Bankruptcy law and practice

Bankruptcy Law

and Practice

GREGORY GERMAIN

BANKRUPTCY LAW

AND PRACTICE

A Casebook Designed to

Train Lawyers for the

Practice of Bankruptcy Law

__________

Gregory Germain

Professor of Law

Syracuse University College of Law

CALI eLangdell Press 2016

i

About the Author

Gregory Germain is a professor at Syracuse University College of Law where he teaches

courses in Contracts, Commercial Transactions, Corporations, Taxation and of course

Bankruptcy Law. He also runs a pro bono bankruptcy program for first year law students, and a

bankruptcy clinic for upper division students. The clinic represents indigent individuals in

bankruptcy cases.

Professor Germain received his JD Degree Magna Cum Laude from the University of

California Hastings College of Law, practiced law for 15 years in Los Angeles and San

Francisco, and then obtained his LLM in Tax from the University of Florida. Following tax

school, he worked as an attorney advisor for the Honorable Renato Beghe of the United States

Tax Court before beginning his teaching career at Syracuse University College of Law.

ii

Notices

This is the first edition of this casebook, updated June 2016. Visit

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CALI.

This material does not contain nor is intended to be legal advice. Users seeking legal

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iii

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iv

Forward

This book is intended for a three credit law school course covering the fundamentals of

bankruptcy law and practice. Students should recognize that this is a “Code” class, and that the

starting place for solving most bankruptcy problems is the Bankruptcy Code itself. Students

should read the materials and work through the problems by direct reference to the provisions of

the Bankruptcy Code. Bankruptcy lawyers simply must be comfortable with the Code in order to

be effective.

The book contains many cases interpreting the Bankruptcy Code. The cases have been

stripped to the essentials to minimize reading. Most cross-citations have been deleted. Issues

discussed in the cases that are not relevant to the point for which the case is included in the

materials have been stricken. Bolding has been added to important language the students should

focus on. The practitioner, of course, should always read full cases and not rely on the edited

versions in this book or on headnotes or other secondary sources. This book contains the bones

of the case, with flesh left only where essential to understanding the court’s reasoning on the

particular issue of relevance to the material in the book.

Much of the learning will come through working with the problems. Many students have

developed the bad practice of reading the questions without trying to solve them. Don’t do that.

You need to try to solve the problems by reading and working through the statute. The best way

to learn and be comfortable with using the statutory language is to work through the statute to

solve the problems.

Some of the problems contain case references. I do not expect my students to read the

cases that are merely cited in the problems, and not reprinted in the book. I discuss some of these

cases with the class when covering the problems. Students interested in the problems are always

free to read the cases for greater understanding, as time permits.

v

Table of Contents

About the Author ...............................................................................................................i

Notices ............................................................................................................................ ii

Forward ........................................................................................................................... iv

Chapter 1: A World without Bankruptcy ..........................................................................1

1.1. A  Wee  Bit  of  History .................................................................................................................... 1

1.2. Enforcing  Claims.......................................................................................................................... 1

1.3. The Self-­‐Help  System  for  Collecting  Unsecured  Claims............................................................... 2

1.4. Practice  Problems:    Fair  Debt  Collection  Practices  Act  (FDCPA).................................................. 2

1.5. The  Judicial  System  for  Collecting  Unsecured  Claims:    Obtaining  and  Enforcing  a  Judgment .... 3

1.6. Provisional  Remedies. ................................................................................................................. 4

1.7. CASES:    The  Sheriff’s  Duty  to  Enforce  Writs................................................................................ 5

1.7.1.1. DAVID  J.  VITALE  v.  HOTEL  CALIFORNIA,  INC.,  184  N.J.  Super  512,  446  A.2d  880  (1982) . 5

1.8. Property  Garnishments............................................................................................................... 9

1.9. Wage  Garnishments.................................................................................................................... 9

1.10. State  Wage  Garnishment  Exemptions....................................................................................... 10

1.11. Exceptions  to  Wage  Garnishment  Limits................................................................................... 10

1.12. Practice  Problems:    Calculating  Wage  Garnishment  Limits....................................................... 11

1.13. State  Law  Execution  Exemptions............................................................................................... 11

1.14. Practice  Problems:  Enforcement  of  Judgments ........................................................................ 11

1.15. Other  Federal  and  State  Exemptions ........................................................................................ 12

1.16. Federal  Tax  Collection ............................................................................................................... 12

1.17. State  Law  Avoiding  Powers ....................................................................................................... 13

1.18. Practice  Problems:    Fraudulent  Transfers ................................................................................. 13

1.19. The  Race  to  the  Courthouse  and  the  Concept  of  Bankruptcy ................................................... 14

Chapter 2: Secured Claims ............................................................................................16

2.1. Liens  and  Priority....................................................................................................................... 16

2.2. Attachment  of  Consensual  Liens............................................................................................... 16

2.3. Attachment  of  Consensual  Liens  on  Real  Property. .................................................................. 17

2.4. Attachment  of  Consensual  Liens  on  Personal  Property ............................................................ 17

2.5. Attachment  of  Judicial  Liens...................................................................................................... 18

2.6. Attachment  of  Statutory  Liens. ................................................................................................. 19

2.7. The  Concept  of  Perfecting  Liens................................................................................................ 20

vi

2.8. Perfection  of  Consensual  Personal  Property  Liens.................................................................... 20

2.9. Priority  of  Consensual  Liens. ..................................................................................................... 21

2.10. Practice  Problems:    UCC  Article  9.............................................................................................. 23

2.11. Purchase  Money  Security  Interests........................................................................................... 24

2.12. Practice  Problems:    Purchase  Money  Security  Interests........................................................... 24

2.13. Perfection  and  Priority  of  Real  Property  Liens .......................................................................... 24

2.14. Practice  Problems:    Real  Estate  Priority .................................................................................... 26

2.15. Foreclosing  the  Right  of  Redemption........................................................................................ 26

2.16. Cases  on  Enforcement  of  Liens ................................................................................................. 28

2.16.1.1. CHAPA  v.  TRACIERS  &  ASSOCIATES,  267  S.W.3d  386  (Ct.  App.  Tex.  2008) .................... 28

2.16.1.2. JORDAN  v.  CITIZENS  &  SOUTHERN  NAT’L  BANK  OF  SOUTH  CAROLINA,  278  S.C.  449  

(1982) ....................................................................................................................................... 30

2.16.1.3. CHERNO  v.  BANK  OF  BABYLON,  54  Misc.2d  277  (NY  1967)........................................... 31

2.16.1.4. BIG  THREE  MOTORS,  INC.,  v.  RUTHERFORD,  432  So.2d  483  (Ala.  1983) ....................... 32

2.16.1.5. WALTER  KOUBA  v.  EAST  JOLIET  BANK,  135  Ill.  App.  3d  264  (1985)............................... 34

2.17. Practice  Problems:    Enforcement  of  Liens  and  Claims .............................................................. 38

Chapter 3: The Bankruptcy System ...............................................................................40

3.1. Purposes  of  Bankruptcy............................................................................................................. 40

3.2. Structure  of  the  Bankruptcy  Code............................................................................................. 41

3.3. Jurisdiction  and  Venue  of  Bankruptcy  Cases............................................................................. 42

3.4. Cases  on  the  Constitutional  Limits  of  Bankruptcy  Jurisdiction.................................................. 43

3.4.1.1. NORTHERN  PIPELINE  CO.  v.  MARATHON  PIPE  LINE  CO.,  458  U.S.  50  (1982)................. 43

3.5. The  Aftermath  of  Northern  Pipeline .......................................................................................... 47

3.6. Cases  on  the  Constitutional  Limits  of  Bankruptcy  Jurisdiction  after  Marathon........................ 47

3.6.1.1. STERN  v.  MARSHALL,  564  U.S.  2,  131  S.  Ct.  2594  (2011) ............................................... 48

3.6.1.2. WELLNESS  INTERNATIONAL  NETWORK,  LTD.,  v.  SHARF,  135  S.  Ct.  1932  (2015)........... 55

3.7. Practice  Problems:    Bankruptcy  Court  Jurisdiction.................................................................... 58

3.8. Venue  of  Bankruptcy  Cases....................................................................................................... 59

3.9. Cases  on  Bankruptcy  Venue ...................................................................................................... 60

3.9.1.1. IN  ENRON  CORP.,  274  B.R.  327  (2002)........................................................................... 60

3.10. Practice  Problems:    Filing  Voluntary  Petitions........................................................................... 64

3.11. Voluntary  Bankruptcy  Petitions................................................................................................. 65

3.12. Involuntary  Bankruptcy  Petitions.............................................................................................. 66

vii

3.13. Practice  Problems  – Involuntary  Petitions ................................................................................ 66

3.14. Dismissal  of  Properly  Filed  Bankruptcy  Petitions  for  “Cause.”.................................................. 67

3.15. Bad  Faith  Dismissals after  the  2005  Amendments.................................................................... 68

3.16. Dismissal  of  Cases  Properly  Filed  under  Other  Chapters .......................................................... 70

3.17. Cases  on  Bad  Faith  Dismissals ................................................................................................... 70

3.17.1.1. IN  RE  JOHNS-­‐MANVILLE  CORPORATION,  36  B.R.  727  (Bankr.  S.D.N.Y.  1984)................ 70

3.17.1.2. IN  RE  SQL  CARBON,  200  F.3d  154  (3d  Cir.  1999)............................................................ 74

3.18. Voluntary  and  Involuntary  Conversion  and  Dismissal............................................................... 77

3.19. Dismissal  of  Consumer  Chapter  7  Cases  for  “Abuse”  – The  Means  Test................................... 78

3.20. Practice  Problems:    Dismissal  for  Abuse  – The  Means  Test,  Part  One ...................................... 79

3.21. Dismissal  for  “Abuse”  -­‐ The  Means  Test,  Part  Two ................................................................... 80

3.22. Rebutting  the  Presumption  of  Abuse  under  the  Means  Test.................................................... 81

3.23. Attorney  Sanctions  for  Means  Test  Violations.......................................................................... 81

3.24. Eligibility  after  Prior  Bankruptcy  Cases...................................................................................... 81

Chapter 4: The Bankruptcy Estate .................................................................................83

4.1. The  Estate.................................................................................................................................. 83

4.2. Cases  on  Property  of  the  Estate ................................................................................................ 83

4.2.1.1. BOARD  OF  TRADE  OF  CHICAGO  v.  JOHNSON,  264  U.S.  1  (1924) ................................... 83

4.2.1.2. BUTNER  v.  UNITED  STATES,  440  U.S.  48  (1979)............................................................. 85

4.3. Aftermath:    Application  to  the  Bankruptcy  Code ...................................................................... 87

4.4. Practice  Problems.  Property  of  the  Estate ................................................................................ 87

4.5. Cases  on  Mixed  Prepetition  and  Post-­‐Petition  Earnings  as  Property  of  the  Estate................... 88

4.5.1.1. IN  RE  BAGEN,  186  B.R.  824  (Bankr  S.D.N.Y.  1995)......................................................... 88

4.5.1.2. TOWERS  v.  WU,  173  B.R.  411  (9th Cir.  BAP  1994) .......................................................... 90

4.5.1.3. SHARP  v.  DERY,  253  B.R.  204  (E.D.  Mich.  2000)............................................................. 92

Chapter 5: Exemptions...................................................................................................95

5.1. Exemptions................................................................................................................................ 95

5.2. Practice  Problems:  Which  State’s  Exemptions  Apply? .............................................................. 96

5.3. Electing  the  State  or  Federal  Exemption  Scheme ..................................................................... 96

5.4. Practice  Problems:    The  Federal  Exemptions. ........................................................................... 98

5.5. Cases  on  the  Allowance  of  Exemptions..................................................................................... 99

5.5.1.1. TAYLOR  v.  FREELAND  &  KOONZ,  503  U.S.  638  (1992).................................................... 99

viii

5.5.1.2. SCHWAB  v.  REILLY,  30  S.  Ct.  2652  (2010)..................................................................... 101

5.6. Exemption  Planning................................................................................................................. 103

5.7. Cases  on  Exemption  Planning.................................................................................................. 104

5.7.1.1. NORWEST  BANK  NEBRASKA  v.  OMAR  A.  TVETEN,  848  F.2d  871  (8th Cir.  1988)........... 104

5.8. Notes  on  Tveten ...................................................................................................................... 109

5.9. Avoiding  Liens  that  Impair  Exemptions................................................................................... 109

5.10. Practice  Problems:  Avoiding  Liens  that  Impair  Exemptions.................................................... 110

5.11. Cases  on  Avoiding  Liens  that  Impair  Exemptions.................................................................... 111

5.11.1.1. FARREY  v.  SANDERFOOT,  500  U.S.  291  (1991)............................................................. 111

Chapter 6: The Automatic Stay ....................................................................................114

6.1. What  is  the  automatic  stay?.................................................................................................... 114

6.2. Practice  Problems:    The  Automatic  Stay ................................................................................. 114

6.3. Cases  on  Using  the  Automatic  Stay  as  a  Sword....................................................................... 117

6.3.1.1. SPORTFRAME  OF  OHIO  V.  WILSON  SPORTING  GOODS,  40  B.R.  47  (Bankr.  N.D.  Ohio  

1984) ..................................................................................................................................... 117

Chapter 7: Operating the Estate...................................................................................120

7.1. The  United  States  Trustee. ...................................................................................................... 120

7.2. The  Case  Trustee ..................................................................................................................... 120

7.3. The  Section  341  Meeting......................................................................................................... 121

7.4. No  Asset  Cases ........................................................................................................................ 122

7.5. Use,  Sale  and  Lease  of  Property .............................................................................................. 122

7.6. Practice  Problems:    Sale  of  Property ....................................................................................... 123

7.7. Cases  on  the  Sale  of  Property.................................................................................................. 124

7.7.1.1. MARATHON  PETROLEUM  v.  COHEN,  599  F.3d  1255  (11th Cir.  2010)........................... 124

7.8. Post-­‐Bankruptcy  Financing ...................................................................................................... 127

7.9. Practice  Problems:    Post  Petition  Financing ............................................................................ 129

7.10. Cases  on  Post  Petition  Financing............................................................................................. 130

7.10.1.1. IN  RE  SAYBROOK  MANUFACTURING  CO.,  INC.,  963  F.2d  1490  (11th  Cir.  1992).......... 130

7.10.1.2. READING  v.  BROWN,  391  U.S.  471  (1968) ................................................................... 133

7.10.1.3. IN  RE  RESOURCES  TECHNOLOGY  CORP.,  662  F.3d  472,  474  (7th  Cir.  2011)................ 136

7.11. Executory  Contracts  and  Unexpired  Leases  – Assumption  and  Rejection .............................. 138

7.12. Practice  Problems:    Executory  Contracts  -­‐ Assumption  and  Rejection ................................... 140

7.13. Cases  on  Executory  Contracts ................................................................................................. 142

ix

7.13.1.1. IN  RE  JAMESWAY  CORPORATION,  201  B.R.  73  (Bankr.  S.D.N.Y.  1996)........................ 142

7.13.1.2. IN  RE  GARDINIER,  INC.,  831  F.2d  974  (11th  Cir.  1987)................................................. 143

7.13.1.3. IN  RE  COMPUTER  COMMUNICATIONS,  INC.,  824  F.2d  725  (9th  Cir.  1987)................. 144

7.13.1.4. RIESER  v.  DAYTON  COUNTRY CLUB  CO.,  972  F.2d  689  (6th  Cir  1992).......................... 147

Chapter 8: Enhancing the Estate .................................................................................153

8.1. Fraudulent  Transfers  (11  U.S.C.  §  548).................................................................................... 153

8.2. The  Trustee’s  State  Law  Powers  (11  U.S.C.  §  544(b)).............................................................. 153

8.3. Practice  Problems  – Fraudulent  Transfers .............................................................................. 154

8.4. Cases  on  Fraudulent  Transfers................................................................................................ 155

8.4.1.1. BFP  v.  RESOLUTION  TRUST  CORPORATION,  511  U.S.  531  (1994)................................ 155

8.4.1.2. ALLARD  v.  FLAMINGO  HILTON,  69  F.3d  769  (6th  Cir.  1995)......................................... 158

8.5. Introduction  to  Bakersfield  Westar......................................................................................... 161

8.6. Cases  on  “Property”  and  Fraudulent  transfers........................................................................ 161

8.6.1.1. IN  RE  BAKERSFIELD  WESTAR,  INC.,  226  B.R.  227  (9th Cir.  BAP  1998) ........................... 162

8.7. The  Strong  Arm  Power  (11  U.S.C.  §  544(a))............................................................................. 167

8.8. Practice  Problems:    The  Strong  Arm  Power ............................................................................ 168

8.9. Cases  on  the  Strong  Arm  Power.............................................................................................. 168

8.9.1.1. IN  RE  PROJECT  HOMESTEAD,  INC.,  374  B.R.  193  (Bankr.  MD  NC  2007)....................... 168

8.9.1.2. IN  RE  LOUISE  CARY  MORENO,  293  B.R.  777  (Bankr.  D.  Col.  2003)............................... 170

8.10. Preferences  (11  U.S.C.  §  547).................................................................................................. 173

8.11. Practice  Problems:    The  Preference  Law ................................................................................. 173

8.12. Cases  on  Preferences .............................................................................................................. 175

8.12.1.1. BEIGIER  v.  IRS,  496  U.S.  53  (1990)................................................................................ 175

8.12.1.2. IN  RE  CASTILLO,  39  B.R.  45  (Bankr.  D.  Col.  1984)......................................................... 177

8.12.1.3. PARKS  v.  FIA  CREDIT  SERVICES,  N.A.,  550  F.3d  1251  (10th  Cir.  2008) ......................... 178

8.12.1.4. IN  RE  UNICOM  COMPUTER  CORPORATION,  13  F.3d  321  (9th Cir.  1994)...................... 181

8.13. Preference  Defenses  – 11  U.S.C.  §  547(c) ............................................................................... 183

8.14. Cases  on  Preference  Defenses ................................................................................................ 184

8.14.1.1. UNION  BANK  v.  WOLAS,  502  U.S.  151  (1991).............................................................. 185

8.14.1.2. IN  RE  TOLANA  PIZZA,  3  F.3d  1029  (7th  Cir.  1993)........................................................ 186

8.15. Practice  Problems:    Preference  Exceptions............................................................................. 188

8.16. Statutory  Liens.  11  U.S.C.  §  545............................................................................................... 190

x

8.17. Setoffs.  11  U.S.C.  §  553 ........................................................................................................... 190

8.18. Practice  Problems:    Setoff  Preferences................................................................................... 191

8.19. Cases  on  Setoffs ...................................................................................................................... 191

8.19.1.1. DURHAM  v.  SMI  INDUSTRIES,  INC.,  882  F.2d  881  (4th  Cir.  1989)................................ 191

8.20. Statute  of  Limitations  on  Avoiding  Powers.  11  U.S.C.  §  546(a)............................................... 193

8.21. Relation-­‐back  Perfection  Rules.  11  U.S.C.  §  546(b)................................................................. 193

8.22. Reclamation  Rights.  11  U.S.C.  §  546(c).................................................................................... 194

8.23. Cases  on  Reclamation  Rights................................................................................................... 195

8.23.1.1. IN  RE  ARLCO,  INC.,  239  B.R.  261  (Bankr.  S.D.N.Y.  1999) .............................................. 195

8.23.1.2. PHAR-­‐MOR  v.  McKESSON  CORPORATION,  534  F.3d  502  (6th  Cir.  2008)..................... 199

8.24. Recovering  Avoided  Transfers.  11  U.S.C.  §  550....................................................................... 201

8.25. Practice  Problems:    Recovering  Avoided  Transfers................................................................. 202

8.26. Cases  on  Recovering  Avoided  Transfers.................................................................................. 202

8.26.1.1. BONDED  FIN.    SERV.,  INC.,  v.  EUROPEAN  AMERICAN  BANK,  838  F.2d  890  (7th  Cir.  1988)

..................................................................................................................................... 202

8.26.1.2. KELLOGG  v.  BLUE  QUAIL  ENERGY,  831  F.2d  586  (5th  Cir.  1987).................................. 207

8.27. Practice  Problems:  The  Debtor’s  Avoiding  Powers ................................................................. 212

Chapter 9: Secured Claims in Bankruptcy ...................................................................214

9.1. The  Section  506(a)  Split........................................................................................................... 214

9.2. Cases  on  Valuation  and  the  Section  506(a)  Split..................................................................... 214

9.2.1.1. ASSOCIATES  COMMERCIAL  v.  RASH,  520  U.S.  953  (1997) ........................................... 214

9.2.1.2. IN  RE  BROWN,  746  F.3d  1236  (11th  Cir.  2014) ............................................................ 217

9.3. Practice  Problems:    The  506(a)  Split........................................................................................ 219

9.4. Practice  Problems:    Post-­‐Petition  Interest,  Fees,  Costs  and  Charges  (11  U.S.C.  §  506(b)) ...... 219

9.5. Cases  on  Post-­‐Petition  Interest  under  §  506(b) ...................................................................... 221

9.5.1.1. IN  RE  RESIDENTIAL  CAPITAL,  INC.,  508  B.R.  851  (Bankr.  S.D.N.Y.  2014)...................... 221

9.6. The  Section  506(c)  Surcharge.................................................................................................. 226

9.7. Section  506(d)  and  Striping-­‐down  or  Striping-­‐Off  Liens.......................................................... 226

9.8. Cases  on  Stripping  Liens  under  Section  506(d) ....................................................................... 227

9.8.1.1. DEWSNUP  v.  TIMM,  502  U.S.  410  (1992)..................................................................... 227

9.9. Stripping  Wholly  Unsecured  Liens  in  Chapter  7 ...................................................................... 230

9.10. Redemption.  11  U.S.C.  §  722................................................................................................... 231

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9.11. Debtor’s  Treatment  of  Secured  Claims  in  Chapter  7:    Surrender,  Redeem  or  Reinstate  – or  

Maybe  “Ride  Through.” ....................................................................................................................... 231

9.12. Post-­‐Petition  Effect  of  Security  Interests:    Section  552........................................................... 233

9.13. Practice  Problems:    Floating  Liens  in  Bankruptcy.................................................................... 233

9.14. Relief  from  Stay  and  Adequate  Protection.............................................................................. 234

9.15. Cases  on  Relief  from  Stay ........................................................................................................ 235

9.15.1.1. UNITED  SAVINGS  v.  TIMBERS  OF  INWOOD  FOREST,  484  U.S.  365  (1988) ................... 236

9.15.1.2. BANKERS  LIFE  INS.  CO.,  v.  ALYUCAN  INTERSTATE  CORP.,  12  B.R.  803  (Bankr.  D.  Utah  

1981) ..................................................................................................................................... 239

9.15.1.3. FORD  MOTOR  CREDIT  COMPANY  v.  DOBBINS,  35  F.3d  860  (4th  Cir.  1994) ................ 240

9.16. Practice  Problems:  Relief  from  Stay ........................................................................................ 244

Chapter 10: Unsecured Claims in Bankruptcy .............................................................245

10.1. What  is  a  “Claim”?................................................................................................................... 245

10.2. Cases  on  Claims  and  Due  Process............................................................................................ 245

10.2.1.1. MULLANE  v.  CENTRAL  HANOVER  BANK  &  TRUST  CO.,  339  U.S.  306  (1950)................ 245

10.2.1.2. A.H.  ROBINS  CO.  v.  GRADY,  839  F.2d  198  (4th  Cir.  1988) ............................................ 250

10.2.1.3. IN  RE  JOHNS-­‐MANVILLE  CORP.,  36  B.R.  743  (Bankr.  S.D.N.Y.  1984)............................ 252

10.2.1.4. KANE v.  MANVILLE,  843  F.2d  636  (2d  Cir.  1988).......................................................... 254

10.2.1.5. EPSTEIN  v.  PIPER  AIRCRAFT,  58  F.3d  1573  (11th  Cir.  1995)......................................... 260

10.2.1.6. IN  RE  FAIRCHILD  AIRCRAFT  CORP.,  184  B.R.  910  (Bankr.  W.D.  Tex.  1995) .................. 262

10.2.1.7. IN  RE  GROSSMAN’S  INC.,  607  F.3d  114  (3d  Cir.  2010)................................................. 271

10.2.1.8. MAIDS  INTERNATIONAL,  INC.,  v.  Ward,  194  B.R.  703  (Bankr.  D.  Mass.  1996)............. 276

10.3. Claim  Procedures..................................................................................................................... 284

10.4. Practice  Problems:    Landlord,  Employer  and  Certain  Contingent  Claims................................ 285

10.5. Cases  on  Claim  Estimation  and  Limitations............................................................................. 286

10.5.1.1. IN  RE  RADIO-­‐KEITH-­‐ORPHEUM  CORPORATION,  106  F.2d  22  (2d  Cir.  1939)................ 286

10.5.1.2. IN  RE  EL  TORO  MATERIALS  COMPANY,  INC., 504  F.3d  978  (9th  Cir.  2007).................. 287

10.6. Priority  Claims  – 11  U.S.C.  §  507 ............................................................................................. 289

10.7. Practice  Problems:    Priority  Claims.......................................................................................... 291

10.8. Subordination:    11  U.S.C.  §  510............................................................................................... 291

10.9. Abandonment:    11  U.S.C.  §  554............................................................................................... 292

10.10. Cases  on  Abandonment  of  Property  in  Bankruptcy............................................................. 292

10.10.1.1. MIDLANTIC  NAT’L  BANK  v.  NJDEP,  474  U.S.  494  (1986) .......................................... 292

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10.11. Distribution  to  Creditors:    11  U.S.C.  §  726 ........................................................................... 295

Chapter 11: The Discharge ..........................................................................................297

11.1. The  Discharge  Order................................................................................................................ 297

11.2. Cases  on  Violation  of  the  Discharge  Order.............................................................................. 297

11.2.1.1. IN  RE  ANDRUS,  189  B.R.  413  (N.D.  Ill.  1995)................................................................ 297

11.3. Denial  of  Discharge.................................................................................................................. 299

11.4. Cases  on  Denial  of  Discharge................................................................................................... 301

11.4.1.1. DAVIS  v.  DAVIS,  911  F.2d  560  (11th  Cir.  1990) ............................................................ 301

11.4.1.2. IN  RE  BAJGAR,  104  F.3d  495  (1st  Cir.  1997)................................................................. 302

11.5. Exceptions  to  Discharge:    11  U.S.C.  §  523 ............................................................................... 304

11.5.1.1. Automatically  Non-­‐Dischargeable  Debts..................................................................... 305

11.5.1.2. Debts  Non-­‐Dischargeable  Only  On  Timely  Request  of  the  Creditor ............................ 307

11.6. Cases  on  Exceptions  to  Discharge ........................................................................................... 307

11.6.1.1. FAHEY  v.  MASS.  DEP’T  OF  REVENUE,  2015  BL  41157  (1st  Cir.  2015) ........................... 307

11.6.1.2. BRUNNER  v.  NEW  YORK  STATE  HIGHER  EDUC.    SERV.  CORP.,  831  F.2d  395  (2d  Cir.  1987)

..................................................................................................................................... 311

11.6.1.3. ELLINGSWORTH  v.  AT&T  UNIVERSAL  CARD  SERV.,  212  B.R.  326  (Bankr.  W.D.  Mo.  1997)

..................................................................................................................................... 312

11.6.1.4. IN  RE  SHARPE,  351  B.R.  409  (Bankr.  N.D.  Tex.  2006)................................................... 321

11.6.1.5. ARCHER  v.  WARNER,  538  U.S.  314  (2003) ................................................................... 325

11.6.1.6. KAWAAUHAU  v.  GEIGER,  523  U.S.  57  (1998)............................................................... 329

11.6.1.7. BULLOCK  V.  BANKCHAMPAIGN,  133  S.  Ct.  1754  (2013) .............................................. 330

11.7. Reaffirmation:    11  U.S.C.  §  524(c) ........................................................................................... 332

11.8. Practice  Problems:    Protecting  the  Discharge. ........................................................................ 333

Chapter 12: Wage Earner Reorganizations under Chapter 13 ....................................335

12.1. Introduction............................................................................................................................. 335

12.2. Reasons  for  Filing  under  Chapter  13 ....................................................................................... 335

12.3. The  Chapter  13  Process........................................................................................................... 335

12.4. The  Chapter  13  Plan  Term  (and  “Commitment  Period”)......................................................... 336

12.5. Restructuring  Secured  Claims  in  a  Chapter  13  Plan ................................................................ 336

12.6. Cases  on  Restructuring  Secured  Claims  in  Chapter  13 ............................................................ 340

12.6.1.1. TILL  v.  SCS  CREDIT  CORP.,  541  U.S.  465  (2004)............................................................ 340

12.6.1.2. NOBELMAN  v.  AMERICAN  SAVINGS  BANK,  508  U.S.  324  (1993) ................................. 343