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

McKinstry v. B&H Contractors, LLC (In re GC London KY Inc.)

(Bankr. E.D. Ky. Oct. 11, 2017)

The bankruptcy court enters judgment in favor of the Chapter 11 trustee, holding the trustee is entitled to recover approximately $280,000 in post-petition transfers and recover $40,000 in prepetition payments. The debtors repaid a post-petition loan that was not approved by the bankruptcy court and which was not in the ordinary course. The prepetition payments were preferential and the new value defense and ordinary course defenses do not apply. Opinion below.

Judge: Schaaf

Attorney for Trustee: Fowler Bell PLLC, Matthew D. Ellison

Attorneys for Defendant: Giodano, Halleran & Cisela, P.C., Donald F. Campbell, Jr.; Bingham Greenebaum Doll, James R. Irving, April A. Wimberg

2017-10-11 – in re gc london ky

Author: Matt Lindblom

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

(7th Cir. Sep. 22, 2017)

The Seventh Circuit affirms the bankruptcy court, holding that the defendant’s new value defense to the trustee’s preference claim was valid. The trustee argued that the defendant was compensated for the new value when the debtor transferred to an affiliate prepetition its contract and debt owed to the defendant. The court finds such transfer merely acted as an assignment of the debt and did not discharge the debt. Thus, the new value defense was applicable. Opinion below.

Judge: Sykes

Attorneys for Trustee: Kilpatrick Townsend & Stockton LLP, Colin Bernardino, Todd C. Meyers, Michael D. Langford

Attorneys for Defendant: Stinson Leonard Street LLP, Mark S. Carder; Bingham Greenbaum Doll, LLP, Thomas C. Scherer

2017-09-22 – in re onestar long distance 1

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

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

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

Official Committee of Unsecured Creditors v. T.D. Investments, LLP (In re Great Lakes Quick Lube LP)

(7th Cir. Mar. 11, 2016)

The Seventh Circuit reverses the bankruptcy court’s judgment dismissing the committee’s fraudulent and preferential transfer claims. The committee brought the claims against the debtor’s landlord. The basis of the claims was the debtor’s termination of the leases 52 days before declaring bankruptcy. The court holds that there could have been value available to creditors if the leases remained in effect on the petition date. The committee was not seeking to evict the new tenant, but was merely seeking the value that was allegedly lost. The court remands to the bankruptcy court to determine the value of the transfer and any defenses of the landlord. Opinion below.

Judge: Posner

Attorneys for Committee: Kerkman & Dunn, Evan P. Schmit, Gregory M. Schrieber

Attorneys for Landlord: Hudec Law Offices, S.C., Patrick J. Hudec

2016-03-11 – in re great lakes quick lube

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