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

Grede v. FCStone, LLC (In re Sentinel Management Group, Inc.)

(7th Cir. Aug. 14, 2017)

The Seventh Circuit reverses the district court and holds that certain funds held by the debtor were held in trust for the appellant and other creditors in the same customer class. The funds therefore were not property of the estate that should be distributed pro rata to all creditors. Opinion below.

Judge: Hamilton

Attorneys for Appellant: Foley & Lardner LLP, Stephen Bedell, Robert Seth Bressler, Geoffrey S. Goodman, David B. Goroff, Thomas P. Krebs, William J. McKenna, Jr.

Attorneys for Appellee: Jenner & Block LLP, Vincent E. Lazar, Catherine L. Steele, Angela M. Allen, Barry Levenstam

2017-08-14 – in re fcstone

Author: Matt Lindblom

Secure Leverage Group, Inc. v. Bodenstein (In re Peregrine Financial Group, Inc.)

(7th Cir. Aug. 8, 2017)

The Seventh Circuit adopts the district court’s opinion, affirming the bankruptcy court’s ruling in favor of the trustee. The trustee did not include the plaintiffs in a priority distribution of “customer property” under 11 U.S.C. §§761-767, which governs the bankruptcy of a futures commissions merchant. Opinion below.

Judge: Rovner

2017-08-08 – in re peregrine financial – amended

Author: Matt Lindblom

Carroll v. Takada

(7th Cir. July 18, 2017)

The Seventh Circuit affirms the bankruptcy court’s order sustaining the trustee’s objection to the debtors’ $30,000 exemption in trust assets. The debtors argued the spendthrift provisions in the trust prevented the interest from becoming property of the estate. The court holds that the trust interest fully vested before the debtors filed bankruptcy. An exemption was inappropriate and the interest was property of the estate. Opinion below.

Judge: Sykes

Attorney for Debtors: Julia D. Mannix

Attorney for Trustee: Zane Zielinski

2017-07-18 – in re carroll

Author: Matt Lindblom

 

Netzer v. Office of Lawyer Regulation

(7th Cir. Mar. 13, 2017)

The Seventh Circuit affirms the district court’s dismissal of the appeal. The debtor failed to appeal the bankruptcy court’s order within the 14-day period set forth in Bankruptcy Rule 8002(a)(1). The court discusses authority holding that courts do not have equitable powers to contradict bankruptcy statutes and rules. Opinion below.

Judge: Easterbrook

Attorney for Debtor: Randy Joseph Netzer

Attorney for Appellee: Sean Michael Murphy

2017-03-13 – in re netzer

Author: Matt Lindblom

Cox v. Nostaw, Inc. (In re Central Illinois Energy Cooperative)

(7th Cir. Feb. 8, 2017)

The Seventh Circuit denies the trustee’s motion to dismiss his appeal and remand so that the bankruptcy court could approve the settlement between the parties, as the bankruptcy court recently indicated that it would approve the settlement. The court denies the motion because Appellate Procedure Rule 12.1 requires that the district court indicate that it would grant the same relief as the bankruptcy court. Opinion below.

Judge: Ripple

Attorneys for Trustee: Riordan, Fulkerson, Hupert & Coleman, Alan Fulkerson

Attorneys for Appellee: Howard & Howard Attorneys PLLC, Thomas W. O’Neal

2017-02-08-in-re-central-illinois-energy-cooperative

Author: Matt Lindblom

In re Kempff

(7th Cir. Jan. 30, 2017)

The Seventh Circuit affirms the bankruptcy court’s judgment in favor of the debtor in the nondischargeability action. The creditor argued the discharge should be denied because the debtor transferred funds to pay a tax claim after the petition was filed and because of misstatements in the debtor’s schedules. The bankruptcy court found that the debtor did not authorize the post-petition transfer and found her testimony that the errors in the schedules were innocent mistakes. The court affirms, finding no basis to disturb the bankruptcy court’s findings and acceptance of the debtor’s testimony. Opinion below.

Judge: Sykes

Attorneys for Debtor: Burke, Warren, Mackay & Serritella, P.C.

Attorney for Appellant: Jeffrey W. Finke

2017-01-30-in-re-kempff

Author: Matt Lindblom