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UPS Cap. Bus. Credit v. Gencarelli (In re Gencarelli)

At issue was a commercial lender's right to receive a bargained-for prepayment penalty from a solvent debtor. Defendant creditor sought review of a decision of the District Court for the District of Rhode Island, which held that 11 U.S.C. § 506(b) governed and that it could recover prepayment penalties only if they were reasonable; it further affirmed a bankruptcy court's determination that they were not.
Ruling: 
Bankruptcy court erred in disallowing claim for prepayment penalties based on standards for priority rather than allowability.
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United States v. Hyde

The District Court for the District of Massachusetts ruled that defendant bankruptcy debtor's restitution order, imposed in a criminal case, created an entirely new obligation owed to plaintiff United States unaffected by the debtor's homestead exemption and 11 U.S.C. § 522(c), and the United States could enforce its garnishment order against sale proceeds of the debtor's home. The debtor appealed the district court's order.
Ruling: 
Obligation under Mandatory Victims Restitution Act was not subject to homestead exemption.
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McGarry v. Chew (In re Chew)

Appellant siblings, who were referred to as creditors, challenged a decision of the District Court for the District of Massachusetts, which held that their arguments regarding their respective shares in appellee debtor's claimed state homestead exemption under 11 U.S.C. § 522(b) were barred by principles of claim preclusion due to their prior state court claims.
Ruling: 
Creditors'constructive trust arguments regarding debtor's homestead exemption should have been asserted in state court and properly barred by bankruptcy court.
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Fields Station LLC v. Capitol Food Corp. (In re Capitol Food Corp.)

Appellant, the corporate owner of commercial premises upon which appellee debtor sought to reorganize under chapter 11 and reopen as a food market, challenged, on appeal of the District Court for the District of Massachusetts'intermediate affirmance, the judgment of the bankruptcy court which denied the owner's motion to dismiss the chapter 11 petition on the ground that it was not filed in good faith.
Ruling: 
Potential loss of lease that would have eliminated chances for reorganization provided grounds for bona fide chapter 11 petition.
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Eastern Savings Bank v. LaFata (In re LaFata)

Before the court were two appeals. In the first, appellant bank challenged an order of the District Court for the District Court of Massachusetts which allowed the bifurcation of appellee debtor's chapter 13 claims. The bank also appealed an order of the Bankruptcy Appellate Panel of the First Circuit (Panel) which denied its Fed. R. Civ. P. 60(b) motion seeking reconsideration of three orders decided in the debtor's favor.
Ruling: 
Banktuptcy court properly bifurcated mortgage claim secured by two lots where home was mistakenly built on dividing property line.
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Ford v. Skorich (In re Skorich)

Appellee wife filed for divorce. Debtor husband filed a bankruptcy petition. The wife filed a motion with the bankruptcy court to obtain escrowed funds awarded to her in the divorce. Appellant trustee argued that the transfer to escrow agents was a preferential transfer avoidable under 11 U.S.C. § 547. The District Court for the District of New Hampshire held that the trustee could not avoid the transfer. The trustee appealed.
Ruling: 
Deposit of funds into escrow for benefit of debtor's former spouse pursuant to divorce decree was not a preferential transfer.
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Morley v. Ontos Inc. (In re Ontos Inc.)

Appellants, former employees of debtor corporation and alleged creditors, challenged an order from the District Court for the District of Massachusetts that affirmed a bankruptcy court's approval of a stipulation for waiver and release entered by the trustee for the bankruptcy estate with appellees, debtor's corporate officers, shareholders, and board members.
Ruling: 
Claims for breach of fiduciary duty against directors of debtor were property of the estate and could be settled by trustee.
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Ostrander v. Gardner (In re Milivision Inc.)

Appellant lenders made a loan to debtor. The next day, debtor's creditors filed an involuntary chapter 11 petition. Unaware of the bankruptcy petition, appellants did not record a financing statement relating to their loan until five days after the loan was made. The bankruptcy court permitted the trustee to invoke 11 U.S.C. § 547, the "strong-arm" provision, to avoid appellants'interest in debtor's assets. They appealed.
Ruling: 
Creditor's postpetition recording of financing statement did not relate back to date of loan.
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Collins v. Great Atlantic Mortg. Corp. (In re Lazarus)

The District Court for the District of Massachusetts affirmed a bankruptcy court's entry of summary judgment in favor of creditor mortgagee in declining to set aside a mortgage on the ground that it constituted a preferential transfer pursuant to 11 U.S.C. § 547(b) in debtor co-owner's bankruptcy case. The trustee appealed.
Ruling: 
Debtor's refinance with original mortgagee was preferential subject to possible applicability of 547(c) exceptions.
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