In re Mann

(Bankr. W.D. Ky. Aug. 10, 2017)

The bankruptcy court denies the U.S. Trustee’s motion to enter an order for sanctions and requiring disgorgement of fees. The attorney had provided advice to the debtor about the petition and schedules that the debtor had drafted. The attorney was not aware that a bankruptcy was filed until he received the U.S. Trustee’s motion. The court declines to grant the relief requested under these circumstances. Opinion below.

Judge: Lloyd

2017-08-10 – in re mann

Author: Matt Lindblom

Secure Leverage Group, Inc. v. Bodenstein (In re Peregrine Financial Group, Inc.)

(7th Cir. Aug. 8, 2017)

The Seventh Circuit adopts the district court’s opinion, affirming the bankruptcy court’s ruling in favor of the trustee. The trustee did not include the plaintiffs in a priority distribution of “customer property” under 11 U.S.C. §§761-767, which governs the bankruptcy of a futures commissions merchant. Opinion below.

Judge: Rovner

2017-08-08 – in re peregrine financial – amended

Author: Matt Lindblom

Kendrick v. Rister (In re Rister)

(Bankr. E.D. Ky. Aug. 4, 2017)

The bankruptcy court grants the motion to dismiss the trustee’s complaint. The court recently entered an order dismissing the trustee’s complaint for failure to state a claim but permitted the trustee leave to amend the complaint. See In re Rister. The amended complaint alleged that the vehicle became property of the estate because it was a proceed of the debtor’s contractual rights to the vehicle as of the petition date, whereas the original complaint alleged the vehicle itself was property of the estate on the petition date. The court finds that the fact that the debtor’s name was not on the certificate of title on the petition date is still dispositive. Opinion below.

Judge: Wise

Attorney for Trustee: Michael B. Baker

Attorneys for Defendants: Steffen Law Offices, Eric A. Steiden; Frost Brown Todd LLC, Paige Leigh Ellerman, Adam J. Webb; Aaron J. Nash; Patricia L. Johnson

2017-08-04 – in re rister

Author: Matt Lindblom

Coslow v. Reisz (In re Coslow)

(Bankr. W.D. Ky. July 28, 2017)

The bankruptcy court enters summary judgment in favor of the debtor and orders the trustee to abandon any interest in the debtor’s residence. As of the petition date there was no equity in the property due to the balance on two mortgages. After the petition date, due to postpetition payments on the second mortgage, significant equity in the property was created. The trustee argued the equity was property of the estate. The court, however, holds that the debtor is entitled to such postpetition equity. As of the petition date, the property was of inconsequential value to the estate and thus should be abandoned. Opinion below.

Judge: Stout

Attorneys for Debtor: Seiler Waterman LLC, David M. Cantor, William P. Harbison, Keith J. Larson

Attorneys for Trustee: Tilford, Dobbins & Schmidt, PLLC, William Stephen Reisz

2017-07-28 – in re coslow

Author: Matt Lindblom

Kohut v. United Healthcare Insurance Company (In re LSC Liquidation, Inc.)

(6th Cir. July 18, 2017)

The Sixth Circuit affirms the bankruptcy court’s order modifying its prior sale order under Rule 60(b). The court’s original order approved a sale of estate assets but the sale agreement and the order failed to include certain contracts to be assumed and assigned to the buyer. The court finds that modification of the order was appropriate because the motion to modify the order was filed within one year of entry of the sale order and the bankruptcy court properly exercised its discretion after weighing the relevant factors. Opinion below.

Judge: Stranch

Attorneys for Movant: Wolfson Bolton, Anthony J. Kochis, Scott A. Wolfson

Attorney for Appellee: Jeffrey Scott Grasi

2017-07-18 – in re lsc liquidation

Author: Matt Lindblom

Carroll v. Takada

(7th Cir. July 18, 2017)

The Seventh Circuit affirms the bankruptcy court’s order sustaining the trustee’s objection to the debtors’ $30,000 exemption in trust assets. The debtors argued the spendthrift provisions in the trust prevented the interest from becoming property of the estate. The court holds that the trust interest fully vested before the debtors filed bankruptcy. An exemption was inappropriate and the interest was property of the estate. Opinion below.

Judge: Sykes

Attorney for Debtors: Julia D. Mannix

Attorney for Trustee: Zane Zielinski

2017-07-18 – in re carroll

Author: Matt Lindblom

 

Community Financial Services Bank v. Edwards (In re Edwards)

(Bankr. W.D. Ky. July 17, 2017)

The bankruptcy court enters judgment in favor of the lender, holding the debt owed by one of the debtors would not be discharged, pursuant to 11 U.S.C. § 523(a)(6). The debtor disregarded the lender’s security interest in his business’s inventory, using the proceeds of the inventory for personal expenses in violation of the security agreement. The court holds that the lender failed to present sufficient evidence to except the other debtor’s (the first debtor’s spouse) debt from discharge. Opinion below.

Judge: Stout

Attorney for Plaintiff: Martin W. Johnson

Attorney for Debtors: Steve Vidmer

2017-07-17 – in re edwards

Author: Matt Lindblom