Payment to Surety Not ‘Preference’

Lien-Stripping Approved in Chapter 20 Cases

By Deborah Elkins
Published: May 14, 2013
Tags: 4th U.S. Circuit Court of Appeals, Bankruptcy, Judge Albert Diaz

In a “Chapter 20” bankruptcy case – a Chapter 13 bankruptcy filed within four years of a Chapter 7 discharge – there is no per se rule barring lien-stripping, and the 4th Circuit affirms an order stripping off liens secured by collateral with no value to support them in this suit involving debtors’ residences. The [...]

Virginia lawyers find trouble in Maryland

By Peter Vieth
Published: May 1, 2013
Tags: Bankruptcy, Federal Courts, Lawyer Discipline, Real Estate, Virginia State Bar

A trio of Virginia-licensed lawyers recently found themselves facing criminal or disciplinary action in this state after first running afoul of authorities in Maryland. A lawyer who pleaded guilty in Maryland to taking part in a small business loan fraud scheme said to involve more than $100 million in losses now has admitted to misappropriating [...]

No Error in Denial of Nondebtor Releases

By Deborah Elkins
Published: April 24, 2013
Tags: Bankruptcy, Judge Anthony J. Trenga, U.S. District Court - Eastern District

In this appeal by debtor National Heritage Foundation, the Alexandria U.S. District Court upholds the bankruptcy court’s decision that certain nondebtor release provisions of debtor’s fourth amended plan of reorganization were not warranted and should be severed from the reorganization plan. On appeal, debtor National Heritage Foundation Inc. raises three issues: whether, on remand the [...]

No Hardship Discharge for Doctor’s Loans

By Deborah Elkins
Published: April 22, 2013
Tags: Bankruptcy, Judge Anthony J. Trenga, U.S. District Court - Eastern District

A 65-year-old student loan recipient who has trained and worked as an ophthalmologist, and who has a graduate degree in special education and has nearly completed a Ph. D. in education, has not demonstrated that her inability to make student loan payments is likely to persist or that she had made good faith efforts to [...]

Property Transfer to Parent Was Fraudulent

By Deborah Elkins
Published: April 16, 2013
Tags: Bankruptcy, Judge Samuel G. Wilson, U.S. District Court - Eastern District

A debtor who transferred 90 percent of his interest in a 50-acre parcel to his mother for $10, but delayed notarizing the deed until shortly before the rescheduled foreclosure sale, and then failed to disclose his transfer, may not have the debt discharged, as the Roanoke U.S. District Court affirms the bankruptcy court. Debtor’s closely [...]

Disbarment raises questions about reciprocal discipline

By Peter Vieth
Published: April 10, 2013
Tags: Bankruptcy, Federal Courts, Judge Stephen C. St. John, Lawyer Discipline, Virginia State Bar

For the second time in a dozen years, a Virginia State Bar discipline panel has struggled with whether Virginia lawyers should be forced to defend their VSB privileges based on suspension or revocation by federal authorities. The issue of so-called “reciprocal discipline” arose in the case of a Portsmouth lawyer who had his privilege to [...]

Fee Award OK Under Retainer and Rule

By Deborah Elkins
Published: April 3, 2013
Tags: Bankruptcy, Judge Michael F. Urbanski, U.S. District Court - Western District

A Harrisonburg U.S. District Court upholds a bankruptcy court’s fee award to debtor’s counsel for work that included adversary proceedings and a motion to sell a parcel of real estate, based on the bankruptcy court’s interpretation of the Rule 2016(b) disclosure and a retainer agreement. The bankruptcy court found that the attorney’s fees for the [...]

No Proofs of Claim for HOA Members

By Deborah Elkins
Published: March 29, 2013
Tags: Bankruptcy, Judge Anthony J. Trenga, U.S. District Court - Eastern District

In this bankruptcy proceeding by debtor homeowners’ association, the bankruptcy court erred in allowing proofs of claim filed by HOA members who say they suffered damages when they reasonably relied on false representations about allocation of parking spaces to townhomes without garages; the Alexandria U.S. District Court reverses judgment for the appellee-creditors, who failed to [...]

Purchase Loan Was Nondischargeable

By Deborah Elkins
Published: March 20, 2013
Tags: Bankruptcy, Judge Norman K. Moon, U.S. District Court - Western District

A Lynchburg U.S. District Court reverses a bankruptcy court’s denial of a creditor’s motion to have a debt declared nondischargeable; the bankruptcy court erred in its factual findings, and the district court concludes the creditor has proven fraudulent misrepresentations that render the debt nondischargeable. The creditor, a semi-retired homebuilder, loaned $150,000 to debtor to allow [...]