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In re Wynne Residential Asset Mgmt. LLC

Ruling
Fees of counsel to debtor in possession reduced by half due to representation of debtor's principal and other insiders.
Procedural posture

A chapter 7 debtor filed an application and amended application for compensation to a law firm and an attorney (the applicants) for fees and expenses incurred while representing the debtor in possession (DIP) during the chapter 11 phase of the bankruptcy estate. A bankruptcy administrator objected, arguing that the applicants were not "disinterested persons" as defined in 11 U.S.C.S. § 101(14) and as required by 11 U.S.C.S. § 327.

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Commercial opinion summary, case decided on December 18, 2009 , LexisNexis #0210-036

Maloy v. Sigmon (In re Maloy)

Ruling
Settlement of legal malpractice action on behalf of estate approved.
Procedural posture

Chapter 7 debtors and a trustee filed an adversary proceeding against defendants, an attorney and his law firm, to recover funds under 11 U.S.C.S. § 542 for the benefit of the estate. The debtors alleged as grounds for recovery that defendants committed malpractice. The trustee filed a motion for approval of a settlement agreement with defendants pursuant to Fed. R. Bankr. P. 9019.

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Consumer opinion summary, case decided on December 07, 2009 , LexisNexis #0110-087

In re Fitness Mgmt. Group

Ruling
State enforcement of health club bond requirements against debtor was subject to police and regulatory power exception from stay.
Procedural posture

The State of North Carolina brought an action in a State court against a bankruptcy debtor alleging that the debtor committed unfair and deceptive trade practices by failing to maintain adequate bonds for its health clubs. The State moved for a declaration of exemption from the automatic stay under 11 U.S.C.S. § 362(b)(4) based on the State's exercise of its police and regulatory powers.

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Commercial opinion summary, case decided on November 23, 2009 , LexisNexis #1209-112

In re Preston

Ruling
Trustee's motion for turnover granted as to money in debtor's accounts on petition date.
Procedural posture

The chapter 7 trustee filed an objection to exemptions claimed by the debtor and a motion for turnover as to certain amounts in the debtor's accounts.

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Consumer opinion summary, case decided on September 24, 2009 , LexisNexis #1109-053

In re Houser

Ruling
Confirmation of above median debtors' plan denied due to 50 month commitment period rather than the required 60 months and insufficient payment to general unsecured creditors.
Procedural posture

The applicable commitment period mandated by 11 U.S.C.S. § 1325(b)(4) for above median debtors, which was the case, was sixty months. Since the debtors' proposed plan was shorter, and because the proposed plan did not pay unsecured creditors in full, it could not be confirmed. Based on their schedules, the debtors had monthly disposable income of $ 2,334. The debtors failed to overcome the presumption that the means test determination of disposable income was also their projected disposable income. They claimed a secured expense of $ 205.75, which was the monthly debt payment on their Starcraft camper, proposing to retain the camper and continue to make those payments to the lender. The creditor argued successfully that the camper was a luxury item that should be surrendered, and that the $205.75 of future income had to be devoted to paying unsecured creditors. Also, because the debtors' car was paid for, the court held that the debtors were not entitled to take the standard IRS table deduction for automobile expense against projected disposable income.

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Consumer opinion summary, case decided on December 14, 2007 , LexisNexis #0909-022