In re Kiriazis

(6th Cir. B.A.P. Jan. 28, 2016)

The Sixth Circuit B.A.P. affirms the bankruptcy court’s order denying the creditor’s motion to reopen the bankruptcy case. The creditor’s attorney stated on the record that the creditor had committed a willful violation of the discharge injunction and that the creditor was negotiating  a resolution with the debtor. The bankruptcy court entered an order finding the creditor had violated the injunction and that punitive damages were appropriate, but left the issue of damages open for the parties to negotiate and report back to the court. The case was closed after an agreed order was entered resolving the pending motion. The creditor then sought to reopen the case and to reconsider the prior order, but the bankruptcy court refused, finding a notice of appeal was not timely filed, and the motion to reconsider was not timely. Opinion below.

2016-01-28 – in re kiriazis

Amended Opinion: 2016-02-02 – in re kiriazis

Author: Matt Lindblom

Village Green I, GP v. Federal National Mortgage Association (In re Village Green I, GP)

(6th Cir. Jan. 27, 2016)

The Sixth Circuit affirms the district court’s finding that the Chapter 11 plan was proposed in bad faith. The plan proposed to pay small claims in full but over a 60-day period. This class of claims was technically impaired due to the delayed payment and it voted to accept the plan. The principle secured lender appealed. The Court finds that the plan was not proposed in good faith, as required by 11 U.S.C. § 1129(a)(3), because it was designed to circumvent  § 1129(a)(10)’s requirement for an accepting impaired class of claims. Opinion below.

2016-01-27 – in re village green

Author: Matt Lindblom

In re Posey

(Bankr. W.D. Ky. Jan. 21, 2016)

The bankruptcy court overrules the debtor’s objection to the division of unemployment insurance’s claim for overpayment of benefits to the debtor. The debtor argued that the claim should be unsecured, rather than secured as submitted by the division. The court finds that the claim is secured by virtue of KRS 341.415(3), which creates a lien against property of a recipient of improperly paid benefits. Opinion below.

2016-01-21 – in re posey

Author: Matt Lindblom

Smith v. SIPI, LLC (In re Smith)

(7th Cir. Jan. 20, 2016)

The Seventh Circuit reverses the district court and affirms the bankruptcy court, holding that a tax sale under Illinois’s interest rate auction system does not necessarily establish a transfer for reasonably equivalent value under 11 U.S.C. § 548(a)(1)(B). Thus, property sold under such system can still be considered fraudulently conveyed. Under this Illinois system, the winning bid amount bears no relationship to the value of the underlying real estate because the lowest bid wins (i.e., bidders bid how little money they are willing to accept in return for payment of the owner’s delinquent taxes). Opinion below.

2016-01-20 – in re smith

Author: Matt Lindblom

 

Waldman v. Stone

(W.D. Ky. Jan. 15, 2016)

On remand from the Sixth Circuit, the district court apportions fault 50/50 between the two defendants (pursuant to KRS 411.182) and reduces the punitive damage award proportionally with the reduction of compensatory damages. The court also finds that the punitive damages should be apportioned 50/50. The two defendants had conspired to defraud the debtor of his interest in his business entity. Opinion below.

 

2016-01-15 – waldman v stone

Author: Matt Lindblom

Juett v. Casciano (In re Casciano)

(6th Cir. B.A.P. Jan. 11, 2016)

The B.A.P. reverses the bankruptcy court’s determination that, for purposes of 11 U.S.C. § 523(a)(6) the debtor did not “willfully” cause an injury to the plaintiff when he punched the plaintiff in the face. The bankruptcy court incorrectly required that the plaintiff prove that the debtor intended to cause the specific harm that resulted. Further, while self-defense may negate a finding of “malicious” conduct under that Code section, the bankruptcy court failed to analyze the facts under the applicable law on self-defense. Finally, the court holds that references to the Debtor’s conviction by a plea of nolo contendere are inadmissible in the non-dischargeability action. Opinion below.

2016-01-11 – in re casciano

Author: Matt Lindblom

In re Vernon

(Bankr. W.D. Ky. Jan. 8, 2016)

The bankruptcy court grants the creditor’s motion to vacate an order sustaining the debtor’s objection to the creditor’s claim. The court entered the order prior to the expiration of the 30-day period in Bankruptcy Rule 3007(a) (requiring 30 days and a hearing for claim objections). The creditor filed an amended claim with additional support for its claim, and the debtor failed to rebut the evidence. Thus, the claim is allowed. Opinion below.

2016-01-08 – in re vernon

Author: Matt Lindblom

Chinook USA, LLC v. Duck Commander, Inc.

(W.D. Ky. Jan. 8, 2016)

The district court grants the defendants’ motion to withdraw the reference to the bankruptcy court. The debtor filed this action prior to filing its bankruptcy petition. The debtor then asserted the same claims against the defendant in an adversary proceeding. The court holds that there is good cause for withdrawal of the reference because of the overlapping facts, parties, issues, and requested relief. Opinion below.

2016-01-08 – chinook usa v duck commander

Author: Matt Lindblom

The Village at Knapp’s Crossing, LLC v. Pioneer Ventures, LLC (In re The Village at Knapp’s Crossing)

(6th Cir. Jan. 8, 2016)

The Sixth Circuit affirms the B.A.P.’s decision dismissing the appeal for mootness. The debtor appealed an order converting its case from Chapter 11 to Chapter 7 but did not seek or obtain a stay of the conversion order. The bankruptcy court then authorized a sale of the debtor’s primary asset, which was necessary to any Chapter 11 plan. Because there is no mechanism to unwind the sale or bring the property back into the estate, the appeal is now moot. Opinion below.

2016-01-08 – village at knapps crossing v pioneer ventures

Author: Matt Lindblom

Grede v. Bank of New York Mellon Corp. (In re Sentinel Management Group, Inc.)

(7th Cir. Jan. 8, 2016)

The Seventh Circuit reverses the district court’s decision that the bank defendant did not have inquiry notice when it loaned funds to a cash management entity that was able to provide collateral far in excess of the value of its own assets—it was pledging the cash of its customers. The court affirms the district court’s decision that the bank’s behavior did not rise to the level of warranting equitable subordination of its claim. Opinion below.

2016-01-08 – in re sentinel management group

Author: Matt Lindblom