4th Circuit

‘Once a Creditor, Always a Creditor,’ Even if the Claim Is Paid, Judge Phillips Says

Being branded as a creditor is like a tattoo; it won’t ever come off.

Circuit Split Widens Sovereign Immunity for Section 544(b) Claims

The circuits are now split 2/1 on the waiver of sovereign immunity under Section 544(b) for lawsuits by a trustee based on claims that could have been made by an actual creditor.

The Concept of Bifurcated Fee Agreements Approved on Appeal in South Carolina

Reversing the bankruptcy court, the district court decided that a local rule did not bar bifurcated fee arrangements altogether.

Another District Judge Emphatically Rejects a Plan with Non-Debtor Third-Party Releases

A district judge in Virginia holds that third-party, non-debtor releases must be approved by district judge under Stern and must comply with the strictures of Federal Rule 23.

Interest Not Required on 100% ‘13’ Plans that Don’t Commit All Disposable Income

Treaties disagree on whether interest is required in 100% chapter 13 plans when the debtor is not devoting all disposable income to the plan.

Johnson & Johnson Venue Transferred from North Carolina to New Jersey

Deciding to transfer venue, a North Carolina bankruptcy judge said that the debtor underwent a corporate restructuring ‘purely for the purpose of filing bankruptcy.’

To Count in Subchapter V, Loans Need Not Benefit Only the Small Business Debtor

If a loan benefits both a debtor and someone else, the loan still may be included in counting whether the debt “arose from the commercial or business activities of the debtor.”

Fourth Circuit Would Discharge CERCLA Claims if Pollution Occurred Before Filing

Maryland district judge predicts that the Fourth Circuit would adopt a debtor-friendly rule more broadly discharging environmental claims when the acts occurred before chapter 11.

Bad Faith Permits Dismissal of a Chapter 13 Case with Conditions, Judge Waites Says

Debtor accepted a bar to refiling to avoid dismissal with prejudice of her chapter 13 case.

Over-the-Top Allegations of Stay Violation Bring $10,000 Sanction for Violating Rule 11

Counsel sanctioned $10,000 for making allegations about an intentional or malicious stay violation without having performed an investigation to justify the claims.