing and in the alternative affirming the bankruptcy court's decision to strike the bankruptcy petitions filed by respondents rather than to dismiss their cases, the order is vacated where: 1) the U.S. Trustee's responsibility to represent and protect the public interest afforded it a substantial interest in, and therefore standing, to proceed with this appeal; 2) the court needed only assure itself that it was deciding a live case or controversy, and Article III jurisdiction existed; and 3) the restrictions of 11 U.S.C. sections 301 and 109(h) were not jurisdictional, but rather elements that must be established to sustain a voluntary bankruptcy proceeding.

[08/23] In re: Raynor
In a Chapter 7 trustee's action to avoid certain transfers that debtor made to his wife, the Bankruptcy Appellate Panel's (BAP) order affirming a stipulated judgment entered by the bankruptcy court, holding that the BAP must defer to the district court's original determination that the cause of action was not time-barred and, pursuant to the law of the case doctrine, declining to revisit the issue, is affirmed where the plain language of 11 U.S.C. section 546 set the statute of limitations period as a full two years, which did not render the claim untimely.

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Property Law & Real Estate

[09/03] Official Comm. of Unsecured Creditors v. Anderson Senior Living Prop., LLC.
In an appeal from the Bankruptcy Appellate Panel's (BAP) grant of debtors' motion to dismiss as moot pursuant to 11 U.S.C. section 363(m), plaintiffs' appeal of the bankruptcy court's authorization of the sale of debtors' interests in seven co-owned properties as well as the undivided interests of the tenants in common (TIC), is affirmed as the BAP properly determined that section 363(m) moots the appeal because, even though the bankruptcy court approved the sale of the TIC property interests pursuant to section 363(h), the debtors ultimately sold the properties pursuant to section 363(b) and that sale was never stayed.

[09/02] Bakalar v. Vavra
In an action seeking a declaration that plaintiff was the owner of a drawing by Egon Schiele, judgment for plaintiff is vacated where: 1) although it is unclear whether a cause of action comparable to the counterclaims of defendants could be successfully brought in Austria, allowing the claims to go forward under New York law was consistent with the principles underlying the decision of the Supreme Court of Austria; and 2) the district judge, by applying Swiss Law, erred in placing the burden of proof on defendants to show that the Nazis looted the drawing.

[09/02] Vanderkous v. Conley
In a trustee's suit seeking to quiet title to certain real property, trial court's finding that the trustee's attempt to dismiss the action was void ab initio, because it was made after trial court had commenced and after it had entered judgment quieting title in trustee and directing him to pay defendant the full market value of the property as compensation for defendant's equitable interest, is affirmed where: 1) the trial court properly set aside trustee's purported dismissal of the action; 2) the court properly ordered the trustee to compensate defendant for her equitable interest in the property when it quieted his title to the garage area; and 3) substantial evidence supports the property's valuation as a conforming legal lot.

[09/01] Gallagher v. Magner
In consolidated actions by several owners and former owners of rental properties in St. Paul, Minnesota, challenging the City of St. Paul's enforcement of its housing code, summary judgment for defendants is affirmed in part where: 1) plaintiffs did not assert a claim under the McDonnell Douglas framework; 2) plaintiffs were not exercising a right under the Fair Housing Act by leasing to racial minorities; and 3) plaintiffs failed to reference a particular section of the St. Paul Code, let alone analyze why that section was vague. However, the order is reversed in part where the city's aggressive enforcement of the Housing Code resulted in a disproportionate adverse effect on racial minorities, particularly African-Americans.

[08/31] Wickens v. Shell Oil Co.
In plaintiffs' suit against Shell Oil under Indiana's Underground Storage Tank Act, claiming that Shell Oil was liable for the contamination on a plot of land where plaintiffs' shoe store was located, district court's grant of most of the plaintiffs' requests for corrective actions costs and attorney's fees is affirmed in part, reversed in part and remanded where: 1) without a better showing from the plaintiffs' attorney, the court will assume that the district court did its job properly when it decided to award $37,443.25 in litigation costs and disbursements; 2) there is no error in ordering Shell to pay for the corrective action costs incurred in May and June 2007; 3) district court did not abuse its discretion in denying the attorney's request for prejudgment interest; 4) district court did not abuse its discretion in denying Shell's Rule 60(b) motion; and 5) district court's judgment is reversed and remanded insofar as it miscalculated when it deducted the attorney's wife's fees from the attorneys' fees award.

[08/31] Colony Cove Properties, LLC. v. City of Carson
In a mobilehome park owner's challenge to a city ordinance specifying conditions permitting conversion of a mobilehome park from landlord ownership to resident ownership, trial court's conclusion that the city's responsibilities when faced with a mobilehome park conversion application were essentially ministerial, in issuing a writ directing the city to vacate the ordinance in its entirety and to vacate an ordinance imposing a moratorium on mobilehome park conversions while the city studied the issue is affirmed in part and reversed in part where: 1) trial court's conclusion that the city's role under section 66427.5 is purely ministerial is incorrect; 2) the ordinance at issue conflicted with section 66427.5 and is therefore invalid; and 3) the issue of the validity of the moratorium was moot at the time the writ was granted.

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