(B.A.P. 6th Cir. Nov. 28, 2017)

The Sixth Circuit B.A.P. affirms the bankruptcy court’s dismissal of the Chapter 12 bankruptcy case. The court finds that the bankruptcy court failed to give the debtor proper notice and opportunity to be heard prior to the dismissal. However, the violation of due process was harmless error. The delay in filing a confirmable plan and continuing loss to the estate warranted the dismissal. Opinion below.

Judge: Preston

Attorney for Appellant: Heather McKeever

Attorneys for Appellees: Carrie Ann Rohrscheib; Bradley Arant Boult Cummings LLP, Edmund S. Sauer

2017-11-28 – in re haffey

Author: Matt Lindblom

In re Penick

(Bankr. E.D. Ky. Aug. 28, 2017)

The bankruptcy court denies confirmation of the debtors’ proposed Chapter 12 plan. The court first determines that the debtors’ timber operations constitute a “farming operation” under § 101(21). Those operations are ongoing rather than a single cut of all timber at one time. The debtors are eligible to proceed under Chapter 12. However, the debtors failed to provide sufficient evidence that the proposed plan was feasible. Opinion below.

Judge: Wise

Attorney for Debtors: Michael L. Baker

Attorneys for Creditor: Morgan & Pottinger, Scott T. Rickman

2017-08-28 – in re penick

Author: Matt Lindblom

In re Buckman

(Bankr. W.D. Ky. Mar. 9, 2017)

The bankruptcy court grants the secured creditor’s motion for stay relief because it was inadequately protected as a result of there being insufficient funds to make the first payment to the creditor under the confirmed Chapter 12 plan. Opinion below.

Judge: Lloyd

Atttorneys for the Debtor: Kaplan & Partners LLP, James Edwin McGhee, III, Charity Bird Neukomm

Attorneys for Creditor:  Andrews Law Firm, PLLC, Ashley Sanders Cox

2017-03-09 – in re buckman

Author: Matt Lindblom

In re Perkins

(Bankr. W.D. Ky. Dec. 22, 2016)

The bankruptcy court overrules the creditor’s objection and confirms the Chapter 12 plan. The creditor argued that the debtor was not a “family farmer,” and thus did not qualify for Chapter 12. The court finds that the debtor had sufficient income from the farming operation to satisfy the Code’s definition, which definition the court construes broadly. Further, the court finds the debtor’s debt level does not exceed the debt limitation for Chapter 12. The court looks only to the debtor’s schedules, rather than adding the scheduled debt to the debt reflected in the filed claims. Opinion below.

Judge: Lloyd

Attorney for Debtor: Sandra D. Freeburger

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

2016-12-22-in-re-perkins

Author: Matt Lindblom

In re Willams

(Bankr. W.D. Ky. Apr. 22, 2016)

The bankruptcy court denies the U.S. Trustee’s motion to dismiss the Chapter 12 case. The debtors testified at their § 341 meeting of creditors that they had not engaged in a farming operation since two years before the petition was filed and did not intend to return to farming. The court applies the Code’s definition of “family farmer” and first finds that the debtors had engaged in a farming operation even though they contracted with their son to do the physical planting and harvesting of crops. The court also holds that the Code does not require the debtor to be engaged in a farming operation at the time the petition was filed, in part because Chapter 12 permits liquidation of the farming operation. Opinion below.

Judge: Lloyd

Attorney for Debtors: Kerrick Bachert PSC, Scott A. Bachert

Attorney for U.S. Trustee: Tyler Yeager

2016-04-22 – in re williams

Author: Matt Lindblom

In re Haffey

(Bankr. E.D. Ky. June 5, 2015)

The bankruptcy court grants the U.S. Trustee’s motion to dismiss the Chapter 12 case. The debtor failed to timely propose an amended plan after the first plan was deemed unconfirmable, failed to appropriately respond to discovery requests, and failed to file required reports. Dismissal was appropriate under 11 U.S.C. § 1208(c). Opinion below.

2015-06-05 – in re haffey

Author: Matt Lindblom

Sunshine Heifers, LLC v. Citizens First Bank (In re Purdy)

(6th Cir. Aug. 14, 2014)

The Sixth Circuit reverses the bankruptcy court’s decision holding that the livestock business’s leases of livestock to the debtor dairy farmer were per se security agreements such that the bank’s purchase money security interest trumped the livestock business’s interest in the livestock. The court applies Arizona state law (per the choice of law provision in the leases) and determines that the agreements are true leases—not security agreements—because they lacked an option for the dairy farmer to purchase the livestock. Judge Drain dissents, stating the “leases” should be considered security agreements because the economic life of the individual heads of cattle would not last the term of their lease. Opinion below.

2014-08-14 – in re purdy