6th Circuit

Irby v. Fashion Bug (In re Irby)

Plaintiffs, discharged bankruptcy debtors, brought an adversary proceeding against defendant creditors alleging that the creditors violated the discharge injunction of 11 U.S.C. § 524 by continuing to report the debtors'discharged debts. The creditors did not respond and the debtors moved for default judgment.
Ruling: 
Creditors did not violate discharge injunction since they only reported the debtor's unpaid but discharged debts and did not act to collect the debts.
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In re Burkett

In an adversary proceeding, plaintiff, a chapter 7 trustee, filed an objection to proofs of claim of defendant creditors, requesting disallowance under 11 U.S.C. § 502 primarily because of their failure to attach sufficient supporting documentation to the proofs of claim.
Ruling: 
Court overruled trustee's objection to creditors'lack of supporting documentation in their proofs of claim since they established the validity, ownership, and amount of the claim and there were no factual disputes on the claims.
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Farmer v. Green Tree Serv. LLC (In re Snelson)

Plaintiff, a chapter 7 trustee in bankruptcy, filed an adversary complaint seeking to avoid a lien on the debtor's mobile home held by defendant creditor, pursuant to 11 U.S.C. § 544, and to recover the value of the mobile home for the benefit of the debtor's estate under 11 U.S.C. § 551. The trustee claimed the lien was avoidable due to a clerical error in the description of the collateral. Both parties moved for summary judgment.
Ruling: 
Trustee could not avoid creditor's lien since the creditor's security interest was perfected despite a clerical error in the description of the collateral.
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In re Trobaugh

Debtors filed a voluntary petition for relief under chapter 13 of the Code. Debtors later moved to avoid creditor's lien on a mobile home pursuant to 11 U.S.C. § 522(f).
Ruling: 
Debtors were denied motion to avoid a creditor's lien on their mobile home since the lien was consensual.
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In re Kennedy Mfg.

A law firm representing a bankruptcy debtor submitted its final application for compensation and reimbursement of expenses. The U.S. trustee objected to the application on the grounds that certain of the firm's services did not benefit the estate, time spent with a financial advisor was not compensable, and the firm engaged in overstaffing.
Ruling: 
Debtor's attorneys were granted most of their fees over the trustee's objection that their services did not benefit the estate since the fees were reasonably calculated to benefit the estate when they were performed.
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In re Wycuff

Bankruptcy debtors, a husband and wife, claimed a homestead exemption in their residence to which the wife held sole legal title, including the husband's dower interest in the property. Creditors, the debtors'mortgagees, objected to the exemption.
Ruling: 
Debtors were only entitled to a homestead exemption as to the property's legal title in relation to the trustee's interest pursuant to the debtor husband's dower interest, but the debtors' homestead exemption was disallowed as to the property's equitable interest since the creditor's mortgage existed premarriage and thus was superior to the claimed exemption.
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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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In re Jenkins

Moving creditor sought to reopen a bankruptcy case to permit filing a motion to modify or amend the order of discharge and for relief from the discharge injunction, so the creditor could bring a claim against the debtor for the unauthorized use and conversion of the creditor's house boat in the Circuit Court for Knox County, Tennessee.
Ruling: 
Creditor was denied motion to reopen bankruptcy case but only because the creditor was not listed as a creditor and could pursue a separate nondischargeability proceeding regarding damages claim at any time.
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Mostoller v. CitiCapital Commer. Corp. (In re Stetson & Assocs.)

Plaintiff chapter 7 trustee brought an adversary complaint to avoid several liens against personal property of the debtor that were held by defendant creditor pursuant to financing statements filed pursuant to Tenn. Code Ann. § 47-9-101 et seq. (Article 9 of the Uniform Commercial Code.) The creditor moved for relief from the automatic stay and for abandonment by the trustee of the bankruptcy estate's interest in the collateral.
Ruling: 
Trustee could not avoid a creditor's lien and did not have priority over the creditor's interests since the creditor's interests were perfected at the time of filing.
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Chattanooga Agric. Credit Assoc. v. Davis (In re Davis)

Plaintiff creditor brought an adversary proceeding against defendant bankruptcy debtor seeking a declaration that a debt owed to the creditor by the debtor was not dischargeable. The debtor moved to dismiss the complaint as untimely filed under Fed. R. Bankr. P. 4007(c), and the creditor acknowledged the untimeliness but asserted equitable estoppel and equitable tolling.
Ruling: 
Consent decree was not valid for nondischargeability determination and creditor's untimely delay in filing adversary proceeding led to dismissal.
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