Richardson v. Caswell (In re Caswell)

(Bankr. W.D. Ky. Mar. 25, 2015)

The bankruptcy court grants the plaintiff’s motion for summary judgment in this nondischargeability action. The plaintiff obtained a jury verdict against the debtor in state court based on a claim of fraud in selling to the plaintiff worthless stock. The bankruptcy court holds that the state court judgment precludes the debtor from defending against the plaintiff’s allegations under § 523(a)(2)(A). Opinion below.

2015-03-25 – richardson v caswell

Author: Matt Lindblom

Metrou v. M.A. Mortenson Company

(7th Cir. Mar. 23, 2015)

The seventh circuit reverses the district court’s order limiting the trustee’s recovery on the debtor’s tort claim to the value of creditor claims not already paid through the bankruptcy. The debtor had scheduled a workers’ compensation claim when he filed the chapter 7 petition, but after receiving the discharge he brought claims for the same injury and sought significant damages. The tort defendants moved for summary judgment, arguing that the debtor was estopped from asserting the claims because he failed to schedule them in the bankruptcy, and the court appropriately granted that motion. The debtor then moved to reopen the bankruptcy so that the trustee could pursue the claims. The district court allowed the substitution but entered an order limiting the damages sought to the value of the amount of the creditor claims not paid in the bankruptcy (because the debtor should not be permitted to benefit when he omitted the claim from his schedules). The claims were not worth pursuing after the reduction and thus the trustee appealed. The seventh circuit holds that the claim should not be reduced so that creditors are harmed. Instead, the district court should determine whether the debtor’s omission was intentional such that he should be barred from sharing in any recovery on the claim. Opinion below.

2015-03-23 – metrou v ma mortenson company

Author: Matt Lindblom

In re Gibson

(Bankr. E.D. Ky. Mar. 20, 2015)

The bankruptcy court denies the chapter 13 debtor’s motion to modify his plan. The debtor sought to reclassify the creditor’s secured claim as an unsecured claim. Apparently, the creditor may have perfected its lien postpetition, but the confirmed chapter 13 plan nevertheless treated the claim as secured. Following missed plan payments to the creditor, the debtor sought the plan modification. The court holds that while modifications to the amount or timing of specific payments may be permitted, modifications to reclassify claims are prohibited. Opinion below.

2015-03-20 – in re gibson

Author: Matt Lindblom

In re Equine Oxygen Therapy Resources, Inc., et al.

(Bankr. E.D. Ky. Mar. 20, 2015)

The bankruptcy court approves the proposed settlement agreement under Bankruptcy Rule 9019. The court applies the Sixth Circuit Bard factors to determine whether the settlement is fair and equitable: (1) probability of success in the litigation; (2) difficulties, if any, to be encountered in the matter of collection; (3) complexity of the litigation involved; and (4) paramount interest of the creditors and a proper deference to their reasonable views in the premises. The claim settled was a bad faith claim against an insurer under Florida law. Applying each of the factors, the Court holds the settlement is fair and equitable. Opinion below.

2015-03-20 – in re equine oxygen therapy

Author: Matt Lindblom

In re Burgett

(Bankr. W.D. Ky. Mar. 20, 2015)

The bankruptcy court denies the debtor’s application for waiver of the chapter 7 filing fee. The court finds that the debtor is not indigent by his life circumstances, but instead is indigent by choice. Thus, the circumstances do not warrant the extraordinary relief requested. Opinion below.

2015-03-20 – in re burgett

Author: Matt Lindblom

In re Nageleisen

(Bankr. E.D. Ky. Mar. 18, 2015)

The bankruptcy court holds that KRS 427.170 merely allows Kentucky debtors to claim 11 U.S.C. § 522(d) exemptions in bankruptcy. It does not adopt the federal bankruptcy exemptions into the body of state exemption law. Thus, the court rejects the debtor’s argument that she should be permitted to claim the § 522(d) exemptions as well as an exemption in entireties property under state law. Opinion below.

2015-03-18 – in re nageleisen

Author: Matt Lindblom

Central Engineering & Construction Associates, Inc. v. Holcim (US), Inc. (In re Central Engineering & Construction Associates, Inc.)

(Bankr. S.D. Ind. Mar. 16, 2015)

The bankruptcy court grants summary judgment in favor of the debtor, holding the creditor does not have a security interest in personal property of the debtor. Prepetition, the creditor obtained a judgment against the debtor and filed a financing statement with the Indiana Secretary of State claiming the creditor had a security interest in the debtor’s personal property by virtue of the judgment. The bankruptcy court concludes that under Indiana law, in order to create a lien on personal property, a judgment creditor must issue and levy on execution. The judgment itself did not give rise to a lien. Opinion below.

2015-03-16 – in re central engineering

Author: Matt Lindblom