ATexasBankruptcyLawyersBlog

Dealing with mortgage servicers can be frustrating. Sometimes it is difficult or impossible to get a clean chain of title or a good accounting. In a new opinion by Judge Stacey Jernigan, the Court was faced with a request for fees incurred by a chapter 13 debtor's counsel in dealing with two motions for relief from stay over a three year period, one of which was withdrawn and the other one of which was denied for failure to prove standing. Counsel sought to recover fees based on 28 U.S.C. Sec. 1927 and the court's inherent authority.

The Fifth Circuit has upheld a Texas bankruptcy court's order recharacterizing the ostensible debt of a non-insider as equity. Matter of Lothian Oil Incorporated, No. 10-50683 (5th Cir. 8/9/11). Unlike other circuits to consider the issue, the Fifth Circuit relied on Sec. 502(b) and Texas state law rather than the Court's equitable powers under Sec. 105. You can find the opinion here.

The Fifth Circuit has ruled that, under the facts of the specific case, that bidders could recover their costs without a showing of direct benefit to the estate. Matter of ASARCO LLC, No. 10-40930 (5th Cir. 8/16/11). The specific holding was that reimbursement of costs incurred in submitting a bid were governed by the business judgment standard under 11 U.S.C. Sec. 363(b) rather than the benefit to the estate standard under 11 U.S.C. Sec. 503(b).

In an important ruling, the Fifth Circuit Court of Appeals sitting en banc ruled that a debtor's nondisclosure would not bar a trustee from pursuing a large judgment for the benefit of creditors. Reed v. City of Arlington, No. 08-11098 (5th Cir. 8/11/11). The opinion overruled an earlier panel decision. You can read the new opinion here.