Justia U.S. 4th Circuit Court of Appeals Opinion Summaries

The district court affirmed the bankruptcy court's ruling that the non-debtor release provision in NHF's Chapter 11 reorganization plan was unenforceable. The court concluded that NHF has failed to demonstrate that it faces exceptional circumstances justifying the enforcement of the Release Provision in its Reorganization Plan. NHF failed to make the necessary showing to support the risk of donor litigation, nor has it carried its broader burden of justifying the non-debtor release of its Reorganization Plan. View "National Heritage Foundation v. Behrmann" on Justia Law

The trustee filed an action to avoid and recover certain payments made by FMI to First Tennessee. The trustee alleged that the payments were fraudulent transfers under 11 U.S.C. 548, and were part of a fraudulent scheme. The court concluded that the bankruptcy court and the district court correctly applied the objective good-faith standard in determining that the bank employees' testimony provided competent objective evidence that satisfied the bank's burden of proving its affirmative defense under section 548(c). The court also concluded that the bankruptcy court did not clearly err in holding that the bank accepted the payments from FMI in good faith. Accordingly, the court affirmed the judgment of the district court. View "Taneja v. First Tennessee Bank NA" on Justia Law

Qimonda, a German corporation that manufactured semiconductor devices, filed for insolvency in Munich, Germany. Plaintiff, the insolvency administratort, filed an application in the United States Bankruptcy Court under Chapter 15 of the Bankruptcy Code, petitioning the U.S. court to recognize the German insolvency proceeding as a "foreign main proceeding" in order to obtain privileges available under Chapter 15. At issue before the court was how to mediate between the United States' interests in recognizing and cooperating with the foreign insolvency proceeding and its interests in protecting creditors of Qimonda with respect to U.S. assets, as provided by 11 U.S.C. 1521 and 1522. The court concluded that the bankruptcy court properly recognized that plaintiff's request for discretionary relief under section 1521(a) required it to consider the interest of the creditors and other interested parties, including the debtor under section 1522(a) and that it properly construed section 1522(a) as requiring the application of a balancing test. The court also concluded that the bankruptcy court reasonably exercised its discretion in balancing the interest of the licensees against the interests of the debtor and finding that application of 11 U.S.C. 365(n) was necessary to ensure the licensees under Qimonda's U.S. patents were sufficiently protected. Accordingly, the court affirmed the judgment of the district court. View "Dr. Michael Jaffe v. Samsung Electronics Co." on Justia Law

Debtors claimed that the bankruptcy court erred by including an inheritance that postdated their Chapter 13 bankruptcy petition by more than 180 days as part of their bankruptcy estate. The court concluded that Bankruptcy Code Section 1306(a) extended the timeline for including "the kind" of property "specified in" Section 541 in Chapter 13 bankruptcy estates. Accordingly, the court affirmed the bankruptcy court's inclusion of the inheritance in debtors' Chapter 13 bankruptcy estate. View "Carroll v. Logan" on Justia Law

Debtor filed a Chapter 13 petition in the bankruptcy court identifying his interest in his primary residence located in Maryland. On appeal, debtor and his spouse argued that the bankruptcy court erred in refusing to strip off a lien on the ground that the spouse's property interest was not part of the bankruptcy estate. The lien was against the property that debtor owned with his non-debtor spouse as tenants by the entireties. The court concluded that the statutory provisions authorizing a strip off, and applicable Maryland property law, did not permit a bankruptcy court to alter a non-debtor's interest in property held in a tenancy by the entirety. The court held that the bankruptcy court correctly determined that it lacked authority to strip off debtor's valueless lien because only debtor's interest in the estate, rather than the complete entireties estate, was before the bankruptcy court. Accordingly, the court affirmed the judgment. View "Alvarez v. HSBC Bank" on Justia Law

Debtor appealed the district court's denial of the confirmation of his proposed Chapter 13 plan on the grounds that it did not accurately reflect his disposable income and that it was unfeasible if debtor's Social Security income was excluded from his "projected disposable income." The court vacated and remanded, holding that the plain language of the Bankruptcy Code excluded Social Security income from the calculation of "projected disposable income," but that such income nevertheless must be considered in the evaluation of a plan's feasibility. View "Ranta v. Gorman" on Justia Law

Defendant appealed from the district court's order affirming the bankruptcy court's finding of fraud and entry of a nondischargeable judgment for SG Homes. The court concluded that SG Homes justifiably relied on defendant's fraudulent misrepresentations and thereby suffered proven damages. Therefore, the bankruptcy court's finding of fraud on the basis of justifiable reliance was not clearly erroneous. Further, the award of damages for SG Homes was not clearly erroneous and the bankruptcy court did not err in determining that the judgment debt was nondischargeable under 11 U.S.C. 523(a)(2)(A). Accordingly, the court affirmed the judgment. View "SG Homes Associates, LP v. Marinucci" on Justia Law

This is an adversary proceeding arising out of the bankruptcy of debtor (Derivium). Plaintiff (Grayson), assignee of the Chapter 7 bankruptcy trustee, appealed from a district court judgment affirming the bankruptcy court's decision to grant summary judgment for defendants (Wachovia). The court concluded that the district court did not err in affirming the grant of summary judgment for Wachovia on Grayson's Customer Transfers claim; summary judgment for Wachovia on Grayson's Cash Transfers claim; the bankruptcy court's determinations that the stockbroker defense applied to commissions; and the bankruptcy court's ruling that in pari delicto barred Grayson's tort claims against Wachovia. View "Grayson Consulting, Inc. v. Wachovia Securities, LLC" on Justia Law

Plaintiff filed charges of discrimination with the EEOC against his employer, Dollar General, alleging that Dollar General failed to provide reasonable accommodation for his disability in violation of the Americans with Disabilities Act of 1990 (ADA), 42 U.S.C. 12101-12213. While awaiting the EEOC's notice of his right to sue, plaintiff filed for Chapter 13 bankruptcy. Then plaintiff filed the present suit in district court. Dollar General moved for summary judgment, arguing that the filing of plaintiff's Chapter 13 bankruptcy petition deprived plaintiff of standing to maintain his ADA claim. The court agreed with its sister circuits and concluded that because of the powers vested in the Chapter 13 debtor and trustee, a Chapter 13 debtor could retain standing to bring his pre-bankruptcy petition claims. The court also concluded that because plaintiff was unable to show that he could perform the essential functions of his position with a reasonable accommodation, the district court properly granted summary judgment in Dollar General's favor. Accordingly, the court affirmed the judgment of the district court. View " Wilson v. Dollar General Corp." on Justia Law

Debtors filed a Chapter 7 bankruptcy petition and sought to discharge their unsecured debt, strip down liens on their primary residence and a rental property, and obtain a loan modification to address mortgage arrears on the properties. The Trustee subsequently challenged confirmation orders entered by the bankruptcy court and affirmed by the district court, stripping off junior liens against debtors' residences. The Trustee argued that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 created a per se rule barring lien-stripping in so-called "Chapter 20" cases. The Act, however, dd not bar the orders entered by the bankruptcy court, and the stripping off of valueless liens - liens secured by collateral without a single penny of value to support it - was otherwise consistent with the Bankruptcy Code. Accordingly, the court affirmed the judgment. View "Branigan v. Davis" on Justia Law