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BANKRUPTCY BULLETIN David M. Tanabe ,  Winthrop & Weinstine, P.A. In Kelley v. Safe Harbor Managed Account 101, Ltd. , No. 20-3330, 2022 WL 1177748 (8th Cir. Apr. 21, 2022), the Eighth Circuit reversed the district court and remanded to consider whether certain transfers to a financial institution where made in connection with a securities contract for the safe harbor exception to avoidance pursuant to 11 U.S.C. § 546(e). This case is one of many arising from the multi-billion-dollar fraud perpetuated by former Minnesota businessman, Thomas Petters, through his company, Petters Company, Inc. (“PCI”). Appellee Safe Harbor Managed Account 101, Ltd. ...
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BANKRUPTCY BULLETIN David M. Tanabe ,  Winthrop & Weinstine, P.A.   In Kamal v. Baker Tilly US, LLP , No. CV 21-1549 (MJD/DTS), 2022 WL 1050053 (D. Minn. Apr. 7, 2022), the court granted a motion to dismiss aiding and abetting claims as derivative claims belonging exclusively to the bankruptcy trustee. In this case, a holding company issued notes. The holding company was part of a complex web of entities. A retail energy company (the “Company”) assumed the notes in a restructuring. The Company structured the borrowed funds under another entity thereby allegedly giving unfettered access to a principal owner (“Principal”) without any personal guarantees ...
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BANKRUPTCY BULLETIN David M. Tanabe ,  Winthrop & Weinstine, P.A. In Beers v. Experian Information Solutions, Inc. , No. 20-CV-1797 (WMW/JFD), 2022 WL 891620 (D. Minn. Mar. 25, 2022), the court granted summary judgment to a credit reporting agency on the claim under the Fair Credit Reporting Act (FCRA) given a lack of evidence that (1) the erroneous credit report caused actual damages and (2) the defendant’s procedures for reporting Chapter 7 bankruptcies were willful or reckless.   The plaintiff received a Chapter 7 bankruptcy discharge. The defendant, a credit reporting agency, issued a credit report which erroneously reported that two accounts ...
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BANKRUPTCY BULLETIN David M. Tanabe ,  Winthrop & Weinstine, P.A. In ASI, Inc. v. Aquawood, LLC , No. CV 19-763 (JRT/HB), 2022 WL 980398 (D. Minn. Mar. 31, 2022), the court determined that it did not have personal jurisdiction for alter ego and fraudulent transfer claims against a debtor’s liquidators that filed a petition for recognition of a foreign proceeding under Chapter 15 of the Bankruptcy Code. The plaintiff won a judgment in the District of Minnesota in the amount of $8.5 million against the debtor. Thereafter, the debtor initiated proceedings in its home jurisdiction of Hong Kong to liquidate its assets. The principals of the debtor also ...
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BANKRUPTCY BULLETIN David M. Tanabe ,  Winthrop & Weinstine, P.A.   In Reinhardt v. Rent-A-Center West, Inc. , No. 21-CV-2158 (NEB/LIB), 2022 WL 161571 (D. Minn. Jan. 18, 2022), the district court refused to exercise supplemental jurisdiction over a state law claim for invasion of privacy and referred to the bankruptcy court the other claim for violation of the automatic stay under 11 U.S.C. § 362. In the case, the defendants attempted to repossess a mattress and box spring after the plaintiff filed a bankruptcy petition. The plaintiff sued the defendants on the following claims: (1) violation of the automatic stay under 11 U.S.C. § 362(k) and ...
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It is not unusual for a person arrested and charged with a crime to worry that a lawyer might refuse to take their case. After all, who would want to represent a guilty person? While the fear that telling an attorney the truth regarding their arrest might cause their legal counsel to quit the case, the reality is that attorneys have an obligation to advocate for their clients—guilty or innocent. What’s more, the attorney’s primary role is holding the state to their burden of proof. It is not enough for a prosecutor to believe in your guilt; they must prove it beyond a reasonable doubt. Your attorney has an obligation to help you fight back against the prosecution ...
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AUTHOR’S NOTE - “What Minnesota Legal Ethics is all About” is the title of one chapter of my treatise, Minnesota Legal Ethics.  The chapter is not a complete chronicle, but it includes several sections that discuss ethics issues of the day.  Some of the issues involve interpreting, updating, and applying the law to difficult circumstances.  Others involve the challenges faced by the professional responsibility system, beginning with the case of Supreme Court justice who cheated on his bar exam, continuing with the “bombs and bullets” episode, and culminating in 2020-21 with the tumult in the law arising from the murder of George Floyd, the attempts to overturn ...
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BANKRUPTCY BULLETIN Contributing Editor: Deneese Yang In Lynch v. Experian Information Solutions, Inc. , 2022 WL 190753 (D. Minn. Jan. 21, 2022), the district court affirmed a discovery order for production as to the accuracy of credit reporting procedures to remove debt discharged in bankruptcy (so called “bankruptcy scrubs”). Plaintiffs alleged that the credit reporting agency continued to report a particular account as owing for more than one year after it was discharged in bankruptcy. Plaintiffs asserted this error violated the Fair Credit Reporting Act (“FCRA”), as a negligent or willful failure to follow reasonable procedures intended to assure ...
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Lawmakers, MADD, and other anti-drunk driving groups have successfully lobbied for harsher sentencing on repeat DWI offenders, in hopes of deterring those drivers from offending again in the future. Many repeat DWI offenders suffer from chemical dependency issues or mental illness. Increased mental health services and reducing repeat DUI offenses are connected. Public funds might be more effective at curbing DWIs if directed towards recovery programs and improved access to mental health resources. In this blog, our Minnesota DWI Attorneys review new research indicating that habitual DWI offenders might suffer from an undiagnosed mental illness, which impacts ...
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BANKRUPTCY BULLETIN Contributing Editor: Chris Anderson , The Law Office of Chris Anderson, Esq.   In Hughes v. Wisconsin Central Ltd et al. , 2021 WL 5042101 (D. Minn. Oct. 29, 2021), U.S. District Court Judge Donovan W. Frank denied defendants Wisconsin Central Ltd., Portaco, Inc. and Racine Railroad Products, Inc.’s motion for summary judgment and held that it was premature to determine whether plaintiff had standing to pursue claims or should be judicially estopped. The plaintiff filed a voluntary petition under chapter 13 in 2012. In 2018, the bankruptcy court closed the plaintiff’s chapter 13 bankruptcy case. A year after receiving a chapter ...
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Checkpoints are a commonly-used technique by law enforcement to identify, arrest, and prosecute motorists for driving while impaired (DWI). Despite countless challenges at the United States Supreme Court, the justices have repeatedly ruled DWI checkpoints constitutional in most situations. Despite their prevalence nationwide, DWI checkpoints are not legal in Minneapolis. The police are prohibited from relying on them, meaning you are within your rights to refuse to stop at one. Read More: Can You Refuse to Stop at a DWI Checkpoint in Minneapolis? Gerald Miller, P.A . is a premier defense firm in Minnesota. We have over 38 years of experience ...
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BANKRUPTCY BULLETIN Contributing Editor: Patrick Patino , Patino Law Office In State of North Dakota, ex rel. Wayne Stenehjem v. Bala (In re Racing Services, Inc.) , 2022 WL 69240, (B.A.P. 8th Cir. January 7, 2022), the Bankruptcy Appellate Panel affirmed the denial of the State of North Dakota’s statutory claim and contract claim in a case that has dragged on for over 17 years. In this case, the State of North Dakota (the “State”) agreed to pay the Debtor $15 million for collecting unauthorized taxes from the Debtor while it provided pari-mutuel horse wagering services. Creditors filed claims to partake in the distribution of those funds. A month ...
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A Post-Verdict Motion for Judgment as a Matter of Law Cannot Raise New Issues BANKRUPTCY BULLETIN Contributing Editor: Daniel W. Remington , Lathrop GPM In Olsen as Trustee for Xurex, Inc. v. Di Mase et al . , Case No. 20-2771, 2022 WL 273277 (8th Cir. Jan. 31, 2022), the Eighth Circuit affirmed the lower court’s determination that the defendant’s post-verdict motion for judgment as a matter of law did not comply with Fed. R. Civ. P. 50(b) because it raised legal errors and factual omissions that were not identified in defendant’s pre-verdict motion for judgment as a matter of law under 50(a). In 2010, Xurex and DuraSeal Pipe Coatings Company, ...
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BANKRUPTCY BULLETIN Contributing Editor: James C. Brand , Fredrikson & Byron, P.A.   In In re Ralph , Case No. 21-31428 (Bankr. D. Minn. Dec. 13, 2021), Judge Fisher took a first step toward addressing whether consumer bankruptcy attorneys may enter into arrangements with their chapter 7 clients to receive payment post-petition.  The fee arrangement at issue provided that the debtor would pay the attorney no fees pre-petition and instead would pay $2,497 post-petition in twelve monthly installments.  The record included evidence that if the Debtor instead paid the fee in full pre-petition, the fee would have been less than $2,497.  Judge Fisher ...
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A lot of people ask me if Covid-19 executive orders are constitutional, so I decided to write an article about it. Do COVID-19 executive orders violate the separation of powers clause? The federal constitution does not contain a separation of powers clause. Nevertheless, its structure and language strongly suggest that the Framers intended the three branches to do different things. Article I says, “All legislative powers herein granted shall be vested in a Congress….” Article II talks about the President having   the   executive power. And Article III says courts have   the   judicial power. Clearly the plan was for legislators to make laws, not to enforce ...
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BANKRUPTCY BULLETIN Co-Editors in Chief: Alex Beeby , Larkin Hoffman and ; David M. Tanabe ,  Winthrop & Weinstine Contributing Editors: David M. Tanabe and Karl J. Johnson , Taft Stettinius & Hollister LLP In Nationwide Judgment Recovery, Inc. v. Simons (In re Simons) , Ch. 7 Case No. 20-40631, Adv. No. 21-04027, 2021 WL 5225940 (Bankr. D. Minn. Nov. 9, 2021), Judge Sanberg held that § 523(a)(19)(A)(i) does not apply to a debtor that has not been found to have violated securities laws and that the plaintiff failed to present evidence that the debtor purchased or sold securities as required under § 523(a)(19)(A)(ii).  Simons was a net winner ...
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New CLE: "Stress and Secondary Trauma in Family Law Practice" - 1/11/2022 - 12:00 noon to 1:00 p.m .  Family law attorneys and professionals experience higher than average levels of stress and secondary trauma, yet these things are rarely talked about. Attorneys Karl Nastrom and Bob Schuneman aim to change that. Karl Nastrom , Indian Child Welfare Law Center, and Bob Schuneman , Lawyers Concerned for Lawyers outreach coordinator, will present information on the nature and sources of stress and secondary trauma among family law attorneys and other professionals who work in the family law field. They will also discuss the help and resources that are available ...
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Author's Note: The article and update below were first published in Minnesota Lawyer on November 29 and December 1, 2021.  The update (1) clarifies a statement in the article; and (2) adds citations to blogs that provide more information on two cases cited in the article; and (3) adds citation and comment to a new case, filed November 24, 2021.  A recent Washington Post article discussed “Why Prosecutors Get Away With Misconduct.” 1 The article focused on prosecutors who were not disciplined despite appellate court findings of misconduct. California supplied most of the article’s evidence, but the article also cited Minnesota and other states. Is it true ...
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