In re Lexington Hospitality Group, LLC

(Bankr. E.D. Ky. Sep. 15, 2017)

The bankruptcy court denies the lender’s motion to dismiss the Chapter 11 bankruptcy. The lender argued that the party signing the debtor’s petition did not have the requisite authority to commence a bankruptcy case for the debtor. The bankruptcy court finds that amendments to the debtor’s operating agreement were made for the sole purpose of eliminating the debtor’s ability to file for bankruptcy without the lender’s consent. The court finds this violates Federal public policy and the provisions are unenforceable. Opinion below.

Judge: Schaaf

Attorneys for Debtor: Laura Day DelCotto, Jamie L. Harris, Sara A. Johnston, DelCotto Law Group PLLC

Attorneys for Creditor: Martin B. Tucker, Sarah S. Mattingly, Dinsmore & Shohl LLP

2017-09-15 – in re lexington hospitality group

Author: Matt Lindblom

Lee Group Holding Company, LLC v. Walro (In re Lee)

(S.D. Ind. Aug. 10, 2015)

The district court affirms the bankruptcy court’s order granting the trustee’s motion for summary judgment and finding that the debtor’s voting rights in the non-debtor Indiana limited liability company were property of the estate. The other members of the LLC argued that the debtor did not hold an interest that could be property of the estate, because his voting rights derived from his role as manager rather than a membership interest in the LLC. Applying Indiana law and interpreting the language of the operating agreement, the court disagrees and affirms. Opinion below.

2015-08-10 – lee group holding company v walro

Author: Matt Lindblom

Walro v. The Lee Group Holding Co., LLC (In re Lee)

(Bankr. S.D. Ind. Dec. 18, 2014)

The bankruptcy court grants the trustee’s request for an order holding that the Indiana limited liability company and its members violated the automatic stay when they executed a resolution terminating the debtor’s voting rights post-petition. The debtor was the manager of the LLC and had control of the LLC’s business and affairs as of the petition date. After the petition was filed, the other members of the LLC executed the resolution and appointed a new manager without court approval. The court analyzes the terms of the operating agreement and Indiana LLC law and determines that the debtor’s interest in the LLC became property of the estate and the act to terminate his voting rights was a violation of the automatic stay. Opinion below.

2014-12-18 – walro v the lee group

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