The Goldilocks Approach: Getting the Standard of Review Just Right
Normally, a Court of Appeals reviews a bankruptcy court’s interpretation of a confirmed bankruptcy plan for abuse of discretion. This standard affords deference to the bankruptcy court’s interpretation of what is often its own prior language. When the plan is interpreted by a district court, though, the abuse of discretion standard may not be appropriate. A recent decision out of the Sixth Circuit, In re Settlement Facility Dow Corning Trust, 2010 WL 5128712 (6th Cir., Dec. 17, 2010), addresses this very situation.
By Negative Equity = PMSI
In March, the Sixth Circuit Court of Appeals became the eighth circuit to hold that negative equity financing satisfies the definition of a purchase money security interest (PMSI). See In re Westfall, 2010 WL 1050265 at *4 (6th Cir. Mar. 24, 2010).
Disclosure in Bankruptcy: When Too Little and Too Late Bar a Lawsuit
A case decided within the last few weeks in the Western District of Tennessee reaffirmed the importance of debtors disclosing causes of action that belong to the estate early and often or risk dismissal on grounds of judicial estoppel. Judicial estoppel in essence bars a party from taking inconsistent positions in different courts regarding the same subject matter. The idea is to discourage gamesmanship by litigants.
Non-dischargeability and Intent to Defraud
The 6th Circuit Bankruptcy Appellate Panel has addressed what constitutes the intent to defraud for purposes of establishing non-dischargeability under Section 523(a)(4) of the Bankruptcy Code. The president of a car dealership appealed the determination that a $2.4 million debt owed to his lender was non-dischargeable as embezzlement.
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