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7th Circuit

PACA Doesn’t Give Rise to Denial of Discharge for Defalcation, Chicago Judge Says

A PACA trust lacks the hallmarks of a trust, so a failure to pay a produce supplier doesn’t give rise to a nondischargeable debt for defalcation while acting in a fiduciary capacity, Judge Goldgar says.

Even a $3 Million Claim for Severance Is Exempt in Illinois as Wages, Easterbrook Says

Pleas to injustice and unfairness failed to persuade the Seventh Circuit to depart from a state law exemption for wages.
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Seventh Circuit Limits Punitive Damages to Total Compensatory Damages of $582,000

Despite atrocious mortgage servicing, the circuit court cut a jury’s $3 million award of punitive damages to $582,000.
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Medical Bills Are Held to Be Consumer Debts, Invoking the Means Test

Someone forced into bankruptcy on account of medical bills will also be forced into chapter 13.

Receivership Court May (Sometimes) Bar the Filing of an Involuntary Bankruptcy

Court weighs the relative advantages of receivership versus bankruptcy in deciding whether to bar the filing of an involuntary bankruptcy.

Seventh Circuit Holds that Parking Tickets and Fines Are Chapter 13 ‘Admin’ Expenses

Appeals courts won’t allow bankruptcy to shield debtors from paying parking tickets and fines incurred in the course of a chapter 13 case.
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Failure to Raise a Stern Objection Violates a Lawyer’s Standard of Care

The lawyer whose waiver led to Wellness International avoided malpractice by the skin of his teeth.

Debtors’ Attorneys Are Paid in Chapter 13 Before Secured Creditors

Indiana bankruptcy and district judges rule that secured lenders are only entitled to ‘adequate protection’ until the debtor’s counsel’s allowed fees have been paid in full.

Section 505(a) Doesn’t Confer Jurisdiction to Determine Amount of a Tax, Circuit Says

Seventh Circuit splits with other circuits on basis for jurisdiction to determine the amount of a tax.
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Seventh Circuit Splits with the First Circuit on Sufficiency of Financing Statements

Seventh Circuit holds that a financing statement is sufficient if it describes collateral by reference to an unattached security agreement.
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