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2008 NORTON BANKRUPTCY LAW SEMINAR MATERIALS

Appellate Court Decisions Related
To Bankruptcy Cases

By William Norton, III

A. CASES INVOLVING BANKRUPTCY CODE SECTIONS

1. 101(31)(A) Insider

Rupp v. United Security Bank (In re Kunz), 489 F.3d 1072 (10th Cir. June 5, 2007) (In preference action, "director emeritus" is not an insider for purposes of S 101(31)(A).)

2. 101(51B) Single Asset Real Estate

In re Scotia Pacific Co., LLC, 508 F.3d 214 (5th Cir. Nov. 13, 2007) (Debtor was not a single asset real estate under S 101(51B) because substantial business other than the operation of the real estate occurred on the property. The debtor had more than 60 employees in its timber operation. Sophisticated operations took place, such as planning, growing and maintaining the timber as well as building and maintenance of roads on the property.)

3. 105(a) Substantive Consolidation

In the Matter of AMCO Insurance, 444 F.3d 690 (5th Cir. March 31, 2006) (Bankruptcy Court erred in ordering substantive consolidation of debtor and non-debtor nunc pro tunc, where Bankruptcy Court had previously authorized creditor to pursue litigation with non-debtor in state court and consolidation would void the litigation.)

4. 105(a) Equity Power

In re Excel Innovations, Inc., 502 F.3d 1086 (9th Cir. Sept. 7, 2007) (When a debtor applies for a preliminary injunction under S 105(a) to stay a proceeding in which the debtor is not a party, the bankruptcy court must balance the debtor's likelihood of success in reorganization against the relative hardship to the parties and consider the public interest. Consideration of whether the debtor has an inadequate remedy at law or would suffer irreparable harm is unnecessary.)

In re Official Cmte. of Unsecured Creditors, 453 F.3d 225 (4th Cir. June 27, 2006) (Bankruptcy court has power to recharacterize an allowed claim as equity rather than debt, even in the absence of inequitable conduct by the claimant.)

5. 106(a) Sovereign Immunity

In re Soileau, 488 F.3d 302 (5th Cir. May 22, 2007) (State may not avoid, on grounds of sovereign immunity alone, discharge of debtor's forfeiture judgment incurred as surety on bail bonds.)

 

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