Harris v. Viegelahn and Bullard v. Hyde Park Savings Bank - 6-2-15

The Supreme Court recently issued two unanimous decisions in bankruptcy cases, Harris v. Viegelahn and Bullard v. Hyde Park Savings Bank. 

Harris v. Viegelahn, decided on May 18, involved the conversion of a Chapter 13 bankruptcy case into a Chapter 7 bankruptcy case. In Chapter 13 bankruptcy, the debtor is permitted to keep his assets but his postpetition wages are property of the bankruptcy estate and may be distributed to creditors. In Chapter 7 bankruptcy, the debtor’s assets are immediately liquidated and made available to creditors--but postpetition wages remain the debtor’s. The question in this case was whether, upon conversion from Chapter 13 to Chapter 7, postpetition wages still in the hands of the Chapter 13 trustee remain available to creditors, or must instead be returned to the debtor. In an opinion delivered delivered by Justice Ginsburg, the Court held unanimously that the debtor was entitled to the return of any postpetition wages not yet distributed by the Chapter 13 trustee.  The contrary judgment of the Fifth Circuit was reversed and the case remanded.

Bullard v. Hyde Park Savings Bank, decided on May 4, concerned whether a debtor could appeal a bankruptcy court's order denying confirmation of the debtor's proposed repayment plan. In an opinion delivered by Chief Justice Roberts, the Court held unanimously that the order denying confirmation was not a final order subject to immediate appeal.  The judgment of the First Circuit, which had dismissed the debtor’s appeal for lack of jurisdiction, was affirmed.

To discuss these cases, we have Zvi Rosen, who is a Visiting Assistant Professor of Law at the Hofstra University Maurice A. Deane School of Law.

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