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2008 NORTON BANKRUPTCY LAW SEMINAR MATERIALS

Appellate Court Decisions Related
To Bankruptcy Cases

By William Norton, III

court action that was property of the estate and had been sold post-petition to another party. Debtor's challenge to the bankruptcy court's order allowing the sale was moot under S 363(m) because the debtor did not seek a stay of the order and the sale had been effectuated. Also, the injunction did not violate the Anti-Injunction Act because S 105 is an express authorization by Congress allowing bankruptcy courts to enjoin state court proceedings.)

Suter v. Goedert, 504 F.3d 982 (9th Cir. Oct. 1, 2007) (District court erred in dismissing as moot debtor's appeal of bankruptcy court order permitting trustee to sell debtors' interest in legal malpractice lawsuit. Trustee sold the lawsuit to the attorneys accused of malpractice, and the bankruptcy court denied debtors' request to stay the sale. The attorneys dismissed the malpractice lawsuit, which was then pending before the Nevada Supreme Court. On the appeal of the sale order, the district court erred when it did not require the attorneys to prove that the debtors could not obtain relief from the Nevada court. Under Nevada procedure, the debtors would have an extraordinary writ available to them under which the Nevada court might reinstate the appeal of the malpractice lawsuit.)

In re Rare Earth Minerals, 445 F.3d 359 (4th Cir. Apr 18, 2006) (Appeal of assumption and sale of oil and gas lease was moot pursuant to S 363(m) after sale to good-faith purchaser and failure of appellant to obtain stay. Mootness was not defeated by appellant's claim that lease was not property of the estate pursuant to state law, or by appellant's late-raised claim that purchase was not in good faith due to prior recorded interests in lease.)

27. 365(a) Executory Contracts -- Assumption

In re Johnson, 501 F.3d 1163 (10th Cir. Aug. 28, 2007) (Automobile retail installment contract was not an executory contract. Debtor's sole obligation to tender payments and retailer's sole obligation to release its lien when handing over vehicle title are insufficient to classify the sales contract as executory.)

Dick v Conseco, Inc., 458 F.3d 573 (7th Cir. August 11, 2006) (Debtor could terminate CEO's employment contract upon its bankruptcy pursuant to ipso facto clause. Section 365(e)(1) prohibition of bankruptcy-triggered terminations of executory contracts did not apply, because the contract was not an executory agreement pursuant to Indiana law.)

In re United Air Lines, Inc., 453 F.3d 463 (7th Cir. July 6, 2006) (Because bond-related obligations in UAL's ground lease at the Denver International Airport could not be severed from the ground lease pursuant to Colorado

 

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