Latest 3 Cases This Week: In Re: 21st Century Oncology Holdings, Inc. (2d Cir.), In re Harris (6th Cir.), Slawson Exploration Co., Inc. v. Nine ...

The Selfie Coup: How to Tell If Your Government Is Plotting to Overthrow Itself

DEAN FALVY

Dean Falvy, a lecturer at the University of Washington School of Law in Seattle, describes how to tell whether a government is plotting to overthrow itself—a phenomenon he calles a “Selfie Coup.” Falvy explains the difference between a Selfie Coup and creeping authoritarianism by providing examples of both and argues that the more aware civil society is of the possibility of a Selfie Coup, the more likely it can prepare its defenses in time to prevent it.

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In Re: 21st Century Oncology Holdings, Inc.

Court: US Court of Appeals for the Second Circuit

Docket: 19-1725

Opinion Date: July 20, 2020

Judge: Dennis G. Jacobs

Areas of Law: Bankruptcy

The Second Circuit affirmed the bankruptcy court's order capping appellant's claim for certain incentive payments promised by his former employer pursuant to 11 U.S.C. 502(b)(7), which limits employee claims for damages "resulting from the termination of an employment contract." The court held that appellant's right to receive the payments was accelerated as a result of his termination, and thus section 502(b)(7) applied to his claim. In this case, pursuant to appellant's contract, portions of the incentive bonuses were not in fact due prior to termination, but were accelerated as the contract expressly provides. Therefore, the court held that the plain language of section 502(b)(7) requires that the court apply it to cap appellant's claim for accelerated payments.

In re Harris

Court: US Court of Appeals for the Sixth Circuit

Docket: 19-4081

Opinion Date: July 17, 2020

Judge: Per Curiam

Areas of Law: Bankruptcy

The Harrises filed a voluntary Chapter 13 bankruptcy petition. The bankruptcy court issued an automatic stay. The Harrises’ neighbors, the Cooleys, subsequently filed a lawsuit, seeking removal of an encroaching fence. While the state court case remained pending, the Harrises filed an adversary proceeding against the Cooleys, alleging violation of the bankruptcy court order by filing the state court complaint and that the Cooleys “continue to pursue to take control of" property of the bankruptcy estate (the fence) to which, the Harrises alleged, they were entitled by adverse possession. The bankruptcy court dismissed the Harrises’ adversary proceeding on abstention grounds. The district court and Sixth Circuit affirmed. The bankruptcy court did not abuse its discretion: the adverse possession claim is governed by state law, and in Ohio, such a claim is “disfavored.” The property at issue is not a part of the bankruptcy estate and the disposition of the Harrises’ adverse possession claim will not impact the administration of the bankruptcy proceeding. Rejecting an argument that the Cooleys knowingly violated the bankruptcy court order, the court noted that they are not creditors of the bankruptcy estate and the Harrises do not allege that they were injured by the state court action. The automatic stay provision provides that only “an individual injured by any willful violation of a stay” may recover damages, 11 U.S.C. 362(k)(1).

Slawson Exploration Co., Inc. v. Nine Point Energy, LLC

Court: US Court of Appeals for the Eighth Circuit

Docket: 19-1945

Opinion Date: July 20, 2020

Judge: Bobby E. Shepherd

Areas of Law: Bankruptcy, Real Estate & Property Law

After Slawson entered into an oil and gas exploration and production agreement with TPC, TPC's successor-in-interest filed for bankruptcy. Slawson then filed a proof of claim seeking payment, pursuant to the Promote Obligation, on all wells in which TPC's successor-in-interest elects to participate. The bankruptcy court confirmed the reorganization claim, but gave Slawson leave to commence litigation to determine whether the Promote Obligation runs with the land and is therefore not dischargeable in bankruptcy. Slawson then filed a declaratory action against Nine Point, TPC's successor-in-interest after the bankruptcy. The Eighth Circuit affirmed the district court's grant of summary judgment to Nine Point and held that the district court did not err in determining that the Promote Obligation is not a covenant running with the land because the obligation to make a payment did not directly benefit the land. The district court also did not err by determining that the obligation was not a real property interest or an equitable servitude under North Dakota law.