New York Eastern District

Average Lateness and Bucketing Tests Confirm the Ordinary Course Defense

A district judge in Brooklyn applied the two most commonly used tests for the ‘ordinary course’ defense to uphold dismissal of preference complaints.

Bankruptcy Judge Finds Liability for a Municipality’s Denial of Due Process Rights

A local government removed a lawsuit to bankruptcy court, but the bankruptcy judge turned around and slam-dunked the government for violating the plaintiff’s Fourteenth Amendment rights.

District Judge Effectively Bars a Short Sale Without Paying the Homestead Exemption

Reversing, a Long Island district judge credits value to a homeowner’s ability to delay foreclosure, taking a position contrary to a recent decision from a Ninth Circuit B.A.P.

District Judge Barred Redesignation to SBRA in a Case Pending 16 Months

Redesignation under the SBRA might become a hot topic once again when (if) Congress raises the cap back to $7.5 million.

Long Island Judge Ends ‘Loss Mitigation’ in His Courtroom

No more informal ‘no-look’ fees in the courtroom of Bankruptcy Judge Robert Grossman.

How the Ordinary Course Defense Works When the Supplier Doesn’t ‘Hound’ for Payment

The ‘average-lateness’ test reveals payments that were not made in the ‘ordinary course.’

‘13’ Trustees Are Paid Even if Dismissal Comes Before Confirmation, District Judge Says

A chapter 13 trustee is not a federal employee for the purposes of the Federal Tort Claims Act.

Estate Claims Can’t Be Sold for Trivial Recovery by Unsecured Creditors

Had the purchaser of estate claims offered to waive its own unsecured claim, the sale might have been approved.

In ‘Chapter 20,’ Discharged Mortgage Claim Resurrects as Unsecured, EDNY Judge Says

Judge Grossman didn’t abolish ‘chapter 20’ entirely. He required the debtor to treat the subordinate mortgage lender like all other unsecured creditors, even though the debtor’s personal liability to the lender had been discharged in the prior chapter 7 case.

The Pleading and Proof Required for Claims Against a Subsequent Transferee

Read Judge Grossman’s opinion as though it were a final exam question to see how many issues you spot and whether you come up with the correct answers.