JURISDICTION AND PRECEDENTIAL EFFECT: The bankruptcy courts, and Bankruptcy Appellate Panel, are Article I Courts under the US Constitution. The district courts and courts of appeal are Article III courts. As such, the Courts of Appeal are not bound by the decisions of the bankruptcy appellate panel, but considers such decisions as advisory only. In fact, district courts and courts of appeal routinely perform a de novo analysis (considering the facts and law anew) of the Bankruptcy Appellate Panel’s findings. In re Silverman 616 F.3rd 1001 (9th Circuit 2010).
AUTOMATIC STAY: The Bank froze the debtor’s accounts after the filing of the bankruptcy, and notified the trustee and the debtor. The bank did not use the funds as a set off for any debt. This is sometimes referred to as an administrative hold upon the debtor’s account. The court held that this action, all by itself, did not constitute a violation of the automatic stay; the bank requested information from the trustee, after making the trustee aware of the freeze on the account. The trustee did not respond. The actions of the bank constituted no violation of law. Mwangi v. Wells Fargo Bank 764 F.3d 1168 (CA9, 2014)
AUTOMATIC STAY: Corporate debtor was sued in class-action in New Mexico state court, prior to filing bankruptcy. As part of his bankruptcy, the corporate debtor asked to remove the class action to Bankruptcy Court. This removal was not barred by the automatic stay, which would have been an absurd result that could prevent even the filing of a Proof of Claim. In re Cashco, Inc. 598 B.R. 9 (2019), citing to, among others, In re North County Village 135 B.R. 641 (1992), and In re Miller, 397 F.3d 726 (2005).
BANKRUPTCY LAW (9th Circuit Bankruptcy Appellate Panel; Procedure for Reopening): Where debtor sought to reopen bankruptcy case on behalf of his LLC, bankruptcy court properly denied this relief. The debtor sought to reopen matters that would not affect the disposition of the debt; he had failed to timely appeal the fees of the trustee and the filing of a tax return; and he could file an amended tax return outside of the bankruptcy process. A case should not be reopened where “reopening the case would be a ‘pointless exercise.’“ (In re Caldel Holdings, LLC, Bankruptcy Appellate Panel Case No. NC-21-1083-BFS, filed October 27, 2021 [unpublished].
BANKRUPTCY LAW (9th Circuit Bankruptcy Appellate Panel; Homestead Exemption): Where debtors did not live in the property continuously from the time the judgment liens attached until the date of the filing of the bankruptcy petition, and where the facts showed that debtors had leased the property and were apparently living in another location on a permanent basis, homestead exemption was properly denied. Creditors could file claims and go through the bankruptcy process to attempt to collect appropriate portions of the debt. In re Jaswinder Singh Bhangoo, [published opinion] 9th Circuit Bankruptcy Appellate Panel, No. BAP No. EC-21-1158-BSL, filed December 22, 2021.