Judge Flatley

First Exchange Bank v. Cross (In re Cross)

Plaintiff creditor (bank) filed an adversary proceeding seeking to except about $74,000 from the anticipated Chapter 7 discharge of defendant debtor pursuant to 11 U.S.C.S. § 523(a)(4).
Ruling: 
Loss resulting from debtor officer's default on loan issued against creditor bank's policy was dischargeable and not fiduciary defalcation as debtor was not acting within scope of duties.
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Consumer case opionion summary, case decided on October 01,2010, LexisNexis #1010-116

In re Bailey

Movant, an ex-wife of a chapter 13 debtor, asked the court to dismiss debtor's chapter 13 case as permitted by 11 U.S.C.S. § 1307(c) on her claim that he had filed it in bad faith and for the non-economic purpose of harassing her and causing her increased attorney's fees, and also to circumvent rulings of a state court relating to debtor's financial obligations.
Ruling: 
Bad faith dismissal denied as debtor's expenses far exceeded net income.
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Consumer case opionion summary, case decided on September 24,2010, LexisNexis #1010-102

In re Bon-Air Pship

A bankruptcy debtor was a single asset real estate debtor and, within hours of a hearing upon a motion of the bankruptcy trustee to sell the debtor's real property, the debtor moved for voluntary dismissal of its bankruptcy case under 11 U.S.C.S. § 707 to allow the debtor to sell the property.
Ruling: 
Voluntary dismissal denied in best interests of debtor and creditor.
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Commercial case opionion summary, case decided on August 30,2010, LexisNexis #0910-090

First Exch. Bank of W. Va. v. Cross (In re Cross)

Plaintiff creditor sought entry of summary judgment on its claim against the debtor to except a foreclosure deficiency balance of about $50,000 from his chapter 7 discharge under 11 U.S.C.S. § 523(a)(4).
Ruling: 
Foreclosure deficiency owed by debtor who was an employee of creditor bank was dischargeable absent fiduciary duty.
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Consumer case opionion summary, case decided on August 27,2010, LexisNexis #0910-083

In re Tiger Aircraft LLC

A Chapter 7 trustee filed an objection to a creditor's classification of its proof of claim as unsecured on the grounds that the creditor's claim was on account of its equity interest in the debtor and thus, pursuant to 11 U.S.C.S. § 726, it could only be paid if all unsecured claims received full payment. The court treated the parties' briefs as cross-motions for summary judgment.
Ruling: 
Creditor's claim based on equity interest in debtor could not be classified as unsecured.
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Commercial case opionion summary, case decided on August 06,2010, LexisNexis #1010-123

In re Ricco Inc.

The United States Trustee (UST) sought the appointment of chapter 11 trustees in debtors' bankruptcy cases on grounds of gross mismanagement and incompetence. Debtors applied to employ bankruptcy counsel.
Ruling: 
Chapter 11 trustee appointed due to gross mismanagement.
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Commercial case opionion summary, case decided on June 28,2010, LexisNexis #0910-097

In re Universal Enters. of W. Va. LLC

Creditor bank objected to the application of the debtor to employ a law firm as its legal counsel. The law firm also represented an associated chapter 11 debtor that leased property from the debtor.
Ruling: 
Debtor could retain law firm that also represented an associated debtor that leased debtor's property.
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Commercial case opionion summary, case decided on June 09,2010, LexisNexis #0810-075

In re Quail Farm LLC

Two creditors sought the dismissal or conversion of a chapter 11 debtor's case pursuant to 11 U.S.C.S. § 1112(b). Their motion was opposed by the debtor and by a subordinate lienholder.
Ruling: 
Single real estate asset case of single member LLC dismissed in best interests of creditors and estate.
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Commercial case opionion summary, case decided on May 05,2010, LexisNexis #0710-026

Bailey v. Davant (In re Bailey)

Chapter 13 debtor filed a complaint against defendants, his former spouse and her attorney, alleging that they violated the automatic stay under 11 U.S.C.S. § 362(a) by failing to affirmatively stop a pre-petition garnishment of his wages. The debtor filed a motion for judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c) and Fed. R. Bankr. P. 7012.
Ruling: 
Debtor's spouse and spouse's attorney were jointly and severally liable for violating stay by failing to halt garnishment instituted prepetition.
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Consumer case opionion summary, case decided on April 12,2010, LexisNexis #0610-077

Pague v. Harshman (In re Pague)

Plaintiff debtor filed a chapter 7 bankruptcy petition and received a discharge under 11 U.S.C.S. § 727(a). The debtor filed an adversary proceeding against defendants, a creditor and her attorney, seeking damages for violations of the discharge injunction under 11 U.S.C.S. § 524(a). The court granted the debtor's request for entry of default, but deferred ruling on the debtor's request for default judgment.
Ruling: 
Creditor liable for violating discharge injunction by pursuing personal liability of debtors.
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Consumer case opionion summary, case decided on April 05,2010, LexisNexis #0610-067

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