In re Licking River Mining, LLC

(Bankr. E.D. Ky. Sep. 22, 2015)

The bankruptcy court approves the trustee’s employment applications over the lender’s objections. The lender argued that the professionals sought to be employed were not disinterested for reasons including that they were involved with the case before conversion to chapter 7 and potentially had a conflict with accepting payment from a collateral carve-out. The court approves the applications, except for the provision of a retainer to one of the professionals. Opinion below.

2015-09-22 – in re licking river mining

Author: Matt Lindblom

Mediofactoring v. McDermott (In re Connolly North America, LLC)

(Sixth Circuit, Sep. 21, 2015)

The Sixth Circuit reverses the bankruptcy court and district court, holding that a creditor making a substantial contribution in a Chapter 7 case may be awarded an administrative expense claim. Section 503(b) expressly provides that creditors making substantial contributions in Chapter 9 cases and Chapter 11 cases may be awarded an administrative expense claim. The lower courts held that this necessarily excludes such claims in Chapter 7 cases. The Sixth Circuit holds that because 503(b)’s list is not exclusive (the list is preceded by the word “including”), a creditor in a Chapter 7 case case may be awarded an administrative expense claim for making a substantial contribution. Opinion below.

2015-09-21 – in re connolly north america

Author: Matt Lindblom

Central Mortgage Company v. Murry (In re Burger)

(S.D. Ind. Sep. 21, 2015)

The district court affirms the bankruptcy court’s decision determining the winning bidder at an auction of estate property. The secured lender argues it submitted a credit bid that was higher than the successful bid. However, the secured lender failed to communicate a credit bid to the auctioneer, and the emails to the auctioneer’s alleged agent were insufficient to overcome the auctioneer’s determination of the successful bid at the auction. Opinion below.

2015-09-21 – in re burger

Author: Matt Lindblom

Giese v. Community Trust Bank (In re HRNC Dissolution Co.)

(Bankr. E.D. Ky. Sep. 9, 2015)

The bankruptcy court denies the plaintiff’s motion for mandatory abstention under 28 U.S.C. § 1334(c)(2). The plaintiff brought an action in state court alleging ownership of funds that were distributed to two purchasers of a debtor’s assets in bankruptcy. The defendants removed the case to the district court and the district court referred the case to the bankruptcy court because it was related to the bankruptcy case. The bankruptcy court determines that the majority of plaintiff’s claims are core claims and the others are inextricably intertwined with the core claims. Thus, the motion is denied. Opinion below.

2015-09-09 – giese v community trust bank

Author: Matt Lindblom

Bankr. N.D. Ind. Opinions

In re Shell (Bankr. N.D. Ind. May 12, 2015) – Court overrules trustee’s objection to claim because trustee failed to allege any facts to support conclusory allegation that claim was barred by statute of limitations.

2015-05-12 – in re shell

In re Wembley (Bankr. N.D. Ind. May 19, 2015) – Court denies debtor’s motion to reconsider order dismissing case.

2015-05-19 – in re wimbley

Seifert v. Diskey (In re Diskey) (Bankr. N.D. Ind. May 19, 2015) – Court revokes the debtor’s discharge under 11 U.S.C. § 727(a)(6) and (d)(3) for failure to comply with a court order.

2015-05-19 – seifert v diskey

In re Teeple (Bankr. N.D. Ind. Aug. 6, 2015) – Court overrules the debtor’s objection to the trustee’s final report and proposed distribution.

2015-08-06 – in re teeple

Johnson v. U.S. Dept. of Education (In re Johnson) (Bankr. N.D. Ind. Aug. 6, 2015) – Court rules against the debtor, finding education loan is non dischargeable.

2015-08-06 – johnson v us department of education

In re Long (Bankr. N.D. Ind. Aug. 7, 2015) – Court overrules objection to trustee’s motion for turnonver, because party filing objection (not the debtor) did not have standing to object.

2015-08-07 – in re long

Author: Matt Lindblom

In re Clinton County Hospital, Inc.

(Bankr. W.D. Ky. Sep. 3, 2015)

The bankruptcy court denies the debtor’s motion to employ the law firm as special counsel nunc pro tunc. The debtor sought to employ the firm for its expertise in a particular area of law. However, the motion was filed eight months after the bankruptcy was commenced. Thus, while the motion met many of the factors necessary to employ a professional under 11 U.S.C. § 327, the delay in filing the motion was not satisfactorily explained to the court. Thus, the motion is denied. Opinion below.

2015-09-03 – in re clinton county hospital

Author: Matt Lindblom

In re Purdy

(W.D. Ky. Sep. 2, 2015)

Following the Sixth Circuit’s reversal of the bankruptcy court’s finding that livestock leases were disguised security agreements (see Sunshine Heifers, LLC v. Citizens First Bank (In re Purdy)), the bankruptcy court determines the rights of the lessor and lessee debtor in the proceeds of the earlier sale of the livestock. After a lengthy discussion of testimony on the issue, the court ultimately concludes that the lessor is entitled to the proceeds. Opinion below.

2015-09-02 – in re purdy

Author: Matt Lindblom

Cory v. Bennett

(W.D. Ky. Aug. 31, 2015)

The district court affirms the bankruptcy court’s dismissal of the claims against the debtor without prejudice. The debtor objected to dismissing the claims, following a settlement agreement, without condition or awarding him attorney fees. The district court finds the bankruptcy court was within its discretion to do so, as the debtor did not suffer plain legal prejudice as a result of the dismissal. Opinion below.

2015-08-31 – cory v bennett

Author: Matt Lindblom

Saint Catherine Hospital of Indiana, LLC v. Indiana Family and Social Services Administration

(7th Cir. Aug. 28, 2015)

The Seventh Circuit reverses the district court and affirms the bankruptcy court, finding that the hospital assessment fee of the state was a pre-petition claim and thus subject to the automatic stay. The fee was determined by analyzing conduct of the debtor occurring prepetition. The court discusses and applies the “conduct test” to determine when the claim accrued and ultimately determines it accrued prepetition. Thus, the state was not permitted to withhold Medicaid reimbursements to offset the claim postpetition. Opinion below.

2015-08-28 – saint catherine hospital of indiana v indiana fam

Author: Matt Lindblom