7th Circuit

Constructive Notice Won’t Save a Sale Under 363(m) Absent Actual Notice, Seventh Circuit Says

To be a good faith purchaser under Section 363(m), a purchaser must be given actual notice to those with an interest in the property. Constructive notice won’t suffice.
Court: 

No Withdrawal or Jury Trial on Claims that Lawyers Violated Section 526

The district court opinion affirms the notion that bankruptcy courts have ‘core’ power without a jury to adjudicate claims of attorney misconduct.

Bankruptcy Is a Big Risk for Unmarried Couples Who Split Up

Family lawyers should be acutely aware that bankruptcy protections for former spouses don’t cover unmarried couples.
Court: 

Chapter 13 Can Shield Preferences from Recovery

So long as the debtor is paying unsecured creditors what chapter 13 requires, the debtor is not obliged to pursue preferences.

Costs of a Disciplinary Proceeding Again Held Nondischargeable Under Section 523(a)(7)

Seventh Circuit says that costs incurred by disciplinary authorities are not in compensation for ‘actual pecuniary loss.’
Court: 

Supplier Socked for $3.5 Million in Preferences Although All Bills Were Paid on Time

Hounding a debtor for payment and shortening credit terms defeated an ‘ordinary course’ defense to a preference.

Although Unusual, Postpetition Retainers Are Permissible, Chicago Judge Says

The possibility that interim compensation allowances can be disgorged means that counsel won’t have an undue advantage over other administrative creditors, Judge Cleary says.

PACA Debt Isn’t Nondischargeable, Chicago Judge Says, Siding with the Minority

Lower courts are split on whether violating a PACA trust results in a nondischargeable debt. The question is on direct appeal to the Eleventh Circuit.

Complaint Survives Against Chicago for Not Releasing Impounded Cars Immediately

Despite Fulton, a Chicago bankruptcy judge rules that the City of Chicago might have violated Section 362(a)(4), (a)(6) or (a)(7) by refusing to release impounded cars immediately after a debtor files a chapter 13 petition.

Judge Barnes Tells Gamblers What Records to Keep to Win a Discharge in Bankruptcy

The suggestion that the debtor never won undercut the poker player’s testimony about uncorroborated gambling losses.

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