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northern district of alabama

Bepco LP v. 15375 Mem. Corp. (In re 15375 Mem. Corp.)

Ruling
Bankruptcy court erred in failing to dismiss case for bad faith where debtor sought to avoid litigation and protect assets from liability.
Procedural posture

In consolidated bankruptcy cases, appellant creditor challenged the primary ruling of the Bankruptcy Court for the District of Delaware, which denied a motion to dismiss the debtors' petitions as not filed in good faith. Appellees, the debtors and two related parties, both Cayman Islands corporations, cross-appealed other aspects of the bankruptcy court ruling.

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Commercial opinion summary, case decided on January 27, 2009 , LexisNexis #0309-017

In re Kim

Ruling
Confirmation denied for bad faith due to lack of changed circumstances since debtor's prior case was dismissed for inability to propose plan.
Procedural posture

Debtors proposed a chapter 13 plan which provided only a minimal dividend to unsecured creditors. The bankruptcy trustee objected to confirmation of the plan based on lack of feasibility, failure to satisfy the best interests of creditors, and lack of good faith.

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Consumer opinion summary, case decided on January 14, 2009 , LexisNexis #0609-094

Hastings v. Hastings (In re Hastings)

Ruling
Debt owed to surety was nondischargeable to the extent debtors used trust res to make unauthorized payments.
Procedural posture

Plaintiff surety filed an adversary proceeding against defendant debtors to determine the dischargeability of a claim pursuant to 11 U.S.C.S. § 523(a)(4). The surety filed a motion for summary judgment.

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Consumer opinion summary, case decided on December 23, 2008 , LexisNexis #0209-077

Southhall v. Check Depot Inc. (In re Southhall)

Ruling
Adversary proceeding based on creditor's inclusion of debtor's full social security number in its proof of claim dismissed as it did not violate bankruptcy code or rules in effect at the time of filing.
Procedural posture

Plaintiff debtor filed for chapter 13 relief. Defendant creditor filed an unsecured proof of claim, which included the debtor's full social security number. The debtor filed an adversary proceeding against the creditor, alleging violation of the Bankruptcy Code and contempt, invasion of privacy, and violation of the Gramm-Leach-Bliley Act (GLBA). The creditor moved to dismiss.

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Consumer opinion summary, case decided on December 19, 2008 , LexisNexis #0209-037

In re Majors

Ruling
Relief from stay to proceed with eviction denied where creditor was protected by equity cushion in property.
Procedural posture

A mortgage creditor filed a motion for relief from the automatic stay in order to proceed with the eviction/ejectment of the chapter 13 debtor from a residential property in a state court proceeding, under 11 U.S.C.S. § 362(d). The debtor argued that cause did not exist to modify the stay, and that he had sufficient equity in the property to warrant continued protection under the stay.

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Consumer opinion summary, case decided on December 18, 2008 , LexisNexis #0209-040

Shaw Group Inc. v. SWE&C Liquidating Trust (In re Stone & Webster Inc.)

Ruling
Bankruptcy court properly denied motion by purchaser of debtor's assets to intervene in adversary proceeding based on alleged subrogation rights to creditor's claim.
Procedural posture

Appellant, a buyer of debtors'assets, challenged an order of the bankruptcy court of the District of Delaware denying its motion to intervene under Fed. R. Civ. P. 24(a)(1), (2) and 11 U.S.C.S. § 1109(b) in an adversary the debtors, a company and its subsidiary, filed to contest their liability under the company's guarantee of any award against the subsidiary's joint venture in connection with an oil company contract.

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Commercial opinion summary, case decided on November 13, 2008 , LexisNexis #1208-103

Buesgens v. Bergman (In re Bergman)

Ruling
Employment discrimination proceeding by third party whose only connection with bankruptcy was a similar complaint by debtor dismissed for lack of subject matter jurisdiction
Procedural posture

Plaintiff employee was ordered to show cause why his adversary proceeding for employment discrimination against defendants, a debtor, the trustee, the officials, and the attorneys, should not have been dismissed for lack of jurisdiction.

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Consumer opinion summary, case decided on October 21, 2008 , LexisNexis #0309-056

Hackney v. Hackney (In re Hackney)

Ruling
Mortgage obligation to debtor's former spouse was dischargeable in accordance with settlement in debtor's prior bankruptcy.
Procedural posture

Plaintiff former wife and her attorney sued defendant chapter 11 debtor, alleging that two obligations owed by the debtor, which arose out of a divorce proceeding, were nondischargeable under 11 U.S.C.S. § 523(a)(5) and (15). The debtor counterclaimed for breach of contract, fraud, and abusive and outrageous conduct because they failed to abide by a settlement reached in the debtor's previous chapter 11 case. The court held a trial.

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Consumer opinion summary, case decided on October 10, 2008 , LexisNexis #1208-117

General Steel Inc. v. Farris (In re Farris)

Ruling
Discharge denied due to debtor's failure to disclose multiple businesses and business records.
Procedural posture

In proceedings that were consolidated, plaintiff five creditors filed actions to determine the dischargeability of certain debts owed by a chapter 7 debtor, pursuant to 11 U.S.C.S. § 523. Two of the creditors also filed objections to discharge of the debtor, pursuant to 11 U.S.C.S. § 727. A consolidated trial was held and the court issued findings of fact and conclusions of law.

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Consumer opinion summary, case decided on September 30, 2008 , LexisNexis #1208-124

Greene v. Burke (In re Burke)

Ruling
Bankruptcy court properly reviewed validity of state court judgment that recognized judgment against debtor by Mexican court.
Procedural posture

Appellee debtor filed an adversary proceeding against appellant creditor, seeking a judgment that a claim the creditor filed against the debtor's bankruptcy estate was invalid. On remand from a decision by the district court, the Bankruptcy Court for the District of Colorado sustained the debtor's objections to the creditor's claim. The creditor appealed.

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Consumer opinion summary, case decided on September 29, 2008 , LexisNexis #1008-104