- Volume 9, Issue #8
- U.S. High Court: Inherited IRAs Not 'Retirement Funds,' Not Exempt In Bankruptcy
WASHINGTON, D.C. - The U.S. Supreme Court on June 12 ruled that funds held in inherited individual retirement accounts (IRAs) are not "retirement funds" within the meaning of the Bankruptcy Code because they represent an opportunity to use money immediately as opposed to a fund of retirement savings (Brandon Clark, et al. v. William Rameker, No. 13-299, Chapter 7, U.S. Sup.).
- U.S. High Court Says District Court 'Cured' Bankruptcy Dispute With De Novo Review
WASHINGTON, D.C. - The U.S. Supreme Court on June 9 unanimously ruled that any potential error made by a bankruptcy court regarding its own judgment in a "core" proceeding under 28 U.S. Code Section 157(b) was "cured" by a district court's de novo review of the matter because the issue received the same review from the district court that it would have received had the bankruptcy court treated the claims as noncore proceedings (Executive Benefits Insurance Agency v. Arkinson, No. 12-1200, U.S. Sup.).
- Bank Of America: High Court Must Hear Case Of Chapter 7 Bankruptcy Lien Issue
WASHINGTON, D.C. - Bank of America NA filed a petition for writ of certiorari with the U.S. Supreme Court that was made available on the docket June 5, in which it seeks high court review regarding whether the Bankruptcy Code permits a Chapter 7 debtor to "strip off" a junior mortgage lien in its entirety when the outstanding debt owed to a senior lienholder exceeds the current value of the collateral (Bank of America v. David B. Caulkett, No. 13-1421, Chapter 7, U.S. Sup.).
- Creditor In Bitcoin Bankruptcy Agrees Not To Object To Venue, Chapter 15 Status
DALLAS - The foreign representative of bankrupt bitcoin exchange operator MtGox Co. Ltd. and creditor CoinLab Inc. on June 9 reached a stipulated agreement under which CoinLab agrees that it will not object to MtGox's Chapter 15 bankruptcy status or its choice of venue (In Re: MtGox Co. Ltd., No. 14-31229, Chapter 15, N.D. Texas Bkcy.).
- 12 Foundations: Syncora's Subpoenas Regarding Detroit Debt Plan Should Be Quashed
DETROIT - A group of foundations involved in community philanthropy for the bankrupt City of Detroit on June 13 filed a brief in the U.S. Bankruptcy Court for the Eastern District of Michigan supporting their motion to quash subpoenas filed by creditors Syncora Capital Assurance Inc. and Syncora Guarantee Inc. (the Syncora parties) (City of Detroit, No. 13-53846, Chapter 9, E.D. Mich. Bkcy.).
- Michigan Legislature Passes, 'With Immediate Effect,' Law Giving Detroit $194.8M
LANSING, Mich. - The Michigan Senate on June 3 passed without amendment, and with "immediate effect," the Michigan Financial Review Commission Act (MFRCA), which will allocate $194.8 million in funds to the bankrupt City of Detroit to deal with its current debt, and would create the Financial Review Commission (FRC), which would have the power to approve the city's financial plan.
- MF Global Trustee: $25M In WARN Act Claims Should Be Disallowed, Expunged
NEW YORK - The trustee in the Chapter 11 bankruptcy of MF Global Inc. (MFGI), the customer investment affiliate of MF Global Holdings Inc. (MFGH), on June 16 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York, arguing that $25 million in claims filed by former employees of MFGI should be disallowed and expunged (In Re: MF Global Inc., 11-2790, Chapter 11, S.D. N.Y. Bkcy.).
- ResCap Trust: $32.85M Claim Filed In 'Bad Faith' And Should Be Disallowed
NEW YORK - The Residential Capital Borrower Claims Trust on June 16 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York, contending that a couple's $32.85 million claim against the bankruptcy estate should be disallowed because it was not timely filed and it demonstrates conduct that was "dilatory and in bad faith" (In Re: Residential Capital LLC, No. 12-12020, Chapter 11, S.D. N.Y. Bkcy.).
- 'Girls Gone Wild' Trustee: Founder, Affiliate Should Be Held In Contempt
LOS ANGELES - The trustee in the Chapter 11 bankruptcy of GGW Brands LLC, which makes adult entertainment videos carrying the name "Girls Gone Wild," on June 2 filed a brief in the U.S. Bankruptcy Court for the Central District of California contending that the Bankruptcy Court should hold in contempt GGW, one of its affiliated companies and GGW's founder Joseph Francis (In Re: GGW Brands LLC, No. 13-15130, Chapter 11, C.D. Calif. Bkcy.).
- Creditors: OSG Not Permitted To Disallow Defense Costs In Underlying Litigation
WILMINGTON, Del. - A group of underwriters who are creditors in the Chapter 11 bankruptcy of Overseas Shipholding Group Inc. (OSG) on June 3 filed a brief in the U.S. Bankruptcy Court for the District of Delaware arguing that OSG should not be permitted to disallow their claims for defense costs in underlying securities litigation related to the bankruptcy (In Re: Overseas Shipholding Group Inc., No. 12-20000, Chapter 11, D. Del. Bkcy.).
- 5th Circuit: Debtor's Motion To Withdraw Plea In Fraud Case Denied Properly
NEW ORLEANS - A panel of the Fifth Circuit U.S. Court of Appeals on June 3 ruled that a lower court properly refused to grant a debtor's motion to withdraw a guilty plea concerning bankruptcy fraud because although his court-appointed counsel was "deficient," there was no evidence that the debtor would have pleaded differently if he had had better representation (United States of America v. Bobby D. Curtis, No. 12-30819, Chapter 13, 5th Cir.; 2014 U.S. App. LEXIS 10331).
- Delaware Supreme Court Rejects Suit Arising From Washington Mutual Bankruptcy
WILMINGTON, Del. - The Delaware Supreme Court on May 28 found that a suit the Washington Mutual Inc. (WMI) liquidating trust filed seeking coverage from directors and officers insurers is not yet ripe for adjudication and reversed a lower court's ruling (XL Specialty Insurance Co., et al. v. WMI Liquidating Trust, No. 499, 2013, Del. Sup.; 2014 Del. LEXIS 230).