In re Pfetzer

(Bankr. E.D. Ky. Mar. 22, 2018)

The bankruptcy court addresses the issue of whether a motion to dismiss for lack of good faith under 11 U.S.C. § 1307(c) can save an otherwise untimely § 1325(a)(7) objection to confirmation of a Chapter 13 plan. The court holds that because § 1325(a)(7) requires the determination of the debtor’s good faith in filing the petition as part of the plan confirmation process, a motion to dismiss under § 1325(a)(7) cannot rely on an allegation of lack of good faith if the motion is filed after the deadline to object to confirmation. Opinion below.

Judge: Wise

Attorney for Debtor: Michael B. Baker

Attorney for Creditor: Finney Law Firm, LLC, Justin C. Walker

2018-03-22 – in re pfetzer

Author: Matt Lindblom

In re Valentine Hill Farm LLC

(Bank. S.D. Ind. Jan. 25, 2018)

The bankruptcy court grants the debtor’s motion to dismiss the Chapter 12 case but bars the debtor from refiling a case under any chapter for 180 days. The debtor filed its motion after the trustee filed a motion to dismiss and for a 180-day refiling bar. The court concludes that the debtor has the right to dismiss its case under 11 U.S.C. § 1208(b), and thus the trustee’s motion must be denied. However, the court finds that the case was filed in bad faith and thus the Court can order the 180-day bar without motion under § 349(a). Opinion below.

Judge: Moberly

Attorney for Debtor: McClure O’Farrell, Thomas B. O’Farrell

Trustee: Joseph M. Black, Jr.

2018-01-25 – in re valentine hill farm

Author: Matt Lindblom

In re Dickson

(Bankr. E.D. Ky. Nov. 22, 2017)

The bankruptcy court grants the the creditors’ motion for sanctions pursuant to Bankruptcy Rule 9011. The creditors argued that the debtor filed her Chapter 11 petition in bad faith. The court finds that sanctions are appropriate because the debtor filed the petition without a legitimate bankruptcy purpose. The debtor sought the protection of the automatic stay but did not intend to reorganize or seek an orderly liquidation. Instead, the debtor sought to obtain a civil remedy—the stay of execution of the judgment against the debtor while her appeal was pending. Opinion below.

Judge: Wise

Attorneys for Debtor: Gess Mattingly & Atchison, William W. Allen, Stefan J. Bing, John Thomas Hamilton, Elizabeth Thompson

Attorney for Creditors: DelCotto Law Group PLLC, Jamie L. Harris

2017-11-22 – in re dickson

Author: Matt Lindblom

In re Atlas Red-D Mix, Inc.

(Bankr. S.D. Ind. Nov. 10, 2015)

The bankruptcy court dismisses the chapter 7 business debtor’s bankruptcy for cause under 11 U.S.C. § 707(a). The debtor had ceased operations a few years prior to the bankruptcy, due to the death of its principal. The individual that inherited the stock then caused the debtor to withdraw from a pension fund to which the debtor was a contributing employer, which caused the debtor to incur a $3.5 million liability. The fund obtained a judgment against the debtor, took steps to collect on the judgment, and the debtor then filed a chapter 7 petition. The court finds that the case should be dismissed for cause because the debtor filed the bankruptcy in bad faith. The court finds that factors supporting a dismissal for bad faith include that the debtor had transferred four parcels of real property after the fund sued the debtor, the bankruptcy was essentially a two-party dispute, and there was no real purpose for the bankruptcy because the corporate debtor would not receive a discharge. Opinion below.

2015-11-10 – in re atlas red-d mix

Author: Matt Lindblom

In re Peterson

(Bankr. S.D. Ind. Feb. 4, 2015)

The bankruptcy court denies the creditor’s motion to dismiss or convert the chapter 7 case. The creditor had obtained a judgment against the debtor and her employer for the debtor’s unlawful accessing and dissemination of the creditor’s medical information. The creditor sought dismissal of the case under § 707(b) (failure of means test), but the court determined the debtor’s debts were not primarily consumer debts and thus that section did not apply. While the judgment was not a business debt, that did not necessarily mean it was a consumer debt. The creditor also sought dismissal for cause under § 707(a). The court recognized that seeking to pay a large debt of one creditor is a factor in favor of dismissal, but that alone did not warrant dismissal for cause. There was no evidence of the debtor’s ability to pay the large judgment. Finally, the creditor alternatively sought to convert the case to chapter 11, but the court denied the request, finding no credible evidence of the debtor’s ability to pay the debt or that chapter 11 would benefit creditors more than chapter 7 (in part because the creditor could collect the judgment from the debtor’s employer). Opinion below.

2015-02-04 – in re peterson

Author: Matt Lindblom