Judge Hillman

Jalbert v. M.G.E. UPS Sys. (In re CGI Liquidation Inc.)

Plaintiff, the liquidating supervisor of the consolidated debtors, filed an adversary proceeding seeking a return of three alleged preferential payments to defendant corporation. The corporation denied that the payments were avoidable preferences and filed a motion for partial summary judgment seeking judgment on one of the payments.
Ruling: 
Corporation was denied partial summary judgment in a transfer avoidance action since the corporation failed to show that the payment from debtors was less than it would have been entitled to receive under chapter 7 and, thus, not preferential.
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In re Abbott

The debtor filed a motion to obtain a determination that the prepetition arrearage that was owed to the creditor had been paid in full. The creditor was the holder of the first mortgage on the debtor's residence. The creditor objected to the motion, on the grounds that the debtor continued to owe an additional amount of prepetition arrearage.
Ruling: 
Servicer of a creditor's mortgage was denied claim for additional prepetition arrearages since that claim had been addressed in prior confirmed plans.
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In re Southcoast Express Inc.

A lessor of a commercial property contended that it terminated a bankruptcy debtor's lease of the property before the debtor filed its bankruptcy petition, and thus the automatic bankruptcy stay did not bar the lessor's eviction action under 11 U.S.C. § 362(b)(10). The lessor moved for an order determining that the bankruptcy stay did not apply or granting relief from the stay.
Ruling: 
Court ruled that the automatic stay did not apply to a lease terminated prepetition by the expiration of the lease term, but an evidentiary hearing was needed to determine if the lease was properly terminated.
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Gharavi v. U.S. Dept. of Educ. (In re Gharavi)

Plaintiff debtor filed an adversary proceeding seeking the discharge of her student loans pursuant to 11 U.S.C. § 523(a)(8). Defendant creditors defended the complaint by arguing that the debtor had resources to pay the obligation. The court held an evidentiary hearing.
Ruling: 
Court discharged most of the debtor's student loan debt due to undue hardship related to the debtor's multiple sclerosis.
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Stone v. Casiello (In re Casiello)

After the bankruptcy court entered judgment in favor of defendant debtor, the debtor then filed a motion for sanctions pursuant to 11 U.S.C. § 105(a), 28 U.S.C. § 1927, and Fed. R. Bankr. P. 9011. The bankruptcy court ruled that the motion was untimely. The U.S. District Court remanded the matter, holding that there were no time constraints under 28 U.S.C. § 1927.
Ruling: 
Court held that it had jurisdiction to impose sanctions for attorneys'unreasonable prolonging of proceedings.
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In re Coastal Bus & Equip. Sales Inc.

Creditor IRS moved for relief from the automatic stay to setoff pre-petition tax overpayments of the debtor against its unpaid tax liabilities incurred during the pendency of its chapter 11 case, including withholding, Federal Insurance Contributions Act ("FICA"), and Federal Unemployment Tax Act taxes.
Ruling: 
IRS was granted right to apply prepetition tax liability refunds against unpaid postpetition tax liability incurred during the debtor's chapter 11 case under a right of recoupment.
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Lucas v. Lyle (In re Lyle)

Plaintiff creditors, owners of a residence, brought an adversary proceeding against defendant bankruptcy debtor, a contractor, alleging that a debt to the owners for the contractor's defective work was nondischargeable under 11 U.S.C. § 523(a)(2)(A) based on the contractor's misrepresentation that the contractor was licensed. The bankruptcy court reconsidered the owners'claim upon remand from the district court.
Ruling: 
Debt for unlicensed contractor debtor's damage to a residence from defective work was deemed dischargeable since the debtor did not misrepresent that the debtor was unlicensed.
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