In re Ferguson

(7th Cir. Aug. 23, 2016)

The Seventh Circuit dismisses the appeal, holding it does not have jurisdiction. The bankruptcy court entered an order permitting marshaling  of the debtor’s assets to pay two secured creditors. The district court reversed, holding that marshaling was inappropriate because there were no longer two funds available to pay both creditors (one had been distributed to one of the creditors years earlier). There was no order, however, that directed how the remaining assets would actually be distributed. Thus, the Seventh Circuit held that there was no final order and it did not have appellate jurisdiction. Opinion below.

Judge: Easterbrook

Attorney for Appellant: Robert Lindstrom

Attorney for Debtor: Carrie Leigh Magerl

Attorneys for United States: Gerard A. Brost, Thomas J. Clark, Peter Sklarew, Patrick J. Urda

Attorney for Trustee: Jeana K. Reinbold

2016-08-23 – in re ferguson

Author: Matt Lindblom

Bash v. Textron Financial Corporation (In re Fair Finance Company)

(6th Cir. Aug. 23, 2016)

The Sixth Circuit reverses the dismissal of certain of the trustee’s claims against the defendant entity alleged to have assisted the debtor with a Ponzi scheme. The debtor financial services company had been purchased by two individuals in 2002 and was transformed into a front for the Ponzi scheme. The scheme collapsed in 2009, an involuntary petition was filed against the Debtor, and the trustee brought claims including fraudulent transfer claims against the defendant. The lower court dismissed all claims, but the Sixth Circuit, interpreting Ohio state law, holds that the trustee adequately pled certain claims that should not have been dismissed. Opinion below.

Judge: Davis

Attorneys for Appellant: Baker & Hostetler, Daniel R. Warren, Thomas D. Warren, Joseph F. Hutchinson, David F. Proaño

Attorneys for Appellee: Gibson, Dunn & Crutcher LLP, Mitchell A. Karlan; Bricker & Eckler LLP, James P. Schuck, Kenneth C. Johnson, Quintin F. Lindsmith

2016-08-23 – in re fair finance company

Author: Matt Lindblom

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

(E.D. Ky. Aug. 18, 2016)

The district court grants the motion to unseal the record. The record had been sealed following a motion that asserted the documents contained confidential settlement information. However, the court made clear that if someone requested that the record be unsealed, the moving party would have the heavy burden of showing why particular documents should remain sealed. The movant failed to meet that burden here, with respect to the record as a whole. The court orders that the record be unsealed with the limited exception of specific portions that contain the settlement amount.

Judge: Thapar

Attorneys for Appellants: Foley & Lardner, LLP, David B. Goroff, Geoffrey S. Goodman; Dinsmore & Shoal LLP, David James Treacy; Hoover Hull Turner LLP, Michael R. Limrick, Patrick A. Ziepolt, Wayne C. Turner

Attorneys for Appellees: The Getty Law Group, PLLC, C. Thomas Ezzell, Richard A. Getty; Ware Jackson Lee O’Neill Smith & Barrow, LLP, Paul Smith, Timothy F. Lee

2016-08-18 – in re black diamond mining company

Author: Matt Lindblom

Sunshine Heifers, LLC v. Purdy

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

The district court affirms the bankruptcy court’s decision that proceeds of the auction of the debtor’s cattle were properly payable to the bank, which held a first priority security interest in the debtor’s assets. While the Sixth Circuit had reversed the bankruptcy court’s prior decision finding the second creditor’s lease of the cattle to be a second priority lien (rather than a true lease), the bankruptcy court’s decision here was not clearly erroneous and was based on the evidence presented at the hearing to determine ownership of the cattle auctioned. The bankruptcy court found that all of the cattle subject to the leases had been sold prior to the auction. Opinion below.

Judge: McKinley

Attorneys for Plaintiff: Keller & Almassian, PLC, Michael D. Almassian, Nicholas S. Laue

Attorneys for Defendants: Kerrick Bachert PSC, Ashley D. Gerughty, Scott A. Bachert

2016-08-15 – sunshine heifers v purdy

Author: Matt Lindblom

 

BCL-Sheffield, LLC v. Gemini Int’l, Inc. (In re Tolomeo)

The Seventh Circuit dismisses the appeal, holding that the bankruptcy court’s final order implementing the district court’s order directing turnover of assets to the bankruptcy estate was valid, because it resolved a core proceeding. The appellants contended that it was a non-core proceeding and thus required a district court order to be final. Opinion below.

Judge: Posner

Attorney for Appellants: Jordan Law P.C., Terrence M Jordan

Attorneys for Appellees: Levenfeld Pearlstein, LLC, Jason B. Hirsh, George J. Spathis, Sugar, Friedberg & Felsenthal, Elizabeth Vandesteeg

2016-08-11 – in re tolomeo

Author: Matt Lindblom

In re Jackson

(6th Cir. B.A.P. Aug. 4, 2016)

The Sixth Circuit B.A.P. holds that the bankruptcy court abused its discretion in awarding sanctions against a creditor for violation of a discharge order in the individual’s Chapter 7 bankruptcy case. The condominium association rescheduled a sheriff’s sale of the debtor’s condominium unit to complete a pre-petition foreclosure. The bankruptcy court found that the association’s primary objective was to collect the discharged debt from the debtor, for reasons including that there was likely no equity available to pay the association through the sale. The Sixth Circuit B.A.P. holds that this was an abuse of discretion, as the association had the right to enforce its lien post-petition. Opinion below.

Judge: Humphrey

Attorney for Condominium Association: Kaman & Cusimano, Erika R. Finley, Joseph E. DiBaggio

Debtor: Pro Se

2016-08-04 – in re jackson

Author: Matt Lindblom

Akeley v. Hudson (In re Hudson)

(Bankr. W.D. Ky. Aug. 2, 2016)

The bankruptcy court denies the debtor’s motion to dismiss the nondischargeability action and denies the plaintiff’s cross-motion for summary judgment. The plaintiff’s claims under 11 U.S.C. § 523(a)(2)(A), (4), and (6) were based on allegations that the debtor misrepresented his intent with respect to a transaction in which the plaintiff transferred his ownership interest in a business in exchange for a promissory note from the debtor. The court finds that the plaintiff stated claims under the above sections and that there were genuine issues of fact that precluded summary judgment. Opinion below.

Judge: Lloyd

Attorney for Plaintiff: Dinsmore & Shoal, John M. Spires

Attorney for Debtor: Fauver Law Office, PLLC, Shannon Renee Fauver

2016-08-02 – in re hudson

Author: Matt Lindblom

In re Beath

(Bankr. S.D. Ind. July 29, 2016)

The bankruptcy court denies the debtor’s motion to transfer venue of his chapter 7 bankruptcy case from the Terra Haute Division to the Evansville Division. The debtor failed to satisfy the standard set forth in 28 U.S.C. § 1412 for venue transfer. The debtor’s travel time to each court location was virtually the same, and thus Evansville was no more convenient than Terra Haute. Further, there was no showing that the interests of justice would be better served by the transfer. Opinion below.

Judge: Graham

Attorney for Debtor: M. Brian Jeffries

2016-07-29 – in re beath

Author: Matt Lindblom