(W.D. Ky. Aug. 6, 2014)
The district court dismisses the debtor’s appeal of the bankruptcy court’s determination that the automatic stay did not prevent the bank from proceeding with a foreclosure sale of property owned by the debtor’s corporation, which had not filed bankruptcy. The debtor had filed an amended schedule listing his corporation as an “alias” in an attempt to prevent the sale, but the bankruptcy court struck the amendment and then dismissed the bankruptcy due to the debtor’s failure to timely submit a proposed Chapter 13 plan. The district court agreed with the bankruptcy court’s decision regarding the inapplicability of the automatic stay and dismissed the appeal because the bankruptcy proceeding had been dismissed. Opinion below.
2014-08-06 – lea v farmers national bank
(E.D. Ky. Aug. 6, 2014)
The district court holds the bankruptcy court incorrectly used the federal “lodestar” method to determine whether attorney fees were reasonable for purposes of a fee-shifting provision of a settlement agreement between the trustee of the unsecured creditors trust and the former restructuring specialists. The trustee argued the Philadephia-based billing rates were unreasonable, and should have been adjusted to be in line with the Kentucky market. The court holds the bankruptcy court should have used Kentucky state law when determining the reasonableness of the fee, as state law controls the interpretation of contracts. The court nevertheless adopts the bankruptcy court’s proposed findings of fact and conclusions of law, because the result was the same under either analysis. The fees were reasonable under the circumstances, even though the rates were higher than those in the local market. Opinion below.
2014-08-06 – in re black diamond mining company
(Bankr. E.D. Ky. July 31, 2014)
The bankruptcy court denies the debtors’ motion to reject two executory contracts. The two contracts were part of an indivisible, integrated property exchange transaction, and thus they could not be severed for the purpose of rejection under 11 U.S.C. § 365. A master property exchange agreement evidenced the parties’ intent that all of the component contracts were part of a single agreement. Opinion below.
2014-07-31 – in re trinity coal corporation