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Case Summaries

Bankruptcy Law

[02/02] Gentry v. Siegel
In bankruptcy proceedings in which former employees of the debtor filed claims for unpaid overtime wages, the district court's judgment affirming the bankruptcy court's denial of a Rule 9014 motion and its refusal to allow the claimants to pursue class actions is affirmed, where: 1) the bankruptcy court was within its discretion to rule that the bankruptcy process would provide a process superior to the class action process for resolving the claims of former employees; 2) notice of the bankruptcy process to the named claimants was not constitutionally deficient; and 3) with respect to unnamed claimants, the named claimants lacked standing to challenge the notice.

[01/30] Matter of Thorpe Insulation Co.
In Chapter 11 bankruptcy proceedings, the district court's affirmance of the bankruptcy court's orders denying a creditor's motion to compel arbitration and disallowing its claim is affirmed, where: 1) the resolution of the creditor's claim was a core matter in the bankruptcy; 2) the bankruptcy court did not abuse its discretion in denying the creditor's motion to compel arbitration; 3) the bankruptcy court did not abuse its discretion by declining to give the creditor further opportunity for discovery; 4) the creditor's claim was properly disallowed because because the debtor's covenants in a settlement agreement were purported prepetition waivers of the protections of the Bankruptcy Code, which need not be permitted.

[01/27] Matter of Meruelo Maddux Properties, Inc.
In Chapter 11 bankruptcy proceedings involving the question whether the debtor was subject to the single asset real estate provisions of the Bankruptcy Code, the district court's holding that the single asset real estate provisions applied is affirmed, where: 1) the debtor, which existed solely to operate a 92-unit apartment complex, could be characterized as a single asset real estate debtor under the Bankruptcy Code; 2) the plain language of the Code gives no basis for a "whole business enterprise" exception to single asset real estate debtor status that would allow the court to consider parent corporation and sister subsidiaries; and 3) the district court did not err in its approach to granting relief from the automatic stay by leaving questions about whether the debtor timely took timely corrective action to the bankruptcy court in the first instance.

[01/25] Flores v. Kmart Corp.
In a wrongful death action brought against a corporation that had filed for Chapter 11 bankruptcy pursuant to which a bankruptcy court had entered an order confirming a reorganization plan and discharging all known and unknown claims against the corporation, the trial court's demurrer dismissal of the complaint is reversed, where on the limited record of bankruptcy proceedings provided by the corporation, and consistent with Fourteenth Amendment due process principles, the corporation failed to demonstrate, at the demurrer stage, that the approval of the reorganization plan barred all of the plaintiffs' claims.

[01/24] In the Matter of Thorpe Insulation Co.
In a bankruptcy case in which several insurance companies that did not reach settlements with the debtors were not allowed to challenge the Chapter 11 reorganization plan, the district court order issuing and affirming the plan is reversed with instructions on remand, where: 1) the appeal was not equitably moot; 2) the appellants met statutory, constitutional, and prudential standing requirements; 3) the appellants had standing in bankruptcy court to object to confirmation of the plan; and 4) anti-assignment provisions contained in contracts between the appellants and debtors were preempted by federal bankruptcy law.

[01/06] Vegas Diamond Properties, LLC v. FDIC
In an appeal from a judgment of the district court dissolving a Temporary Restraining Order on the ground that the anti-injunction provision of the Financial Institutions Reform, Recovery and Enforcement Act precluded it from enjoining the FDIC from conducting a trustee's sale of certain real properties, appeal is dismissed as moot where the subject properties were sold prior to appeal.

[01/06] DiVittorio v. HSBC Bank USA, NA
In an appeal from a judgment of the district court upholding the bankruptcy court's dismissal of plaintiff's truth-in-lending complaint for rescission, Mass. Gen. Laws ch. 140D, section 10, judgment is affirmed where the complaint failed to state a claim and, alternatively, because plaintiff knowingly and voluntarily waived any rights to rescission.

[12/30] Payne v. Lampe
In an appeal from an order of the district court affirming the Bankruptcy Court's order dismissing an action against the former custodian for the shares owned by a minor, order is vacated where defendant-custodian breached his fiduciary duties when he secured and retained an amount in partial satisfaction of a judgment that he obtained against a family business of which he was a director and in which he and the minor-beneficiary were the shareholders of record.

[12/29] In Re: Nortel Networks, Inc.
In an appeal from a judgment of the district court upholding the bankruptcy court's enforcement of a Section 362(b)(4) automatic stay against appellants, judgment is affirmed where appellants failed to show that they fall within the police power exception to the stay.

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