Knauer v. Krantz (In re Eastern Livestock Co., LLC)

(Bankr. S.D. Ind. Oct. 28, 2015)

The bankruptcy court grants the defendant’s motion for summary judgment in this preference action. The defendant had sold and delivered cattle to the debtor prepetition and received payment in the form of checks three days after delivery. The checks were then voided and replaced by a single wire transfer a few days later. All of this occurred within 90 days of the petition date. The court finds that the ordinary course defense does not apply based on lack of evidence of the terms of prior transactions between the parties. The court finds, however, that the contemporaneous exchange defense is applicable. The debtor and the defendant intended a contemporaneous exchange and such an exchange was actually accomplished (despite the voiding of the checks and replacement by wire transfer). Opinion below.

2015-10-28 – knauer v krantz

Author: Matt Lindblom

Blevins v. Herzig (In re Herzig)

(Bankr. W.D. Ky. Oct. 26, 2015)

The bankruptcy court grants the debtor’s motion to vacate the clerk’s entry of default against him in this nondischargeability action. The court considers the standard for vacating an entry of default under Bankruptcy Rule 7055(c) and finds that the debtor met that standard. The plaintiff is not prejudiced by the requested relief, the debtor made a sufficient showing of a potential meritorious defense, and the default was not precipitated by culpable conduct of the debtor. The delay was caused, in part, because the debtor had moved to a new address, and the debtor had acted in a reasonable amount of time to retain counsel. Opinion below.

2015-10-26 – in re herzig

Author: Matt Lindblom

In re Dekorte

(Bankr. S.D. Ind. Oct. 22, 2015)

The bankruptcy court holds that the Chapter 13 debtor cannot cram down a portion of the auto lender’s secured claim because it represents a purchase money security interest (“PMSI”) for a vehicle the debtor purchased for personal use within 910 days of bankruptcy, which is protected from cram down by the hanging paragraph of 11 U.S.C. § 1325(a). However, the lender had paid off a prior loan as part of the current secured loan, but that did not pay off negative equity in collateral for the prior loan and was otherwise unrelated to the current loan transaction. Thus, the lender could not protect from cram down that portion of the claim. Opinion below.

2015-10-22 – in re dekorte

Author: Matt Lindblom

In re Lengacher

(Bankr. N.D. Ind. Oct. 6, 2015)

The bankruptcy court denies the creditor’s motion to dismiss the trustee’s objection to the creditor’s claim, without prejudice. The creditor failed to comply with a local rule requiring supporting briefs to be filed separate from their motions. The court reasoned that confusion as to deadlines for responding to such a motion would likely result because the local rule was not followed. Opinion below.

2015-10-06 – in re lengacher

Author: Matt Lindblom

United Fire & Casualty Company v. Eldridge (In re Eldridge)

(Bankr. E.D. Ky. Oct. 14, 2015)

The bankruptcy court grants the debtor’s motion to dismiss the nondischargeability action. The debtor had filed a previous bankruptcy in 2005 in which the creditor’s claims forming the basis for the current action had been discharged. The creditor had notice of the prior bankruptcy and all claims held by the debtor had arisen prior to that bankruptcy. Opinion below.

2015-10-14 – united fire v eldridge

Author: Matt Lindblom

Brandt v. Hammond (In re Equipment Acquisition Resources, Inc.)

(7th Cir. October 13, 2015)

The Seventh Circuit affirms the bankruptcy court’s order granting summary judgment to the casino defendant. The Chapter 11 plan administrator sought to avoid and recover fraudulent transfers made to the casino. The debtor had made about $8 million in fraudulent transfers to its owner, who then used the funds at the casino. The casino asserted the good faith defense in 11 U.S.C. § 550(b)(1). The casino did not have knowledge of the voidability of the transfer avoided and acted in good faith in accepting the funds for value given. Opinion below.

2015-10-13 – brandt v horseshoe hammond

Author: Matt Lindblom

MERV Properties, L.L.C. v. Forcht Bancorp, Inc. (In re MERV Properties, L.L.C.)

(6th Cir. B.A.P. Oct. 6, 2015)

The Sixth Circuit B.A.P. affirms the bankruptcy court’s order granting summary judgment in favor of the bank. The debtor brought claims against the bank following the debtor’s default on the loan after its Chapter 11 plan was confirmed. The debtor alleged fraud and collusion against the bank and others. The bank moved to dismiss the claims based on a release provision in a forbearance agreement that had been executed by the debtor, and the bankruptcy court granted the motion. On appeal, the court rejects the debtor’s argument that it should have been allowed time to conduct discovery because that issue was not preserved for appeal. The court also holds that the debtor failed to show that there exists a dispute of material fact as to the validity of the release. The adverse interest exception did not apply because the forbearance agreement provided benefits to the debtor. Finally, the court holds that the forbearance agreement was not unconscionable under Kentucky law. Opinion below.

2015-10-06 – merv properties v forcht bancorp

Author: Matt Lindblom