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2008 NORTON BANKRUPTCY LAW SEMINAR MATERIALS

Appellate Court Decisions Related
To Bankruptcy Cases

By William Norton, III

federal government violated automatic stay when it terminated contract with debtor pursuant to ipso facto clause providing for default and a termination payment in the event of a bankruptcy filing.)

21. S362(d)(1) Automatic Stay — Relief

In re J.A. Jones, Inc., 492 F.3d 242 (4th Cir. June 26, 2007) (Estate of motorists killed in a highway accident in a construction zone was a known creditor of construction firm debtor and, thus, entitled to actual notice of proof of claim bar date.)

In re Myers, 491 F.3d 120 (3d Cir. June 21, 2007) (Dismissal of Chapter 13 petition and retroactive annulment of automatic stay were appropriate based on debtor's bad conduct. State court fraudulent transfer action was pending pre-petition against debtor and corporation of which she was the only shareholder. The bankruptcy also properly annulled the automatic stay, and this annulment had the effect of ratifying the state court actions that were voidable as violations of the automatic stay.)

22. S362(h) Automatic Stay — Damages

In re Myers, 491 F.3d 120 (3d Cir. June 21, 2007) (Dismissal of Chapter 13 petition and retroactive annulment of automatic stay were appropriate based on debtor's bad conduct. State court fraudulent transfer action was pending pre-petition against debtor and corporation of which she was the only shareholder. On the motion of the state court plaintiff, the bankruptcy court properly dismissed the petition under S 1307(c) and refused to convert it to a Chapter 7 case pursuant to S 1307(a).)

23. 362(k) Automatic Stay — Violations

In re Johnson, 501 F.3d 1163 (10th Cir. Aug. 28, 2007) (Automobile retailer willfully violated automatic stay by repossessing debtor's vehicle after Chapter 13 petition was filed and refusing to return the vehicle after learning of the filing. Retailer did not receive official notice of the bankruptcy case because of debtor's error in listing retailer's address on the petition, but debtor's attorney called the retailer, informed retailer of the bankruptcy and requested return of the vehicle. Retailer believed the call was a scam by debtor to regain possession of the vehicle. Retailer's belief was based on the demeanor of debtor's attorney, which seemed unlike that of other attorneys with whom the retailer had dealt, the attorney's refusal to provide documentation proving debtor had filed a bankruptcy petition and retailer's belief that debtor's previous bankruptcy prevented filing of another petition. In order to prove a willful violation of the automatic stay under

 

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