Irvin v. Faller

(W.D. Ky. May 7, 2015)

The district court denies the adversary proceeding defendant’s motion to withdraw the reference. The plaintiffs obtained a state court judgment against the defendant before the defendant filed his Chapter 7 petition. The plaintiffs then commenced the adversary proceeding to have the judgment declared non-dischargeable. The court first concludes that the motion was not timely filed, as it was filed nearly a year after the adversary complaint and after substantial briefing in the bankruptcy court. The court also concludes that the defendant failed to show cause for a discretionary withdraw of the reference because the non-dischargeability action was a core proceeding and the defendant was not entitled to a jury trial. Opinion below.

2015-05-07 – irvin v faller

Author: Matt Lindblom

Kentucky Employees Retirement System v. Seven Counties Services, Inc.

(W.D. Ky. Feb. 4, 2015)

The district court denies the appellants’ motion to stay the bankruptcy court’s orders confirming the debtor’s chapter 11 plan until appeals are concluded. The court holds that the appellant failed to show likelihood of success on its appeal of the issue of whether an executory contract existed between the appellant and the debtor. Further, the appellants failed to show certain and immediate harm would result if the confirmation orders are not stayed. Opinion below.

2015-02-04 – kers v seven counties services

Author: Matt Lindblom

Reisz v. Crocker

(W.D. Ky. Dec. 23, 2014)

The district court affirms the bankruptcy court’s order setting the Chapter 7 trustee’s commission at an amount lower than the § 326 statutory rate. The trustee sold collateral property with a $50,000 carveout for unsecured creditors. However, after the debtor’s homestead exemption and bankruptcy estate taxes were paid, only about $22,000 of the carveout remained. The trustee requested the remainder as a commission, as it was less than the statutory commission. The United States Trustee objected and requested the commission be set at $5,000, and the bankruptcy court entered its order with the lower amount. The trustee appealed, arguing the statutory rate was a reasonable commission. The district court affirmed, noting that the trustee should not have conducted the sale if there would be no benefit to unsecured creditors. The court held that the circumstances warranted a commission lower than the statutory rate. Opinion below.

2014-12-23 – reisz v crocker

Seven Counties Services, Inc. v. NextGen Healthcare Systems, LLC

(W.D. Ky. Aug. 12, 2014)

The adversary proceeding defendant filed a motion to withdraw the reference to the bankruptcy court, arguing the debtor’s claims were merely non-core breach of contract claims. The district court denied the motion, finding that the defendant consented to the bankruptcy court’s jurisdiction when it filed its proof of claim. The defendant’s withdrawal of the proof of claim after the adversary proceeding was filed did not alter the effect of that consent. Opinion below.

2014-08-12 – seven counties services v nextgen healthcare

Lea v. Farmers National Bank

(W.D. Ky. Aug. 6, 2014)

The district court dismisses the debtor’s appeal of the bankruptcy court’s determination that the automatic stay did not prevent the bank from proceeding with a foreclosure sale of property owned by the debtor’s corporation, which had not filed bankruptcy. The debtor had filed an amended schedule listing his corporation as an “alias” in an attempt to prevent the sale, but the bankruptcy court struck the amendment and then dismissed the bankruptcy due to the debtor’s failure to timely submit a proposed Chapter 13 plan. The district court agreed with the bankruptcy court’s decision regarding the inapplicability of the automatic stay and dismissed the appeal because the bankruptcy proceeding had been dismissed. Opinion below.

2014-08-06 – lea v farmers national bank

Jones v. Simon

(W.D. Ky. July 24, 2014)

The district court affirms the bankruptcy court’s finding that the creditor’s claim was not a secured claim. The agreement giving rise to the creditor’s claim did not evidence an intent to create a security interest in proceeds of the bankruptcy trustee’s settlement agreement with a preferential transfer defendant. There was no provision in the agreement regarding any particular property serving as collateral. Further, even if the agreement had created a security interest, the creditor had not taken steps to perfect such interest and thus the trustee could have avoided the lien in the bankruptcy. Opinion below.

2014-07-24 – jones v simon