Now Updating

Summarizing by Lars Fuller

Kirkland v. Rund (In the Matter of EPD Investment Company, LLC)

-- F.3d -- (9th Cir. 2016)
The Ninth Circuit Court of Appeals affirmed the the bankruptcy court's ruling denying Defendants' motion to compel arbitration. In core proceedings, the bankruptcy court has discretion to decline to enforce otherwise applicable arbitration provisions only if arbitration would conflict with underlying purpose of the bankruptcy code. Therefore, the bankruptcy court was not bound by the arbitration agreements for purposes of the fraudulent transfer claims.
Procedural context:
Defendant / Appellant appealed the bankruptcy court's order denying their request to compel arbitration. The bankruptcy court held that compelling the arbitration would conflict with the underlying purpose of the bankruptcy code. Defendant appealed to the District Court, but the District Court affirmed the bankruptcy court's decision. The Defendant then appealed to the Ninth Circuit Court of Appeals.
EPD Investment Co. and Jerrold S. Pressman ("Debtor") filed Chapter 7 bankruptcy. Trustee commenced an adversary seek (among other claims - avoidance of pre-bankruptcy transfers) Defendants. The Trustee further asserted that EPD Investment Co. operating a ponzi scheme. Defendant John Kirkland was counsel for both Debtor(s) prior to the bankruptcy. Defendant Kirkland invested or lent approximately $150,000.00 to EPD Investment Co. When EPD Investment Co. could not repay its creditors, Defendant Kirkland transferred his interest in EPD Investment Co. to a trust wherein his wife was the trustee. Additionally, the trust filed, shortly after the transfer, filed a financing statement against all of the Debtor(s)' assets. Defendant moved the bankruptcy court to compel arbitration pursuant to the terms of agreements with both Debtor(s). Defendant further asserted that the Trustee's claims were "disguised" as non-core claim; however, Defendant acknowledged that the fraudulent transfer claim was statutorily core.
Honorable Barry G. Silverman and Susan P. Graber, Circuit Judges, and Jennifer A. Dorsey,* District Judge.

ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!

About us in numbers

3322 in the system

3193 Summarized

11 Being Processed