Northern District

Benderson v. Clayton (In re Clayton)

Plaintiff landlord sued defendant chapter 7 debtor, alleging that the amounts the debtor owed for damage to rental property were excepted from discharge pursuant to 11 U.S.C. § 523(a)(2) because the debtor had entered into a rental agreement with the intent to defraud and induce plaintiff to rent her the property. The court took evidence.
Ruling: 
Amounts owed for damage to rental property were excepted from discharge since landlord showed debtor had entered into rental agreement with intent to defraud and induce landlord to rent to debtor.
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In re Ashby

In debtor's chapter 7 case, the bankruptcy trustee sought authority to pay liens on auctioned property from the proceeds of the sale, as well as payment of the attorney's fees and expenses from trustee's funds on hand. The creditors objected to payment of contingent fees to the attorney for the trustee. The attorney requested fees based on a one-third contingent fee agreement.
Ruling: 
Trustee was granted authority to pay attorney for services selling debtor's real estate but fee was reduced to account for attorney performing trustee duties.
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Currell v. Paxton (In re Paxton)

Plaintiffs were creditors of a corporation, which itself filed for relief under chapter 7, and of which defendant debtor was an officer. The creditors filed an adversary proceeding against the debtor seeking a denial of discharge under 11 U.S.C. § 727(a)(4)(A), (a)(4)(C) and (a)(7). The complaint alleged that the debtor entered into an agreement with the corporation's competitor to undermine the corporation.
Ruling: 
Court ruled against creditors seeking denial of discharge since creditors failed to show fraudulent intent or false oath.
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Schmidt v. Bauer (In re Bauer)

Plaintiff creditor filed a motion for summary judgment on his action for a determination that a judgment debt based on a state court finding of conversion by defendant debtor was excepted from discharge, pursuant to 11 U.S.C.S. § 523(a)(4) and (6). The creditor alleged that the judgment established larceny or embezzlement under section 523(a)(4), and the finding of legal malice established willful and malicious injury under section 523(a)(6).
Ruling: 
State court judgments were not excepted from discharge since judgments did not establish fraudulent intent or malice or willful and malicious injury under same standard as required under section 523(a).
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Hanrahan v. Walterman (In re Walterman Implement Inc.)

Plaintiff chapter 7 trustee filed an action against defendant, the president and sole shareholder of debtor corporation, pursuant to 11 U.S.C. § 549 alleging that defendant revoked the debtor's subchapter S election in violation of the automatic stay. The trustee moved for summary judgment.
Ruling: 
President and sole shareholder of debtor corporation violated automatic stay by postpetition revoking debtor's subchapter S status since that status was estate property.
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In re Barlas

A bankruptcy debtor was granted a discharge subject to a determination of the nondischargeability of a potential debt to a creditor who had a lawsuit pending in which the debtor was a named defendant prior to her bankruptcy. The debtor moved for sanctions against the creditor's counsel for violating the bankruptcy stay by serving the debtor with a deposition subpoena in the lawsuit.
Ruling: 
Court deemed that creditor's counsel did not violate discharge injunction by serving debtor with deposition subpoena since creditor was entitled to depose debtor as witness and information requested was relevant to dischargeability issues.
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Fokkena v. Hippen

Plaintiff trustee filed an adversary complaint against defendant debtor to deny the debtor's discharge under 11 U.S.C. § 727(a)(2) and (a)(4). The trustee claimed that the debtor attempted to transfer or conceal property and gave a false oath or account.
Ruling: 
Discharge was denied due to debtor's material false statements.
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In re Schrandt

Bankruptcy debtors'plan was confirmed and the trustee's claims report allowed a creditor's claim secured by the debtors'automobile and the creditor's unsecured claim for the balance of the amount owed which was greater than the value of the vehicle. The debtors objected to allowance of the unsecured portion of the claim, asserting that the creditor agreed to waive the unsecured claim.
Ruling: 
Debtors failed to overcome the prima facie evidence of the validity of the creditor's claim.
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In re Fulton

A bankruptcy debtor asserted that she filed her bankruptcy petition while in mental and emotional turmoil and without adequate information, and that her financial circumstances changed to allow payment to creditors. The debtor moved to dismiss her bankruptcy case under 11 U.S.C. § 707(a) or 305(a)(1), and the trustee objected to dismissal.
Ruling: 
Debtor who after filing became financially able to pay creditors was denied a motion to dismiss the debtor's case since there was still risks that creditors would not get paid.
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In re Vaske

The debtors obtained an order reopening their case under chapter 7. The debtors filed a motion to avoid nonpurchase money, nonpossessory liens held by the creditors, for machinery and equipment that the debtors claimed were used in their farming operation. One of the creditors objected to the reopening of the proceeding.
Ruling: 
Court denied the creditor's motion for relief from the court's order to reopen a case since the property at issue was exempt under state law and the creditor had not made any prior effort to recover the property.
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