Articles Posted in Bankruptcy

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Petitioners executed a promissory note and mortgage in favor of Mortgage Electronic Registrations Systems, Inc. The notary acknowledgment on the mortgage was left blank. The mortgage was subsequently recorded with the county recorder. The interest in the mortgage was later assigned to Bank. Thereafter, Petitioners initiated a Chapter 13 bankruptcy and commenced an adversary proceeding seeking to avoid the mortgage as defectively executed. The bankruptcy court determined that its interpretation of Ohio Rev. Code 1301.401 would be dispositive in this case and certified to the Supreme Court questions of state law concerning whether section 1301.401 has an effect on the case. The Supreme Court answered that section 1301.401 applies to all recorded mortgages in Ohio and acts to provide constructive notice to the world of the existence and contents of a recorded mortgage that was deficiently executed under Ohio Rev. Code 5301.01. View "In re Messer" on Justia Law

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Appellants, Gregory and Jo Ellen Adkins, filed a complaint for a writ of prohibition to prevent Appellee, the county municipal court judge, from exercising any further jurisdiction in Smith v. Adkins. Appellants claimed the judge patently and unambiguously lacked jurisdiction over the underlying municipal court case because a no-asset bankruptcy discharge in 2001 barred the action. The court of appeals dismissed Appellants' claim. The Supreme Court affirmed, holding that Appellants could not establish that the municipal court judge lacked jurisdiction, as (1) the complaint in the municipal court case alleged a secured-debt claim, which would not be discharged by the bankruptcy; (2) the bankruptcy discharge specified that not all types of debts were discharge; (3) there was evidence that the parties to the underlying suit had an ongoing relationship that continued after the bankruptcy discharge was entered in 2001; and (4) Appellants may have waived their affirmative defense of discharge in bankruptcy by failing to raise it in the municipal court case in an answer or an amended answer. View "State ex rel. Adkins v. Mun. Court (Shanahan)" on Justia Law

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Appellants, PNH Inc. and Ronald Creatore, filed an action against Alfa Laval Flow, Inc., which manufactures equipment for sanitary processing of food and beverages, for abuse of process and tortious interference with a contract. Appellants asserted that Alfa Laval Flow misused an involuntary-bankruptcy case it filed against its distributor in an effort to eliminate Creatore as a competitor in the sale of equipment for sanitary processing of food and beverages. The trial court dismissed the claims. The Seventh District affirmed, holding that federal law preempts state-law causes of action alleging the abuse of bankruptcy proceedings. The Supreme Court affirmed, holding that the United States Bankruptcy Code preempts state-law claims that allow the recovery of damages for misconduct committed by a litigant during bankruptcy proceedings. View "PNH, Inc. v. Alfa Laval Flow, Inc." on Justia Law