Bankruptcy Blogs

In the previous post, I commented on In re Adbox, Inc., 2007 WL 1584582 (9th Cir. June 4, 2007), a case which explains the maybe not so obvious – why can’t creditors counterclaim in an avoidance action and offset their claims against their disgorgement liability?

If you have defended a few preference actions, I’ll bet that you’ve heard this one from your client more than once: “Can I countersue them for what they owe me?" The obvious (to a bankruptcy lawyer) and correct response is “no,” but you might not have been 100% glib if called upon to explain why. Now the Ninth Circuit has come to your rescue, and you can just say “In re Adbox, Inc., 2007 WL 1584582 (9th Cir. June 4, 2007).

Bankruptcy Judge Lee of the Eastern District of California probably doesn’t think that it should be necessary to remind litigants that a personal injury plaintiff need not obtain relief from the post-discharge injunction in order to commence or continue a lawsuit against the debtor, so long as it is clear that the plaintiff will resort only to insurance coverage to pay the claim.

Bankruptcy Judge Jury of the Central District has joined the majority of courts across the land in holding that a chapter 7 debtor may deduct, for purposes of means testing, expenses which the debtor has sworn elsewhere in her bankruptcy papers she has no intention of paying. The case is In re Wilkins, 2007 WL 1933591 (Bankr. C.D.Cal.).

We all know that per 11 U.S.C. § 303(i), when an involuntary bankruptcy petition is unsuccessful, the court may grant judgment against the petitioning creditors for attorney fees, and may also award damages and punitive damages if the petition was filed in bad faith. The Bankruptcy Appellate Panel has sharpened those tools in a recent decision: In re Macke International Trade, Inc., 2007 WL 1845519 (Bankr. App. 9th Cir. June 8, 2007).