Turnover

Trustee Who Sought Turnover of Contract Receivable Bound by Arbitration Clause

03/10/22

A trustee who sought "turnover" of amounts owed under a construction contract had an arbitration clause in that contract enforced against him. The Bankruptcy Court found that the bankruptcy exception to enforcement of an arbitration clause was narrow and did not apply to a construction dispute. Satija v.  Kella (In re Davila General Contractors, LLC), Adv. No. 21-1047 (Bankr. W.D. Tex. 3/9/22). The order can be found on CM/ECF at Docket #23.

What Happened

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Supreme Court Rules That Passive Retention Does Not Violate Stay

01/14/21

 The Supreme Court decided that a creditor which passively retains possession of estate property does not "exercise control" over such property in violation of 11 U.S.C. Sec. 362(a)(3). The Court viewed the word "exercise" to require active measures.  Case No. 19-357, Chicago v. Fulton (1/14/21), which can be found here.

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Supreme Court Set to Hear Passive Stay Violation Case

12/29/19
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.
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The Intersection of the SCA and Bankruptcy Code

11/14/16

In a lengthy opinion published November 7, 2016, Judge Sontchi of the Delaware Bankruptcy Court provided a thorough analysis of the interaction between the Stored Communications Act (“SCA”) and the Bankruptcy Code.  Judge Sontchi’s opinion is available here (the “Opinion”).  The Opinion was issued in the Chapter 15 case In re Irish Bank Resolution Corporation Limited, Case No. 13-12159.

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IPC International: Transfer of Venue Granted in Adversary Proceeding

11/08/14

Any defendant to a bankruptcy adversary proceeding seeking to transfer venue of their case should read the recent opinion dated November 3, 2014, in which the Honorable Mary F. Walrath granted Defendant’s motion to transfer venue in the case styled as:

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Debtor’s Apparent Draining of Bank Accounts Days Before Filing Chapter 7 Petition Leads To Turnover Order And Objection To Discharge

08/24/13

Bankruptcy lawyers regularly caution debtors to avoid unusual financial transactions, including credit card charges, cash withdrawals, and the like, prior to filing their case.  This is a case in which a pro se debtor withdrew several thousand dollars in the week before filing and got caught.  In addition, Debtor also requested, and initially received, approval for a waiver of her filing fee because she appeared destitute.  In re Ricks, Ch. 7 Case No. 13-60100, 2013 Bankr. LEXIS 3355 (Bankr. S.D. Ga.

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Debtor’s Apparent Draining of Bank Accounts Days Before Filing Chapter 7 Petition Leads To Turnover Order And Objection To Discharge

08/24/13

Bankruptcy lawyers regularly caution debtors to avoid unusual financial transactions, including credit card charges, cash withdrawals, and the like, prior to filing their case.  This is a case in which a pro se debtor withdrew several thousand dollars in the week before filing and got caught.  In addition, Debtor also requested, and initially received, approval for a waiver of her filing fee because she appeared destitute.  In re Ricks, Ch. 7 Case No. 13-60100, 2013 Bankr. LEXIS 3355 (Bankr. S.D. Ga.

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Court Orders Turnover of Attorney Files in Billion Dollar Case

08/13/11
Attorneys are entrusted with a lot of sensitive information. The attorney-client privilege exists to allow clients to speak candidly with their attorneys. However, when the same attorney represents multiple parties, the privilege may not be so absolute. In the case of In re Crescent Resources, LLC, No. 09-11507 (Bankr. W.D. Tex. 7/22/11), Bankruptcy Judge Craig Gargotta was asked to decide who could access the attorney files in a billion dollar dispute.
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A New Kind of Tax Shelter That Also Doesn’t Work, and Why Do Molehills Turn Into Mountains?

05/13/07

James and Beverly Nichols filed their 2001 federal income tax return on January 20, 2002. The return showed that they were entitled to a refund in the amount of $2,231.57. They checked the box on their return, making the irrevocable election to apply that amount to payment of future taxes, pursuant to 26 U.S.C. § 6513(d). Sixteen days later, the Nichols filed their chapter 7 petition.

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A New Kind of Tax Shelter That Also Doesn’t Work, and Why Do Molehills Turn Into Mountains?

05/13/07

James and Beverly Nichols filed their 2001 federal income tax return on January 20, 2002. The return showed that they were entitled to a refund in the amount of $2,231.57. They checked the box on their return, making the irrevocable election to apply that amount to payment of future taxes, pursuant to 26 U.S.C. § 6513(d). Sixteen days later, the Nichols filed their chapter 7 petition.

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