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 Mustafa

(Bankr. E.D. Ky. September 14, 2016)

Debtor obtained a personal loan from bank to buy a Mercedes at a car auction and represented to the loan officer that the car was for personal and family use. The day debtor received the loan proceeds he leased the car to his used car business, which then sold the car to debtor’s friend, an out of state resident. Debtor failed to satisfy the bank loan with the sales proceeds. Instead, his business used the proceeds to pay its debts. Also, the business never transferred title to the car to debtor’s friend in order to hide the fact that the car had been sold. Debtor continued to make a few loan payments to the bank, but eventually quit and filed Chapter 13, which is when the bank learned that the car had been sold. The bank filed a dischargeability action and the court found that debtor made material misrepresentations to obtain a consumer loan and never intended to use the car for personal use. Thus, the debt, including attorney’s fees, was nondischargeable pursuant to both §523(a)(2) and (a)(6). Also, debtor’s plan, in which he proposed to surrender the vehicle to the bank, was not confirmed and was found lacking in good faith since, among other things, the car was currently located out of state in a repair shop subject to a $10,000 mechanics lien. Opinion below.

Judge: Schaaf

Attorney for Debtor: Tom Bunch

Attorney for Creditor: Greg Pavey and Jessica Middendorf

Author: Robert Imperial

2016-09-14-in-re-mustafa

Brandt v. Hammond (In re Equipment Acquisition Resources, Inc.)

(7th Cir. October 13, 2015)

The Seventh Circuit affirms the bankruptcy court’s order granting summary judgment to the casino defendant. The Chapter 11 plan administrator sought to avoid and recover fraudulent transfers made to the casino. The debtor had made about $8 million in fraudulent transfers to its owner, who then used the funds at the casino. The casino asserted the good faith defense in 11 U.S.C. § 550(b)(1). The casino did not have knowledge of the voidability of the transfer avoided and acted in good faith in accepting the funds for value given. Opinion below.

2015-10-13 – brandt v horseshoe hammond

Author: Matt Lindblom