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Tag Archives: Bankruptcy

Bankruptcy – Labor & Employment – Severance Plan – Earned Compensation — Priority (access required)

Matson v. Alarcon The 4th Circuit affirms a bankruptcy court holding that terminated employees of debtor LandAmerica Financial Group “earned” their severance compensation on the date they became participants in the debtor company’s severance plan immediately after their termination, and rejects the trustee’s position that only a pro-rated portion of the claims had been “earned” in the 180 days before the bankruptcy petition.

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Bankruptcy – Judicial Lien – Avoidance – State Law Exemption – Failure to Claim (access required)

Botkin v. DuPont Community Credit Union Although debtor had not claimed an exemption under Virginia law in her Highland County real estate, she nevertheless could avoid a judicial lien held by appellant credit union on that property under the controlling bankruptcy statute, and the 4th Circuit upholds the district court decision that the Bankruptcy Code does not require a debtor to actually claim an exemption in property subject to a judicial lien sought to be avoided under 11 U.S.C. § 522(f).

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Bankruptcy – Real Property – Mortgage – Avoidable Transfer (access required)

Goldman v. Capital City Mortgage Corp. The 4th Circuit upholds a decision for a Chapter 7 bankruptcy trustee who sued appellant mortgage company to avoid transfer of an 11.8-acre parcel of real estate in Maryland pledged by debtor; the court accepts the trial court finding that the mortgage company did not show it was a transferee who took for value, in good faith and without knowledge of the voidability of the transfer, under 11 U.S.C. § 550(b). The transferee, Capital City Mortgage Corporation (CCM), argues that our holding in Smith v. Mixon, 788 F.2d 229 (4th Cir. 1986), requires us to find that the absence of actual knowledge of the voidability of the transfer is all that is needed to find good faith under § 550(b)(1). We do not agree.

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