Aspen Skiing Co. v. Cherrett, No. 14-60079 (9th Cir. 2017)
Annotate this CaseA housing loan, made by an employer to an employee as a key part of a compensation package, qualified as a non-consumer debt. The Ninth Circuit affirmed the Bankruptcy Appellate Panel's decision affirming the bankruptcy court's denial of creditor's motion to dismiss debtor's Chapter 7 bankruptcy petition for abuse under 11 U.S.C. 707(b)(1). As a preliminary matter, the panel held that the bankruptcy court's order denying creditor's motion to dismiss under section 707(b) was final and appealable. On the merits, the panel held that the bankruptcy court did not err by finding that the housing loan was a non-consumer debt. The panel agreed with the bankruptcy court that debtor incurred the housing loan primarily for a non-consumer purpose connected to furthering his career.
Court Description: Bankruptcy. The panel affirmed the Bankruptcy Appellate Panel’s decision affirming the bankruptcy court’s denial of a creditor’s motion to dismiss a Chapter 7 bankruptcy petition for abuse under 11 U.S.C. § 707(b)(1). Agreeing with other circuits, the panel held that the bankruptcy court’s order was final and appealable because it conclusively resolved the debtors’ ability to file a Chapter 7 bankruptcy petition and conclusively determined the discrete issue whether a debt was primarily non-consumer and therefore subject to discharge under Chapter 7. The panel held that the debtor’s housing loan, made by an employer to an employee as a key part of a compensation package, qualified as non-consumer debt. The panel held that the bankruptcy court did not clearly err in finding that the debtor incurred the housing loan primarily for a non- consumer purpose connected to furthering his career. Accordingly, § 707(b)(1), which allows the bankruptcy court to dismiss a case filed by a debtor whose debts are primarily consumer debts, did not apply. Dissenting, Judge Nguyen wrote that the correct standard of review was de novo because the case involved undisputed facts and the only issue was the legal conclusion to be drawn from those facts, and the panel majority created an intra- and IN RE CHERRETT 3 inter-circuit split by reviewing for clear error. Judge Nguyen wrote that under de novo review, it was clear that the housing loan was consumer debt incurred by an individual primarily for a personal, family, or household purpose.
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