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THE CONSUMER BANKRUPTCY LETTER |
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In This Issue:
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December 6, 2004
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ACADEMY NEXT STOP - TEXAS!
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PENDING EVENTS, SEMINARS & CLE
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HEADS-UP ON RECENT CASES
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WOMAN CHARGED WITH FRAUD
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JUSTICES SAY NO NEED TO SPLIT 9TH CIRCUIT
The U.S. Court of Appeals for the 9th Circuit is the largest and most diverse federal circuit court, encompassing both Silicon Valley and Hollywood as well as the wilds of Idaho, Montana, and Nevada. Right before the Nov. 2 election, the House of Representatives approved an amendment offered by Rep. Mike Simpson of Idaho to split the 9th Circuit into three smaller circuits. In an op-ed in The Recorder, Ninth Circuit Justices Alex Kozinski and Sidney Thomas argue that such a split is unnecessary, and that the costs of the spilt, $130 million upfront and $22 million each year, are too high. Governor Arnold Schwarzenegger as well as Washington and Arizona Governors Gary Locke and Janet Napolitano oppose the split. The American Bar Association, Federal Bar Association, and many state bars are also against the 9th Circuit split.
SOURCE: Commercial Law League of America CLLA.org
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WOMAN CHARGED WITH FRAUD FOR DRAFTING FALSE BANKRUPTCY COURT ORDER
EAST ST. LOUIS - An Edwardsville woman has been charged with bankruptcy fraud after prosecutors got a whiff of a business that pumps waste out of portable toilets.
Lewis bought an F-550 pumper truck in April 2000 for $40,000 and financed it through Fairville, a finance company in Chaddsford, Pa. But Royal Thrones' business began to falter and filed for bankruptcy in 2001. Under the reorganization, the company was forced to repay creditors in monthly installments.
The bankruptcy case was later dropped because Royal Thrones failed to make the required payments. Once the bankruptcy protection was lifted, Fairville told Lewis the finance company intended to repossess the waste pumper.
Lewis then created a fraudulent bankruptcy court order that said Royal Thrones should be allowed to keep the pumper truck and prohibited Fairville from repossessing the truck, prosecutors stated.
According to court documents, Lewis then faxed the false documents to lawyers for the finance company, who got suspicious and took the documents to the East St. Louis bankruptcy court and discovered the order wasn't valid.
SOURCE: Beth Hundsdorfer
Belleville News Democrat
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SUPREME COURT RULES TILA CAPS DAMAGES AN INDIVIDUAL MAY RECOVER
On Tuesday, November 30, The Supreme Court held that the most recent changes to the Truth in Lending Act (“TILA”) capped the damages an individual could recover for violations of TILA prescriptions governing consumer loans, contrary to the language of TILA.
The Supreme Court held that the most recent changes to the Truth in Lending Act (“TILA”) capped the damages an individual could recover for violations of TILA prescriptions governing consumer loans, contrary to the language of TILA.
Several Circuit Courts had interpreted new language in TILA to state that damages to personal-property loans should be twice the amount of the finance charge with no limitation, while closed-end mortgages were subject to a $200 minimum and $2,000 maximum.
KOONS BUICK PONTIAC GMC, INC. v. NIGH
CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
November 30, 2004
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FRAUD FINDING IN STATE COURT IS RES JUDICATA IN BANKRUPTCY COURT
Where a prepetition State court fraudulent transfer judgment found, by clear and convincing evidence, that a transferee under UFTA's actual fraud provisions for "willful conduct and fraud" and imposed punitive damages, that judgment was entitled to collateral estoppel to establish liability in a later 523(a)(6) dischargeability action in the transferee/debtor's bankruptcy.
In re Shore (10th Cir. 2004)
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PLAINTIFF IN SUIT FOR VIOLATION OF FAIR CREDIT REPORTING ACT MUST PROVE DAMAGES
To prevail against a credit reporting agency on an FCRA claim based upon an inaccurate report of a bankruptcy filing, an individual must prove damages (e.g. a denial of credit) after he notified the credit reporting agency of the error. A denial of credit arising before such notification is not damages under the FCRA.
Sarver v. Experian Information Solutions (7th Cir. 2004)
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CLAIMED HOTEL EXPENSE OF $770 IN FEE APPLICATION IS DISALLOWED
A one-night New York City hotel expense reimbursement request of $770 is not allowable in the absence of an explanation for why the expense was out of line with other lodging expenses on the same fee application. CALR expenses are denied due to lack of sufficient detail regarding the research.
In re Fibermark, Inc. (Bankr. VT 2004)
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PROPERTY HELD AS TENANCY BY THE ENTIRETIES IS NOT PROPERTY OF THE ESTATE
Property owned by a Chapter 13 bankruptcy debtor as tenancy by the entireties with a non-debtor under Florida law is not part of the bankruptcy estate and therefore cannot be reached by creditors.
In re Musolino (11th Cir 2004)
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ATTORNEY SANCTIONED FOR ELECTRONICALLY FILING CASE WITHOUT DEBTOR'S ORIGINAL SIGNATURE
The bankruptcy court did not err in imposing Rule 9011 sanctions against an attorney who electronically filed a bankruptcy petition that the debtor had not signed.
On December 5, 2003, Briggs, another attorney at Critique, electronically filed a second Chapter 13 petition for the debtor. The debtor did not sign the petition, did not give Briggs permission to file a second petition, and, in fact, had never even spoken to Briggs. After receiving the debtor's file with the signed, voluntary petition from the first case, Briggs decided that this document was sufficient authorization for a second case filing. Briggs acknowledged that no petition bearing the debtor's original signature existed for the second case. He filed the petition believing time was of the essence because of a pending foreclosure sale on the debtor's home. The debtor never attended the meeting of creditors in the second case because she did not know about the second filing. On December 29, 2003, while the second case was still pending, the debtor retained attorney Elbert Walton and filed a third Chapter 13 petition.
In re Phillips (8th Cir. BAP 2004)
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PUBLISHED BY KING BANKRUPTCY MEDIA FOR BANKRUPTCY PROFESSIONALS 7080 Donlon Way Suite 222 Dublin California 94568 (925) 829-6460
© King Bankruptcy Media 2004 CONTACT US AT editor@bankruptcymedia.com
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