Case Summaries

[05/14] Hall v. US
In Chapter 12 bankruptcy proceedings in which the debtors proposed treating a capital gains tax on the postpetition sale of their farm as an unsecured claim to be paid to the extent funds were available, with the unpaid balance being discharged, the objection of the IRS is sustained, as the federal income tax liability resulting from the sale was not "incurred by the estate" under section 503(b) of the Bankruptcy Code, and thus was neither collectible nor dischargeable in the Chapter 12 plan.

[05/14] In re Heritage Highgate, Inc.
In a residential home builder's Chapter 11 proceedings, the Bankruptcy Court's determination that the secured claims of a group of secondary creditors should be valued at zero is affirmed, where: 1) in proceedings to value secured claims under section 506(a) of the Bankruptcy Code, a burden-shifting analysis is appropriate; 2) the Bankruptcy Court properly concluded that the fair market value of the debtor's project as of the plan confirmation date controlled whether the creditors' claims were secured; 3) denying the creditors future lot sale proceeds that exceed the project's judicially determined value as of confirmation did not constitute a form of impermissible lien stripping; and 4) the Bankruptcy Court did not clearly err in determining the value of the collateral securing the secured debt.

[05/04] In re VistaCare Group, LLC
In a case in which the purchaser of a retirement and assisted living facility alleged that the seller had damaged the purchaser's interests by wrongfully selling lots within the same subdivision plan, an order of the district court affirming the order of the bankruptcy court granting the purchaser's motion for leave to sue the seller's Chapter 7 bankruptcy trustee in state court is affirmed, where: 1) under the doctrine established in Barton v. Barbour, 104 U.S. 126 (1881), leave of the bankruptcy court is required before instituting such an action; and 2) the bankruptcy court did not abuse its discretion in concluding that the purchaser had met its burden of establishing that its claims against the trustee were "not without foundation."

[05/01] In re Federal-Mogul Global Inc.
In chapter 11 bankruptcy proceedings in which the debtor sought to transfer rights under insurance liability policies to a personal injury trust set up to resolve asbestos-related liability, the lower courts' rejection of the insurance companies' objection to the plan's confirmation is affirmed, where the anti-assignment provisions in the insurance policies were preempted by the Bankruptcy Code at 11 USC section 1123(a)(5)(B) to the extent they purported to prohibit transfer to a trust set up under 11 USC section 524(g).

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