§ 553

Redmond v. IGT Inc. (In re Gmj Global Logistics Inc.)

Ruling: 
Claims by shipper could be setoff against claims of estate.
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Commercial case opionion summary, case decided on September 24,2013, LexisNexis #1013-056

Tusa-Expo Holdings Inc. v. Knoll Inc.

Ruling: 
Preference period payments on prepetition invoices were not avoidable but prepetition receivables were avoidable as impermissible setoffs.
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Commercial case opionion summary, case decided on August 05,2013, LexisNexis #0813-128

Morris v. U.S. Dept. of Agric. Rural Hous. Serv. (In re Morris)

Plaintiff chapter 7 debtor filed a complaint against defendant, the U.S. Department of Agriculture Rural Housing Service (the agency), seeking to recover under 11 U.S.C.S. § 553(b) amounts set off by the agency. The debtor moved for summary judgment, seeking the return of the amount set off, while the United States moved for summary judgment seeking to return only $519.19 to the debtor.
Ruling: 
U.S. agency ordered to turn over setoff of tax refund only to extent it improved its position in preference period and after close of tax year.
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Consumer case opionion summary, case decided on June 19,2013, LexisNexis #0713-058

Damas v. United States (In re Damas)

Ruling: 
Debtor not entitled to recover offset of Social Security payments.
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Consumer case opionion summary, case decided on January 06,2013, LexisNexis #0114-133

In re Farinacci

Plaintiff chapter 7 trustee claimed that defendants improperly setoff a debt owed to them by the debtor within the 90-day preference period and also asserted that the setoff was avoidable pursuant to 11 U.S.C.S. § 553. The trustee and defendants filed cross-motions for summary judgment.
Ruling: 
Preference period setoff that did not improve creditor's position could not be avoided.
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Consumer case opionion summary, case decided on December 06,2012, LexisNexis #0113-056

Ries v. Legendary Marine Inc. (In re Genmar Holdings Inc.)

Trustee sought summary judgment on its claim to recover a preference per 11 U.S.C.S. § 547 from defendant creditor. When defendant moved for summary judgment on claims that it was entitled to a setoff per 11 U.S.C.S. § 553 and /or to common law recoupment, plaintiff challenged the availability of either remedy.
Ruling: 
Creditor not entitled to setoff against preference claim.
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Commercial case opionion summary, case decided on October 29,2012, LexisNexis #1112-096

Holber v. Suffolk Constr. Co. (In re Red Rock Servs. Co. LLC)

Plaintiff, chapter 7 Trustee of the bankruptcy estate of debtor subcontractor (the sub), initiated this construction litigation seeking to collect $1,667,945, plus attorneys' fees, costs and interest, from defendant prime contractor (the prime). The prime asserted certain defenses and sought a setoff of any amounts owed.
Ruling: 
Creditor contractor allowed setoff of prepetition debt against amount owed to debtor subcontractor.
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Commercial case opionion summary, case decided on August 30,2012, LexisNexis #1212-094

Riley v. United States Dept of Agric. Rural Dev. (In re Riley)

Chapter 7 debtors filed a motion for summary judgment in their adversary proceeding against defendant United States, on behalf of its agency, the United States Department of Agriculture, Rural Housing Service (USDA RHS), seeking a turnover of a federal income tax refund intercepted by USDA RHS as an offset pursuant to 11 U.S.C.S. § 553(a) to monies owed by the debtors.
Ruling: 
Turnover of intercepted tax refund granted as USDA RHS had improved its position during look back period and could not exercise right of setoff.
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Consumer case opionion summary, case decided on June 07,2012, LexisNexis #0712-058

In re WL Homes LLC

Before the court was a Motion for Relief from the Automatic Stay filed by an insurance company. The company held roughly $2.2 million in insurance premium overpayments--called a "return premium"--that belonged to debtor under a pre-bankruptcy insurance policy. The chapter 7 trustee and some homeowners objected to the lift stay motion.
Ruling: 
Relief from stay denied where creditor insurance company did not establish right to setoff.
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Commercial case opionion summary, case decided on May 16,2012, LexisNexis #0612-025

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