Justia U.S. 5th Circuit Court of Appeals Opinion Summaries

Comcast loaned the Network $100 million, secured by a lien on substantially all of the Network's tangible and intangible assets, including an Affiliation Agreement. Pursuant to the Agreement, a Comcast subsidiary agreed to pay the Network to carry the Network's content on its cable systems. The Network involuntarily entered into bankruptcy; Comcast elected to treat its entire claim as secured before a plan or reorganization was confirmed; and then the bankruptcy court conducted a valuation of the Network's assets, including the Agreement. The bankruptcy court concluded that the Agreement had no value and the district court affirmed. The Fifth Circuit held, however, that the district court did not consider the value of Comcast's collateral in light of the reality of the plan of reorganization and accordingly deducted waived Network liabilities from the Agreement's value. Accordingly, the court remanded for further proceedings. View "Houston SportsNet Finance, LLC v. Houston Astros, LLC" on Justia Law

Comcast loaned the Network $100 million, secured by a lien on substantially all of the Network's tangible and intangible assets, including an Affiliation Agreement. Pursuant to the Agreement, a Comcast subsidiary agreed to pay the Network to carry the Network's content on its cable systems. The Network involuntarily entered into bankruptcy; Comcast elected to treat its entire claim as secured before a plan or reorganization was confirmed; and then the bankruptcy court conducted a valuation of the Network's assets, including the Agreement. The bankruptcy court concluded that the Agreement had no value and the district court affirmed. The Fifth Circuit held, however, that the district court did not consider the value of Comcast's collateral in light of the reality of the plan of reorganization and accordingly deducted waived Network liabilities from the Agreement's value. Accordingly, the court remanded for further proceedings. View "Houston SportsNet Finance, LLC v. Houston Astros, LLC" on Justia Law

In this consolidated appeal stemming from the bankruptcy of nineteen companies that were tenants-in-common of a student housing development called the Reserve, the Fifth Circuit reversed in part and affirmed in part the bankruptcy court's judgment. The court reversed the bankruptcy court's reduction of UTSA's share of net proceeds from 21.17% to 3.14%, based on serious procedural deficiencies, the lack of notice to UTSA regarding the imposition of a constructive trust, and the remedy's violation of the terms of the Code. The court held, however, that the bankruptcy court did not err in reducing Woodlark's proof of claims from $510,475,98 to $410,097.78. The court remanded for further proceedings. View "UTSA Apartments, LLC v. UTSA Apartments 8 LLC" on Justia Law

In this consolidated appeal stemming from the bankruptcy of nineteen companies that were tenants-in-common of a student housing development called the Reserve, the Fifth Circuit reversed in part and affirmed in part the bankruptcy court's judgment. The court reversed the bankruptcy court's reduction of UTSA's share of net proceeds from 21.17% to 3.14%, based on serious procedural deficiencies, the lack of notice to UTSA regarding the imposition of a constructive trust, and the remedy's violation of the terms of the Code. The court held, however, that the bankruptcy court did not err in reducing Woodlark's proof of claims from $510,475,98 to $410,097.78. The court remanded for further proceedings. View "UTSA Apartments, LLC v. UTSA Apartments 8 LLC" on Justia Law

The proceeds of a homestead sold after the filing of a petition for Chapter 7 bankruptcy remain exempt from the debtor's estate if they are not reinvested within the time frame required to invoke the proceeds rule of Texas homestead law. In Hawk v. Engelhart, 871 F.3d 287 (5th Cir. 2017), the Fifth Circuit held that funds withdrawn from an exempted retirement account after the filing of a Chapter 7 bankruptcy do not lose their exempt status even if the money is not redeposited in a similar account within 60 days pursuant to Texas's proceeds rule. In this case, the court saw no reason why Hawk's analysis should not apply to Texas's homestead exemption. Therefore, the homestead here was exempt because it was owned at the commencement of debtor's bankruptcy. Accordingly, the court reversed the district court's judgment and reinstated the bankruptcy court's order dismissing the adversary proceeding. View "Lowe v. DeBerry" on Justia Law

The Fifth Circuit affirmed the district court's decision vacating and remanding the bankruptcy court's order calling for a reduction in the trustee's requested fee. Determining that creditors have standing, the court held that the percentage amounts listed in 8 U.S.C. 326 are presumptively reasonable for Chapter 7 trustee awards. The court found the reasoning in Mohns, Inc. v. Lanser, 522 B.R. 594, 601 (E.D. Wis.), persuasive in addressing the statutory provisions at issue. Therefore, the court remanded for redetermination of the award. View "Caillouet v. JFK Capital Holdings, LLC" on Justia Law

The Fifth Circuit affirmed the district court's decision vacating and remanding the bankruptcy court's order calling for a reduction in the trustee's requested fee. Determining that creditors have standing, the court held that the percentage amounts listed in 8 U.S.C. 326 are presumptively reasonable for Chapter 7 trustee awards. The court found the reasoning in Mohns, Inc. v. Lanser, 522 B.R. 594, 601 (E.D. Wis.), persuasive in addressing the statutory provisions at issue. Therefore, the court remanded for redetermination of the award. View "Caillouet v. JFK Capital Holdings, LLC" on Justia Law

A debtor claiming federal exemptions under section 522 of the Bankruptcy Code may exempt a 100% interest in an asset in certain cases because the relevant provisions of section 522 cap the value of the asset a debtor may exempt, not the debtor's interest in that asset. The Fifth Circuit answered the certified question and thus returned the case to the bankruptcy court for further proceedings. View "Peake v. Ayobami" on Justia Law

The Fifth Circuit granted debtors' petition for panel rehearing and withdrew the previously filed opinion. The court denied debtors' petition for rehearing en banc.The court held that the bankruptcy court erred in ordering debtors to turn over the liquidated funds from an IRA to the trustee. In this case, the property interest was "withdrawn from the estate" when the exemptions were allowed, and there was no provision under which debtors' subsequently acquired interests in amounts distributed from the IRA could become part of the estate. Accordingly, the court reversed the bankruptcy court's order requiring debtors' to turn over the liquidated funds to the trustee and remanded for further proceedings. View "Hawk v. Engelhart" on Justia Law

The Fifth Circuit affirmed the district court's determination that it lacked jurisdiction to consider debtor's appeal of the bankruptcy court's decision in debtor's adversary proceeding. The court also affirmed the bankruptcy court's decision to reopen his main bankruptcy proceeding to allow the DOE and ECMC to file proofs of claim. In this case, the amended statement of issues and designation of record could not fairly be called a notice of appeal within the meaning of Federal Rule of Bankruptcy Procedure 8003(3). Furthermore, allowing DOE and ECMC to reopen the main bankruptcy proceeding served to establish their standing in the adversary proceeding and enabled debtor, should he have prevailed, to obtain a discharge against the correct entities. Likewise, the bankruptcy court did not err by allowing DOE and ECMC to file proofs of claim. View "Dorsey v. US Department of Education" on Justia Law