Danielson v. Flores (In the Matter of Flores)
- Summarized by Kevin Baum , Windels Marx Lane & Mittendorf, LLP
- 11 years 4 months ago
- Citation:
- Danielson v. Flores (In re Flores), No. 11-55452, --- F.3d --- (9th Cir. Aug. 29, 2013)
- Tag(s):
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- Ruling:
- Affirming the Bankruptcy Court, the Ninth Circuit, sitting en banc, held that a Bankruptcy Court may confirm a chapter 13 plan of reorganization under section 1325(b)(1)(B) only if the plan’s duration is at least as long as the applicable commitment period under section 1325(b)(4), without regard to whether the debtor has positive, zero, or negative projected disposable income. In reaching its decision, the court expressly overruled the portion of its previous decision in Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868, 875 (9th Cir. 2008) in which the Ninth Circuit had previously held that section 1325(b)(1)(B) does not impose a minimum duration for a Chapter 13 bankruptcy plan if the debtor has no "projected disposable income," as such term is defined in the Bankruptcy Code.
- Procedural context:
- Rehearing en banc from a divided panel of the Ninth Circuit ruling on a direct appeal that reversed the Bankruptcy Court’s order sustaining the chapter 13 trustee’s objection to the chapter 13 debtors’ plan, holding that section 1325(b) required that the plan have a minimum during of five years notwithstanding the fact the debtors had no “projected disposable income.”
- Facts:
- The chapter 13 debtors proposed a plan of reorganization under which they would pay $122 per month (or one percent of the allowed unsecured, nonpriority claims) for a period of three years. The chapter 13 trustee objected to the plan, arguing that section 1325(b) required a plan with a minimum duration of five years because the debtors’ then-current monthly income was above the median annual family income in the applicable state. The debtors contended that section 1325(b)(1)(B) does not set forth a minimum plan duration for debtors who, like them, have no projected disposable income, and, therefore, their three-year plan was permissible.
- Judge(s):
- O’Scannlain, Thomas, Silverman, Graber, Wardlaw, Paez, Murguia, Christen, and Nguyen, Circuit Judges (majority opinion); Kozinski, Chief Judge, and Pregerson, Circuit Judge (dissenting opinion)
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