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

Debtor's ex-wife loaned him two sums of money to support his separate business. At issue was whether the debt was dischargeable in bankruptcy. The court affirmed the judgment of the bankruptcy court and concluded that the debt was nondischargeable under Section 523(a)(15) of the Bankruptcy Code, which left it to the state court to decide whether a property right was properly addressed in divorce proceedings, or as a separate contractual claim. View "Kinkade v. Kinkade" on Justia Law

These consolidated appeals arose from the district court's appointment of a receiver of Jeffrey Baron's personal property and entities he owned or controlled. Barron and Munish Krishan formed a joint venture involving the ownership and sale of internet domain names. Disputes arose between the venturers, resulting in at least seven lawsuits. The district court subsequently sought to stop Baron's practice of regularly firing one lawyer and hiring a new one. Baron appealed the receivership order and almost every order entered by the district court thereafter. The court reversed and remanded, holding that the appointment of the receiver was an abuse of discretion. Numerous motions and a writ of mandamus to overturn the bankruptcy court's striking of notices of appeal to the district court were also before the court. Most were denied as moot and the court addressed the remaining motions that were relevant. View "Netsphere Inc., et al v. Baron" on Justia Law

ASARCO filed a voluntary Chapter 11 bankruptcy petition in the bankruptcy court. Lehman was retained as ASARCO's financial advisor and investment banker during the bankruptcy proceedings. Lehman subsequently commenced its own bankruptcy proceedings. Barclays then acquired Lehman's investment banking and financial advisory businesses. At issue on appeal was the fee dispute between ASARCO and Barclays. The court held that the bankruptcy court erred in awarding the $975,000 fee enhancement to Barclays. Although the court found no reversible error, the court remanded to the district court with instructions to remand to the bankruptcy court for it to consider whether a Success Fee was appropriate in light of the court's conclusion that the fee enhancement award was made in error. View "ASARCO, L.L.C., et al v. Barclays Capital, Inc." on Justia Law

Three cases related to the Mexican reorganization of Vitro S.A.B. de C.V., a corporation organized under the laws of Mexico, were consolidated before the court. The Ad Hoc Group of Vitro Noteholders, a group of creditors holding a substantial amount of Vitro's debt, appealed from the district court's decision affirming the bankruptcy court's recognition of the Mexican reorganization proceeding and Vitro's appointed foreign representatives under Chapter 15 of the Bankruptcy Code. Vitro and one of its largest third-party creditors each appealed directly to the court the bankruptcy court's decision denying enforcement of the Mexican reorganization plan because the plan would extinguish the obligations of non-debtor guarantors. The court affirmed in all respects the judgment of the district court affirming the order of the bankruptcy court in No. 12-10542, and the court affirmed the order of the bankruptcy court in Nos. 12-0689 and 12-10750. The temporary restraining order originally entered by the bankruptcy court, the expiration of which was stayed by the court, was vacated, effective with the issuance of the court's mandate in Nos. 12-10689 and 12-10750. View "Ad Hoc Group of Vitro Noteholders v. Vitro S.A.B. de C.V." on Justia Law

This was a direct appeal from the bankruptcy court involving a dispute with contract vendors. The court held that the reservation language in the Reorganization Plan was sufficiently specific and unequivocal under In re United Operating, LLC. The court could not find, however, that the Litigation Trustee had standing to sue each of the appellees here. The Reservation Plan specifically carved out released claims. Accordingly, the Litigation Trustee lacked standing to bring, and the bankruptcy court was without jurisdiction to hear, any such claims. Therefore, the court vacated the bankruptcy court's order and remanded for further proceedings. View "Compton v. Aker Pusnes AS, et al" on Justia Law

Debtor executed a Balloon Note and Deed of Trust in favor of Wells Fargo for the purchase of a home and subsequently filed for bankruptcy. On appeal, Wells Fargo challenged the district court's amended order granting debtor's motion for summary judgment, finding that Wells Fargo was judicially estopped from filing a claim in the Second Bankruptcy for any amounts that could have been, but were not, claimed in the First Bankruptcy. Because the district court abused its discretion in finding that Wells Fargo adopted inconsistent positions in debtor's bankruptcy proceedings and that the bankruptcy court's acceptance of Wells Fargo's claims in the First Bankruptcy was not negated by debtor's dismissal without discharge, the application of judicial estoppel was not warranted. Accordingly, the court reversed and remanded. View "Wells Fargo Bank, N.A. v. Oparaji" on Justia Law

Countrywide appealed a class certification order of the bankruptcy court. Plaintiffs are former chapter 13 debtors with mortgages serviced by Countrywide. Plaintiffs claimed, among other things, that the fees Countrywide charged while plaintiffs' bankruptcy cases were still pending were unreasonable, unapproved, and undisclosed under Federal Rule of Bankruptcy Procedure 2016(a). Because the bankruptcy court's decision was not an abuse of discretion, the court affirmed its grant of class certification for plaintiff's injunctive relief claim. Because the court's precedence rejected the fail-safe class prohibition, the court concluded that the bankruptcy court did not abuse its discretion when it defined the class in the present case. Because the court concluded that Countrywide's Rule 59(e) motion for reconsideration was not based on newly discovered evidence, the court did not revisit the bankruptcy court's separate merits denial of the motion. View "Rodriguez, et al v. Countrywide Home Loans, Inc." on Justia Law

Debtor filed for bankruptcy under Chapter 13. After Debtor filed her petition and plan, the Trustee objected to confirmation of the plan, asserting that Debtor's petition and plan were not filed in good faith and that the amount of attorney's fees sought by Debtor was unreasonable. The bankruptcy court overruled the Trustee's objection and approved Debtor's Chapter 13 petition and plan and the requested legal fees and advanced legal costs. The district court reversed, finding that Debtor's plan was filed in bad faith. The Fifth Circuit Court of Appeals reversed the district court and affirmed the bankruptcy court, holding (1) it was not clearly erroneous for the bankruptcy court to find Debtor's plan was not an attempt to abuse Chapter 13 but rather a responsible decision given her particular circumstances, and thus, the district court erred when it reversed the bankruptcy court on the ground that Debtor's plan was filed in bad faith; and (2) the bankruptcy court did not abuse its discretion when it awarded $2,800 in attorney fees to Debtor's counsel. View "Sikes v. Crager" on Justia Law

At issue in this case was whether the Supreme Court's decision in Perdue v. Kenny A. ex rel Winn, which curtailed the authority of district courts to award fee enhancements in federal fee-shifting cases, unequivocally overruled the Fifth Circuit Court of Appeals' precedent in the bankruptcy arena. Here Debtors filed for chapter 11 bankruptcy protection. Debtors retained Appellee to assist in their restructuring process. After Debtors' bankruptcy plan was confirmed by the bankruptcy court, Appellee requested approval of a $1 million fee enhancement. The bankruptcy court denied the request because Appellee failed to satisfy the strict requirements of the Supreme Court's holding in Perdue. The district court reversed, holding that the bankruptcy court erred in treating the federal fee-shifting decision in Perdue as binding authority in a bankruptcy proceeding. On remand, the bankruptcy court awarded Appellee the $1 million fee enhancement. The Fifth Circuit Court of Appeals affirmed, holding that Perdue did not unequivocally, sub silentio overrule the Fifth Circuit's prior precedent. View "CRG Partners Group, LLC v. Neary" on Justia Law

The bankruptcy Trustee of MBS Management Services, Inc. (MBS), a management company for dozens of apartment complexes, appealed judgments rejecting his claim that payments made by the debtor to MXEnergy Electric, Inc (MX) to reimburse MX for supplying electricity to the complexes were avoidable preferences. The bankruptcy court and district court found that the payments were made on a "forward contract" expressly exempt from the Bankruptcy Code's preference provision. The Fifth Circuit Court of Appeals affirmed, holding that because the agreement was a forward contract within the meaning of 11 U.S.C. 546(e), and because expert testimony from the President and CEO of MX was admissible, the bankruptcy and district court's correctly rejected the Trustee's avoidance action. View "Lightfoot v. MXenergy Elec., Inc. " on Justia Law