Wheatley v. Oklahoma Tower & Energy Services, LLC (In re Alliance Management Services, LLC)

(Bankr. W.D. Ky. Jan. 23, 2018)

The bankruptcy court enters summary judgment against the defendant in this preference action. The trustee served requests for admissions on the defendant, but the defendant failed to submit timely responses. The trustee sought entry of summary judgment based on the requests for admission being deemed admitted. The bankruptcy court finds that the admissions satisfy the trustee’s burden, and summary judgment in the amount of $125,282 is appropriate.

Judge: Lloyd

Attorneys for Trustee: Seiller Waterman LLC, Neil Charles Bordy, Keith J. Larson

Attorney for Defendant: Ron D. Brown

2018-01-23 – in re alliance management services

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

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

The Unsecured Creditors Committee of Sparrer Sausage Company, Inc. v. Jason’s Foods, Inc.

(7th Cir. June 10, 2016)

The Seventh Circuit reverses, holding the bankruptcy court applied too narrow of a baseline payment range to the creditor’s ordinary course defense in this preference action. While this court agreed that there were a few payments outside the ordinary course, the new value defense applied to completely offset those payments. Opinion below.

Judge: Sykes

Attorneys for Appellant: Nixon Peabody LLP, Richard Scott Alsterda, Theodore Eric Harman

Attorneys for Appellee: Clark Hill PLC, Pamela Joy Leichtling, Scott N. Schreiber

2016-06-10 – unsecured creditors committee v jasons foods

Author: Matt Lindblom

Levin v. Verizon Business Global, LLC (In re Onestar Long Distance, Inc.)

(S.D. Ind. Mar. 28, 2016)

The district court affirms the bankruptcy court’s judgment that found the creditor established a new value defense to the trustee’s preference claim. The debtor made payments to the creditor on a promissory note during the preference period. The creditor continued to provide services to the debtor during the preference period, and it billed for those services on a monthly basis. The total value of the services exceeded the debtor’s payments. The court holds that the bankruptcy court correctly applied the per diem method of allocation of new value credit under the facts of this case, and the new value defense applied. Opinion below.

Judge: Young

Attorneys for Trustee: Kilpatrick Stockton LLP, Colin M. Bernadino, Michael D. Langford, Todd C. Meyers, Rubin & Levin, P.C., Elliott D. Levin, James T. Young

Attorneys for Creditor: Stinson Morrison Hecker LLP, Mark S. Carder, Bingham McHale LLP, Thomas C. Scherer

2016-03-28 – in re onestar long distance

Author: Matt Lindblom

Holloway v. Veterans Administration (In re Holloway)

(Bankr. W.D. Ky. Dec. 3, 2015)

The bankruptcy court grants the defendant’s motion for judgment in this preference action. The debtor received overpayments for disability benefits from the defendant in the years leading up to the bankruptcy. Within the preference period, the defendant had recouped some of the overpayment from the debtor’s active duty military pay. The court holds that the defendant was entitled to recoup the funds under the doctrine of recoupment, because the source of the defendant’s claims was a contract, and the debtor’s claims arose from the same contract. Opinion below.

2015-12-03 – holloway v veterans administration

Author: Matt Lindblom

Knauer v. Krantz (In re Eastern Livestock Co., LLC)

(Bankr. S.D. Ind. Oct. 28, 2015)

The bankruptcy court grants the defendant’s motion for summary judgment in this preference action. The defendant had sold and delivered cattle to the debtor prepetition and received payment in the form of checks three days after delivery. The checks were then voided and replaced by a single wire transfer a few days later. All of this occurred within 90 days of the petition date. The court finds that the ordinary course defense does not apply based on lack of evidence of the terms of prior transactions between the parties. The court finds, however, that the contemporaneous exchange defense is applicable. The debtor and the defendant intended a contemporaneous exchange and such an exchange was actually accomplished (despite the voiding of the checks and replacement by wire transfer). Opinion below.

2015-10-28 – knauer v krantz

Author: Matt Lindblom

Listecki v. Official Committee of Unsecured Creditors

(7th Cir. Mar. 10, 2015)

The Seventh Circuit holds that the Religious Freedom Restoration Act and the First Amendment do not bar application of the bankruptcy code’s fraudulent transfer and preferential transfer provisions to the archdiocese’s prepetition transfer of $55 million to a trust for maintaining cemeteries. Because the creditor’s committee does not act under “color of law” and does not constitute the “government” for purposes of the Act, the committee may proceed with its avoidance action against the debtor archdiocese. The Free Exercise Clause also does not bar application of those provisions because they are generally and neutrally applicable, further a compelling governmental interest, and are narrowly tailored. Opinion below.

2015-03-09 – listecki v official committee of unsecured creditors

Author: Matt Lindblom

Indiana Family And Social Services Administration v. Saint Catherine Hospital of Indiana, LLC (In re Saint Catherine Hospital of Indiana, LLC)

(S.D. Ind. Issued May 30, 2014)

The Southern District of Indiana affirms the bankruptcy court’s summary judgment in favor of the debtor hospital on its preference claim against the Indiana Family and Social Services Administration (“FSSA”).  The Court held that FSSA’s withholding of Medicaid reimbursements to the debtor were preferential and no defenses applied.  Opinion below.

2014-05-30 – in family and social services v st catherine hospital

Levin v. Verizon Business Global, LLC (In re OneStar Long Distance, Inc.)

Issued May 2, 2014

Judge Young of the Southern District of Indiana reverses the bankruptcy court’s decision in the trustee’s avoidance action that almost $2.5 million in pre-petition transfers were subject to the new value affirmative defense.  Opinion below.

2014-05-02 – levin v verizon