Justia Nebraska Supreme Court Opinion Summaries

Articles Posted in Bankruptcy

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Jack Irwin owed a warehouse that Shade rented to store personal property. West Gate Bank held notes payable from Shade that were secured by Shade’s personal property. Shade later defaulted on the notes. Irwin and West Gate subsequently agreed to move Shade’s personal property pursuant to an “Abandonment” document. When Shade filed for bankruptcy, the bankruptcy court approved distribution of the proceeds in Shade’s personal property to West Gate, concluding that the Abandonment document was not an assignment or release of West Gate’s perfected security interest. Thereafter, Irwin filed this action against West Bank in district court alleging that West Gate breached its obligations under the Abandonment document by failing to pay the proceeds to Irwin. The district curt entered judgment in favor of West Gate. The Supreme Court affirmed, holding (1) the district court’s determination regarding the preclusive effect of the bankruptcy court’s ruling with respect to an assignment or release of West Gate’s security interest in Shade’s property was not relevant to this appeal; and (2) the district court did not err in concluding that the Abandonment document was not an enforceable contract or a warranty.View "Irwin v. West Gate Bank" on Justia Law

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Plaintiff obtained a default judgment against Red Willow Dairy, LLC, and Jim and Ann Huffman. The day before the order granting the default judgment was signed and file stamped, Red Willow Dairy and the Huffmans filed for chapter 7 bankruptcy. Plaintiff settled her claim in return for an assignment of rights to any causes of action Red Willow Dairy and the Huffmans might have against Fireman’s Fund Insurance Company with respect to the underlying lawsuit. Plaintiff then sued Fireman’s for breach of its duty to defend Red Willow Dairy and Huffmans. The district court found that the filing of the default judgment violated the automatic stay of the U.S. Bankruptcy Court and therefore granted summary judgment in favor of Fireman’s. The Supreme Court affirmed, holding the the filing of the bankruptcy stayed any further proceedings in the underlying action, preventing the rendition and entry of the default judgment. View "Doe v. Firemen's Fund Ins. Co." on Justia Law