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		<title>Bankruptcy: Meaning of &#8220;Defalcation&#8221;</title>
		<link>http://www.gucl.com/2013/05/14/attorney-blog/bankruptcy-meaning-defalcation-002861.html</link>
		<comments>http://www.gucl.com/2013/05/14/attorney-blog/bankruptcy-meaning-defalcation-002861.html#comments</comments>
		<pubDate>Tue, 14 May 2013 15:49:53 +0000</pubDate>
		<dc:creator>Neil Orleans</dc:creator>
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		<description><![CDATA[By: Neil J. Orleans The term “defalcation” has been a statutory exception to discharge since 1867.  The courts have long disagreed about the meaning of defalcation. An individual cannot obtain a bankruptcy discharge from a debt “for fraud or defalcation while acting in a fiduciary capacity, embezzlement or larceny.” 11 U.S.C. § 523 (a) (4). In the unanimous opinion of Bullock v. BankChampaign, N.A., No. 11-1518 (May 13 2013), 569 U.S.____ (2013), the United States Supreme Court held that defalcation “includes a culpable state of mind requirement akin to that which accompanies application of the other terms in the same statutory phrase.” Id. at *1  (referring to 11 U.S.C. § 523 (a) (4)). The Court further held that “ [w]e describe that state of mind as one involving knowledge of, or gross recklessness in respect to, the improper nature of the relevant fiduciary behavior.” Id. at *1. Thus, the Supreme Court has resolved 146 years of uncertainty in defining defalcation under the statute so as to preclude discharge from a debt.]]></description>
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		<title>Bankruptcy: Inherited IRAs &#8211; Exempt vs. Non-Exempt</title>
		<link>http://www.gucl.com/2013/04/24/attorney-blog/bankruptcy-inherited-iras-exempt-vs-non-exempt-002855.html</link>
		<comments>http://www.gucl.com/2013/04/24/attorney-blog/bankruptcy-inherited-iras-exempt-vs-non-exempt-002855.html#comments</comments>
		<pubDate>Wed, 24 Apr 2013 14:10:21 +0000</pubDate>
		<dc:creator>Neil Orleans</dc:creator>
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		<description><![CDATA[By: Neil J. Orleans The 7th Circuit Court of Appeals has held that inherited IRAs are not exempt from the reach of creditors in a bankruptcy case. In Re Brandon Clark and Heidi Heffron- Clark, Nos. 12-1241 and 12-1255 (7th Cir. 2013). 11 U.S.C. 522 (d) (12) states that retirement funds are exempt “ to the extent that those funds  are in a  fund or account that is exempt from taxation” under various sections of the Internal Revenue Code. The 7th Circuit held that while IRAs are generally exempt from seizure by creditors, those inherited from previous owners are not exempt since those funds cease to be retirement funds when inherited from the deceased owner. This ruling clashes with decisions from the 5th Circuit and 8th Circuit Bankruptcy Appeals Panel, both of which held that inherited IRAs are exempt from the reach of creditors. In Re Chilton, 674 F.3d 486 (5th Cir. 2012) and In re Nessa, 426 B.R. 312 (8th Cir. B.A.P. 2010). Thus with the split of Circuits, this issue is ripe for consideration by the U.S. Supreme Court.]]></description>
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		<title>Bankruptcy &#8211; Post Confirmation Actions: Reservation of Causes of Action</title>
		<link>http://www.gucl.com/2013/04/19/attorney-blog/bankruptcy-post-confirmation-actions-reservation-action-002849.html</link>
		<comments>http://www.gucl.com/2013/04/19/attorney-blog/bankruptcy-post-confirmation-actions-reservation-action-002849.html#comments</comments>
		<pubDate>Fri, 19 Apr 2013 14:25:32 +0000</pubDate>
		<dc:creator>Neil Orleans</dc:creator>
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		<description><![CDATA[By: Neil J. Orleans In  Wooley v. Haynes &#38; Boone, et.al.(In re SI Restructuring Incorporated), No. 11-51106 (5th Cir. April 18, 2013), the Court examined the ability of a creditor to bring Post Confirmation causes of action on behalf of a reorganized debtor. Wooley brought the action in the Bankruptcy Court, which denied Wooley’s Motion to  pursue the post confirmation cause of action. On appeal to the Fifth Circuit, the Fifth Circuit affirmed the Bankruptcy Court, relying on the  Fifth Circuit’s earlier opinions in Dynasty Oil &#38; Gas, LLC v. Citizens Bank (In re United Operating , LLC), 540 F. 3d 351 (5th Cir. 2008), Spicer v. Laguna Madre Oil &#38; Gas II, LLC (In re Texas Wyoming Drilling, Inc.), 647 F. 3d 547 (5th Cir. 2011)  and Compton v. Anderson (In re MPF Holdings US LLC), 701 F. 3d 449 (5th Cir. 2012) A debtor or creditor acting on behalf of the estate, as in the case at bar, may bring a post confirmation cause of action only if the confirmed plan “expressly provides for the claims’ retention and enforcement by the debtor.” “For a reservation to be effective, it &#8216; must be specific and unequivocal’ -  blanket reservations of ‘any and all claims’ are insufficient.” In the case at bar, the reservation was unequivocal but lacked sufficient specificity. Accordingly, the Fifth Circuit affirmed the Bankruptcy Court’s denial of standing of the Wooley’s to pursue the cause of action against Haynes &#38; Boone and the other named defendants.]]></description>
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		<title>Bankruptcy: Priority of Liens</title>
		<link>http://www.gucl.com/2013/04/16/attorney-blog/bankruptcy-priority-liens-002842.html</link>
		<comments>http://www.gucl.com/2013/04/16/attorney-blog/bankruptcy-priority-liens-002842.html#comments</comments>
		<pubDate>Tue, 16 Apr 2013 20:38:04 +0000</pubDate>
		<dc:creator>Neil Orleans</dc:creator>
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		<description><![CDATA[By: Neil J. Orleans In First National Bank v. Crescent Electric Supply, No. 12-10386 (5th Cir. April 5, 2013), the Fifth Circuit weighed priority of liens between a mechanic’s  lien and a secured lender. The lender recorded its deed of trust and security agreement in Tarrant County, Texas on September 1, 2006. Two contractors performed services as part of the renovation of the Hospital which owned the real property. The contractors filed their mechanic’s liens. The contractors claimed priority over the Bank’s deed of trust. The Hospital filed for bankruptcy protection. The key issue was whether the contractors had supplied visible materials and/or labor before the Deed of Trust was filed on September 1, 2006. The Bankruptcy Court ruled in favor of the contractors. The Bank appealed to the District Court, which held that neither contractor had complied with the requirements of Texas Property Code Section 53.124, which requires that construction or materials be visible from inspection of the land on which improvements are made. In so ruling the District Court relied on Diversified Mortgage Investors v. Lloyd D. Blaylock General Contractors, Inc., 576 S.W.2d 704 ( Tex. 1978). The District Court went on to hold that any materials delivered or labor commenced had not been visible from inspection prior to September 1, 2006. The Fifth Circuit affirmed the District Court. In reaching its decision, the Fifth Circuit relied in part on a Stipulation that acknowledged that the first visible work or delivery of visible materials was after September 1, 2006. The work was preliminary or preparatory since the requisite permit for actual renovation work had not been obtained.]]></description>
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		<title>Frank Broyles Explains Creation of Business Ethics Program for Irving ISD Students</title>
		<link>http://www.gucl.com/2013/04/15/attorney-blog/frank-broyles-explains-creation-business-ethics-program-irving-isd-students-002826.html</link>
		<comments>http://www.gucl.com/2013/04/15/attorney-blog/frank-broyles-explains-creation-business-ethics-program-irving-isd-students-002826.html#comments</comments>
		<pubDate>Mon, 15 Apr 2013 21:50:49 +0000</pubDate>
		<dc:creator>Frank L. Broyles</dc:creator>
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		<description><![CDATA[Frank Broyles chaired a business ethics seminar attended by around 250 Irving Independent School District high school and middle school students plus numerous Irving ISD staff. Frank invited Dr. Paul Melendez, founder of the University of Arizona’s Center for Leadership Ethics and Assistant Dean for its Eller College of Management, to put on the seminar. Frank first contacted Dr. Melendez after Frank was asked by the bankruptcy section of the State Bar of Texas to make a presentation in China on a legal ethics article Frank had published in the American Bankruptcy Institute Journal, entitled “Duty of Lawyers Representing Insolvent Debtors to Disclose Confidential Information to Creditors.” Frank studied Dr. Melendez’s ethics philosophies at a lecture and used some of what he learned for the bankruptcy presentation. Frank and Dr. Melendez then teamed up at the 2012 Collegiate Ethics Competition held at the University of Arizona campus in Tucson, Arizona when Dr. Melendez asked Frank to participate as a judge. Frank really enjoyed the experience, and it inspired him to get more involved in academic ethics programs. Frank is on the Board of Directors of La Buena Vida Foundation, an Irving-based non-profit organization dedicated to helping Irving students, and also serves as a Vice-Chair of the District Improvement Committee for Irving ISD. Frank said the idea that the University of Arizona’s ethics outreach program could work in the Irving community came naturally to him. He then went to work organizing the business ethics seminar for Irving ISD students. The seminar was held on March 1, 2013, at the University of Dallas campus in Irving, Texas. It was extremely successful, and the students were very engaged.  As a result, Irving ISD, a 35,000-student district, is already making plans for next year’s event and is considering making it a two-day program for approximately 500 of its top students. For more information, please read the University of Arizona’s Eller College of Management article about the program at http://www.eller.arizona.edu/buzz/2013/apr/ethics.asp.]]></description>
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		<title>Texas Supreme Court Expands Scope of Property Interests Subject to Taking Claims</title>
		<link>http://www.gucl.com/2013/04/03/attorney-blog/texas-supreme-court-expands-scope-property-interests-subject-claims-002820.html</link>
		<comments>http://www.gucl.com/2013/04/03/attorney-blog/texas-supreme-court-expands-scope-property-interests-subject-claims-002820.html#comments</comments>
		<pubDate>Wed, 03 Apr 2013 16:29:14 +0000</pubDate>
		<dc:creator>David Paschall</dc:creator>
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		<description><![CDATA[Expanding the scope of “property interests” subject to taking claims, the Texas Supreme Court last week also expanded the exposure of municipalities to these claims in El Dorado Land Co., L.P. v. City of McKinney, No. 11-0834, 2013 WL 1276045 (Tex. 2013). The deed conveying real property from El Dorado Land Co. to the City of McKinney required that the property be used only for park purposes and included an “option” for El Dorado to purchase the property if the condition was violated.  Ten years later, McKinney constructed a library on part of the property and El Dorado sought to exercise its option.  El Dorado sued the City for inverse condemnation following the City’s refusal to acknowledge El Dorado’s claimed right of repurchase. The Trial Court sustained the City’s plea to the jurisdiction based on lack of subject matter jurisdiction.  The Dallas Court of Appeals affirmed, ruling El Dorado’s “option” was a contractual right and the City immune from suit for the claimed breach of the contractual right.  The Texas Supreme Court, however, determined the “option” was a reversionary interest in real property, akin to a right of reentry, and compensable under the takings clause of the Texas Constitution.  The case was reversed and remanded to the Trial Court to determine whether construction of the library violated the deed restrictions and, if so, to what extent the City had taken El Dorado’s interest in the property. Municipalities should carefully scrutinize and review with their legal counsel real property conveyances prior to commencing projects on properties subject to conditions and in which another party retains any type of interest, present or future.    These considerations must also factor into negotiations for future conveyances.  At GUC&#38;L, our attorneys have the depth and experience in municipal and real property matters to help our clients navigate these changing and often complex currents.]]></description>
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		<title>Texas Supreme Court Holds Express Warranty Supersedes Implied Warranty for Good and Workmanlike Repair</title>
		<link>http://www.gucl.com/2013/04/02/attorney-blog/texas-supreme-court-holds-express-warranty-supersedes-implied-warranty-good-workmanlike-repair-002814.html</link>
		<comments>http://www.gucl.com/2013/04/02/attorney-blog/texas-supreme-court-holds-express-warranty-supersedes-implied-warranty-good-workmanlike-repair-002814.html#comments</comments>
		<pubDate>Tue, 02 Apr 2013 21:40:57 +0000</pubDate>
		<dc:creator>GUC&#38;L</dc:creator>
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		<description><![CDATA[By: Richard Schellhammer and Lindsey Reinhardt In 1987, the Texas Supreme Court recognized “an implied warranty to repair or modify existing tangible goods or property in a good and workmanlike manner.”  Melody Home Manufacturing Co. v. Barnes, 741 S.W.2d 349, 354 (Tex. 1987). On March 29, 2013, the Court held that the implied warranty is a “gap-filler,” and an express warranty can supersede it if the parties’ agreement sufficiently describes the manner, performance, or quality of the services.  Gonzales v. Southwest Olshan Foundation Repair Co., LLC, 2013 WL 1276033, *6 (Tex. Mar. 29, 2013). In Southwest Olshan, the foundation repair company allegedly failed to properly repair a foundation, and the homeowner sued Olshan for, among other claims, breach of implied warranty to perform repairs in good and workmanlike manner.  Id. at 1.  The agreement executed by the homeowner and company (the “Agreement”) specified that the service provider would perform foundation repair in a good and workmanlike manner and adjust the foundation for the life of the home due to settling.  Id.  The Court held that due to the specificity of the warranty language in the Agreement, the express warranty superseded the implied warranty of good and workmanlike repair.  Id. at 6.]]></description>
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		<title>Bankruptcy: Administrative Claim for Goods Delivered within 20 Days of Bankruptcy &#8211; Disallowance of Claims</title>
		<link>http://www.gucl.com/2013/04/02/attorney-blog/bankruptcy-administrative-claim-goods-delivered-20-days-bankruptcy-disallowance-claims-002808.html</link>
		<comments>http://www.gucl.com/2013/04/02/attorney-blog/bankruptcy-administrative-claim-goods-delivered-20-days-bankruptcy-disallowance-claims-002808.html#comments</comments>
		<pubDate>Tue, 02 Apr 2013 17:41:52 +0000</pubDate>
		<dc:creator>Neil Orleans</dc:creator>
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		<description><![CDATA[By: Neil J. Orleans Section 503 (b) (9) of the Bankruptcy Code grants to creditors an administrative priority claim for goods delivered to a debtor, in the ordinary course of business, within 20 days of a bankruptcy filing. This priority is the same priority which is granted for attorney’s fees and other costs incurred during the course of the bankruptcy. Section 502 (d) of the Bankruptcy Code provides that the Court shall disallow any claim filed by a claimant that has received an avoidable transfer such as a preferential payment. The issue presented to the Court in In re Energy Conversion, 486 BR 872 ( Bankr. E.D. Mich. 2013) is whether Section 502 (d) applies to 503 (b) (9) claims. The Court noted that there is a split of authority on the issue. The Energy Conversion Court concluded after reviewing the various authorities that Section 502 (d) does not apply to 503 (b) (9) claims. Because there is a split of authority, we can expect to see further cases going both ways but it is doubtful that the Supreme Court will take up the issue in the foreseeable future.]]></description>
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		<title>Mechanic’s Lien Affidavit – Substantial Compliance?</title>
		<link>http://www.gucl.com/2013/03/29/attorney-blog/mechanics-lien-affidavit-substantial-compliance-002803.html</link>
		<comments>http://www.gucl.com/2013/03/29/attorney-blog/mechanics-lien-affidavit-substantial-compliance-002803.html#comments</comments>
		<pubDate>Fri, 29 Mar 2013 15:35:09 +0000</pubDate>
		<dc:creator>GUC&#38;L</dc:creator>
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		<description><![CDATA[By: Mike Johnson and Lindsey Reinhardt A mechanic’s lien affidavit must substantially comply with the requirements in Chapter 53 of the Texas Property Code.  On March 21, 2013, the Houston appellate court (1st Dist.) addressed whether a mechanic’s lien affidavit did so when it failed to include the months in which the work was done and materials were furnished, the name and last known address of the person to whom the materials were furnished, and a statement identifying the date each notice of claim was sent to the owner.  LTF Real Estate Co., Inc. v. D &#38; D Util. Supply, LLC, 2013 WL 1183300, *9 (Tex. App.- Houston [1st Dist.] Mar. 21, 2013, no. pet. h.). When determining whether an affidavit substantially complies, courts have distinguished between “mere technical defects, which can be excused, and those defects that are more substantive in nature.…”  Id. (quoting Mustang Tractor &#38; Equip. Co. v. Hartford Accident &#38; Indem. Co., 263 S.W.3d 437, 441 (Tex. App. – Austin 2008, pet. denied).  The Mustang Tractor court held that an affidavit’s omission of the date that the pre-lien notices were sent to the owner was a mere technical error when the pre-lien notices provided the date and method of service; the lien affidavit substantially complied because no one was misled by the omission.  263 S.W.3d at 441.  In contrast, the Austin appellate court held in 2006 that an affidavit that did not list the months in which the work was preformed did not substantially comply with the statute.  Milner v. Balcke-Durr, Inc., 2006 WL 2190516, *3 (Tex. App. – Austin Aug. 4, 2006, no pet.). The Houston appellate court determined last week that by failing to identify the party to whom the materials were allegedly furnished and failing to recite the months in which the materials were delivered, the claimant failed to substantially comply with the statute.  LTF Real Estate Co., Inc., 2013 WL 1183300 at *10.  The lien was invalid.  Id. The lesson: prior to filing a mechanic’s lien affidavit, make sure that it complies with the requirements in Chapter 53 of the Property Code. This article is for informational purposes and does not contain or convey legal advice.  The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer.  Please contact a GUC&#38;L attorney for more information regarding construction law and mechanic’s liens.]]></description>
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		<title>Paul Underkofler Listed Among 2013 Best Lawyers in America</title>
		<link>http://www.gucl.com/2013/03/18/attorney-blog/paul-underkofler-listed-2013-lawyers-america-002794.html</link>
		<comments>http://www.gucl.com/2013/03/18/attorney-blog/paul-underkofler-listed-2013-lawyers-america-002794.html#comments</comments>
		<pubDate>Mon, 18 Mar 2013 14:23:50 +0000</pubDate>
		<dc:creator>Paul B. Underkofler</dc:creator>
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		<description><![CDATA[For the eighth consecutive year, Paul B. Underkofler has been recognized as one of the Best Lawyers in America (Woodward/White, Inc.).  As stated on the Best Lawyers in America website, &#8220;Best Lawyers is the oldest and most respected peer-review publication in the legal profession. A listing in Best Lawyers is widely regarded by both clients and legal professionals as a significant honor, conferred on a lawyer by his or her peers.&#8221;]]></description>
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