Smith v. Capital One Bank (USA), N.A.

(7th Cir. Dec. 22, 2016)

The Seventh Circuit affirms the district court’s judgment that the action against the debtor’s spouse did not violate the Chapter 13 co-debtor stay. The action against the spouse was based on a credit card account held only by the spouse. The debtor argued that, based on Wisconsin law, her assets were subject to the spouse’s credit card debt. The court holds that, while the automatic stay would prevent collection from property of the estate, the co-debtor stay did not prevent the action against the spouse because the debtor was not a “co-debtor” on that debt. Opinion below.

Judge: Flaum

Attorneys for Debtor: Kerkman & Dunn, Briane F. Pagel, Jr., Gregory M. Schreiber

Attorneys for Appellee: Hunton & Williams, Jarrett Lee Hale, Gregory G. Hesse, Eric W. Flynn, Faegre Baker Daniels LLP,  Jeffrey P. Justman, Jane E. Maschka, Aaron D. Van Oort

2016-12-22-smith-v-capital-one-bank

Author: Matt Lindblom

Loventhal v. Edelson

(7th Cir. Dec. 21, 2016)

The Seventh Circuit affirms the bankruptcy court’s judgment that certain real property of the debtor was exempt because it was held in a tenancy by the entirety under Illinois law. The creditor argued that the tenancy by the entirety was severed when the real property had been transferred to a trust prepetition. The Seventh Circuit examines applicable Illinois statutes and concludes that the transfer did not sever the tenancy by the entirety. Opinion below

Judge: Posner

Attorney for Debtor: Kofkin Law, Scott J. Kofkin

Attorneys for Creditor: Schwartz & Kanyock, Andrew R. Schwartz, Karen Irene Jeffreys Bridges

2016-12-21-loventhal-v-edelson

Author: Matt Lindblom

In re Trentadue

(7th Cir. Sept. 14, 2016)

The Seventh Circuit affirms the bankruptcy court and district court ruling that debtor husband must pay ex-wife’s attorney’s fees as a priority, non-dischargeable domestic support obligation (DSO). Debtor was ordered by a state court to pay $25,000 directly to his ex-wife’s attorney for “significant over-trial”. He never paid and eventually filed Chapter 13. His ex-wife’s attorney filed a DSO claim for $25,000. Debtor objected to the claim but was overruled. On appeal, he argued that the over-trial award did not deserve DSO status because it was not payable to his spouse, former spouse, child, or caregiver as required by §101(14A) of the Code. The 7th Circuit noted that debtor’s interpretation of §101(14A) was correct, but refused to address this argument because he failed to raise it before the bankruptcy court or the district court. Debtor also argued that DSO status should be denied because the over-trial award was intended as punishment, not as support, but the Court noted that every Circuit that has considered the issue (including the 6th, in In re Rugiero, 502 F.App’x. 436, 439 (6th Cir. 2012)) has recognized that attorney fee awards can constitute support under certain circumstances. Opinion below.

Circuit Judges: Ripple, Kanne, and Williams

Attorney for Debtor/Appellant: Jared Nusbaum

Attorney for Appellee: Helen Ludwig

Author: Robert Imperial

2016-09-14-in-re-trentadue

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

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

FTI Consulting, Inc. v. Merit Management Group, LP

(7th Cir. July 28, 2016)

The Seventh Circuit holds that the safe harbor provision of 11 U.S.C. § 546(e) does not apply to a transaction in which an entity that serves as merely a conduit for a pre-petition transfer is the only entity that fits one of the necessary categories of entities in that section. The conduit was a financial institution, which is a type of entity protected by § 546(e). However, neither the debtor nor the transferree were a type of entity that is protected. Thus, the court holds that the safe harbor provision does not apply and reverses the district court judgment. Opinion below.

Judge: Wood

Attorneys for Trustee: Reid Collins & Tsai LLP, Gregory S. Schwegmann

Attorneys for Defendant: Seyfarth Shaw LLP, Jason J. DeJonker, James B. Sowka

2016-07-28 – fti consulting v merit management

Author: Matt Lindblom

Zeiden v. Griswold (In re Wierzbicki)

(7th Cir. July 27, 2016)

The Seventh Circuit affirms the bankruptcy court’s order finding that the debtor’s prepetition transfer of a farm to the defendant was a fraudulent transfer subject to avoidance. The debtor transferred the farm in exchange for the defendant’s agreement to abandon litigation he had brought against the debtor. The bankruptcy court found that the debtor did not receive reasonably equivalent value in exchange for the farm. Opinion below.

Per Curiam

Defendant: Pro Se

Attorney for Trustee: Brenda L. Zeddun

2016-07-27 – in re wierzbicki

Author: Matt Lindblom

Wittman v. Koenig

(7th Cir. July 26, 2016)

The Seventh Circuit interprets a Wisconsin exemption statute applicable to annuity contracts. The statute provides that such a contract is exempt from assets available to creditors so long as it “complies with the provisions of the internal revenue code.” The trustee argued for a narrow interpretation of this language, while the Court ultimately agrees with the broader interpretation of the statute employed by Wisconsin bankruptcy courts. Opinion below.

Judge: Hamilton

Attorney for Debtors: Dewitt Ross & Stevens S.C., Craig E. Stevenson

Attorney for Trustee: Ruder Ware, Steven Martin Anderson

2016-07-26 – wittman v koenig

Author: Matt Lindblom

Germeraad v. Powers

(7th Cir. June 23, 2016)

The Seventh Circuit reverses the bankruptcy court, concluding that the bankruptcy code permits modification of a confirmed Chapter 13 plan based on increased income post-confirmation. While the code does not expressly permit modification on this basis, other courts have permitted this. The trustee had filed a motion to increase the debtors’ plan payments based on an alleged $50,000 post-confirmation increase in the debtors’ annual income. Opinion below.

Judge: Adelman

Attorney for Debtor: Eugene Wedoff

Attorney for Trustee: Kenneth T. Siomos

2016-06-23 – germeraad v powers

Author: Matt Lindblom

In re Sobczak-Slomczewski

(7th Cir. June 13, 2016)

The Seventh Circuit holds that Bankruptcy Rule 8002(a)’s 14-day time limit for filing a notice of appeal is jurisdictional. Thus, the debtor’s appeal was properly dismissed because it was filed on the fifteenth day after entry of the order. While this court had clearly held the rule was jurisdictional in prior opinions, it revisited the issue in light of the Supreme Court’s decisions in Bowles v. Russell (2007) and Kontrick v. Ryan (2004). The court finds that the rule is not merely a claim-processing rule as described in those opinions. Opinion below.

Appellant: Pro Se

Attorneys for Appellee: Meltzer, Purtill & Steele LLC, David L. Kane, Whyte Hirschboeck Dudek S.C., Jeffrey McIntyre

2016-06-13 – in re sobczak-slomczewski

Author: Matt Lindblom