Northern District

In re Rodrigues

Movant, the U.S. Trustee, sought dismissal of a chapter 7 case pursuant to 11 U.S.C.S. § 707(b)(1) as presumptively abusive under § 707(b)(2) and as an abuse under the totality of circumstances per § 707(b)(3). At issue was whether, under the test for presumptive abuse, debtors' mortgage obligations on the date of filing were to be included in the "means test calculation" even though debtors intended to surrender the home to the lienholders.
Ruling: 
Inclusion of mortgage payments on property intended for surrender in means test calculation is not grounds for abuse dismissal.
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Consumer case opionion summary, case decided on February 11,2008, LexisNexis #0308-083

Church at San Francisco Where Jesus is Lord v. Winston (In re Church at San Francisco Where Jesus is Lord)

After debtor's voluntary chapter 11 proceeding was dismissed on the request of the parties, debtor filed an adversary proceeding against certain persons who were involved with property that was a part of the bankruptcy estate. At issue was whether the court had subject matter jurisdiction per 11 U.S.C.S. § 1334(b) over the adversary complaint and whether it ought to grant debtor's ex parte application for a temporary restraining order (TRO).
Ruling: 
Bankruptcy court lacked subject matter jurisdiction over post-dismissal adversay proceeding concerning postpetition conduct of third parties.
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Commercial case opionion summary, case decided on February 05,2008, LexisNexis #0308-104

In re Mitchell

The chapter 7 Trustee applied to hire a real estate brokerage firm to market estate commercial real property. The United States Trustee objected, arguing that the firm was disqualified from acting for the estate because one of its principals owned stock in the parent company of the bank which held the first deed of trust on the property and also sat on the board of directors of that company. This connection was disclosed in the application.
Ruling: 
Real estate brokerage firm could be retained to market estate commercial property despite principal's conections with bank holding deed of trust.
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Consumer case opionion summary, case decided on January 18,2008, LexisNexis #0208-107

Bay Area Diamond Wholesalers Inc. v. Polinski (In re Polinski)

Plaintiff creditor filed a complaint against defendant debtor to deny the debtor his discharge under 11 U.S.C. § 727. The creditor alleged three grounds for denying the discharge: (1) that the debtor transferred title of his home to his wife with the intent to hinder, delay or defraud a creditor; (2) that he failed to keep or preserve adequate business records: and (3) that he failed to satisfactorily explain the disappearance of assets.
Ruling: 
Discharge denied due to debtor's failure to account for disappearance of precious gems.
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Consumer case opionion summary, case decided on January 15,2008, LexisNexis #0308017

Locke v. Old Crocker Inn Road LLC (In Levy)

Plaintiff trustee filed an adversary proceeding seeking avoidance of the transfer of funds by the debtors from their trust to defendant limited liability company ("LLC") as a fraudulent transfer, a declaration that the bankruptcy estate had equitable ownership of their property, and a judgment that the LLC be wound up and liquidated.
Ruling: 
Transfer from debtors'trust to LLC for no consideration was fraudulent.
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Consumer case opionion summary, case decided on December 19,2007, LexisNexis #0208-025

In re Ng

Before the court was a motion for a stay pending appeal of the court's September 28, 2007 order requiring that a person who had interests in a certain real property (movant) turn over possession of the real property.
Ruling: 
Sale free and clear of debtor's interests extinguished all remaining rights in property.
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Consumer case opionion summary, case decided on December 13,2007, LexisNexis #0108-115

Cummings v. Educational Credit Mgmt. Corp. (In re Cummings)

Plaintiff debtor initiated a proceeding against defendant creditor to have a student loan obligation owed to the creditor of about $100,000 discharged pursuant to 11 U.S.C. § 523(a)(8). The court held a trial and issued a memorandum opinion.
Ruling: 
68 year old debtor with health problems that prevented continuance of limited family counseling business granted undue hardship discharge of student loan debt.
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Consumer case opionion summary, case decided on November 13,2007, LexisNexis #1207-102

Billing Res. v. FTC (In re Billing Res.)

A chapter 11 debtor sought a court order pursuant to 11 U.S.C. § 105 to enjoin the Federal Trade Commission ("FTC") from prosecuting the enforcement aspect of an action pending in federal district court in Florida (Enforcement Action), to enjoin a receiver appointed by the district court from implementing or enforcing an omnibus order entered in the district court action, and to unblock funds currently held by the debtor in a blocked account.
Ruling: 
FTC enforcement action that would harm reorganization stayed through date certain.
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Commercial case opionion summary, case decided on November 02,2007, LexisNexis #1207-036

Alam v. Swain (In re Swain)

When defendant debtor filed a chapter 7 bankruptcy, plaintiff creditor filed an adversary complaint by which she sought a ruling that a debt owed to her by the debtor was nondischargeable pursuant to 11 U.S.C. § 523(a)(2)(A) and (B). Plaintiff, however, abandoned her claim under section 523(a)(2)(B) before trial.
Ruling: 
Dishonored guaranty executed by third party in favor of creditor with whom debtor had cohabited did not establish fraud on the part of debtor.
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Commercial case opionion summary, case decided on November 02,2007, LexisNexis #1207-068

ATR-Kim Eng Capital Partners Inc. v. Bonilla (In re Bonilla)

Plaintiff creditor filed an adversary proceeding against defendant debtor seeking a determination that its debt was nondischargeable pursuant to 11 U.S.C. § 523(a)(4). The debt arose from a state court judgment in which found that the debtor, a corporate director, had breached his duty of loyalty to the creditor, a minority shareholder. The debtor moved to dismiss contending that a corporate director was not a "fiduciary"under section 523(a)(4).
Ruling: 
Director's complete failure to act to preserve corporate assets was fiduciary defalcation so that debt was nondischargeable.
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Commercial case opionion summary, case decided on October 16,2007, LexisNexis #1107-048

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