Writing for the panel, Circuit Judge Duane Benton explained that section 524(e) of the Bankruptcy Code provides that the "discharge of a debt of the debtor does not affect the liability of any other entity on … such debt." Lariat was deemed to accept the plan because its allowed claim was paid in full. Michael E. Gans, Clerk of Court. The Eighth Circuit noted plaintiff’s claimed injury was broader than that and remanded for the district court to consider whether deprivation of ERISA protections would constitute a sufficient injury to confer standing. /Root 121 0 R ", Allowing Lariat's claim in an uncapped amount, Judge Benton explained, would violate the purpose of section 502(b)(6) because Lariat would receive a windfall at the expense of other creditors. (B) any unpaid rent due under such lease, without acceleration, on the earlier of such dates…. >> /Linearized 1 /Length 1686 Judge Benton also cited a century-old decision of the U.S. Supreme Court for the proposition that "'discharge destroys the remedy, but not the indebtedness'" (quoting Zavelo v. Reeves, 227 U.S. 625, 629 (1913)). "Lariat, as lessor," the judge wrote, "should not avoid the cap—and receive a windfall—because it is filing a claim based on a fraudulent-transfer judgment from a breach of the lease, instead of a claim based just on the breach. In 2014, the state court ruled that Mr. Wigley's bankruptcy discharge did not retroactively relieve Mrs. Wigley of her liability for the fraudulent transfer judgment. S.D.N.Y. Consistent with rulings by other courts, the Eighth Circuit said yes, applying ordinary meanings to the statutory terms “maintain” and “organization.”. 0000003298 00000 n See In re Ancona, 2016 WL 828099, at *5 (Bankr. 2020), the court of appeals reversed a bankruptcy appellate panel decision and held that an individual debtor's joint liability with the guarantor of a real property lease for a fraudulent transfer judgment: (i) was not discharged as a result of the lease guarantor's prior bankruptcy discharge; but (ii) was nonetheless capped under section 502(b)(6). 0000002856 00000 n The United States Court of Appeals for the Eighth Circuit is a United States federal court with appellate jurisdiction over the following United States district courts: Eastern District of Arkansas Western District of Arkansas Northern District of Iowa Southern District of Iowa District of Minnesota Eastern District of Missouri Western District of Missouri District of Nebraska District of North Dakota District of South Dakota The court … He reasoned that guarantors and garnishees are "analogous to fraudulent transferees because their liability is one step removed from the breach of lease. 0000065257 00000 n Finally, the Eighth Circuit addressed the Establishment Clause issue. Named the "Innovative Law Firm of the Year" by the International Legal Technology Association, the firm’s commitment to client service and depth of expertise draws clients to Jackson Lewis for excellent value-driven legal advice. endobj Newsletters, We use cookies to deliver our online services. In Wigley, the Eighth Circuit considered whether an individual debtor's joint liability with the guarantor of a lease for a fraudulent transfer judgment was capped under section 502(b)(6). Second, the Eighth Circuit again looked to dictionary definitions to conclude “organization” means “an administrative and functional structure” or “a group of people who work together in an organized way for a shared purpose.”   The court concluded the internal benefits committee met this definition, as it was a group of people who worked together for a shared purpose. 2003); see generally Collier on Bankruptcy ¶ 502.03(7)(a) (16th ed. To prevent landlords under long-term real property leases from reaping a windfall for future rent claims at the expense of other creditors, section 502(b)(6) of the Bankruptcy Code caps the amount of a landlord's claims against a debtor-tenant for damages "resulting from the termination" of a real property lease.

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+ How we made $200K with 4M downloads.

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