Wheatley v. Johnson (In re Johnson)

(Bankr. W.D. Ky. Dec. 21, 2017)

The bankruptcy court enters judgment in favor of the trustee, finding a prepetition transfer from the debtor to her son was a fraudulent transfer under 11 U.S.C. §§ 547 and 548. The debtor had transferred her tax refund to her son for the purpose of paying certain bills and obligations of the son. The debtor did not receive reasonably equivalent value and the Court declines to adopt the “no harm, no foul” rule defense (i.e. wildcard exemption is not fully used, but could have been used for the subject funds). Opinion below.

Judge: Lloyd

Attorney for Trustee: Peter M. Gannott

Attorney for Defendant: Ross Benjamin Neuhauser

2017-12-21 – in re johnson

Author: Matt Lindblom

Spradlin v. Whitt (In re Licking River Mining, LLC)

(Bankr. E.D. Ky. June 29, 2017)

The bankruptcy court grants the defendants’ motion to dismiss in this adversary proceeding. The trustee sought to subordinate and recharacterize defendants’ claims under 11 U.S.C. § 510, avoid as fraudulent and preferential transfers certain transfers to the defendants, and disallow defendants’ claims. The court finds that the trustee fails to allege facts sufficient to support any of the claims. Opinion below.

Judge: Wise

Attorneys for Trustee: Bingham Greenbaum Doll LLP, Claude R. Bowles, Jr., Danial J. Donnellon, James R. Irving, Alex S. Rodger, April A. Wimberg

Attorneys for Defendants: Brian H. Meldrum, Brian R. Pollock

2017-06-29 – in re licking river mining

Author: Matt Lindblom

Walro v. Hatfield (In re Lee)

(S.D. Ind. June 27, 2017)

The district court adopts the bankruptcy court’s proposed findings and conclusions and holds that the trustee is entitled to avoid a fraudulent transfer made to one of the defendants. The court concludes the transfer of real property is appropriately avoided under the Indiana Uniform Fraudulent Transfer Act. The defendant was not entitled to the status of a good-faith purchaser because the circumstances surrounding the transfer were too bizarre, including facts suggesting the defendant did very little due diligence prior to purchasing the property and failed to obtain any receipt showing cash payments to satisfy the purchase price. Opinion below.

Judge: Young

Attorneys for Trustee: Rubin & Levin PC, John M. Rogers

Attorneys for Defendants: Hostetter & Associates, John K. McDavid, Joshua D. Hershberger

2017-06-27 – in re lee

Author: Matt Lindblom

Spradlin v. Wrigley’s 7-711, Inc. (In re Licking River Mining, LLC)

(Bankr. E.D. Ky. June 21, 2017)

The bankruptcy court grants the defendant’s motion to dismiss the trustee’s complaint, which sought to avoid transfers from debtors to the defendant. The complaint failed to state a claim, in part because the defendant could not be deemed an “insider” of the debtor. The court additionally finds that the complaint contains insufficient facts to support various other claims. Opinion below.

Judge: Wise

Attorneys for Trustee: Bingham Greenbaum Doll LLP, Claude R. Bowles, Jr., Daniel J. Donnellon, James R. Irving, April A. Wimberg

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

2017-06-21 – in re licking river mining

Author: Matt Lindblom

Spradlin v. Monday Coal, LLC (In re Licking River Mining, LLC)

(Bankr. E.D. Ky. Apr. 13, 2017)

The bankruptcy court grants the defendant’s motion to dismiss except with respect to payments received from the debtor within the 90-day prepetition preference period. The court first finds that the trustee failed to state a claim for avoidance of alleged preferential transfers made outside the 90-day period because the facts alleged did not show that the defendant was an “insider” as defined in the bankruptcy code or a “non-statutory insider” under case law. The trustee also failed to allege facts sufficient to support various other claims to avoid transfers to the defendant. Opinion below.

Judge: Wise

Attorneys for Trustee: Bingham Greenbaum Doll LLP, Claude R. Bowles, Jr., Daniel J. Donnellon, Jamies R. Irving, April A. Wimberg

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

2017-04-13 – in re licking river mining

Author: Matt Lindblom

Spradlin v. Pryor Cashman (In re Licking River Mining, LLC)

(Bankr. E.D. Ky. Mar. 24, 2017)

The bankruptcy court grants in part and denies in part the defendant’s motion to dismiss in this fraudulent and preferential transfer avoidance action. The trustee’s amended complaint failed to state claims based on certain transfers, but did state a preferential transfer claim.

Judge: Wise

Attorneys for Trustee: Bingham Greenebaum Doll LLP, Claude R.Bowles, Jr., Daniel J. Donnellon, Alex S. Rodger

Attorneys for Defendant: Ross M. Bagley, Gideon Cashman, Eric M. Fishman, Adam R. Kegley

2017-03-24 – in re licking river mining

Author: Matt Lindblom

Friedmeyer v. Breath of Life O2, LLC (In re Breath of Life Home Medical Equipment and Respiratory Services, Inc.)

(Bankr. S.D. Ind. Mar. 20, 2017)

The bankruptcy court denies the defendants’ motion to dismiss, with the exception of one claim for equitable subordination against one of the defendants. The complaint filed by the trustee asserted counts for veil piercing, fraud and fraudulent transfer, preference avoidance, breach of fiduciary duty, and a demand for accounting and turnover. Opinion below.

Judge: Moberly

Attorney for Trustee: Mark A. Warsco

Attorneys for Defendants: Alerding Castor Hewitt LLP, Michael J. Alerding, Julia E. Dimick, Mitchell Alan Greene, Anthony Frederick Roach; Abraham Murphy

2017-03-20 – in re breath of life home medical

Author: Matt Lindblom

Walro v. Lee (In re Lee)

(S.D. Ind. Feb. 13, 2017)

The district court affirms the bankruptcy court’s judgment in favor of the trustee in this fraudulent transfer action. The district court rejects the defendant’s arguments that the bankruptcy court relied too heavily on a trust document and state court judgment for the finding of fraud. The bankruptcy court did not abuse its discretion by entering a money judgment for the value of the shares at the time of the transfer rather than ordering that the shares be returned (at their depreciated value). The bankruptcy court also did not commit clear error in valuing the shares. Opinion below.

Judge: Young

Attorneys for Trustee: Rubin & Levin PC, John M. Rogers

Appellant: Pro Se

2017-02-13-in-re-lee

Author: Matt Lindblom

Meoli v. The Huntington National Bank

(6th Cir. Feb. 8, 2017)

The Sixth Circuit reverses in part the bankruptcy court’s judgment in this fraudulent transfer action. The defendant bank received funds as loan payments from an affiliate of the debtor. The affiliate entity was created by the debtor to facilitate a ponzi scheme. The bankruptcy court held that all of the loan payments were recoverable. The Sixth Circuit differentiates between direct loan payments from the affiliate, indirect loan payments resulting from the affiliate depositing into the debtor’s bank account, and excess deposits later withdrawn by the debtor or seized by the government. Opinion below.

Judge: Rogers

Attorneys for Trustee: Mika, Meyers, Beckett & Jones, Douglas Arthur Donnell, Fredric Norman Goldberg

Attorneys for Defendant: Covington & Burling, Robert Allen Long, Jr., Mark William, Mosier, David Meir Zionts, Warner, Norcross & Judd, Jeffrey O. Birkhold, James Moskal, Matthew T. Nelson

2017-02-08-in-re-meoli

Author: Matt Lindblom

Spradlin v. Khouri (In re Bruner)

(6th Cir. B.A.P. Jan. 4, 2017)

The Sixth Circuit B.A.P. affirms the bankruptcy court’s decision and order denying the trustee’s request for turnover of funds paid to the debtor’s criminal defense attorney. The debtor’s mother had made the transfer from a bank account held jointly with the debtor. The trustee failed to meet the burden of proving by a preponderance of the evidence that the attorney fee was property of the estate, and thus turnover was inappropriate. Because the debtor had no claim to the fee, the trustee had no claim for turnover. Opinion below.

Judge: Humphrey

Attorneys for Defendants: Khouri Law Firm, Yelena Bakman, Edward P. Kerns, Michael John Khouri, Wai Brenda Tso

Attorneys for Trustee: Bingham Greenebaum LLP, Richard Boydston

2017-01-04-in-re-bruner

Author: Matt Lindblom