Fifth Circuit Vacates Class Certification Order in Bankruptcy Proceeding, Article by Stephen Bumgarner
July 23, 2010
In recent years, a host of mortgage lenders and servicing companies have been targeted in Chapter 13 bankruptcy proceedings for claimed violations of the Bankruptcy Code and Rules stemming from their post-petition assessment of certain fees and costs to debtors’ accounts. The majority of these actions seek to certify a class of similarly situated debtors pursuant to Federal Rule of Civil Procedure 23 (made applicable to bankruptcy proceedings by Federal Rule of Bankruptcy Procedure 7023). However, a recent opinion issued by the United States Court of Appeals for the Fifth Circuit addresses the impropriety of certifying a class in these cases. In Wilborn v. Wells Fargo Bank, N.A. (In re Wilborn), No. 09-20415, —- F.3d —-, 2010 WL 2433091, 2010 U.S. App. LEXIS 12606 (5th Cir. June 18, 2010), the Fifth Circuit vacated the class certification order upon recognizing the individualized circumstances in each debtor’s case.
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by: Stephen J. Bumgarner