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2014 NORTON BANKRUPTCY LAW SEMINAR MATERIALS

RECENT CHAPTER 11 BANKRUPTCY OPINIONS (2014)

By William L. Norton III

their collective bargaining agreement, pursuant to the debtor's last offer to the union employees prior to reaching an impasse in negotiating a new collective bargaining agreement. The court disallowed the claims because they asserted claims that could arguably be subject to the NLRA. The court relied on San Diego Building Trades Council v. Garmon, 359 U.S. 236 (1959) to determine that the debtor, as the party asserting preemption, sufficiently showed that their interpretation of the NLRA was not plainly contrary to its language, that such an interpretation had not been rejected by courts or the NLRB, and that the NLRB could reasonably uphold such an interpretation.

viii. In re 1555 Wabash LLC, 493 B.R. 756 (Bankr. N.D. Ill. 2013)

Issue: Whether an objection to a proof of claim based on a right to a setoff for various reasons should be sustained?

Holding: The bankruptcy court held that the objection should be sustained in part and overruled in part. After confirmation of the debtor's plan, whereby all the debtor's assets were transferred to a lender who was to implement the plan, the lender objected to a claim filed by a construction subcontractor for the unpaid portion of a contract for cement work on the debtor's building. The lender claimed the subcontractor did not complete its work and that the work completed was defective, entitling the lender to a setoff. The court weighed the evidence, finding at most a right to a $40,000 setoff. The lender next claimed that it was entitled to setoff in the amount of debtor's settlement with several sub-subcontractors that the subcontractor was to pay. The court found the lender's evidence lacking to substantiate the amounts of the settlements, and so it relied on the amounts of the subcontractor to determine the amounts to setoff. The subcontractor also asserted that $115,000 of escrowed funds was due to be returned to it. However, the court did not allow the subcontractor to recover the escrowed funds because the subcontractor was aware of its right to such funds prior to the bar date but failed to file a proof of claim for those funds. Lastly, the court rejected the subcontractor's argument that the lender had to pay the subcontractor's attorney fees based on the state's mechanic's lien statute because the statute expressly required only the owner that contracted for improvements to pay such fees. The court concluded that of the subcontractor's original $398,937 claim, it would allow only $79,282.31.

ix. In re AMR Corporation, 492 B.R. 660 (Bankr. S.D.N.Y. 2013)

Issue: Whether a creditor filing a late proof of claim rebutted the presumption that notice of the claims bar date that was properly addressed and mailed was received by the creditor and its attorneys.

Holding: The bankruptcy court held that the creditor did not rebut the presumption of receipt of notice of the claims bar date that was properly addressed and mailed to the creditor and its attorneys. The creditor in question moved the court to order its late proof of claim be deemed timely filed because of the fact that it did not receive actual notice of the claims bar date.

©2014 William L. Norton III

 

 

 

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