Bill on Bankruptcy: Trustees Sleep Easy after High Court Ruling

May 15 (Bloomberg Law) -- Trustees of all types are sleeping easier, knowing that their liabilities for theft by a co-trustee is a debt that can be wiped out in bankruptcy as a result of a unanimous Supreme Court decision discussed by Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle on their video. The week's most important decision in the lower courts came from Cecelia Morris, the Chief Bankruptcy Judge in southern New York, who ruled that parties in a lawsuit can't make settlements secret by saying, "no seal, no deal." Bankruptcy Judge Marvin Isgur in Houston may have ended a bankruptcy trustee's career by removing him from a case where he charged a bankrupt estate $3,500 for a long weekend in New Orleans in connection with an argument in the Court of Appeals. The last item on the video is a decision from the U.S. Court of Appeals in Richmond on an issue that may eventually find its way to the U.S. Supreme Court. The Richmond court found a loophole where an individual can file Chapter 7 and Chapter 13 petitions one after another, in the process stripping off lower-ranking home mortgages that can't be shed in Chapter 7 alone.