Edmondson v. Gordon (In re Gordon)

(6th Cir. B.A.P. May 18, 2017)

The Sixth Circuit B.A.P. affirms the bankruptcy court’s contempt order, but remands the matter for the limited purpose of providing the debtor sufficient notice and an opportunity to be heard on the issue of whether monetary sanctions were reasonable. The debtor sold property of the estate in direct violation of the bankruptcy court’s order. The bankruptcy court held the debtor in contempt and awarded the trustee his attorney fees as a sanction. However, the hearing notice for the contempt order did not make clear that monetary sanctions could be entered against the pro se debtor. Opinion below.

Judge: Opperman

Appellant: Pro Se

Attorney for Appellee: Thompson Burton PLLC, Phillip G. Young, Jr.

2017-05-18 – in re gordon

Author: Matt Lindblom

In re Lockhart

(Bankr. W.D. Ky. Jan. 17, 2017)

The bankruptcy court grants the creditor’s motion for sanctions, and awards the creditor her attorney fees. The debtor filed the Chapter 13 petition for the stated purpose of obtaining more time to obtain a reduction in his maintenance obligation owed to the creditor in the state court. The bankruptcy court finds that this was a violation of Bankruptcy Rule 9011(b). Opinion below.

Judge: Lloyd

Attorney for Debtor: Naber & Joyner, J. Gregory Joyner

Attorney for Creditor: Joseph S. Elder II

2017-01-17-in-re-lockhart

Author: Matt Lindblom

In re Parrish

(Bankr. W.D. Ky. Nov. 16, 2016)

The bankruptcy court grants in part and denies in part the debtor’s motion for sanctions for violation of the automatic stay. The government agency sought to collect its loan default claim by set off against the debtor’s tax refund. The debtor filed bankruptcy, and the government effected the set off before its system flagged the account for the bankruptcy. The court finds a technical violation of the automatic stay but also finds that a set off would have been appropriate and there was no evidence that a stay relief motion would have been denied. Accordingly, the court awards the debtor a minimal amount for the inadvertent stay violation. Opinion below.

Judge: Lloyd

Attorney for Debtor: Julie Ann O’Bryan

Attorney for Creditor: Assistant U.S. Attorney, Jessica R. C. Malloy

2016-11-16-in-re-parrish

Author: Matt Lindblom

In re Blasingame

(6th Cir. B.A.P. Nov. 7, 2016)

The Sixth Circuit B.A.P. reverses the bankruptcy court’s order sanctioning the attorney under Bankruptcy Rule 9011 and 28 U.S.C. § 1927. The court holds that the movant failed to satisfy the twenty-one day safe harbor in Rule 9011 and the one exception to the safe harbor did not apply because the attorney did not actually sign the petition, although he did advise on the case. Further, sanctions under § 1927 were not appropriate because the bankruptcy judge found that the attorney’s behavior fell short of subjective bad faith. The statute requires tactics that far exceed zealous advocacy. Opinion below.

Judge: Preston

Attorney for Movant: Malone Akerly Martin, Bruce W. Akerly, Ballin, Ballin & Fishman, Carl Barry Ward

Attorney for Appellant: Edward Michael Bearman

Author: Matt Lindblom

2016-11-07-in-re-blasingame

In re Jackson

(6th Cir. B.A.P. Aug. 4, 2016)

The Sixth Circuit B.A.P. holds that the bankruptcy court abused its discretion in awarding sanctions against a creditor for violation of a discharge order in the individual’s Chapter 7 bankruptcy case. The condominium association rescheduled a sheriff’s sale of the debtor’s condominium unit to complete a pre-petition foreclosure. The bankruptcy court found that the association’s primary objective was to collect the discharged debt from the debtor, for reasons including that there was likely no equity available to pay the association through the sale. The Sixth Circuit B.A.P. holds that this was an abuse of discretion, as the association had the right to enforce its lien post-petition. Opinion below.

Judge: Humphrey

Attorney for Condominium Association: Kaman & Cusimano, Erika R. Finley, Joseph E. DiBaggio

Debtor: Pro Se

2016-08-04 – in re jackson

Author: Matt Lindblom

McKinstry v. Richard Holmes Enterprises, LLC (In re Black Diamond Mining Company, LLC)

(E.D. Ky. June 16, 2016)

The district court affirms the bankruptcy court’s order dismissing the reopened bankruptcy case. The creditor consented to the unsecured creditors trusts’ settlement of a claim, which was followed by a distribution to creditors and closure of the case. The creditor then moved to reopen the case, and the bankruptcy court granted the motion on condition that the creditor deposit its distribution amount in escrow. The creditor failed to do so, and the case was then dismissed. The bankruptcy court did not err in placing a condition on reopening the case. Because the creditor waited to challenge the settlement and bring claims against the trusts’ attorneys after distribution, there were no fund to indemnify the trust. Thus, the requirement to deposit funds in escrow was appropriate. Opinion below.

Judge: Thapar

Attorneys for Creditor: The Getty Law Group, PLLC, C. Thomas Ezzell, Richard A. Getty, Ware Jackson Lee O’Neill Smith & Barrow, LLP, Paul Smith, Timothy F. Lee

Attorneys for Trust and Its Attorneys: Foley & Lardner, LLP, David B. Goroff, Geoffrey S. Goodman, Dinsmore & Shoal LLP, David James Treacy, Hoover Hull Turner LLP, Michael R. Limrick, Patrick A. Ziepolt, Wayne C. Turner

2016-06-16 – in re black diamond mining company

Grossman v. Wehrle (In re Royal Manor Management, Inc.)

(6th Cir. June 15, 2016)

The Sixth Circuit affirms the decision finding sanctions were appropriate against the attorney because he unreasonably and vexatiously multiplied the proceedings with repeated filings. The bankruptcy court did not abuse its discretion in entering the sanctions order. Opinion below.

Judge: White

Appellant: Dennis Allan Grossman

Attorney for Appellee: Louise M. Mazur, Marc Bryan Merklin, Brouse McDowell, Caroline Louisa Marks

2016-06-15 – in re royal manor management

Author: Matt Lindblom