Western District

In re Davis

Debtor objected to proofs of claim filed by the chapter 7 trustee on behalf of creditors pursuant to Fed. R. Bankr. P. 3004, which claims were not filed within the 30-day limitation imposed under the rules. At issue was whether the claims were properly allowed as "late-filed" claims pursuant to 11 U.S.C.S. § 726 which presumably were to be paid before any surplus was returned to debtor.
Ruling: 
Debtor's objection to late proofs of claim filed by trustee on behalf of unspecified creditors sustained.
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Consumer case opionion summary, case decided on June 11,2010, LexisNexis #0910-067

Johnson v. Davis (In re Davis)

Plaintiff creditor filed a complaint against defendant chapter 7 debtor seeking a determination of nondischargeability under 11 U.S.C.S. § 523(a)(2), (a)(4), and (a)(6). After trial, the creditor moved to add an 11 U.S.C.S. § 727 cause of action. The court took the motion under submission and considered the matter only on 11 U.S.C.S. § 523 grounds.
Ruling: 
Debtor's violation of order preventing alienation of property resulted in nondischargeable claim.
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Consumer case opionion summary, case decided on May 12,2010, LexisNexis #0810-035

In re Brown

A bankruptcy debtor moved to avoid a creditor's second mortgage lien pursuant to 11 U.S.C.S. § 506 on the ground that, based on the actual value of the debtor's residence which secured the lien, the creditor was wholly unsecured.
Ruling: 
Second mortgage that was at least partially secured could not be avoided.
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Consumer case opionion summary, case decided on May 05,2010, LexisNexis #0810-046

Monroe Capital Inc. v. Frumusa (In re Frumusa)

Plaintiff servicing agent commenced an adversary proceeding against defendants, debtor and two other individuals, pursuant to Fed. R. Bankr. P. 7001(2), to have the court determine the owner of the membership interests in a certain limited liability company (LLC).
Ruling: 
Membership interests in limited liability company, owned 100 percent by debtor on petition date, were property of the estate.
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Consumer case opionion summary, case decided on April 14,2010, LexisNexis #0610-136

In re Union City Contractors Inc.

A bank claimed that funds in a bankruptcy debtor's account were subject to the bank's security interest granted by the debtor as security for a loan, but two sureties under separate construction contracts of the debtor asserted that the funds were contract proceeds subject to their indemnification agreements which also extended to an unpaid contract balance. The bank and the sureties cross-moved for relief from the automatic bankruptcy stay.
Ruling: 
Cross motions of bank and sureties for relief from stay to pursue claims to funds in debtor's account granted.
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Commercial case opionion summary, case decided on March 31,2010, LexisNexis #0610-111

Gordon v. Carpitella (In re Carpitella)

Defendant debtor filed a petition initiating a chapter 7 case. Chapter 7 case trustee commenced an adversary proceeding against the debtor, pursuant to 11 U.S.C.S. § 727, which requested that the court deny the debtor's discharge. Plaintiff U.S. Trustee moved for summary judgment. The debtor cross-moved for summary judgment.
Ruling: 
Discharge denied due to debtor's failure to disclose postpetition deposit of check for building sale proceeds and subsequent payment to unlisted creditor.
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Consumer case opionion summary, case decided on March 17,2010, LexisNexis #0610-022

In re Successor Borrower Servs. LLC

In this chapter 11 case, the United States Trustee (UST) objected to the terms of a retainer agreement between debtor and its counsel. The central issue regarding the objection involved the propriety of a security interest that debtor had given as collateral for the payment of legal fees.
Ruling: 
Debtor's attorney could not take security interest to secure legal fees.
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Commercial case opionion summary, case decided on March 05,2010, LexisNexis #0510-071

In re Shtayyeh

Plaintiff, the State of New York, brought an adversary proceeding against defendant Chapter 7 debtor, pursuant to 11 U.S.C.S. § 523(a)(2), (4), (6). The debtor moved to dismiss the action as time-barred, and the State cross-moved to permit a nunc pro tunc extension of time to, in essence, ratify its service of a late, reissued summons.
Ruling: 
State's late motion to permit nunc pro tunc extension of time to ratify late service of timely filed nondischargeability complaint denied.
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Consumer case opionion summary, case decided on March 05,2010, LexisNexis #0510-083

In re Calloway

The debtor moved, pursuant to 11 U.S.C.S. § 522(f), to avoid judgment liens, including one that a creditor had perfected prior to August 30, 2005. The issue was whether the statutory amendment of N.Y. C.P.L.R. 5206, that increased New York's homestead exemption from $ 10,000 to $ 50,000, had retroactive effect, which would allow the debtor to avoid that judgment lien.
Ruling: 
Judgment lien avoided as impairing debtor's retroactively applied state homestead exemption.
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Consumer case opionion summary, case decided on February 16,2010, LexisNexis #0410-117

In re 2670 West Ridge Rd. LLC

Debtor LLC filed a petition under chapter 11 of the Bankruptcy Code, and a lender that obtained a judgment of foreclosure against the debtor in state court filed a motion for relief under 11 U.S.C.S. § 362(d)(2) so commercial property the debtor owned could be sold at a foreclosure sale. The court granted the lender's motion and denied the debtor's motion for reconsideration, and the debtor filed a motion for a stay pending appeal.
Ruling: 
Stay pending appeal of relief from stay to foreclose granted given that third party promise to fund plan shortfall was issue of first impression.
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Commercial case opionion summary, case decided on February 04,2010, LexisNexis #0410-007

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