Commercial Banking, Collections, and Bankruptcy

Dist. Ct. did not err in finding that defendant breached terms of contract giving plaintiff first right of refusal concerning participation in future promotional product/advertising specialties involving defendant, when defendant invited third-party to co-locate trade show with defendant at McCormick Place and failed to offer plaintiff initial opportunity to participate in same trade show. Co-location trade show qualified as covered opportunity as contemplated by contract, and Dist. Ct. could properly reject defendant's argument that third-party's decision to co-locate trade show with defendant was independent act. Moreover, Dist. Ct. did not err in awarding only nominal damages where plaintiff failed to account for diluted demand stemming from participation by plaintiff's members in subject trade show that occurred within four months of another show held by plaintiff, and where plaintiff failed to identify companies that would have attended subject trade show and/or identify actual profits, if any, that third-party generated at subject trade show.

Dist. Ct. did not err in reversing Bankruptcy Ct. order finding that debtors' unpaid loan to creditor was dischargeable, where creditor argued that said debt was nondischargeable due to debtors' fraudulent representations. Bankruptcy Ct. erred in finding that creditor was not justified in relying on debtors' misrepresentations regarding ownership of two McDonald's restaurants. Fact that debtors did not use said restaurants as security for loan was not material where creditor could rely on debtors' representations of ownership in assessing their abilities to satisfy loan obligations. Moreover, instant loan was nondischargeable where record showed that said misrepresentations induced creditor to forbear in collecting on loan, which resulted in collection remedies that had decreased in value..

Law firm, which had filed fee application with Bankruptcy Ct. for services rendered as counsel to creditors’ committee, lacked standing to appeal order dismissing debtors’ involuntary Chapter 11 bankruptcy cases where law firm failed to appear at hearing where dismissal motion was addressed or otherwise object to proposed dismissal prior to Bankruptcy Ct. ruling. Fact that law firm was constituent of creditor committee that was represented at hearing or that law firm filed with Bankruptcy Ct. two motions to reconsider dismissal order did not satisfy appearance and notice requirements for obtaining standing to appeal dismissal order.

Bankruptcy Judge did not err in finding in instant Chapter 13 proceeding that exception to Bankruptcy Ct.’s cramdown authority found under 11 USC section 1325(a) applied to preclude use of said authority to creditor’s purchase money security interest in debtor’s car where said interest was incurred within 910 days prior to filing of instant bankruptcy proceeding. Moreover, Bankruptcy Judge did not err in finding that creditor’s purchase money security interest included not only difference between purchase price of new car and debtor’s down payment, but also negative equity generated when creditor financed and secured difference between amount that debtor still owed on traded-in car and agreed upon value of debtor’s traded-in car.

Dist. Ct. did not err in reversing Bankruptcy Judge order that found under Indiana statute plaintiff-Trustee could not avoid debtor's recorded mortgage, which contained technical defect that, prior to 2007 Amendment to said statute, otherwise allowed Trustee to avoid instant mortgage. While 2007 Amendment was ambiguous as to whether it applied to instant mortgage that had been recorded prior to date of said Amendment, 2008 Amendment to said statute clarified 2007 Amendment so as to render 2007 Amendment (which viewed mortgages with instant technical defect as providing requisite constructive notice to Trustee as if properly recorded) applicable to instant mortgage.