US Bank NA v. The Village at Lakeridge, LLC (In re The Village at Lakeridge, LLC), 814 F. 3d, 993 (9th Cir. Feb, 2016)

By M. Jonathan Hayes, Simon Resnik Hayes LLP (Sherman Oaks, CA)

Issue: When an insider sells its claim, is the buyer treated as an insider for chapter 11 voting purposes? Was the transfer of the claim here in bad faith?

Holding: No. As to bad faith, the bankruptcy court said no and the BAP and the 9th circuit said there was no clear error. The dissent says the bad faith is pretty obvious (which seems right to me).

Appeal from the BAP

Judge Mike Nakagawa, District of Nevada

Opinion by Judge N.R. Smith; Partial Concurrence and Partial . . .

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