Sturgeon v. Hart County Finance, LLC (In re Sturgeon)

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

The bankruptcy court grants the defendant’s motion to dismiss the adversary proceeding because it lacks jurisdiction over the claim asserted. The debtor listed the claim in his schedules, but the trustee effectively abandoned the claim upon filing his report of no distribution. The debtor then filed the adversary proceeding. The court finds that there is no “related to” jurisdiction because the claim was abandoned, outside the estate, and owned by the debtor. Opinion below.

2015-11-20 – sturgeon v hart county finance

Author: Matt Lindblom

In re Travers

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

The bankruptcy court rejects the creditor’s argument that its wholly underwater lien on the Chapter 13 debtors’ residence cannot be avoided based on § 1322(b)(2). The creditor argued that the Supreme Court’s recent decision in Bank of America, N.A. v. Caulkett mandates that result, despite the fact that prior Sixth Circuit precedent makes clear that a Chapter 13 debtor may strip off such a lien. The court holds that Caulkett does not apply and it is required to comply with the prior Sixth Circuit precedent because it has not been overruled. Opinion below.

2015-11-16 – in re travers

Author: Matt Lindblom

In re Walbert Trucking, Inc.

(Bankr. W.D. Ky. Nov. 16, 2015)

The bankruptcy court denies the creditor’s motion to treat a post-petition claim as an administrative claim. The creditor had leased trailers to the debtor prepetition, and the debtor returned all but a few of the trailers to the creditor. The few trailers that were not returned apparently were stolen and not in the debtor’s possession post-petition. The creditor moved to allow the claim for post-petition lease payments for the missing trailers as an administrative expense claim. The court finds that there was no benefit to the estate for the post-petition lease of the trailers and all of the subject leases were entered into prepetition. Thus, it was inappropriate to treat the claim as an administrative claim. Opinion below.

2015-11-16 – in re walbert trucking

Author: Matt Lindblom

Lynn v. Pry

(S.D. Ind. Nov. 13, 2015)

The district court denies the trustee’s motion to dismiss the appeal for numerous procedural errors committed by the appellants. The court describes errors including missed deadlines, improper brief formatting, and ECF filing errors. The court finds that it is a “close call” but the appellants’ attorney’s explanations support a finding of excusable neglect, and thus dismissal is not appropriate. Opinion below.

2015-11-13 – lynn v pry

Author: Matt Lindblom

JJPM, Inc. v. Keen Exploration, LLC (In re JJPM, Inc.)

(Bankr. W.D Ky. Nov. 12, 2015)

The bankruptcy court finds that the defendant’s mechanic’s lien is void for being untimely filed. Applying Illinois’s mechanic’s lien statute, the court finds that the last work that could give rise to a lien occurred in May 2014, more than 90 days prior to the recording of the lien in January 2015 (Illinois requires notice of a mechanic’s lien within 90 days of the last date service was provided). The defendant’s alleged work in October 2014, consisting of reviewing reports about the project and conveying such information, did not add value to the real property. Thus, that date could not be used as the last date of service under the statute. Original and amended opinions below.

2015-11-12 – jjpm v keen exploration

2015-11-13 – jjpm v keen exploration amended

Author: Matt Lindblom

In re Atlas Red-D Mix, Inc.

(Bankr. S.D. Ind. Nov. 10, 2015)

The bankruptcy court dismisses the chapter 7 business debtor’s bankruptcy for cause under 11 U.S.C. § 707(a). The debtor had ceased operations a few years prior to the bankruptcy, due to the death of its principal. The individual that inherited the stock then caused the debtor to withdraw from a pension fund to which the debtor was a contributing employer, which caused the debtor to incur a $3.5 million liability. The fund obtained a judgment against the debtor, took steps to collect on the judgment, and the debtor then filed a chapter 7 petition. The court finds that the case should be dismissed for cause because the debtor filed the bankruptcy in bad faith. The court finds that factors supporting a dismissal for bad faith include that the debtor had transferred four parcels of real property after the fund sued the debtor, the bankruptcy was essentially a two-party dispute, and there was no real purpose for the bankruptcy because the corporate debtor would not receive a discharge. Opinion below.

2015-11-10 – in re atlas red-d mix

Author: Matt Lindblom

CMCO Mortgage, LLC v. Hill

(Bankr. W.D. Ky. Nov. 2, 2015)

The bankruptcy court grants the creditor’s motion for summary judgment in this nondischargeability action. The creditor had obtained a default judgment against the debtor in state court, after the debtor ceased participating in that litigation. The default judgment contained specific findings of fact that satisfied the elements of 11 U.S.C. § 523(a)(6), which applies to claims for conduct causing a “willful and malicious injury.” The court holds that collateral estoppel applies and summary judgment is appropriate. Opinion below.

2015-11-02 – cmco mortgage v hill

Author: Matt Lindblom

In re Ariana Energy, LLC

(Bankr. E.D. Ky. Oct. 30, 2015)

The bankruptcy court sustains the debtor’s objection and disallows the creditor’s claim. The creditor failed to establish that it was a guarantor of a certain agreement to which the debtor was a party. Therefore, the creditor could not prove an essential element of its subrogation claim. Opinion below.

2015-10-30 – in re ariana energy

Author: Matt Lindblom