Southern District

In re Fletcher

A chapter 13 bankruptcy debtor sought a determination of the secured status of a claim of a creditor secured by the debtor's truck, and the debtor moved to value the truck under 11 U.S.C. § 506(a) for purposes of stripping down the creditor's lien. The creditor asserted that section 506 did not apply pursuant to 11 U.S.C. § 1325(a) (hanging paragraph referencing paragraph 5) since the truck was purchased for personal use.
Ruling: 
Secured claim against truck allegedly purchased for business purposes but clearly used for personal purposes could not be bifurcated due to operation of hanging paragraph.
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Consumer case opionion summary, case decided on June 19,2007, LexisNexis #1107-088

Dunn v. Cano & Harry Corp. (In re Canovas)

Plaintiff and intervener chapter 7 trustees, one representing the estate of the debtor and the other representing the estate of the debtor's wife, filed almost identical adversary complaints against defendant creditor, seeking to avoid a payment as either a preferential transfer under 11 U.S.C. § 547(b) or as a fraudulent transfer under 11 U.S.C. § 544(b). The trustees filed a joint summary judgment motion as to their preference claims.
Ruling: 
Payment to commercial creditor from proceeds of sale of business while debtor was insolvent was preferential.
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Dzikowski v. Gauthier (In re Gauthier)

Chapter 7 trustee filed a complaint that objected to the debtors'claim of exempt property, objected to the debtor's discharge, sought to avoid unauthorized postpetition transfers, and claimed that a money judgment was owed. The court held a hearing and issued findings.
Ruling: 
Discharge denied due to debtors'misrepresentations regarding sale of homestead and use of proceeds.
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Feltman v. City Natl Bank (In re Sophisticated Communs. Inc.)

Plaintiff chapter 7 trustee filed a complaint against defendant bank, alleging that certain transfers made by the debtor as deposits into the debtor's bank account at the bank were avoidable and recoverable as preference payments pursuant to 11 U.S.C. §§ 547 and 550.
Ruling: 
Funds deposited by debtor to cover overdrafts were preferential transfers.
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In re Dominique

Chapter 13 debtors moved to determine that postpetition escrow account increases raised by its primary residential lender were dischargeable. The lender asserted that the postpetition obligations secured by debtors'residence could not be modified under 11 U.S.C. § 1322(b)(2), although the lender had not given annual escrow notices to debtors as required by 24 C.F.R. § 3500.17(f).
Ruling: 
Lender waived anti-modification rights by failing to provide debtor with annual notices of escrow increases.
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In re Barons Stores Inc.

Movants, a chapter 11 debtor and the debtor's officers and sole shareholders, filed a motion to reopen the debtor's bankruptcy case, claiming that certain attorneys perpetrated a fraud upon the court in connection with their applications to be retained as general or special counsel.
Ruling: 
Affidavits of disinterestedness given by special counsel were filed in error and did not amount to fraud on the court.
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In re ITG Vegas Inc.

After the debtors petitioned for bankruptcy relief, the debtors filed an application seeking authority to employ a lobbying firm, pursuant to 11 U.S.C. § 327, as a political consultant to the debtors. The limited liability company objected to the application. The debtors thereafter amended their application, modifying their basis for relief to reflect approval pursuant to 11 U.S.C. § 363(b) as a use of cash.
Ruling: 
Lobbying firm could be retained as political consultant to debtor.
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In re Loe

Debtor, an assistant state attorney, filed an emergency motion to dismiss an involuntary bankruptcy proceeding filed pursuant to 11 U.S.C. § 305(b) that had been filed against him by a purported creditor whose criminal conviction had resulted from a prosecution handled by the alleged debtor. At issue was whether the petition was properly dismissed as a bad faith filing.
Ruling: 
Involuntary case filed against state's attorney by inmate he convicted of murder dismissed for bad faith.
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Dunn v. Quiepo (In re Quiepo)

Chapter 7 trustee sought denial of debtor's discharge pursuant to 11 U.S.C. § 727(a)(3), (a)(4) and (a)(5).
Ruling: 
Discharge denied due to debtor's failure to list maiden name in which she took title to certain property and due to unexplained loss of assets.
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Simon Schindler & Sandberg LLP v. Gentilini (In re Gentilini)

Plaintiff law firm filed an action against defendant debtor, claiming that an attorney fee obligation to the law firm, which arose when the law firm represented the debtor's former spouse in divorce proceedings, was not dischargeable under 11 U.S.C. § 523(a)(5). The parties filed cross motions for summary judgment.
Ruling: 
Court ordered fees owed by debtor to former spouse's divorce counsel were dischargeable as not owed to spouse who was no longer obligated to the firm.
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