3rd Circuit

Third Circuit Makes Strict Rules Before Subrogation Rights Kick In

There can be no question about whether the beneficiary of a surety bond has been ‘paid in full’ before the surety has subrogation rights.
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Issue and Claim Preclusion Didn’t Bar Challenging a Lien Previously Considered Valid

Newly applicable law permitted a chapter 13 debtor to cram down a lien that the debtor previously had considered to be valid.

Third Circuit Makes More Rules on the Proper Scope of Asbestos Channeling Injunctions

The Third Circuit made more rules to decide whether an insurance company can be insulated from failure-to-warn claims by the channeling injunction in a chapter 11 ‘asbestos’ plan.
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Good Faith Is No Defense to an Allegedly Willful Stay Violation, Third Circuit Says

Lack of authority on point is no defense to a willful violation of the automatic stay, according to the Third Circuit.
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Chapter 13 Debtor Keeps a Whopping Increase in the Value of a Home

On a question where the courts are split, a New Jersey bankruptcy judge allowed the chapter 13 debtor to retain a $100,000 increase in value when he sold his home.

Chapter 11 Plans May Discharge Post-Confirmation ‘Admin’ Claims, Third Circuit Says

Although Section 1141(d)(1) sets a default rule only discharging claims that arose before confirmation, Circuit Judge Ambro says that a plan may alter the default rule and allow discharge of administrative claims arising after confirmation.
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Bankruptcy Courts Aren’t Prohibited from Entering Mareva Injunctions

The Supreme Court’s Grupo Mexicano decision doesn’t bar a bankruptcy court from freezing a defendant’s assets prior to judgment in a fraud action, Judge Sontchi says.

Critical Vendor Status Is No Defense to a Preference Claim

Critical vendor status is a defense to a preference claim only when the defendant was specifically named in an order, stipulation or agreement requiring full payment of the creditor’s prepetition claim, Judge Dorsey says.

Amended Chapter 13 Plan Allowed to Cure Post-Petition Mortgage Defaults

Courts are split on whether a debtor may amend a chapter 13 plan to cure post-petition defaults on a principal residence.

Contingency Fees Under a Trust Indenture May Not Result in a Claim, Judge Shannon Says

A standard provision in a trust indenture meant no recovery for the indenture trustee’s attorneys.

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