Cox v. Specialty Vehicle Solutions, LLC

(6th Cir. Nov. 14, 2017)

The Sixth Circuit vacates the district court’s judgment dismissing the creditor’s lawsuit against the debtor. The lawsuit was filed after the petition date, and the bankruptcy court entered an order that vacated the automatic stay so that the creditor was permitted “to resume and prosecute to conclusion” the lawsuit. The debtor then filed a motion to dismiss the lawsuit, arguing the initial case filed was null and void because it had been filed in violation of the automatic stay and a second action filed was outside the 30-day period allowed by 11 U.S.C. § 108(c) after lifting of the stay. The court finds that the stay lift order is ambiguous because it doesn’t clearly state that the stay was “annulled” or that the relief granted is retroactive to validate the first lawsuit filed. The court remands for consideration of additional evidence and correct application of Easley v. Petit One Mich. Corp. Opinion below.

Judge: White

Attorneys for Creditor: Seiller Waterman, David M. Cantor, Keith James Larson; Taliaferro, Carran & Keys, Philip Taliaferro, III

Attorneys for Debtor: Casey, Bailey & Maines, Susan L. Maines

2017-11-14 – in re cox

Author: Matt Lindblom

In re Witham

(Bankr. E.D. Ky. Oct. 12, 2017)

The bankruptcy court awards damages to the debtor for the creditor’s willful violation of the automatic stay. The debtor had an agreement with the tanning bed salon in which the salon would deduct a monthly payment from her debit card. Despite numerous notifications of the bankruptcy and the violation of the automatic stay, the salon continued to make the deductions post-petition. The court enters an award for damages that includes attorney fees and punitive damages. Opinion below.

Judge: Wise

Attorney for Debtor: Grant M. Axon

2017-10-12 – in re witham

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 The court awards damages for the amount withdrawn from the debtors’ account and attorney fees, and awards punitive damages in the amount of $5,000.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

Isaacs v. DBI-ASG Coinvester Fund III, LLC (In re Isaacs)

(6th Cir. B.A.P. July 3, 2017)

The Sixth Circuit B.A.P. vacates the bankruptcy court’s judgment and remands for dismissal based on lack of subject matter jurisdiction. The creditor failed to record its mortgage prior to the first Chapter 7 case, recorded it during that case, and it was not challenged. The creditor then sought to foreclose on the mortgage and obtained a state court in rem judgment permitting foreclosure. The debtor then filed a Chapter 13 case and challenged the state court judgment, based on the stay violation in the Chapter 7. The bankruptcy court held that the Rooker-Feldman doctrine did not apply because the state court judgment modified the discharge injunction inappropriately, as the lien was not valid based on the Chapter 7 discharge. The B.A.P. reverses, finding that the Rooker-Feldman doctrine does apply, and that the lien was effective under Kentucky law even if not perfected prior to the Chapter 7. Opinion below.

Judge: Humphrey

Attorney for Debtor: Marcus H. Herbert

Attorney for Creditor: DBI-ASG Coinvester Fund, III, LLC

2017-07-03 – in re isaacs

Author: Matt Lindblom

In re Parrish

(Bankr. W.D. Ky. Nov. 16, 2016)

The bankruptcy court grants in part and denies in part the debtor’s motion for sanctions for violation of the automatic stay. The government agency sought to collect its loan default claim by set off against the debtor’s tax refund. The debtor filed bankruptcy, and the government effected the set off before its system flagged the account for the bankruptcy. The court finds a technical violation of the automatic stay but also finds that a set off would have been appropriate and there was no evidence that a stay relief motion would have been denied. Accordingly, the court awards the debtor a minimal amount for the inadvertent stay violation. Opinion below.

Judge: Lloyd

Attorney for Debtor: Julie Ann O’Bryan

Attorney for Creditor: Assistant U.S. Attorney, Jessica R. C. Malloy

2016-11-16-in-re-parrish

Author: Matt Lindblom

In re Webb

(Bankr. W.D. Ky. Sep. 12, 2016)

The bankruptcy court grants the motion to terminate the automatic stay. The creditor and the debtor entered into a sale contract prepetition for sale of the debtor’s real property. The debtor argued that the sale contract terminated prepetition, and the creditor argued that it should be permitted to pursue its claims on the contract in state court. The court finds that the debtor has no equity in the property and that it is not necessary to an effective reorganization. Thus, stay relief is appropriate. Opinion below.

Judge: Lloyd

Attorney for Debtor: Kruger & Schwartz, Richard A. Schwartz

Attorney for Creditor: Eddins Domine Law Group, PLLC, H. Kevin Eddins

2016-09-12-in-re-webb

Author: Matt Lindblom

In re Licking River Mining, LLC

(Bankr. E.D. Ky. June 6, 2016)

In these jointly administered cases converted to chapter 7, the bankruptcy court modifies the stay for the limited purpose of paying defense costs from the debtor’s D&O insurance policy to the two individual creditors. The creditors were directors and shareholders of one of the debtors and were named defendants in the trustee’s adversary complaint, which alleged the debtors breached their fiduciary duties to the debtor. The court holds it is premature to make a determination as to whether the policy proceeds are property of the estate. Opinion below.

Judge: Wise

Attorneys for creditors: Fowler Bell PLLC, Taft A. McKinstry, Matthew D. Ellison

Trustee: Phaedra Spradlin

2016-06-06 – in re licking river mining

Author: Matt Lindblom