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Southern District

Continental Mfg. Co. Ltd. v. Sommers (In re Contractor Tech. Ltd.)

Appellant company sought judicial review of a decision by the Bankruptcy Court for the Southern District of Texas granting summary judgment in favor appellee bankruptcy trustee in an avoidance proceeding under 11 U.S.C. § 549.
Ruling: 
Transfer was deemed avoidable since check did not clear until postfiling.
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Floyd v. Am. Block Roland Niles Intl Inc. (In re Cooper Mfg. Corp.)

Plaintiff bankruptcy trustee brought adversary proceedings against defendant creditors, alleging that the debtor's transfers of proceeds of a letter of credit to the creditors constituted preferential transfers which were avoidable under 11 U.S.C. § 547(b). The trustee and the creditors cross-moved for summary judgment.
Ruling: 
Transfers were not deemed preferential transfers since assignments were valid and occurred outside preference period.
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Prado v. Cash Am. Advance Inc. (In re Prado)

Plaintiff debtor filed an adversary proceeding seeking damages, sanctions, and attorneys fees for violation of 11 U.S.C. § 362. Defendant pawnbroker moved for dismissal, or in the alternative, summary judgment.
Ruling: 
Debtor had a colorable claim against pawnshop creditor for violating the automatic stay by enforcing its lien on the debtor's collateral since debtor's right to recover the collateral existed at the time of filing.
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In re Salazar

Bankruptcy debtors filed their bankruptcy petition without obtaining credit counseling as required by 11 U.S.C. § 109(h), and the debtors'mortgagee foreclosed on their residence after the petition was filed. The debtors moved for reconsideration of the bankruptcy court's order, which struck the debtor's petition based on ineligibility under section 109(h).
Ruling: 
Foreclosure did not violate an automatic stay since the debtors did not comply with the prefiling credit counseling requirement and were, thus, ineligible as bankruptcy debtors.
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In re Thomas

Bankruptcy debtors'chapter 13 plan provided for payment of the debtors'federal tax liability and the plan was confirmed, but the government subsequently filed a proof of claim for substantially greater tax liability. The debtors stipulated to the claim, and the bankruptcy court considered whether debtors and their counsel intentionally misrepresented the debtors'tax liability.
Ruling: 
Order confirming the debtors'plan was vacated, and sanctions were imposed on the debtor 's counsel based on intentional misrepresentations of the debtor 's tax liability that constituted fraud.
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In re Porcheddu

The court issued a show cause order against an attorney and her law firm after discovering that the firm was adjusting time entries after-the-fact and then holding the fee statements out to be the firm's business records. The attorney and the firm represented creditors in consumer bankruptcy cases in the court.
Ruling: 
Court imposed sanctions on a firm and an attorney for fraudulent fee shifting.
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Gilbane Bldg. Co. v. Air Sys. (In re Encompass Servs. Corp.)

After the debtors' chapter 11 plan was confirmed, plaintiff contractor brought an adversary proceeding against defendant purchaser, seeking a declaration that the debtors'assignment of a subcontract to the purchaser was invalid and remained in the estate, and seeking an injunction against the purchaser from further prosecuting the subcontract in state court. The parties cross- moved for summary judgment; the purchaser moved for abstention.
Ruling: 
Court ruled that it did not have jurisdiction over an action involving the assigment of a subcontract since the subcontract was created independent of the bankruptcy and did not impact postconfirmation distributions to creditors.
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Neely v. Smith (In re Neely)

The debtor appealed two interlocutory orders of the bankruptcy court. The first order denied his 11 U.S.C. § 706(a) motion to convert from a Chapter 7 to a Chapter 13 bankruptcy. The second order withdrew the first order, granted the motion to convert, and then immediately reconverted the debtor's case to a Chapter 7 case.
Ruling: 
Order denying conversion was revoked, and case was remanded for consideration of whether debtor bad faith existed since strong presumption in favor of conversion exists.
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