In re Stapp

(Bankr. S.D. Ind. Aug. 21, 2017)

The bankruptcy court permits the creditor to file a 11 U.S.C. § 523(a)(3)(B) complaint. The creditor moved for leave to file its complaint because it had not received notice of the bankruptcy and the deadline for § 523 complaints had passed. The court finds that the debtor should have scheduled the creditor and that leave was not required given that § 523(a)(3)(B) allowed § 523 claims to be filed at any time if a creditor was not given proper notice of the bankruptcy filing. The court denies the motion with respect to the request to file a § 727 claim because the Bankruptcy Code does not contain a similar provision for those claims. Opinion below.

Judge: Moberly

Attorneys for Debtor: Tucker Legal Services, PC, William J. Tucker, Bradley J. Bucheit

Attorneys for Creditor: Riley Bennett Egloff LLP, Anthony R. Jost, Bryce H. Bennett, Jr.

2017-08-21 – in re stapp

Author: Matt Lindblom

Springer v. RNBJ RTO LLC (In re Springer)

 

(Bankr. W.D. Ky. Aug. 16, 2017)

The bankruptcy court enters judgment against the creditor for its violation of the automatic stay. The creditor is a home furnishing leasing company that leased furniture to the debtors prepetition. While the bankruptcy case was pending, the creditor continued weekly withdrawals from the debtors’ account. The creditor then refused to return the funds and attempted to recover the leased furniture from the debtors’ home. The court awards damages for the amount withdrawn from the debtors’ account and attorney fees, and awards punitive damages in the amount of $5,000. Opinion below.

Judge: Stout

Attorney for Debtor: Ross Benjamin Neuhauser

Attorney for Creditor: Brian Kevin Darling

2017-08-16 – in re springer

Author: Matt Lindblom

Grede v. FCStone, LLC (In re Sentinel Management Group, Inc.)

(7th Cir. Aug. 14, 2017)

The Seventh Circuit reverses the district court and holds that certain funds held by the debtor were held in trust for the appellant and other creditors in the same customer class. The funds therefore were not property of the estate that should be distributed pro rata to all creditors. Opinion below.

Judge: Hamilton

Attorneys for Appellant: Foley & Lardner LLP, Stephen Bedell, Robert Seth Bressler, Geoffrey S. Goodman, David B. Goroff, Thomas P. Krebs, William J. McKenna, Jr.

Attorneys for Appellee: Jenner & Block LLP, Vincent E. Lazar, Catherine L. Steele, Angela M. Allen, Barry Levenstam

2017-08-14 – in re fcstone

Author: Matt Lindblom

In re Mann

(Bankr. W.D. Ky. Aug. 10, 2017)

The bankruptcy court denies the U.S. Trustee’s motion to enter an order for sanctions and requiring disgorgement of fees. The attorney had provided advice to the debtor about the petition and schedules that the debtor had drafted. The attorney was not aware that a bankruptcy was filed until he received the U.S. Trustee’s motion. The court declines to grant the relief requested under these circumstances. Opinion below.

Judge: Lloyd

2017-08-10 – in re mann

Author: Matt Lindblom

Secure Leverage Group, Inc. v. Bodenstein (In re Peregrine Financial Group, Inc.)

(7th Cir. Aug. 8, 2017)

The Seventh Circuit adopts the district court’s opinion, affirming the bankruptcy court’s ruling in favor of the trustee. The trustee did not include the plaintiffs in a priority distribution of “customer property” under 11 U.S.C. §§761-767, which governs the bankruptcy of a futures commissions merchant. Opinion below.

Judge: Rovner

2017-08-08 – in re peregrine financial – amended

Author: Matt Lindblom

Kendrick v. Rister (In re Rister)

(Bankr. E.D. Ky. Aug. 4, 2017)

The bankruptcy court grants the motion to dismiss the trustee’s complaint. The court recently entered an order dismissing the trustee’s complaint for failure to state a claim but permitted the trustee leave to amend the complaint. See In re Rister. The amended complaint alleged that the vehicle became property of the estate because it was a proceed of the debtor’s contractual rights to the vehicle as of the petition date, whereas the original complaint alleged the vehicle itself was property of the estate on the petition date. The court finds that the fact that the debtor’s name was not on the certificate of title on the petition date is still dispositive. Opinion below.

Judge: Wise

Attorney for Trustee: Michael B. Baker

Attorneys for Defendants: Steffen Law Offices, Eric A. Steiden; Frost Brown Todd LLC, Paige Leigh Ellerman, Adam J. Webb; Aaron J. Nash; Patricia L. Johnson

2017-08-04 – in re rister

Author: Matt Lindblom

Coslow v. Reisz (In re Coslow)

(Bankr. W.D. Ky. July 28, 2017)

The bankruptcy court enters summary judgment in favor of the debtor and orders the trustee to abandon any interest in the debtor’s residence. As of the petition date there was no equity in the property due to the balance on two mortgages. After the petition date, due to postpetition payments on the second mortgage, significant equity in the property was created. The trustee argued the equity was property of the estate. The court, however, holds that the debtor is entitled to such postpetition equity. As of the petition date, the property was of inconsequential value to the estate and thus should be abandoned. Opinion below.

Judge: Stout

Attorneys for Debtor: Seiler Waterman LLC, David M. Cantor, William P. Harbison, Keith J. Larson

Attorneys for Trustee: Tilford, Dobbins & Schmidt, PLLC, William Stephen Reisz

2017-07-28 – in re coslow

Author: Matt Lindblom