Supreme Court Round-Up
for defending BB’s core fee application
(albeit not the fees for defending its fee
enhancement). The debtor appealed
to the Fifth Circuit Court of Appeals.
While the Fifth Circuit saw no problem
with the fee enhancements, it reversed
the fee award to BB for defending
its fee application.
BB petitioned
the Supreme Court for certiorari in
July 2014; certiorari was granted on
October 2, 2014. On December 10,
2014, NACBA filed its Brief of Amicus
Curiae in support of the petitioners.
None of the remaining three cases
have completed oral argument yet;
however, certiorari has been granted in
all of them, and they all directly impact
the consumer debtor and the consumer
debtors’ attorney.
Chapter 7 Lien Stripping
In Bank of America, N.A. v. Caulkett, 9
and its partner case Bank of America,
N.A. v. Toledo-Cardona,10 the Supreme
Court will decide whether a Chapter
7 debtor can use Section 506(d) of
the Bankruptcy Code to “strip off”
a fully unsecured junior lien on real
property. The law is pretty settled
that in a Chapter 13 case the debtor
can remove – or strip off – a wholly
unsecured junior lien. 11 It is also well
settled that the junior lien cannot be
reduced to the value of the collateral
if it is partially secured by the debtor’s
residence. 12 Furthermore, in Dewsnup
v. Timm 13 the Supreme Court made it
very clear that a partially secured junior
lien cannot be stripped off in a Chapter
7 case. The only question left is
whether a Debtor can strip off a wholly
unsecured junior lien in a Chapter 7
case. The Eleventh Circuit held that
yes, a Chapter 7 debtor can in fact strip
off a wholly unsecured junior lien in
McNeal v. GMAC Mortgage 14 expressly
rejecting the view of the Fourth, Sixth
and Seventh circuits. 15 The Supreme
Court granted certiorari in these cases
after the Eleventh Circuit denied a
petition to rehear McNeal en banc, 16
foreclosing the last opportunity for the
Eleventh Circuit to resolve the circuit
split without requiring the involvement
of the Supreme Court. Oral argument
has been set for March 24, 2015.
Appealability of Order Denying
Confirmation of Chapter 13 Plan
In Bullard v. Hyde Savings Bank, 17 a
Chapter 13 case out of Massachusetts,
the Supreme Court is asked to decide
whether an order denying confirmation
of a bankruptcy plan is appealable.
Pursuant to 28 U.S.C. §158(a)(1), a
party may appeal “final judgments,
orders, and decrees” of a bankruptcy
court to the district court or the
bankruptcy appellate panel. 28 U.S.C.
§158(a)(3) permits a litigant to appeal
interlocutory orders and decrees,
but only with leave of the court. In
Bullard, the bankruptcy court denied
confirm