H3O Communications, LLC v. Kane (In re AMKO Fishing Co, Inc.

Case Type:
Case Status:
BAP No. HI-17-1255-TaLLs (9th Circuit, Aug 07,2018) Not Published
BAP for 9th Cir. affirmed bankruptcy court (D. HI) ruling that creditor did not have maritime lien that attached to settlement proceeds from chapter 7 trustee's settlement with third party regarding fishing license. Chapter 7 trustee's settlement of dispute was not liquidation of estate's ownership interest in fishing license. Trustee abandoned fishing license and separately resolved disputed issues. Consequently, any maritime lien did not attach to proceeds. Any maritime lien held by creditor remained attached to fishing license and unaffected by abandonment or settlement.
Procedural context:
Creditor moved to enforce lien against settlement proceeds; bankruptcy court (D. HI) denied motion. Creditor appealed to BAP for 9th Cir.
Debtor, a fishing operator, filed chapter 12 bankruptcy, then converted to chapter 7. Creditor "VAK" was prepetition transferee of fishing license from debtor, that remained assigned to debtor. H3O was creditor that asserted maritime lien against debtor's ship ("Deborah Ann") and against fishing license. Chapter 7 trustee proposed to abandon the Deborah Ann. Bankruptcy court approved. Trustee commenced adversary against VAK alleging the fishing permit was fraudulently conveyed. VAK and the Trustee entered into a settlement whereby VAK paid the Trustee $75,000, the Trustee dismissed the complaint, released VAK, and agreed that the Fishing Permit would be abandoned. H3O filed proof of claim asserting maritime lien in the settlement proceeds.
Taylor, Lafferty, Lastreto

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