Camofi Master LDC v. Spradlin

(E.D. Ky. Oct. 6, 2017)

The district court affirms the bankruptcy court’s order granting the trustee’s motion to dismiss the complaint. The trustee has the exclusive right to pursue claims asserted in the complaint. The appellant’s arguments that the lawsuits were distinct are rejected. If the appellant and trustee could both pursue the claims there would be a significant chance of a double recovery. Opinion below.

Judge: Wilhoit

Attorneys for Appellants: Taft, Stettinius & Hollister, LLP, Casey M. Cantrell-Swartz, W. Timothy Miller; Akin Gump Strauss Huaer & Feld LLP, Douglas A. Rapp sport, Robert J. Boller

Attorneys for Appellees: Bingham Greenebaum Doll LLP, Daniel J. Donnellon; Foley & Lardner, LLP, David B. Goroff, Geoffrey S. Goodman; Barber Law PLLC, T. Kent Barber; Luskin, Stern & Eisner LLP, Michael Luskin; Fowler Bell PLLC, Taft A. McKinstry

2017-10-06 – in re camofi master and camhzn master

Author: Matt Lindblom

East Cost Miner, LLC v. Nixon Peabody, LLP

(E.D. Ky. Oct. 3, 2017)

The district court affirms the bankruptcy court’s interpretation of a final cash collateral order, holding the bankruptcy court did not abuse its discretion in finding a carve-out for payment of professional fees included prepetition collateral of the lenders. The text of the order along with a review of the case record made clear that the parties had agreed the prepetition collateral was included. $2.4 million in fees were awarded. Opinion below.

Judge: Wilhoit

Attorneys for Appellants: Luskin, Stern & Eifler LLP, Alex Talesnick, Michael Luskin; Fowler Bell PLLC, Matthew David Ellison, Taft A. McKinstry

Attorneys for Appellees: Nixon Peabody LLP, Christopher M. Desiderio, Dennis J. Drebsky; Amelia Martin Adams, Laura Day DelCotto; Squire Patton Boggs, Eliot M. Smith, Stephen D. Lerner; Foley & Lardner, LLP, David B. Goroff, Edward J. Green, Geoffrey S. Goodman; T. Kent Barber; John L. Daughtery; Rachelle Cathleen Dodson; Phaedra Spradlin

2017-10-03 – in re east coast miner

Author: Matt Lindblom

McKinstry v. Richard Holmes Enterprises, LLC (In re Black Diamond Mining Company, LLC)

(E.D. Ky. Aug. 18, 2016)

The district court grants the motion to unseal the record. The record had been sealed following a motion that asserted the documents contained confidential settlement information. However, the court made clear that if someone requested that the record be unsealed, the moving party would have the heavy burden of showing why particular documents should remain sealed. The movant failed to meet that burden here, with respect to the record as a whole. The court orders that the record be unsealed with the limited exception of specific portions that contain the settlement amount.

Judge: Thapar

Attorneys for Appellants: Foley & Lardner, LLP, David B. Goroff, Geoffrey S. Goodman; Dinsmore & Shoal LLP, David James Treacy; Hoover Hull Turner LLP, Michael R. Limrick, Patrick A. Ziepolt, Wayne C. Turner

Attorneys for Appellees: The Getty Law Group, PLLC, C. Thomas Ezzell, Richard A. Getty; Ware Jackson Lee O’Neill Smith & Barrow, LLP, Paul Smith, Timothy F. Lee

2016-08-18 – in re black diamond mining company

Author: Matt Lindblom

Halpin v. Hardy (In re Hardy)

(Bankr. E.D. Ky. July 8, 2016)

The bankruptcy court holds the debt is dischargeable. The debtor sold a television to the plaintiffs, claiming it was a “high definition” television. The plaintiffs disputed that characterization and obtained a judgment in state court for the purchase price plus punitive damages. However, the court finds that the plaintiffs failed to meet their burden of proof in showing the requisite elements of § 523(a)(2)(A). Opinion below.

Judge: Schaaf

Attorneys for Plaintiffs: Thomas D. Bullock, James Ross Stinetorf, DelCotto Law Group PLLC, Laura Day DelCotto, Dean A. Langdon

Attorneys for Debtors: Getty & Childers, PLLC, J.D. Kermode

2016-07-08 – halpin v hardy

Author: Matt Lindblom

McKinstry v. Richard Holmes Enterprises, LLC (In re Black Diamond Mining Company, LLC)

(E.D. Ky. June 16, 2016)

The district court affirms the bankruptcy court’s order dismissing the reopened bankruptcy case. The creditor consented to the unsecured creditors trusts’ settlement of a claim, which was followed by a distribution to creditors and closure of the case. The creditor then moved to reopen the case, and the bankruptcy court granted the motion on condition that the creditor deposit its distribution amount in escrow. The creditor failed to do so, and the case was then dismissed. The bankruptcy court did not err in placing a condition on reopening the case. Because the creditor waited to challenge the settlement and bring claims against the trusts’ attorneys after distribution, there were no fund to indemnify the trust. Thus, the requirement to deposit funds in escrow was appropriate. Opinion below.

Judge: Thapar

Attorneys for Creditor: The Getty Law Group, PLLC, C. Thomas Ezzell, Richard A. Getty, Ware Jackson Lee O’Neill Smith & Barrow, LLP, Paul Smith, Timothy F. Lee

Attorneys for Trust and Its Attorneys: Foley & Lardner, LLP, David B. Goroff, Geoffrey S. Goodman, Dinsmore & Shoal LLP, David James Treacy, Hoover Hull Turner LLP, Michael R. Limrick, Patrick A. Ziepolt, Wayne C. Turner

2016-06-16 – in re black diamond mining company

Spradlin v. Beads and Steeds Inns, LLC (In re Howland)

(E.D. Ky. June 7, 2016)

The district court affirms the bankruptcy court’s orders holding the trustee failed to state a claim for substantive consolidation and could not proceed on a reverse veil piercing theory under Kentucky law. The trustee alleged the defendant was the recipient of a fraudulent transfer from the debtors, but the transfer was actually made to the defendant by a Kentucky LLC separate from the debtors. Because Kentucky courts have not recognized reverse veil piercing, the district court declines to apply it to disregard the separate existence of the debtors and the LLC. The court also agrees with the bankruptcy court that the trustee failed to allege facts sufficient to apply substantive consolidation. Opinion below.

Judge: Caldwell

Attorney for Defendant: Stoll Keenon Ogden PLLC, Adam M. Back

Attorneys for Trustee: Bingham Greenebaum Doll LLP, James R. Irving, Richard Boydston

2016-06-07 – in re howland

Author: Matt Lindblom

McKinstry v. Richard Holmes Enterprises, LLC (In re Black Diamond Mining Company, LLC)

(E.D. Ky. Feb. 5, 2016)

The district court denies the motion for stay pending the appeal of the bankruptcy court’s order. The bankruptcy court had ordered that the party moving to reopen the bankruptcy case deposit funds into escrow as a condition to reopening the case. The court held that the party must show at a minimum serious questions going to the merits to obtain such a stay, but the party failed to do so. Opinion below.

2016-02-05 – in re black diamond mining

Author: Matt Lindblom