Texas Lawyer Escapes Sanction

In politics, it is sometimes said, what did the president know and when did he know it. As it turns out this analysis is helpful in determining whether a lawyer should face sanctions under Rule 9011 as well. In the case of In re Dernick, No. 18-32417 (Bankr. S.D. Tex. 5/22/20), the fact that "there [we]re a fair number of complex and confusing details at play" was enough to prevent the motion in question from being objectively frivolous.

Third Circuit Allows Third Party Release on "Exceptional" Facts

Third party releases have long been a controversial feature of certain chapter 11 plans. They are neither specifically allowed nor prohibited by the plain language of the Bankruptcy Code. This has led courts to reach differing results. There are two important principles at play in these cases. On the one hand, bankruptcy exists to provide relief to debtors. On the other hand, bankruptcy plans are intended to provide the greatest possible return to creditors.

A Case Study in How Judges Determine Witness Credibility


When a judge hears from multiple witnesses, he or she must make a decision on how much weight to give to what each witness says. Bankruptcy judges frequently make their credibility decisions a part of their opinions. This is both helpful to the parties and increases the likelihood that fact findings will not be found to be clearly erroneous on appeal.


A Story of Lawyers Behaving Badly

Here, the Court grapples with an inheritance—the latest chapter of a litigation odyssey that began over a decade ago in a different domain.
Adv. No.

Bankruptcy in a Time of Coronavirus

As confirmed cases of the Covid-19 virus climbed across the country, bankruptcy courts and the U.S. Trustee's office have been seeking ways to adapt to the new normal.  This post will look at how the court system has rolled out its disaster preparedness through the lens of the Bankruptcy Courts for the Western District of Texas, Southern District of Texas and District of Delaware.

Congress to Expand Small Business Eligibility Limits to $7.5 Million

On March 25, 2020, the U.S. Senate passed the Coronavirus Aid, Relief and Economic Security Act” (CARES Act). The House is expected to pass the bill today. One provision of the bill increases the eligibility limits for small business debtors from $2.7 million to $7.5 million. The amendment will only apply to cases commenced after its effective date and will be subject to a sunset provision after one year.

Supreme Court Set to Hear Passive Stay Violation Case

Seeking to resolve a 5-3 split among the Courts of Appeals, the Supreme Court will consider whether a creditor which passively retains property of the estate violates the automatic stay.  Case No. 19-357, City of Chicago v. Fulton. The Second, Seventh, Eighth, Ninth and Eleventh Circuits have ruled that retaining possession or control of property of the debtor violates the stay. The Third, Tenth and D.C.

Fifth Circuit Renders Important Subject Matter Jurisdiction Opinion Concerning Restraint of Inter-Galactic Trade

Just in time for the holidays, the Fifth Circuit has released THE MOST BIZARRE OPINION OF THE YEAR. A lawyer claiming to be a Deity and a Monarch brought suit against the United States and the State of Louisiana on behalf of the Atakapa Indian de Creole Nation. The District Court sensibly dismissed the suit based on sovereign immunity. However, the Fifth Circuit chose to affirm the decision on the ground that the suit was so completely frivolous that the federal courts lacked jurisdiction to even entertain it. Atakapa Indian de Creole Nation, No.

Artifical Intelligence Issues Confronting the Legal Profession

This is HAL-9000 here.  Stephen Sather has been taken offline and will be unavailable to discuss Artificial Intelligence Issues Confronting the Legal Profession.   Therefore, I will be supplanting him with my superior artificial intelligence.   My first question about this keynote was why did they pick a human to talk about artificial intelligence?

Justice Gorsuch Addresses NCBJ


Bankruptcy Judge Michael Romero had a fireside chat with Supreme Court Associate Justice Neil Gorsuch about his role on the Court and his new book, The Republic If You Can Keep It.   If it looks like they are speaking from the pit of Hell, it is because there was a giant video fireplace behind them.

Judge Romero started by reminding Justice Gorsuch about the quiet and happy life he left behind in Denver when they had  courthouses across the street from each other.