Western District

In re Lucre Inc.

In a chapter 11 matter, an alleged creditor that furnished the use of its network moved for relief from an automatic stay with respect to its interconnection agreement with debtor telecommunications company. The creditor requested that the automatic stay be modified so that it could attempt to dissolve state court injunctions that were preventing it from discontinuing services to debtor notwithstanding debtor's alleged breach of the agreement.
Ruling: 
Automatic stay was modified so that a creditor could move forward with efforts to relieve itself from two injunctions but not with regard to other issues including setoff rights.
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In re Albion Health Servs.

A bankruptcy debtor, a not-for-profit corporation that owned a hospital, ceased operation before filing its bankruptcy petition and its former employees received unemployment compensation from the state of Michigan. The state asserted a claim for reimbursement of the unemployment benefits which it paid, and the trustee objected to the allowance of the claim as a tax priority under 11 U.S.C. § 507(a)(8). The trustee moved for summary judgment.
Ruling: 
Court ruled that a state's claim for reimbursement of unemployment benefits to the debtor's former employees was not an excise tax entitled to priority.
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In re Habash

Appellant creditor filed an adversary complaint to revoke appellee debtor's chapter 7 discharge in the bankruptcy court. The bankruptcy court dismissed the complaint with prejudice and the creditor appealed.
Ruling: 
Proceeding for revocation of discharge properly dismissed as untimely where creditor should have been capable of filing within time limits.
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Ingham County v. Strojny (In re Strojny)

Plaintiff creditor was a county that had entered into a public construction contract with defendant debtor. Due to a billing error, the debtor was overpaid for work on the project. The county obtained a judgment against the debtor. The county filed the instant adversary proceeding against debtor seeking a determination that the debt was nondischargeable pursuant to 11 U.S.C. § 523(a)(2)(A), (a)(4) and /or (a)(6).
Ruling: 
Judgment held by a county for overpayment to a debtor was deemed dischargeable since the debtor did not intend to injure the county by overbilling.
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In re Value Music Concepts

Plaintiff, in his capacity as the creditor representative appointed pursuant to 11 U.S.C. § 1123(b)(3) under debtors'confirmed chapter 11 plan, sued defendant creditors, seeking to recover, pursuant to 11 U.S.C. § 547(b), alleged preferential transfers for the benefit of unsecured creditors. Defendants moved for summary judgment.
Ruling: 
Creditor representative could pursue preference avoidance actions on debts assumed under a settlement agreement between debtors and creditors two weeks before chapter 11 filings.
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