Town Center Flats, LLC v. ECP Commercial II LLC (In re Town Center Flats, LLC)

(6th Cir. Mar. 7, 2018)

The Sixth Circuit affirms the bankruptcy court’s decision finding that the debtor had redeemed real property following a pre-petition foreclosure action. If the debtor could establish that it had not redeemed the property then its affiliate may have title to the property and the bank’s mortgage would no longer encumber the property. However, because Michigan law permits parties to extend the redemption period and the evidence supported a finding that the parties agreed to an extension and negotiated the redemption payment, the mortgage is still effective. Opinion below.

Judge: Cole

Attorney for Appellant: Robert N. Bassel

Attorney for Appellee: ECP Commerical II LLC

2018-03-07 – in re town center flats

Author: Matt Lindblom

U.S. Bank N.A. v. Village at Lakeridge, LLC

(U.S. Sup. Ct. Mar. 5, 2018)

The Supreme Court affirms the Ninth Circuit’s determination that a “clear error” review applied to the issue presented. The issue was whether an individual creditor was an “insider” under 11 U.S.C. § 101(31), which in this case determined whether a chapter 11 cramdown plan could be confirmed. The issue required the bankruptcy court to apply established facts to the correct legal standard for determination of insider status (a mixed question of law and fact). The Court holds that this particular question entails primarily legal work rather than factual work. Accordingly, “clear error” review was appropriate. Opinion below.

Justice: Kagan

2018-03-05 – u. s. bank n. a. v. village at lakeridge, llc

Author: Matt Lindblom

In re Hole

(Bankr. W.D. Ky. Mar. 2, 2018)

The bankruptcy court grants the creditors’ motion for an extension of time to file a non-dischargeability complaint. The motion was filed one day after the deadline for filing such complaints. The court finds that the creditors had been diligent in pursuing their claims, the debtor was not prejudiced by the delay, and the circumstances warranted extending the deadline pursuant to 11 U.S.C. § 105(a). Opinion below.

Judge: Lloyd

Attorney for Debtor: Julie Ann O’Bryan

Attorney for Creditor: Ballard Rogers Law Office, PLLC, B. Ballard Rogers

2018-03-02 – in re hole

Author: Matt Lindblom

Owens v. Coffey (In re Coffey)

(Bankr. W.D. Ky. Mar. 1, 2018)

The bankruptcy court denies the debtor’s motion for judgment on the pleadings. The plaintiff commenced a state court action prior to the bankruptcy that asserted claims against the debtor, including fraud. The debtor argued that the plaintiff’s non-dischargeability claims were barred by res judicata, as the Chapter 13 plan had already been confirmed. The court notes that there was no express provision in the plan that provided the plaintiff’s claims were deemed dischargeable. Further, the debtor’s arguments as to the merits of the underlying claim should be asserted in the state court action and would not defeat the non-dischargeability claims at this stage. The court holds the adversary proceeding in abeyance so the state court action can proceed. Opinion below.

Judge: Stout

Attorney for Debtor: Joseph S. Elder, II

Attorney for Creditor: Willam R. Noelker

2018-03-01 – in re coffey

Author: Matt Lindblom

In re Thomas

(Bankr. E.D. Ky. Mar. 1, 2018)

The bankruptcy court denies the debtors’ motion to seal a settlement agreement they reached with an adversary proceeding defendant. The debtors stated that if the documents were not sealed, the other party would not agree to the settlement. However, the debtors failed to provide any evidence to establish that the circumstances warranted the relief requested. Public access to court records should only be restricted in appropriate circumstances. Opinion below.

Judge: Wise

Attorneys for the Debtors: Strauss Troy, Robert R. Sparks; Matthew T. Sanning

2018-03-01 – in re thomas

Author: Matt Lindblom

Dean v. Lane (In re Lane)

(Bankr. W.D. Ky. Feb. 21, 2018)

The bankruptcy court grants the debtor’s motion to dismiss the nondischargeability action. The plaintiffs asserted a personal injury claim against the debtor, but they were unable to proceed with prosecution of the claim due to the automatic stay. The plaintiffs filed a complaint objecting to the discharge of this claim. The court dismisses the case, holding it does not have jurisdiction to liquidate or estimate the claim because personal injury claims have not been referred to the bankruptcy court, pursuant to LR 83.12(a). Opinion below.

Judge: Lloyd

Plaintiffs: Pro Se

Attorneys for Debtor: Seiller Waterman LLC, Neil Charles Bordy

2018-02-21 – in re lane

Author: Matt Lindblom

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

(U.S. Sup. Ct. Feb. 27, 2018)

The Supreme Court holds that the safe harbor of 11 U.S.C. § 546(e) applies only to the transfer that is sought to be avoided, and is not applicable based solely on intermediary transfers. Section 546(e) exempts from a trustee’s avoidance powers certain types of transfers (e.g., settlement payments as defined in § 101) to certain protected parties, including financial institutions. If the transfer sought to be avoided is between two non-protected parties, the safe harbor does not apply, even if there is an intermediary or conduit party that is a protected party. Opinion below.

Justice: Sotomayor

2018-02-27 – merit management v. fti consulting

Author: Matt Lindblom

Calloway Cleaning & Restoration, Inc. v. McFarland (In re McFarland)

(Bankr. E.D. Ky. Feb. 20, 2018)

The bankruptcy court enters summary judgment in favor of the debtors in this nondischargeability action. Following a Christmas Eve fire at the debtors’ home, they entered into a contract with the plaintiff to restore the property. The contract provided that the plaintiff would take insurance proceeds as compensation for the work. A dispute arose, and the debtors used the insurance proceeds for other expenses. The plaintiff argued that the debt is non-dischargeable under 11 U.S.C. § 523(a)(2) and (4). The court disagrees, finding the creditor failed to present evidence sufficient to establish the necessary intent under § 523(a)(2) or to establish a “fiduciary capacity” under § 523(a)(4). Opinion below.

Judge: Wise

Attorneys for Creditor: Frost Brown Todd LLC, Patricia K. Burgess; Michael E. Nitardy

Attorney for Debtors: Michael L. Baker

2018-02-20 – in re mcfarland

Author: Matt Lindblom

In re Joseph

(Bankr. E.D. Ky. Feb. 7, 2018)

The bankruptcy court grants the debtor’s motion to enforce the discharge injunction and for sanctions. The creditor held a certificate of delinquency for unpaid real property taxes. Post-discharge, the creditor sought and obtained an in rem judgment to foreclose the tax lien. The foreclosure sale did not fully satisfy the lien, and the creditor then recorded a judgment lien against the debtor for the deficiency and sought to foreclose on other real property of the debtor. The bankruptcy court holds this is an attempt to collect on the discharged claim for the unpaid property taxes. Sanctions are appropriate under these circumstances. Opinion below.

Judge: Schaaf

Attorneys for Debtor: Ryan R. Atkinson; DelCotto Law Group PLLC, Michael J. Gartland

Attorneys for Creditor: Bilz & Associates, P.S.C., Joshua M. Bilz, David A. Schulenberg

2018-02-07 – in re joseph

Author: Matt Lindblom

Harker v. PNC Mortgage Company (In re Oakes)

(6th Cir. B.A.P. Feb. 6, 2018)

The Sixth Circuit B.A.P. affirms the bankruptcy court’s order denying the mortgage holder’s motion for judgment on the pleading in this mortgage avoidance action. The creditor argued that recently-enacted Ohio statutes provide that the bankruptcy trustee, as a hypothetical judicial lien creditor, cannot avoid the mortgage, which was improperly executed and recorded. The B.A.P. holds that, pursuant to Ohio law at the time the case was filed, the trustee takes priority over the creditor’s defective mortgage. Opinion below.

Judge: Opperman

Attorneys for Trustee: Donald F. Harker, III; Rieser & Marx, Dianne F. Marx, John Paul Rieser

Attorneys for Creditor: Plunkett Cooney, Amelia A. Bower

2018-02-06 – in re oakes

Author: Matt Lindblom