All items from A Texas Bankruptcy Lawyer's Blog

  Larry E. Kelly who served as U.S. Bankruptcy Judge for the Western District of Texas from 1986-2007, passed away on March 19, 2014.    Chief Bankruptcy Judge Ronald B.

Posted 4 weeks 3 days ago

Bankruptcy sometimes provides a window into unfamiliar worlds.   The recent chapter 15 filing by MtGox Co., Ltd. contains an interesting explanation of the bitcoin phenomenon as well as Japanese involvency proceedures.   In re MtGox Co., Ltd., No. 14-31229 (Bankr. N.D. Tx.).   Here are a few nuggets that I picked up from the initial filings.  

Posted 5 weeks 2 days ago

Expanding upon its decision in Matter of Zibman, 268 F.3d 298 (5th Cir. 2001), the Fifth Circuit has ruled that the proceeds from sale of a Texas homestead lose their exempt character if they are not reinvested within six months--even when the sale takes place post-petition.   Viegelahn v. Frost (In re Frost), No. 12-50811 (5th Cir. 3/5/14).    The opinion can be found here.   The opinion creates a malpractice trap and arguably conflicts with this week's Supreme Court decision in Law v. Siegel.  
The Problem

Posted 6 weeks 1 day ago

In a unanimous decision, the Supreme Court struck down the Ninth Circuit’s imposition of an equitable surcharge against a debtor’s exempt property in Law v. Siegel, No. 12-5196 (3/4/14).  The opinion can be found here.    The opinion by Justice Scalia represents a limitation on the equitable powers of bankruptcy courts to override statutory protections, even when a debtor has behaved badly.   The case is a counterpoint to Marrama v. Citizen’s Bank, 127 S.Ct. 1105 (2007) which had read an equitable good faith requirement into the absolute right to convert a case.
What Happened

Posted 6 weeks 4 days ago

Recently, the Fifth Circuit has authored two opinions in which it opined that parties could not consent to entry of a final order in a case governed by Stern v. Marshall.   In one of these cases, BP RE, LP v. RML Waxahachise Dodge, LLC, 735 F.3d 279 (5th Cir. 2013), the plaintiff, having filed suit in bankruptcy court, invoked Stern v. Marshall after losing on the merits.    The previously prevailing defendants sought rehearing en banc in light of the conflict between the Fifth Circuit decision allowing consent to trial by a Magistrate Judge and BP RE.   Today the Fifth Circuit voted by the narrowest of margins to decline rehearing.    Six judges, including Chief Judge Stewart, would have granted rehearing en banc, while eight judges voted no.   You can find the opinion here.

Posted 7 weeks 2 days ago

Some time ago, I wrote about John Gellene, the silk-stocking lawyer who went to prison for failure to disclose his connections in a high dollar case.   (The article has received 2,423 page views making one of the most read postings from this blog).    I described his situation as what it must feel like to be struck by lightning, that is, a random and thoroughly unexpected reversal of fortune.   Now it looks like Texas attorney Calvin Braun is in the path of the lightning bolt, although in a much smaller case.   The case is an object lesson in the importance of disclosures in bankruptcy and the virtually limitless discretion of the prosecutor.

Posted 7 weeks 2 days ago

This is an article that I did for this year's Advanced Consumer Bankruptcy Course.   I have attempted to summarize all of the published decisions on dischargeability from the Supreme Court, Fifth Circuit, Texas District Courts and Texas Bankruptcy Courts (since 2009 for the Bankruptcy Courts).   
Hopefully you will find this helpful.   I have placed an (*) by the cases that I have previously blogged about.   You can click on the title of the case to get to the prior blog post. 
Supreme Court Cases:

Posted 7 weeks 4 days ago

Judge Tony Davis has authored an opinion which should be recommended reading for anyone litigating preference issues.   The opinion encompasses the court’s rulings on both summary judgment and trial on the merits and touches on both procedural and substantive issues.   Ciesla v. Harney Management Partners (In re KLN Steel Products Co.), No. 13-1013 (Bankr. W.D. Tex. 2/18/14).   The opinion can be found here.
What Happened

Posted 7 weeks 5 days ago

For chapter 11 debtor's lawyers, Matter of Pro-Snax Distributors, Inc., 157 F.3d 414 (5th Cir. 1998) is like the sword of Damocles--constantly hanging over counsel's head and threatening to deny compensation when a case goes south.   While 11 U.S.C. Sec. 330(a)(3) makes results one of several factors to consider in awarding compensation, Pro-Snax makes "identifiable, tangible and material" results a pre-requisite to getting paid.    
While several Bankruptcy Judges have pushed back against Pro-Snax, there has not been a publi-shed decision from the circuit construing Pro-Snax since it came down.   However, that may change soon.

Posted 9 weeks 2 days ago

After the PACER  and CM/ECF outage on Friday January 24, I asked the PACER service center if they had any comment.   They were kind enough to respond on January 27.   Here is the latest information: 

Posted 11 weeks 5 days ago