HIJ Industries, Inc. v. Roy (In re Roy)

(Bankr. E.D. Ky. Jan. 26, 2017)

The bankruptcy court enters judgment in favor of the debtor, dismissing claims under 11 U.S.C. § 523(a)(6) and § 727(a)(2)(A). The plaintiff argued that the debtor executed a scheme that intentionally injured the plaintiff because the debtor became unable to pay on promissory notes. The Court finds that the plaintiff did not establish that the debtor willfully and maliciously injured the plaintiff. Also, while the debtor had transferred title to a truck from his sole ownership to joint ownership with his wife within a year of the bankruptcy petition, the plaintiff failed to establish the requisite intent. Opinion below.

Judge: Wise

Attorney for Plaintiff: Tricia A. Shackelford

Attorney for Debtor: John M. Simms

2017-01-26-in-re-roy

Author: Matt Lindblom

In re Lockhart

(Bankr. W.D. Ky. Jan. 17, 2017)

The bankruptcy court grants the creditor’s motion for sanctions, and awards the creditor her attorney fees. The debtor filed the Chapter 13 petition for the stated purpose of obtaining more time to obtain a reduction in his maintenance obligation owed to the creditor in the state court. The bankruptcy court finds that this was a violation of Bankruptcy Rule 9011(b). Opinion below.

Judge: Lloyd

Attorney for Debtor: Naber & Joyner, J. Gregory Joyner

Attorney for Creditor: Joseph S. Elder II

2017-01-17-in-re-lockhart

Author: Matt Lindblom

In re Zenga

(6th Cir. B.A.P. Jan. 17, 2017)

The Sixth Circuit B.A.P. reverses the bankruptcy court’s order denying the debtors’ motion to dismiss the involuntary bankruptcy petition filed against them by a single creditor. The debtors argued that 11 U.S.C. § 303(b)(1) required a minimum of three petitioning creditors to institute an involuntary bankruptcy against them, because they had twelve or more creditors. The petitioning creditor argued that the debtors should be equitably estopped from asserting they had twelve creditors because in prepetition post-judgment discovery, they stated that they had only ten other creditors. The B.A.P. holds that, while the 303(b)(1) requirement is not jurisdictional, the bankruptcy court erred as a matter of law in applying equitable estoppel because the creditor failed to establish sufficient detriment as a result of the misrepresentation in the post-judgment discovery. Opinion below.

Judge: Humphrey

Attorneys for Debtors: Lefkovitz & Lefkovitz, Steven L. Lefkovitz

Attorneys for Appellee: Bass, Berry & Sims PLC, Gene L. Humphreys

2017-01-17-in-re-zenga

Author: Matt Lindblom

In re Parker

(Bankr. E.D. Ky. Jan. 6, 2017)

The bankruptcy court sustains the creditor’s objection to confirmation of the Chapter 13 plan. The debtor filed her bankruptcy petition after the creditor obtained a judgment and order of sale with respect to the debtor’s residence, after the creditor was the successful bidder at the resulting foreclosure sale, but before the state court confirmed the foreclosure sale. The creditor argued the debtor was not permitted to cure the default through her plan. The court discusses 11 U.S.C. § 1322(c) and holds that the debtor may not cure the default through a plan after the “gavel comes down on the last bid.” Confirmation of the sale and the right of redemption do not affect the analysis. Opinion below.

Judge: Schaaf

Attorney for Debtor: DelCotto Law Group PLLC, Dean A. Langdon

Attorneys for Creditor: Goldberg Simpson, LLC, Stephen R. Solomon, Megan P. Keane

2017-01-06-in-re-parker

Author: Matt Lindblom

In re Neace

(Bankr. E.D. Ky. Jan. 6, 2017)

The bankruptcy court overrules the creditor’s objection to confirmation of the Chapter 13 plan. The creditor argued its claim, secured by the debtors’ mobile home, should be increased by the cost of delivery and set-up of the home. The court holds that set-up and delivery costs may not be used as a means to increase the replacement value as a matter of law. Opinion below.

Judge: Wise

Attorney for Debtor: Daryle M. Ronning

Attorneys for Creditor: McBrayer, McGinnis, Leslie & Kirkland, Zachary A. Horn

2017-01-06-in-re-neace

Author: Matt Lindblom

Spradlin v. Khouri (In re Bruner)

(6th Cir. B.A.P. Jan. 4, 2017)

The Sixth Circuit B.A.P. affirms the bankruptcy court’s decision and order denying the trustee’s request for turnover of funds paid to the debtor’s criminal defense attorney. The debtor’s mother had made the transfer from a bank account held jointly with the debtor. The trustee failed to meet the burden of proving by a preponderance of the evidence that the attorney fee was property of the estate, and thus turnover was inappropriate. Because the debtor had no claim to the fee, the trustee had no claim for turnover. Opinion below.

Judge: Humphrey

Attorneys for Defendants: Khouri Law Firm, Yelena Bakman, Edward P. Kerns, Michael John Khouri, Wai Brenda Tso

Attorneys for Trustee: Bingham Greenebaum LLP, Richard Boydston

2017-01-04-in-re-bruner

Author: Matt Lindblom

Spradlin v. Beads and Steeds Inns, LLC (In re Howland)

(6th Cir. Jan. 3, 2017)

The Sixth Circuit affirms the bankruptcy court’s dismissal of the trustee’s fraudulent transfer complaint. The trustee alleged the defendant was the recipient of a fraudulent transfer from the debtors, but the transfer was actually made to the defendant by an LLC seperate from the debtors. The trustee failed to allege facts sufficient for the doctrine of substantive consolidation and veil piercing is inappropriate here because Kentucky courts endorse the vicarious liability approach to veil piercing rather than the identity approach. The debtor had no interest in the alleged alter ego’s assets. Opinion below.

Judge: Griffin

Attorneys for Defendant: Stoll Keenon Ogden PLLC, Adam M. Back

Attorneys for Trustee: Bingham Greenebaum Doll LLP, Richard Boydston

2017-01-03-in-re-howland

Author: Matt Lindblom

Crawford v. Vanwinkle (In re Vanwinkle)

(Bankr. E.D. Ky. Dec. 27, 2016)

The bankruptcy court dismisses the creditor’s non-dischargeability complaint under 11 U.S.C. § 523(a)(2)(A) and (a)(6). The creditor conceded that the debt was based on a breach of contract claim. However, the creditor alleged the debt was converted to a non-dischargeable debt based on the debtor’s post-judgment efforts to avoid collection. The court finds that the creditor failed to state a claim in part because the alleged behavior did not result in the debt sought to be declared non-dischargeable. Opinion below.

Judge: Schaaf

Attorneys for Plaintiff: DelCotto Law Group PLLC, Laura Day DelCotto

Attorney for Defendant: Michael B. Baker

2016-12-27-in-re-vanwinkle

Author: Matt Lindblom

In re Perkins

(Bankr. W.D. Ky. Dec. 22, 2016)

The bankruptcy court overrules the creditor’s objection and confirms the Chapter 12 plan. The creditor argued that the debtor was not a “family farmer,” and thus did not qualify for Chapter 12. The court finds that the debtor had sufficient income from the farming operation to satisfy the Code’s definition, which definition the court construes broadly. Further, the court finds the debtor’s debt level does not exceed the debt limitation for Chapter 12. The court looks only to the debtor’s schedules, rather than adding the scheduled debt to the debt reflected in the filed claims. Opinion below.

Judge: Lloyd

Attorney for Debtor: Sandra D. Freeburger

Attorneys for Creditor: Stites & Harbison PLLC, Brian H. Meldrum, Brian R. Pollock

2016-12-22-in-re-perkins

Author: Matt Lindblom

Hollowell v. JPMorgan Chase National Association

(N.D. Ind. Dec. 22, 2016)

The district court affirms the bankruptcy court’s order lifting the stay to permit the creditor to proceed with the real property foreclosure action. The debtor failed to provide factual or legal support for his claims of fraud by the creditor. Opinion below.

Judge: Miller

Plaintiff: Pro Se

Attorneys for Defendants: Dykema Gossett PLLC, Jordan S. Huttenlocker, Louis S. Chronowski

2016-12-22-hollowell-v-jpmorgan-chase

Author: Matt Lindblom