Town Center Flats, LLC v. ECP Commercial II LLC (In re Town Center Flats, LLC)

(6th Cir. May 2, 2017)

The Sixth Circuit reverses the bankruptcy court, finding that the assignment of rents acted as a complete transfer of ownership and the assignor did not retain any interest in the rents. The court analyzes Michigan law on such assignments and concludes that because the debtor/assignor had no rights in the rents assigned, they were not property of the bankruptcy estate. Opinion below.

Judge: Stranch

Attorney for Appellant: Robert N. Bassel

Attorney for Appellee: Jeremy S. Friedberg

2017-05-02 – in re town center flats

Author: Matt Lindblom

Harper v. The Oversight Committee (In re Conco, Inc.)

(6th Cir. April 28, 2017)

The Sixth Circuit affirms the district court and the bankruptcy court, holding that the sale of certain equity interests in the debtor to third parties was prohibited by the confirmed Chapter 11 plan. While the plan was silent as to such sales, the bankruptcy court did not abuse its discretion when interpreting the plan and considering the intent of the parties based on the negotiations that resulted in the final confirmed plan. Opinion below.

Judge: Donald

Attorneys for Appellants: Frost Brown Todd, Edward Michael King, John Scott Egan, Cory J. Skolnick; Hahn & Hessen, Gilbert Backenroth; Kaplan & Partners, David S. Kaplan, Casey Leigh Hinkle

Attorneys for Appellee: Bingham Greenbaum Doll, John K. Bush, Claude R. Bowles, Jr., James R. Irving; Seiller Waterman, Neil C. Bordy, Glenn Alan Cohen, Keith James Larson

2017-04-28 – in re conco

District Court Opinion

Bankruptcy Court Opinion

Author: Matt Lindblom

Brown v. Ellmann (In re Brown)

(6th Cir. Mar. 20, 2017)

The Sixth Circuit affirms the bankruptcy court’s order denying the debtor’s claim for an exemption under 11 U.S.C. § 522(d). The real property was fully encumbered by secured claims and thus the debtor had no equity in the property. The court applies its prior decision in In re Baldridge. The trustee also argued that the debtor’s appeal was moot under 11 U.S.C. § 363(m) and other authority but failed to meet the trustee’s burden on the issue. Opinion below.

Judge: Merritt

Attorney for Debtor: Gary Boren

Trustee: Douglas Stanley Ellmann

2017-03-20 – in re brown

Author: Matt Lindblom

Tennessee v. Hildebrand (In re Corrin)

(6th Cir. Feb. 23, 2017)

The Sixth Circuit affirms the bankruptcy court’s decision to confirm the debtor’s Chapter 13 plan, which included payment of overdue property taxes under Tennessee law with an interest rate of 12%. The state argued that the interest rate should be 18% due to the additional 6% interest permitted under the applicable state statute for a default penalty. The court holds that the 12% provided in the “nonbankruptcy law” is applicable, while the 6% penalty is not applicable. Opinion below.

Judge: Stranch

Attorney for State: Gill Robert Geldrich, Office of the Attorney General of Tennessee

Attorney for Debtor: Rothschild & Ausbrooks, Mary Elizabeth Ausbrooks, Alexander Koval

2017-02-23-in-re-corrin

Author: Matt Lindblom

Meoli v. The Huntington National Bank

(6th Cir. Feb. 8, 2017)

The Sixth Circuit reverses in part the bankruptcy court’s judgment in this fraudulent transfer action. The defendant bank received funds as loan payments from an affiliate of the debtor. The affiliate entity was created by the debtor to facilitate a ponzi scheme. The bankruptcy court held that all of the loan payments were recoverable. The Sixth Circuit differentiates between direct loan payments from the affiliate, indirect loan payments resulting from the affiliate depositing into the debtor’s bank account, and excess deposits later withdrawn by the debtor or seized by the government. Opinion below.

Judge: Rogers

Attorneys for Trustee: Mika, Meyers, Beckett & Jones, Douglas Arthur Donnell, Fredric Norman Goldberg

Attorneys for Defendant: Covington & Burling, Robert Allen Long, Jr., Mark William, Mosier, David Meir Zionts, Warner, Norcross & Judd, Jeffrey O. Birkhold, James Moskal, Matthew T. Nelson

2017-02-08-in-re-meoli

Author: Matt Lindblom

Spradlin v. Beads and Steeds Inns, LLC (In re Howland)

(6th Cir. Jan. 3, 2017)

The Sixth Circuit affirms the bankruptcy court’s dismissal of the trustee’s fraudulent transfer complaint. The trustee alleged the defendant was the recipient of a fraudulent transfer from the debtors, but the transfer was actually made to the defendant by an LLC seperate from the debtors. The trustee failed to allege facts sufficient for the doctrine of substantive consolidation and veil piercing is inappropriate here because Kentucky courts endorse the vicarious liability approach to veil piercing rather than the identity approach. The debtor had no interest in the alleged alter ego’s assets. Opinion below.

Judge: Griffin

Attorneys for Defendant: Stoll Keenon Ogden PLLC, Adam M. Back

Attorneys for Trustee: Bingham Greenebaum Doll LLP, Richard Boydston

2017-01-03-in-re-howland

Author: Matt Lindblom

Korean Claimants v. Debtor’s Representatives (In re Settlement Facility Dow Corning Trust)

(6th Cir. Nov. 23, 2016)

The Sixth Circuit affirms the 2015 consent order specifying the manner in which certain provisions of the confirmed Chapter 11 plan would apply to a class of claim holders. The Korean Claimants objected, arguing that the district court lacked authority to enter the consent order and that the consent order was an impermissible modification of the distribution agreement. The court holds that the court had the requisite authority to enter the consent order and it merely clarified the distribution agreement rather than modified it. Opinion below.

Judge: Kethledge

Attorney for Claimants: Yeon Ho Kim

Attorneys for Debtor Entities: Deborah E. Greenspan, Jeffrey S. Trachtman, Ernest H Hornsby, Dianna Pendleton-Dominguez

2016-11-23-in-re-dow-corning

Author: Matt Lindblom