As judges and lawyers wrestle with the most significant changes to the Bankruptcy Code in almost 30 years, we will post some of the most recent BAPCPA cases and newsworthy items, with comments.
DECISIONS ON SURRENDER IN FULL SATISFACTION UNDER SECTION 1325
Here is a brief update of the various appeals pending around the country on the "surrender in full satisfaction" issue under Section 1325 of the Bankruptcy Code:
The Kenney case, No. 07-1664, has been fully briefed but has not been scheduled for oral argument. The appellant's reply brief was filed on October 22, 2007, so it may be several months. The Bankruptcy Court held that a debtor could surrender in full satisfaction of the debt.
The Long case, No. 06-6252, was argued on October 23, 2007 before the Sixth Circuit, and a decision can be expected within the next three to four months. The appellant has argued that the creditor's claim continues as a secured claim even after surrender, and that the deficiency balance after the sale should be allowed and treated as a secured claim, somewhat in accord with the Sixth Circuit's pre-BAPCPA and post-confirmation Nolan decision. Three amicus briefs were filed in that case, one by Ford and drafted by Richardo Kilpatrick, one by a small consortium (GMAC, TMCC, Wells Fargo, Nuvell and American Suzuki), both arguing the rationale ultimately adopted by the Seventh Circuit in Wright, and one by the National Association of Consumer Bankruptcy Attorneys (NACBA).
The Wright case, No. 07-1483, 429 F.3d 829, was decided on July 3, 2007, and not appealed. That decision by Judge Posner disallowed surrender in full and is now the law in the Seventh Circuit (only Illinois and Indiana).
Two cases are pending: In re: Moore, 07-1315, and In re: Osborn, 07-1726. Both cases are scheduled for oral argument on November 16, 2007, before the same panel of judges. Moore is a direct appeal from a decision allowing surrender in full by Judge Mixon in Arkansas, while Osborn is an appeal from an adverse decision by the Eighth Circuit BAP. The appellant in Moore has taken the Wright approach in its brief, while the appellant in Osborn has taken the same approach as the appellant in Long.
The Rodriguez case, No. 07-1046, was decided on August 28, 2007 by the Ninth Circuit BAP and does not appear to have been appealed. This decision is thus strongly persuasive, but not necessarily binding, throughout the Ninth Circuit (Alaska, Arizona, California, Hawai'i, Idaho, Montana, Nevada, Oregon, and Washington). It adopts the Wright rationale.
The Quick case (also known as Ballard), Nos. 07-5109 and 07-5112, was a decision by the Tenth Circuit BAP allowing surrender in full that was appealed to the Tenth Circuit. The Circuit Court appeal has been briefed, and oral argument, if any is held, will not likely occur for several months.
If you have any questions, updates, or suggestions, or know of any other matters going up on appeal, please let me know.