Boone County Utilities, LLC v. The Branham Corp. (In re Boone County Utilities, LLC)

(Bankr. S.D. Ind. Sep. 17, 2014)

The bankruptcy court limits discovery to post-confirmation matters in this adversary proceeding commenced by the chapter 11 debtor. The defendant had been taking steps to collect on a judgment against the debtor’s sole member obtained in state court. The defendant had obtained a charging order against the judgment debtor, but the court discusses applicable state law that limits a charging order only to the economic interest in the subject limited liability company. The confirmed plan released any claim to assets of the debtor held by the judgment debtor—the equity interest holder. Thus, only post-confirmation activities of the debtor should be relevant to the charging order. The court ultimately concludes that discovery related to pre-confirmation matters is inappropriate, and any discovery involving post confirmation issues should be sought in the state court action. Opinion below.

2014-09-17 – in re boone county utilities

McKinstry v. Genser (In re Black Diamond Mining Company, LLC)

(E.D. Ky. July 22, 2014)

The district court grants the trustee’s motion for sanctions against the defendants for spoliation of evidence. The district court found that there was sufficient evidence to conclude that at least two of the defendants intentionally destroyed relevant documents and others negligently did so, although there was not sufficient evidence to find they did so in bad faith (i.e., with knowledge of the value to the litigation). The court orders that permissive adverse inference jury instructions are appropriate. The jury will decide whether the absence of documents most likely reveals that the trustee should prevail on her claims. Opinion below.

2014-07-22 – in re black diamond mining