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BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Briggs and Morgan, P.A. Alexander J. Beeby, Larkin, Hoffman, Daly, & Lindgren Ltd. Contributing Editor: Alexander J. Beeby, Larkin, Hoffman, Daly, & Lindgren Ltd. Taggart_v_Lorenzen_138_S__Ct__1795__2019_.pdf In Taggart v. Lorenzen , 139 S. Ct. 1795 (2019), the Supreme Court established the threshold for determining whether a creditor can be held in contempt for violating a bankruptcy discharge as whether the creditor had an objectively reasonable basis for concluding that its actions were lawful. In Taggart , prior to trial in a pending lawsuit against the debtor, the debtor filed for Chapter ...
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BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Briggs and Morgan, P.A. Alexander J. Beeby, Larkin Hoffman DalyLindgren Ltd  Contributing Editor: Karl Johnson, Briggs and Morgan, P.A. SCOTUS_Mission_Holdings_v_Tempnology_17-1657_4f15.pdf In Mission Product Holdings, Inc. v. Tempnology, LLC , 139 S.Ct. 1652 (2019), the Supreme Court held that a debtor-licensor’s rejection of a trademark licensing agreement did not terminate a licensee’s rights under the executory contract to use the trademark. The Court further held that a case is not moot if there is a claim for monetary relief even if recovery is unlikely. The debtor manufactured exercise ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl J. Johnson, Briggs and Morgan, P.A. Alexander J. Beeby, Larkin Hoffman DalyLindgren Ltd  Contributing Editor: Steven R. Kinsella, Fredrikson & Byron, P.A. Judge_Ericksen___Diocese_of_Winona-Rochester_v__United_States_Fire_Ins__Co_.pdf             In Diocese of Winona-Rochester v. United States Fire Ins. Co. , No. 19-cv-0518 (D. Minn. Apr. 19, 2019), ECF No. 48, the District Court denied a motion to withdraw reference filed by London Market Insurers (“ LMI ”) and supported by other defendant insurers, seeking the transfer of the insurance coverage adversary proceeding from the Bankruptcy Court to ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Briggs and Morgan, P.A. Alexander J. Beeby, Larkin Hoffman DalyLindgren Ltd  Contributing Editor: Amanda Schlitz, U.S. Bank Mus_3_1_19.pdf In In re Mus , 598 B.R. 623 (Bankr. D. Minn. Mar. 1, 2019) (Ridgway, J.), the Bankruptcy Court addressed the power of the debtor to avoid judicial liens pursuant to 11 U.S.C. § 522(f). The debtor had reopened his bankruptcy case and sought to avoid a number of purported “judicial liens” – three money judgments and four orders arising out of his divorce and related state court proceedings, which the state court described as “substantial and tortured.” The ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Briggs and Morgan, P.A. Alexander J. Beeby, Larkin Hoffman DalyLindgren Ltd  Contributing Editor: Karl Johnson, Briggs and Morgan, P.A. In_re_Peabody_Energy_Corporation181302P_08_09_2019.pdf  ​​ In Ad Hoc Comm. of Non-Consenting Creditors v. Peabody Energy Corp., et al. (In re Peabody Energy Corp.), No. 18-1302 (8th Cir. Aug. 9, 2019), the Eighth Circuit, addressing an issue of first impression in this circuit, held that a chapter 11 plan may provide creditors with an opportunity to participate in offerings of the Debtors’ securities at significant discounts without violating the statutory ...
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#WestwoodandCarlson ​ @Michael Carlson I'm putting some final touches on the Hennepin County Law Library CLE powerpoint I'll be presenting this Friday.  A colleague (Charlie Wilson at Ballard Spahr) and I wrote an article ("How Do You Feel About "Good Enough?": Another Look at Citators") and we're going to discuss the article and ethical issues around performing competent legal research.  Charlie and I have both spent some time trying to bridge the distance between what is taught in law school (extensive, exhaustive, expensive research) with what attorneys confront in practice (time and money limitations).  Especially for solo and small firm attorneys who ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Briggs and Morgan, P.A. Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Karl Johnson, Briggs and Morgan, P.A. https://higherlogicdownload.s3.amazonaws.com/MNBAR/UploadedImages/020f5c45-7094-4863-9eb6-668cf5628291/8th_Cir_Fulmer_v_Fifth_Third_18-1786_7_26_2019.pdf              In Fulmer v. Fifth Third Equip. Fin. Co. et al. (In re Veg Liquidation, Inc.) , No. 18-1786  (8th Cir. Jul. 26, 2019), The Eighth Circuit affirmed the dismissal of an adversary proceeding (“AP”) on the basis that it was an impermissible collateral attack on a prior 363 sale order and the denial of the trustee’s ...
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​ #WestwoodandCarlson ​ @Michael Carlson I’m recently back from attending the American Association of Law Libraries annual meeting in our nation’s capitol where over 1700 law librarians geeked out at every turn.  I went on a special, early-morning tour of the DOJ library and building and a large reception was held at, could we have a moment of reverent silence please?, the Library of Congress.  We were greeted by Librarian of Congress Carla Hayden and Law Librarian of Congress Jane Sanchez, and if you need a visual of “preaching to the choir” just picture that.  I also attended a fascinating program describing how librarians at the Folger Shakespeare ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Briggs and Morgan, P.A. Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Alexander J. Beeby, Larkin Hoffman Daly & Lindgren Ltd. https://higherlogicdownload.s3.amazonaws.com/MNBAR/UploadedImages/020f5c45-7094-4863-9eb6-668cf5628291/Judge_Fisher___Welty_v__Callidus_Capital_Corp____In_re_Midwest_Asphalt_Corp__.pdf In Welty v. Callidus Capital Corp. (In re Midwest Asphalt) , Adv. No. 18-04022 (Bankr. D. Minn. Mar. 29, 2019), the bankruptcy court held that the plaintiff successfully preserved his debtor-in-possession loan lien rights in assets sold in an 11 U.S.C. § 363 sale. However, ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Briggs and Morgan, P.A. Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Karl Johnson, Briggs and Morgan, P.A. https://higherlogicdownload.s3.amazonaws.com/MNBAR/UploadedImages/020f5c45-7094-4863-9eb6-668cf5628291/BAP_Abel_v_Queen_18-6023_7_19_2019.pdf             In Abel and Metro Acoustics, LLC v Queen and Queen (In re Queen) , No. 18-6023, 2019 WL 3242035 (BAP 8th Cir. July 19, 2019), the BAP affirmed entry of summary judgment in favor of the debtor-defendants and held that it lacked jurisdiction to consider an issue that was raised only in a withdrawn motion.               ...
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​ ​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Briggs and Morgan, P.A. Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Karl Johnson, Briggs and Morgan, P.A. https://higherlogicdownload.s3.amazonaws.com/MNBAR/UploadedImages/020f5c45-7094-4863-9eb6-668cf5628291/BAP___Edwards_v__City_of_Ferguson.pdf             In Edwards v. City of Ferguson , 601 B.R. 660 (BAP 8th Cir. 2019), the BAP held that a city does not violate the automatic stay by not taking post-petition actions to rescind an arrest warrant and not issuing a compliance letter to assist in reinstatement of a debtor’s driver’s license.             The debtor was given ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Matthew D. Swanson, Fuller, Seaver, & Swanson, P.A. Judge_Wright___Chowdhury_v__Hansmeier.pdf           In Chowdhury v. Hansmeier , Nos. 18-cv-3403, 19-cv-0156 (WMW), 2019 U.S. Dist. Lexis 70481 (D. Minn. Apr. 25, 2019), the District Court (1) held that it lacked jurisdiction to hear an appeal of the bankruptcy court’s October 24, 2018 contempt order due to appellant’s failure to timely file a notice of appeal; (2) vacated in part the bankruptcy court’s December 13, 2018 contempt order to the extent ...
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Even the Office of Lawyers Professional Responsibility sometimes gets mixed up about ethics authorities.  In a recent admonition (reversed on appeal), OLPR charged violations of rules that did not apply to the facts as alleged and failed to take account of recent, applicable case law. Several aspects of a recent discipline – reversed by a Lawyers Board panel - suggest that it is time for an update on Rule 1.9, “Duties to Former Clients.” A brief overview will frame the problems with the discipline. There was no former client conflict rule until 1985, when Rule 1.9 was adopted. Protecting confidentiality was the main policy purpose for adopting Rule 1.9, ...
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​ BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A. Contributing Editor: Amanda Schlitz, U.S. Bank Eighth_Circuit___Paddock_LLC_v__Bennett.pdf                   In The Paddock, LLC v. Bennett (In re Bennett) , 917 F.3d 676 (8th Cir. 2019), the Eighth Circuit addressed the applicability of the antimodification provision.  The debtors’ Chapter 13 plan proposed a bifurcation of The Paddock’s secured claim in their manufactured home into secured and unsecured parts.  The Paddock objected, arguing that the anti-modification provision of § 1322(b)(2) barred that treatment.  There was ...
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​ BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Kesha Tanabe, Tanabe Law Eighth_Circuit___Oetting_v__Sosne__In_re_Green_Jacobson__P_C__.pdf Oetting v. Sosne (In re Green Jacobson, P.C.), 911 F.3d 924 (8th Cir. 2018)             In 2002, the Debtor law firm obtained a $333 million settlement for a class of plaintiff-shareholders.  A settlement fund was established for members of the class.  The fund made two substantial distributions to members of the class, but it was also defrauded by the claims administrator, resulting in a loss of $5.87 million ...
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​ BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A. Contributing Editors James Brand, Fredrikson & Byron, P.A. Christopher Wilcox, Christensen Law Office PLLC BAP___Conway_v__Heyl.pdf             In  Conway v. Heyl (In re Heyl) , 590 B.R. 898 (B.A.P. 8th. Cir. 2018), the BAP affirmed the bankruptcy court’s order finding that the complaint did not state a claim for which relief is available under § 523(a)(19). A creditor brought an adversary complaint based on an investment loss that he alleged was caused by the debtor’s false pretenses, false representations, and actual fraud.  ...
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​ BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Kesha Tanabe, Tanabe Law BAP___Page_v__JP_Morgan_Chase_Bank.pdf               In In re Page, 592 B.R. 334 (B.A.P. 8th Cir. 2018), the debtor sought to discharge a student loan debt, but the Bankruptcy Court found in favor of her student loan servicer. On appeal, the B.A.P. closely examined both the language and legislative history of 11 U.S.C. §523(a)(8), reversed the Bankruptcy Court’s order and remanded for additional findings.              First, to be excepted from discharge, the debt at issue must ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Nauni Manty, Manty & Associates, P.A. Eighth_Circuit___Stoebner_v__Opportunity_Finance_LLC.pdf             This case is a by-product of the various Thomas Petters cases.  Thomas Petters, Inc. was a company involved in a multi-billion Ponzi scheme.  Petters owned Polaroid Holding Corporation (“PHC”) and Polaroid Consumer Electronics, LLC (“PCE”), which are successors in interest to Petters Consumer Brands, LLC (“Petters CB”).  PettersCB paid Polaroid licensing fees from the sale of Polaroid branded consumer ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Karl Johnson, Hellmuth & Johnson, PLLC Snyder_v_Zaligson__17-4113_.pdf             In Snyder v. Zaligson (In re Zaligson) , the bankruptcy court held that revocation of discharge under § 727(d)(1) must be strictly and narrowly construed in favor of the debtor and found that the US Trustee failed to show by a preponderance of the evidence that the debtor’s discharge was obtained by fraud because the debtor is not required to disclose property owned or held by a corporation.             The debtor ...
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​BANKRUPTCY BULLETIN Editors-in-Chief Karl Johnson, Hellmuth & Johnson, PLLC Jeffrey Klobucar, Bassford Remele, P.A.  Contributing Editor: Nauni Manty, Manty & Associates, P.A. BAP___Rucker_v__Belew.pdf             In Rucker v. Belew (In re Belew) , 588 B.R. 875 (8th Cir. BAP 2018), the BAP held that bankruptcy courts lack authority to deny an exemption on a ground that is not specified in the Bankruptcy Code. The trustee objected to the debtor’s claim of exemptions based upon bad faith.  Specifically, the debtor failed to schedule various assets in his initial filing.  The debtor failed to list a debit account, a possible equitable ...
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