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Bankruptcy Law

[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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ERISA

[05/03] HOP Energy, L.L.C. v. Local 553 Pension Fund
In a case in which a company sought an exemption from withdrawal liability under the Multi-Employer Pension Plan Amendments Act because it had sold the operating division that was required to make contributions to a pension fund, the district court's affirmance of an arbitrator's finding that the plaintiff was not exempt is affirmed, where: 1) the proper standard of review was de novo; 2) the "contribution base unit" was hours of employee pay, but while under the asset purchase agreement (APA) the purchaser had an obligation to contribute to the fund at the same rate, it had no obligation to maintain substantially the same number of "hours of pay"; and 3) the arbitrator did not err by excluding extrinsic evidence about the plaintiff's intent when entering the APA.

[04/20] Dickens v. Aetna Life Insurance Co.
In an employee's ERISA suit arising out of the termination of long-term disability benefits under his employer-sponsored plan, an appeal by the claims administrator of an interlocutory order remanding the matter to it is dismissed for lack of jurisdiction, where: 1) a district court order remanding to an ERISA claims administrator for reconsideration does not constitute a final decision; and 2) the collateral order doctrine did not apply.

[04/16] Santomenno v. John Hancock Life Insurance Co. (U.S.A.)
In a suit against an insurance company and its affiliates under ERISA and the Investment Company Act of 1940 (ICA) for allegedly charging the plaintiffs' retirement plans excessive fees on annuity insurance contracts offered to plan participants, the district court's judgment is: 1) affirmed with regard to its dismissal of the ICA claims, where a) the plaintiffs were not security holders entitled to bring a section 36(b) action on behalf of the investment company, since they did not have any interest in the funds when the operative complaint was filed, nor continuously; and b) section 47(b) did not support the excessive fees claim; and 2) vacated as to its dismissal of the ERISA claims, where neither pre-suit demand nor joinder of the plan trustees was a prerequisite to the claims.

[03/27] Sec'y of Labor v. Doyle
In an action by the Secretary of Labor against individuals arising from their alleged breach of fiduciary duties to a union health benefit plan governed by ERISA, the district court's judgment for the defendants is vacated and the case remanded, where the district court erred in failing to determine whether payments--collected by two companies that enabled small businesses to obtain health benefits for their employees by enrolling the employees in the plan, and by a company that marketed this scheme--were plan assets subject to ERISA.

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