Eastern District

In re Davis

After the debtor filed for chapter 13 bankruptcy protection, she filed a chapter 13 plan proposing to make biweekly payments for 36 months. The trustee filed an objection to the plan. The bankruptcy court held a confirmation hearing.
Ruling: 
Plan confirmation denied due to failure to meet minimum "applicable commitment period."
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Collins & Aikman Corp. v. Northern Trust Bank of Cal. (In re Collins & Aikman Corp.)

Plaintiffs, corporate debtors, filed a complaint against defendant, the trustee of a grantor trust or "rabbi trust" that the debtors, as employers, established to create a source of funding for otherwise unfunded benefit plans. The complaint sought the turnover of all assets of the trust. The trust beneficiaries moved to intervene claiming they were entitled to the assets of the trust. The debtors moved for summary judgment.
Ruling: 
Debtors were entitled to turnover of "rabbi trust" assets.
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In re Odette

The debtors moved to convert their chapter 7 case to chapter 13. Creditors filed objections. The first objection was that the debtors were ineligible under 11 U.S.C. § 109(e), because their total debts exceeded the chapter 13 unsecured debt ceiling. The second objection was that irrespective of the outcome of the first objection, the attempted conversion was in bad faith.
Ruling: 
Debtors'guarantee of corporate debt did not cause them to exceed debt limits for chapter 13 and conversion from chapter 7 was allowed.
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In re Guzior

The chapter 7 trustee objected to a tenancy by the entireties property exemption claimed by debtor pursuant to 11 U.S.C. § 522(b)(2)(B).
Ruling: 
Debtor could not claim exemption in entireties property where state law allowed joint creditors to reach entireties interests.
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Shapiro v. Art Leather Inc. (In re Connolly N. Am. LLC)

Plaintiff trustee sued defendant accounts receivable seller pursuant to 11 U.S.C. § 550(a)(1), seeking to avoid and recover six prepetition payments that the chapter 7 debtor made to the purchaser of defendant's accounts receivable. Defendant moved for summary judgment.
Ruling: 
Summary judgment regarding avoidance and recovery claim was denied since issues of fact existed as to whether creditor benefitted from the transfers.
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In re Jones

The debtor's attorney filed a fee application requesting approval of fees of $1,917.85 plus costs of $74.33. The bankruptcy court had awarded $500.00 in fees and $74.33 in costs. On appeal, the district court remanded the fee application for determination consistent with the Sixth Circuit's decision in Boddy.
Ruling: 
Attorney was compensated only for those hours reasonably expended to file the case and obtain the stay since the attorney should have advised debtor that filing a chapter 13 plan was not feasible.
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Izzo v. United States (In re Izzo)

Defendant United States sought review of an adversary proceeding summary judgment ruling by the bankruptcy court that the tax liabilities of plaintiff, a chapter 7 debtor, were not excepted from discharge under 11 U.S.C. § 523(a)(1)(B)(i).
Ruling: 
Court reversed and remanded case since debtors'tax liabilities were deemed nondischargeable due to debtors'untimely filing of seven annual tax returns.
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Shapiro v. First Franklin Fin. Corp. (In re Rechis)

Plaintiff chapter 7 trustee filed an adversary proceeding against defendants, creditors, seeking to avoid a mortgage as a preferential transfer. The trustee moved for summary judgment. The debtor amended her schedule to claim an exemption in the underlying real property as property held by the entireties. The trustee objected to the claimed exemption under the doctrine of laches.
Ruling: 
Mortgage was avoided as a preferential transfer since the debtor's effort to exempt the property as entireties property after an 18-month delay was not allowed.
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Andrus v. Ajemian (In re Andrus)

Plaintiff debtor sued defendant former spouse, seeking a determination that a debt of $146,184 he owed to her under a divorce judgment was a dischargeable debt and not within the exception to discharge of 11 U.S.C. § 523(a)(5). She filed a motion to dismiss or, alternatively, to abstain, a counter-complaint seeking a determination that the debt was non-dischargeable, and a summary judgment motion. Debtor filed his own summary judgment motion.
Ruling: 
Court deemed an amount owed by the debtor to the debtor's former spouse to be dischargeable and not within an exception since the obligation was a property settlement.
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Wells v. TCF Natl Bank (In re Hi Tech Fleet Serv.)

The matter came before the court on plaintiff chapter 7 trustee's motion for summary judgment. The trustee requested summary judgment on a two-count complaint seeking: (1) a determination of the amount, validity, and extent of defendant creditor's claim, and (2) avoidance of an allegedly unauthorized postpetition transfer of funds to the creditor.
Ruling: 
Court dismissed the trustee's complaint alleging avoidable transfers and demanding turnover since no provision in either the Code or case law allowed a chapter 7 trustee to bring an action challenging an asset sale consummated pursuant to court order in a chapter 11 proceeding.
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