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

Spradlin v. Khouri (In re Bruner)

(6th Cir. B.A.P. Jan. 4, 2017)

The Sixth Circuit B.A.P. affirms the bankruptcy court’s decision and order denying the trustee’s request for turnover of funds paid to the debtor’s criminal defense attorney. The debtor’s mother had made the transfer from a bank account held jointly with the debtor. The trustee failed to meet the burden of proving by a preponderance of the evidence that the attorney fee was property of the estate, and thus turnover was inappropriate. Because the debtor had no claim to the fee, the trustee had no claim for turnover. Opinion below.

Judge: Humphrey

Attorneys for Defendants: Khouri Law Firm, Yelena Bakman, Edward P. Kerns, Michael John Khouri, Wai Brenda Tso

Attorneys for Trustee: Bingham Greenebaum LLP, Richard Boydston


Author: Matt Lindblom

Spradlin v. Khouri (In re Bruner)

(Bankr. E.D. Ky. Mar. 7, 2016)

The bankruptcy court grants the defendants’ motion to dismiss the trustee’s action to avoid the transfer of $50,000 to the defendant law firm. The trustee had previously brought an action seeking turnover of the funds and lost. That decision was appealed to the B.A.P. The bankruptcy court here holds that res judicata bars the avoidance action because the prior action resulted in a final decision on the merits, the current case was between the same parties, the issues in the current action were litigated or should have been litigated in the prior action, and there was an identify of the causes of action. Opinion below.

2016-03-07 – in re bruner

Author: Matt Lindblom

Spradlin v. Khouri (In re Bruner)

(Bankr. E.D. Ky. Aug. 10, 2015)

The bankruptcy court grants judgment in favor of the defendants in this turnover action brought by the Chapter 7 trustee. After the petition was filed, the debtor’s mother transferred $50,000 to the debtor’s criminal defense attorney for legal representation. The trustee argued and presented evidence at trial that the funds were actually the debtor’s funds and sought a judgment directing that the $50,000 be turned over to the estate. The bankruptcy court holds that even if the funds originated with the debtor, because the transfer had not been avoided, the funds were no longer property of the estate and thus not subject to turnover under 11 U.S.C. § 542. Opinion below.

2015-08-10 – spradlin v khouri

Author: Matt Lindblom

Lawrence v. Commonwealth of Kentucky Transportation Cabinet (In re Shelbyville Road Shoppes, LLC)

(6th Cir. Jan. 5, 2015)

The Sixth Circuit affirms the bankruptcy court’s order dismissing the trustee’s complaint for turnover of a good faith deposit. The debtor was the assignee of a real property purchase agreement with the cabinet, pursuant to which the debtor could purchase certain real property by a certain date. A good faith deposit had been made. The debtor filed a chapter 7 bankruptcy petition a few days before the deadline to purchase, and the trustee then sought turnover of the deposit. The court holds that the trustee does not have a right to demand turnover of the deposit because it is not part of the bankruptcy estate. The debtor did not have a present right to the deposit at the time the bankruptcy was filed. Opinion below.

2015-01-05 – lawrence v ky transportation cab

In re Atwood

(Bankr. S.D. Ind. Issued June 23, 2014)

The bankruptcy court denies the debtors’ motion to exclude turnover of the portion of their tax refund based on a child tax credit. Even though the bankruptcy petition was filed prior to December 31, 2013, the date the debtors became eligible to receive the refund, the debtors had a contingent interest in the refund on the petition date. Thus, to the extent the refund was for an overpayment of taxes, it is property of the bankruptcy estate. Opinion below.

2014-06-23 – in re atwood