(S.D. Ind. Jan. 14, 2015)
The district court affirms the bankruptcy court’s nondischargeability judgment in the amount of $3 million. The debtor obtained $3 million from a business contact to invest in certain stock. The debtor proceeded to use the funds for other purposes until the investor requested return of the funds, at which time the funds had been spent or lost by the debtor on other ventures. The debtor argued on appeal that if the funds had been invested per the agreement, there would have been a loss based on the drop in value of the stock over the time period in question. Thus, the debtor argued, that drop in value should reduce the amount of the judgment. The court holds that the bankruptcy court properly held that the full $3 million was obtained through fraud and that while the stock may have dropped in value the investor never had an opportunity to take the risk because the debtor failed to comply with the agreement. Opinion below.
2015-01-14 – yeley v forsythe
Author: Matt Lindblom
(S.D. Ind. Sep. 29, 2014)
The district court denies the debtors’ motions to dismiss the appeal. The doctor appealed the confirmation of the two confirmed chapter 11 plans, arguing equity distributions to four doctors were not compliant with certain federal healthcare laws. The debtors moved to dismiss the appeal based on substantial consummation of the plans. The court found that the plans had indeed been substantially consummated, but the appeal, if successful, would only affect the insider distributions and would not likely have any effect on third parties’ rights under the plan. Thus, the appeal can proceed. Opinion below.
2014-09-29 – in re kmc real estate investors, llc
(S.D. Ind. Sep. 15, 2014)
The district court affirms the bankruptcy court’s judgment in favor of the debtor in a non-dischargeability action. The plaintiff hired the debtor to perform work on her vehicle and placed the debtor’s name on the title as a lienholder. The debtor was then somehow placed on the title as the owner, and the debtor sold the vehicle to a third party. The plaintiff sued the debtor in state court and obtained a judgment against him for $5,000. The debtor then paid the plaintiff $800 on the judgment, which was the amount she had paid on the purchase price for the vehicle. The bankruptcy court found that there was therefore no debt remaining that was non-dischargeable. The district court affirmed, finding the plaintiff failed to satisfy her burden of proving a non-dischargeable debt. Opinion below.
2014-09-15 – in re allen
(S.D. Ind. June 30, 2014)
The district court reverses the bankruptcy court, holding that Section 523(a)(3)(B) does not apply to the creditors’ claim that the debtors failed to make required disclosures following the prepetition sale of their home. While the debtors failed to list the claim in their schedules, they did not have knowledge of the claim at the time of the bankruptcy filing (the creditors brought the claim in state court after the discharge order) and thus Section 523(a)(3)(B) did not apply. Because that section does not apply, the bankruptcy court had exclusive jurisdiction to determine the dischargeability of the debt, rather than concurrent jurisdiction with the state court in which the creditors brought their claim, and thus should have decided the dischargeability issue. The district court remands to the bankruptcy court to decide the issue. Opinion below.
2014-06-30 – muir v mcwilliams
(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
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