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1146 Chapter 11 - Tax Exemption
State of Florida Dept. of Revenue v. Piccadilly Cafeterias, Inc. (In re Piccadilly Cafeterias, Inc.), --- F.3d ---- (11th Cir. Apr. 18, 2007) (Tax exemption found in post-BAPCPA § 1146(a) may apply to a § 363 sale that occurs before a plan is confirmed. Debtor's § 363 sale of substantially all its assets was necessary to consummate debtor's plan. Accordingly, the sale was one "under a plan confirmed under § 1129" even though no plan had been confirmed at the time of the sale. The "under a plan" language of § 1146(a) is ambiguous because it can be read either as a temporal restriction on when the confirmation of the plan must occur or as describing eligible transfers regardless of when the plan is confirmed. The court chose the later reading, concluding that the necessity of the transfers to the consummation of a confirmed plan of reorganization, rather than the timing of the transfers, was the touchstone of the analysis.)
In re Marrama, 127 S.Ct. 1105 (U.S. Feb. 21, 2007) (Debtor who made false statements and concealed assets and transfers may not convert case from one under Chapter 7 to one under Chapter 13. Pursuant to § 1307(c), a Chapter 13 case may be converted or dismissed for cause, including the debtor's bad faith conduct. A ruling that a Chapter 13 case may be converted or dismissed for bad faith conduct is tantamount to a ruling that the debtor does not qualify under Chapter 13. Under § 706(d), a case may not be converted unless the debtor may be a debtor under the chapter to which the case is being converted. Accordingly, a bad faith debtor may not convert his case from Chapter 7 to Chapter 13. Dissenting, four justices would have allowed conversion because conversion or dismissal under § 1307(c) differs from eligibility to be a debtor under § 109 and does not implicate the § 706(d) limitation on conversion of a case under Chapter 7 to one under Chapter 13.)
In re Salem, 465 F.3d 767 (7th Cir. Oct. 10, 2006) (Bankruptcy court in Illinois denied approval of debtor's Chapter 13 plan and dismissed case. Before the case was dismissed, debtor had requested the Illinois bankruptcy court to "convert" his closed Chapter 7 case in New York into his pending Chapter 13 case in Illinois, and that motion had been denied but not appealed. Appellate jurisdiction existed regarding the Illinois bankruptcy court's denial of the "conversion" motion even though the denial was not appealed at the time pursuant to Federal Rule of Bankruptcy Procedure 8001 et seq. and even though the ruling was not mentioned in the appeal of the order dismissing the Illinois Chapter 13 case. Denial of the motion was proper, because a case cannot be converted before it is transferred to the jurisdiction where the conversion motion is pending pursuant to 28 U.S.C. 1412 and Federal Rule of Bankruptcy § 1014(b).)
In re Lafata, 483 F.3d 13 (1st Cir. Apr. 3, 2007) (Anti-modification provision of § 1322(b)(2), prohibiting modification of the rights of a holder of "a claim secured only by a security interest in real property that is the debtor's principal
