In re Brunck

(Bankr. S.D. Ind. Feb. 24, 2016)

The bankruptcy court overrules the trustee’s objection to the debtors’ proposed Chapter 13 plan. For purposes of the means test, the debtors deducted as a car ownership expense payments on a non-purchase money loan secured by their car. The trustee objected, arguing that the deduction was inappropriate because it was not a purchase-money loan and thus not a car ownership expense. The trustee relied on the Supreme Court’s decision in Ransom v. FIA Card Services, N.A. The bankruptcy court rejected the trustee’s argument, holding that the expense constituted a car ownership expense for purposes of the means test.

2016-02-24 – in re brunck

Author: Matt Lindblom

In re Conco, Inc.

(Bankr. W.D. Ky. Feb. 18, 2016)

The bankruptcy court grants the oversight committee’s motion to enforce the confirmed Chapter 11 plan. The plan provided that certain equity security interests could be retained by their prepetition holders so long as no payments were made on them and they were not transferred until January 1, 2019. The unsecured creditors committee permitted this (despite the violation of the absolute priority rule) because it was understood that the proposed plan gave them the best possible outcome in the case. The debtor’s competitor sought to purchase the equity interests post-confirmation, and the oversight committee sought to enjoin the sale through its motion. The court holds that this particular plan provision was the result of lengthy negotiations and the unsecured creditors should receive the benefit of that bargain. Opinion below.

2016-02-18 – in re conco, inc

Author: Matt Lindblom

Phi Air Medical, L.L.C. v. Holskey (In re Holskey)

(Bankr. W.D. Ky. Feb. 16, 2016)

The bankruptcy court finds the debt non-dischargeable under § 523(a)(4) and (6). The debtor’s minor son was transported by helicopter to a hospital after an injury. The transport company billed the debtor’s insurance company, and the insurance company sent the reimbursement check to the debtor for transfer to the transport company. The debtor used the funds for other purposes. The court finds the debtor’s explanations inconsistent and holds that the facts support a finding that the debt is based on embezzlement and/or larceny and that the debtor caused a willful and malicious injury to the creditor. Opinion below.

2016-02-16 – In re holskey

Author: Matt Lindblom

In re Payan

(Bankr. S.D. Ind. Feb. 16, 2016)

The bankruptcy court grants the debtor’s motion for sanctions for stay violations. The creditor alleged that it had coded the debtor’s account to reflect the bankruptcy when the creditor received notice of the bankruptcy. However, the creditor’s computer system had recently been updated, and the coding failed to stop the automatic loan payments from being deducted from the debtor’s checking account. Post-petition, the debtor’s wife notified the company three separate times to fix the problem, but the automatic payments continued. The court finds that sanctions were appropriate due to the willful stay violation. Opinion below.

2016-02-16 – in re payan

Author: Matt Lindblom

In re Snowden

(Bankr. E.D. Ky. Feb. 12, 2016)

The bankruptcy court overrules the creditor’s objection to confirmation of the debtors’ chapter 13 plan. The creditor argued that its secured claim could not be modified pursuant to 11 U.S.C. § 1322(b). The collateral real property consisted of five parcels of real property that were contiguous, except for one intervening lot also owned by the debtors. That fact, along with the fact that the debtors purchased the parcels at separate times from different sellers, supported a finding that the lots were not solely the debtor’s principal residence. Thus, the anti-modification provision of § 1322(b) does not apply. Opinion below.

2016-02-12 – in re snowden

Author: Matt Lindblom

Harris v. Deutsche Bank National Trust Company (In re Harris)

(S.D. Ind. Feb. 8, 2016)

The district court affirms the bankruptcy court’s decision holding that the debtor was collaterally estopped from challenging the amount of the mortgage lender’s claim. The lender had obtained judgment in a prepetition state court foreclosure action, in which the debtor had presented the same arguments regarding the loan balance calculation. The district court finds that the doctrine of collateral estoppel applies and the claim amount could not be re-litigated in the bankruptcy. Opinion below.

2016-02-08 – in re harris

Author: Matt Lindblom

Golson-Dunlap v. HSBC Capital (USA), Inc. (In re Garrison)

(S.D. Ind. Feb. 5, 2016)

The district court grants the unopposed motion to withdraw the reference and the motion to dismiss the adversary proceeding with prejudice. The court discusses the standard for withdrawal motions, and finds that the standard is met here. The claims arise out of a contractual relationship outside the bankruptcy and would not be resolved through the claims resolution process. Thus, the bankruptcy court could not issue a final judgment in the matter absent the movant’s consent. Opinion below.

2016-02-05 – in re garrison

Author: Matt Lindblom

McKinstry v. Richard Holmes Enterprises, LLC (In re Black Diamond Mining Company, LLC)

(E.D. Ky. Feb. 5, 2016)

The district court denies the motion for stay pending the appeal of the bankruptcy court’s order. The bankruptcy court had ordered that the party moving to reopen the bankruptcy case deposit funds into escrow as a condition to reopening the case. The court held that the party must show at a minimum serious questions going to the merits to obtain such a stay, but the party failed to do so. Opinion below.

2016-02-05 – in re black diamond mining

Author: Matt Lindblom

In re Robinson

(7th Cir. Feb. 4, 2016)

The Seventh Circuit affirms the district court’s reversal of the bankruptcy court. The debtor claimed an exemption for a rare first edition Book of Mormon under Illinois’s exemption statutes, which permit an exemption for “a bible.” The trustee argued that the debtor should be permitted only to exempt one of the debtor’s other copies, because the rare copy was worth approximately $10,000 and, the trustee argued, the statute was being misused in this case. The court holds that the plain wording of the statute permitted the claimed exemption. Opinion below.

2016-02-04 – in re robinson

Author: Matt Lindblom

Lynn v. Pry

(S.D. Ind. Feb. 3, 2016)

The district court affirms the judgment of the bankruptcy court, avoiding the post-petition transfer of real property. The debtor’s father had transferred real estate to the debtor’s entity prior to the bankruptcy to avoid attachment by creditors. Post-petition, the debtor’s father recorded a deed transferring title back to himself. The father claimed that it was never his or the debtor’s intent for the debtor to have title to the property. The fact that title was transferred to avoid the father’s creditors was sufficient evidence of intent to transfer title, and thus the post-petition transfer from the estate was improper. Opinion below.

2016-02-03 – lynn v pry

Author: Matt Lindblom