Justia U.S. 11th Circuit Court of Appeals Opinion Summaries

Debtor purchased a car from TCL Auto Sales and financed the purchase through Acorn. Debtor then filed for bankruptcy on July 21, 2010. Acorn did not perfect its security interest in the vehicle until July 27, 2010. The court concluded that, where, as here, a Chapter 13 trustee was aware of defects in a creditor's security interest well before confirmation, and chose not to object to the creditor's claim, and affirmatively recommended to the bankruptcy court that it confirm a proposed plan in which the creditor is given a secured position, the bankruptcy court's confirmation of the plan binds the trustee and precluded a post-confirmation avoidance action against the creditor. Accordingly, the court affirmed the decision of the bankruptcy court and the district court granting summary judgment in favor of Acorn. View "Hope v. Acorn Financial Inc" on Justia Law

Chapter 7 debtor appealed the district court's reversal of the bankruptcy court's order denying relief from the automatic stay to the Disciplinary Board. Debtor was disbarred from the practice of law and the Disciplinary Board later filed a complaint in state court seeking to enjoin debtor from the unlawful practice of law and to appoint a conservator to take possession of debtor's client files and take other steps to protect his clients. At issue in this appeal was whether a debt's dischargeability in bankruptcy proceedings - standing alone - constituted "cause" sufficient for a bankruptcy court to provide relief from the automatic stay provisions of 11 U.S.C. 362(a). The court affirmed in part and reversed in part, concluding that the debt was nondischargeable but, in this instance, the district court erroneously relied solely on the debt's dischargeability status in its ruling on the "cause" issue. Accordingly, the court vacated and remanded in part for further proceedings. View "Disciplinary Bd. of the Supreme Court of PA v. Feingold" on Justia Law

The bankruptcy court held that appellants violated 11 U.S.C. 527 and 528(a)(1), Florida Rules of Professional Conduct 4-3.3(a)(1), and 4-8.4(c), and possibly 18 U.S.C. 157(3) by helping appellee file an "ostensibly pro se [Voluntary Chapter 13] bankruptcy petition in bad faith to stall a foreclosure sale." The bankruptcy court held that appellants prepared the Chapter 13 petition as ghostwriters and consequently made false and fraudulent representations to the court. The court concluded that the bankruptcy court erred in its determination that appellants committed fraud when they contracted with appellee to provide foreclosure defense services, took appellee's money, had appellee sign documents, and then filed an ostensibly "pro se," bad faith bankruptcy petition on appellee's behalf. At bottom, the court concluded that appellants did not "draft" a document within the scope of Rule 4-1.2(c) and did not commit fraud in violation of the Florida Rules of Professional Conduct or 18 U.S.C. 157(3). Accordingly, the court reversed and remanded. View "Torrens, et al. v. Hood, Jr." on Justia Law

This case involved the allocation of tax refunds pursuant to a Tax Sharing Agreement (TSA) between two members of a Consolidated Group, the parent corporation (the Holding Company), and one of its subsidiaries (the Bank), the principal operating entity for the Consolidated Group. At issue on appeal was whether the Bankruptcy Court erred in declaring the tax refunds an asset of the bankruptcy estate. The court concluded that the relationship between the Holding Company and the Bank is not a debtor-creditor relationship; when the Holding Company received the tax refunds it held the funds intact - as if in escrow - for the benefit of the Bank and thus the remaining members of the Consolidated Group; the parties intended that the Holding Company would promptly forward the refunds to the Bank so that the Bank could, in turn, forward them on to the Group's members; and in the Bank's hands, the tax refunds occupied the same status as they did in the Holding Company's hands - they were tax refunds for distribution in accordance with the TSA. Accordingly, the court reversed the Bankruptcy Court's judgment and directed that court to vacate it decision declaring the tax refunds the property of the bankruptcy estate and to instruct the Holding Company to forward the funds held in escrow to the FDIC, as receiver, for distribution to the members of the Group in accordance with the TSA. View "Zucker, et al. v. FDIC" on Justia Law

Plaintiff voluntarily filed for Chapter 7 bankruptcy seeking to discharge debts he identified as primarily business related. On appeal, plaintiff challenged the district court's order affirming the bankruptcy court's dismissal of his petition for bad faith under 11 U.S.C. 707(a). The court concluded that, based on the ordinary meaning of the statutory language and relevant principles of statutory construction, the power to dismiss "for cause" in section 707(a) included the power to involuntarily dismiss a Chapter 7 case based on prepetition bad faith. Under the totality of the circumstances, the bankruptcy court did not clearly err in finding that plaintiff filed his Chapter 7 petition in bad faith. Accordingly, the court affirmed the judgment, concluding that the bankruptcy court did not abuse its discretion in dismissing the petition. View "Piazza v. Nueterra Healthcare Physical Therapy, LLC" on Justia Law

Defendant, a lawyer, deposited lucre in his law firm's bank accounts after he was convicted of criminal activity, where it was commingled with the firm's receipts from legitimate clients. At issue was whether the money in the bank accounts at the time defendant was charged was subject to forfeiture. The sheer volume of financial information available and required to separate tainted from untainted monies in this case lead the court to apply the Third Circuit's rule in United States v. Voigt; in this case, the district court erred in ordering forfeiture of the funds as proceeds; consequently, all proceedings the court held subsequent to the imposition of defendant's sentence must be vacated; the court's conclusion did not foreclose the Government's attempt to forfeit a property interest held by defendant individually; and, after addressing the parties' remaining arguments, the court reversed and remanded the judgment of the district court. View "United States v. Rothstein" on Justia Law

The bankruptcy trustee of Northlake, a Georgia corporation, filed suit against defendant, a shareholder of Northlake, alleging that a 2006 Transfer was fraudulent. The facts raised in the complaint and its exhibits, taken as true, were sufficient to conclude that Northlake's benefits under the Shareholders Agreement were reasonably equivalent exchange for the 2006 Transfer. Because the complaint contained no allegations indicating why these benefits did not constitute a reasonably equivalent exchange for the 2006 Transfer, the court had no ground to conclude that they did not. Accordingly, the court affirmed the judgment of the district court. View "Crumpton v. Stephen" on Justia Law

This case stemmed from the fallout from the failure of the Fountainebleau development in Las Vegas, Nevada and involved the contract dispute between the Term Lenders, the Revolving Lenders, and the Borrowers. The district court dismissed the Term Lenders' claims against the Revolving Lenders, finding that the Term Lenders lacked standing to sue. The district court also denied the Borrowers' motion for summary judgment against the Revolving Lenders, rejecting the Borrowers' argument that the Revolving Lenders had breached the contract as a matter of law and alternatively finding there were material issues of fact about whether the Revolving Lenders breached the contract. The court held that the Term Lenders lacked standing to enforce section 2.1(c) of the Credit Agreement promise and affirmed the district court's dismissal of the breach of contract claims. The court could not conclude as a matter of law that the Revolving Lenders broke their promise to fund the Borrowers under section 2 of the Credit Agreement and affirmed the district court's denial of the Borrowers' request for turnover of the loan proceeds and specific performance. View "Avenue CLO Fund, Ltd., et al v. Bank of America, NA, et al" on Justia Law

Debtors filed for chapter 7 bankruptcy in January 2010 and the bankruptcy administrator moved to dismiss the case or convert it to a chapter 13 on the ground that debtors' bankruptcy petition constituted an abuse of the chapter 7 process. The court held that a debtor's ability to pay his or her debts may be taken into account under the totality-of-the-circumstances test set forth in 11 U.S.C. 707(b)(3)(B). Accordingly, the court affirmed the district court's rejection of debtors' argument that the ability to pay could not be considered as part of the totality of the circumstances. View "Witcher, et al v. Early, III" on Justia Law

This appeal arose out of a bankruptcy court proceeding involving the Asbestos Settlement Trust, which was created in bankruptcy court in 1996 to pay asbestos mass tort claims for both bodily injury and property damage against Celotex Corporation and Carey Canada, Inc. Because neither the district court nor the bankruptcy court order was a final judgment or order and because neither order fell within any of the exceptions to this circuit's final judgment rule, the court lacked jurisdiction to review these orders. Accordingly, the court dismissed the appeal. View "Michigan State University, et al v. Abestos Settlement Trust" on Justia Law