French v. Security Seed and Chemical, Inc. (In re French)

(W.D. Ky. April 25, 2017)

The district court affirms the bankruptcy court’s judgment finding the debt owed to the creditor was nondischargeable under 11 U.S.C. § 523(a)(2)(B). The court holds the bankruptcy court’s decision was not clearly erroneous, as the evidence supported a finding that the debtor obtained a loan from the creditor based on a written statement that was materially false as to the debtor’s financial condition. The court also affirms the bankruptcy court’s finding that the creditor did not obtain a lien on personal property of the debtor when the sheriff, following default judgment in the creditor’s favor prepetition, merely located property of the debtor rather than exerted control over the property. Opinion below.

Judge: McKinley

Attorneys for Debtor: King, Deep & Branaman, Harry L. Mathison, Jr.

Attorneys for Creditor: Thomas Arvin & Adams, James G. Adams, III, David E. Arvin

2017-04-25 – in re french

Author: Matt Lindblom

In re Todd

(Bankr. S.D. Ind. April 24, 2017)

The bankruptcy court grants the debtor’s motion, finding the Indiana Department of Workforce Development in contempt for violation of the debtor’s discharge. The department garnished the debtor’s wages post-discharge based on a claim that the debtor improperly received benefits from the department prepetition. The department argued it was collecting on a post-petition claim because it had not determined the debtor was liable until after the petition date. The court rejects that argument, finding the department had a prepetition claim because it was based on prepetition conduct of the debtor. The department’s date of finding of liability did not control. Opinion below.

Judge: Lorch

Attorneys for Debtor: Kinkade & Associates, P.C., Kevin S. Kinkade

Attorney for Department: Megan E. Binder

2017-04-24 – in re todd

Author: Matt Lindblom

In re Wright

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

The Sixth Circuit B.A.P. reverses the bankruptcy court’s finding that a personal injury claim was not abandoned, but affirms the finding that a second claim was not abandoned. The debtor listed the personal injury claim in his schedules, but not the second claim. The trustee filed a notice of no distribution, noting that the personal injury claim was not abandoned. The case was closed, and the trustee later moved to reopen the case to settle the personal injury claim. The court holds that because the trustee did not obtain an order preventing abandonment upon closing the case, the claim was abandoned under 11 U.S.C. § 554. The bankruptcy court correctly held that the unscheduled claim was not automatically abandoned upon closing the case pursuant to § 554(d). Opinion below.

Judge: Harrison

Attorney for Debtor: Gino Pulito

Attorney for Trustee: Lauren A. Helbing

2017-04-17 – in re wright

Author: Matt Lindblom

 

 

McDermott v. St. George (In re St. George)

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

The Sixth Circuit B.A.P reverses the bankruptcy court’s order granting the U.S. Trustee a second extension of the deadline to file a nondischargeability complaint and reverses the subsequent judgment denying the debtor a Chapter 7 discharge. The court finds that the U.S. Trustee failed to establish sufficient cause for an additional extension under Bankruptcy Rule 4004(b). Opinion below.

Judge: Harrison

Attorneys for U.S. Trustee: Amy L. Good, Scott Robert Belhorn, Sharon Nollsch

Attorney for Debtor: Lee Raymond Kravitz

2017-04-17 – in re st george

Author: Matt Lindblom

In re Dior

(Bankr. S.D. Ind. Apr. 14, 2017)

The court grants the debtor’s motion for a hardship discharge under 11 U.S.C. § 1328(b)(1). The debtor had made 44 plan payments but was unable to make the 16 remaining payments. The court finds the recent change in the debtor’s economic circumstances warranted the relief requested. Opinion below.

Judge: Carr

Attorney for Debtor: Steven P. Taylor

2017-04-14 – in re dior

Author: Matt Lindblom

 

Spradlin v. Monday Coal, LLC (In re Licking River Mining, LLC)

(Bankr. E.D. Ky. Apr. 13, 2017)

The bankruptcy court grants the defendant’s motion to dismiss except with respect to payments received from the debtor within the 90-day prepetition preference period. The court first finds that the trustee failed to state a claim for avoidance of alleged preferential transfers made outside the 90-day period because the facts alleged did not show that the defendant was an “insider” as defined in the bankruptcy code or a “non-statutory insider” under case law. The trustee also failed to allege facts sufficient to support various other claims to avoid transfers to the defendant. Opinion below.

Judge: Wise

Attorneys for Trustee: Bingham Greenbaum Doll LLP, Claude R. Bowles, Jr., Daniel J. Donnellon, Jamies R. Irving, April A. Wimberg

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

2017-04-13 – in re licking river mining

Author: Matt Lindblom

Community First Bank of Indiana v. Galyan (In re Galyan)

(Bankr. S.D. Ind. Apr. 13, 2017)

Following trial, the bankruptcy court enters judgment against the debtor, finding the loan debt owed to the bank is nondischargeable under 11 U.S.C. § 523(a)(2)(B). The court finds that the debtor made false representations with respect to his ownership interest in real property and the existence of a debt owed, which representations were reasonably relied upon by the bank when making the loan. Opinion below.

Judge: Carr

Attorneys for Plaintiff: Riley Bennett & Egloff, LLP, Anthony R. Jost

Attorney for Defendant: KC Cohen

2017-04-13 – in re galyan

Author: Matt Lindblom