4th Circuit

Being a ‘Net Winner’ in a Ponzi Scheme Doesn’t Automatically Mean Nondischargeability

Alleging that a debtor realized an ‘impossibly high’ rate of return in a Ponzi scheme isn’t enough to state a claim of nondischargeability for ‘actual fraud.’

Lack of Financial Distress Doesn’t Divest a Court of Subject Matter Jurisdiction

Two North Carolina Courts have held within two months that the Bankruptcy Clause doesn’t demand ‘financial distress’ to establish subject matter jurisdiction.

Agreements in Settlement of Nondischargeable Debts Are Themselves Nondischargeable

Fourth Circuit holds that attorneys’ fees and interest in pursuit of nondischargeable debts are themselves nondischargeable.
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Denial of Modification of a Chapter 11 Plan Is Final and Appealable

Baltimore district judge applies the Fourth Circuit’s ‘substantial and unanticipated’ test to modifications of chapter 11 plans.

With Reservations, a Chapter 11 Debtor with No Financial Distress Avoids Dismissal

Bankruptcy Judge Whitley says that a no-opt-out plan for a solvent debtor might violate creditors’ due process and jury trial rights.

Judge Harner Gives Contours to the Amorphous Notion of ‘New Value’

The ‘new value’ offered by old equity in a chapter 11 plan was insufficient because it was only a small fraction of claims and because the dividend to creditors was also small.

Scheduling a Home with a Low Value Didn’t Protect a ‘13’ Debtor When It Was Sold

In the Fourth Circuit, creditors are compensated when there is a ‘substantial improvement’ in a chapter 13 debtor’s financial condition.

Even Without Personal Liability, a Mortgage on a Debtor’s Property Is a ‘Claim’

The ‘broad’ definition of ‘claim’ by the Supreme Court in Johnson led Judge Huennekens to hold that in rem rights against a debtor’s property give rise to a ‘claim.’

Fourth Circuit: Bankruptcy Courts Aren’t Bound by Article III’s Case or Controversy Requirements

The Fourth Circuit says that bankruptcy courts have broader jurisdiction than other federal courts and that some of their decisions are unreviewable by Article III courts.
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Fourth Circuit: State Law Claims for Discharge Violations Are Not Preempted

The Fourth Circuit declined to follow the First and Sixth Circuits on preemption of automatic stay violations by expanding the ban to redress for discharge violations.
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