In re Taylor

Summary

The Seventh Circuit affirmed a district court decision reversing civil contempt sanctions, attorney-fee damages, and a judgment entered against a creditor and her attorneys in a Chapter 11 bankruptcy matter. The court held that the appeal was not moot because the purported settlement did not provide complete relief. It further held that seeking a state probate-court order ratifying an assignment did not violate the statutory discharge injunction or plan injunction and did not constitute an impermissible collateral attack on the bankruptcy court’s judgment.

Holdings

1. The appeal was not moot because the purported settlement lacked the consent of all parties, might not result in vacatur of the challenged orders, and did not provide all relief sought by the appellees.
2. The appellees did not violate the statutory discharge injunction or the Chapter 11 plan injunction by seeking and obtaining the probate-court ratification order.
3. The probate-court ratification order was not an impermissible collateral attack on the bankruptcy court's dismissal order.

Questions Presented

1. Whether the appeal was moot because of a purported settlement under which Taylor would receive payment and seek vacatur of the challenged bankruptcy orders.
2. Whether seeking and obtaining the probate-court ratification order violated the statutory discharge injunction under 11 U.S.C. § 524(a)(2) or the Chapter 11 plan injunction.
3. Whether the probate-court ratification order constituted an impermissible collateral attack on the bankruptcy court's dismissal order.

Disposition

affirmed