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northern district of illinois

HSBC Bank USA v. United Air Lines Inc. (In re UAL Corp.)

Ruling
Plan confirmation rendered creditor's argument for adequate protection moot.
Procedural posture

Chapter 11 secured creditor filed a motion pursuant to Fed. R. Civ. P. 59(e) to alter or amend the court's judgment, which determined the value of a security interest that creditor held in debtor's lease of maintenance space at an airport. Creditor sought an award of adequate protection pursuant to 11 U.S.C. § 363(e).

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opinion summary, case decided on January 22, 2007 , LexisNexis #0207-057

In re Starling

Ruling
Chapter 7 discharge vacated and case converted to chapter 13 upon second, higher appraisal of debtor's home.
Procedural posture

Chapter 7 debtors filed a combined motion to convert their chapter 7 case to chapter 13 pursuant to 11 U.S.C. § 706(a) and vacate the discharge entered in the chapter 7 case. Trustee opposed the motion, and in the alternative moved that debtors' case be reconverted to chapter 7 should conversion from chapter 7 to chapter 13 be permitted.

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opinion summary, case decided on January 11, 2007 , LexisNexis #0207-063

In re Morales

Ruling
Surrender of vehicle subject to hanging paragraph did not result in full satisfaction of claim.
Procedural posture

Creditor filed an objection to the confirmation of chapter 13 debtor's plan.

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opinion summary, case decided on January 11, 2007 , LexisNexis #0207-048

In re Randle

Ruling
Debtor could deduct current mortgage payment on property to be surrendered in calculating disposable income under means test.
Procedural posture

The U.S. Trustee moved for an order dismissing debtor's chapter 7 bankruptcy filing pursuant to 11 U.S.C. § 707(b)(1) as an abuse of the provisions of chapter 7 on a claim that debtor's income calculated under the "means test" in section 707(b)(2) was high enough to create a presumption of abuse. At issue was whether section 707(b)(2)(A)(iii) permitted debtor to deduct installment payments due on secured debt that she intended to surrender.

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opinion summary, case decided on December 19, 2006 , LexisNexis #0207-006

Ungaretti & Harris LLP v. Steinberg (In re Resource Tech. Corp.)

Ruling
Former chapter 11 trustee's counsel was not entitled to surcharge for services provided to perserve collateral prior to conversion to chapter 7.
Procedural posture

After conversion of a debtor's bankruptcy case from chapter 11 to chapter 7, plaintiff counsel to the former chapter 11 trustee, brought an adversary proceeding against defendant chapter 7 trustee in the converted case, claiming entitlement to payment for counsel's services from funds obtained in a prior settlement. The trustee moved for approval of a settlement which would provide a cash payment to counsel.

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opinion summary, case decided on December 04, 2006 , LexisNexis #0107-012

Paloian v. Grupo Seria S.A. de C.V. (In re GGSI Liquidation Inc.)

Ruling
Corporation that purchased note from bank with knowledge of debtor's bankruptcy collaborated in bank's stay violation.
Procedural posture

Chapter 7 trustee filed a motion to amend the court's judgment to: (1) add a judgment in favor of trustee and against defendant corporation for violation of the automatic stay in collaboration with defendant bank, (2) increase the damages awarded against the bank assertedly based on its violation of its duties under U.C.C. § 9-207; and (3) increase the amount of punitive damages. Trustee also filed applications for attorneys'fees and expenses.

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opinion summary, case decided on November 27, 2006 , LexisNexis #0107-054

In re International Zinc Coatings & Chem. Corp.

Ruling
Voluntary dismissal granted where continuation would not benefit debtor or creditors.
Procedural posture

Chapter 7 debtor filed a motion to dismiss its bankruptcy case pursuant to 11 U.S.C. § 305(a)(1).

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opinion summary, case decided on November 17, 2006 , LexisNexis #1206-037

In re McCoy

Ruling
Claims of bank and notary based on allegation that debtor forged spouse's signature on loan documents alowed over debtor's objection.
Procedural posture

Creditors, a bank and a notary, filed claims against the debtor. The bank acknowledged that one of its claims was a duplicate claim. The claims arose from allegations that the debtor forged his former spouse's signature on loan documents. The debtor objected to the claims, contending that the claims were for reimbursement or contribution of an entity that was liable with the debtor pursuant to 11 U.S.C. § 502(e)(1).

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opinion summary, case decided on November 16, 2006 , LexisNexis #1206-049

In re Barton

Ruling
County clerk sanctioned for violating stay by attempting to collect interest and costs on taxes paid through chapter 13 plan.
Procedural posture

Pending was debtors'motion seeking sanctions against the County Clerk of Will County, Illinois, for violating the automatic stay of 11 U.S.C. § 362. The motion sought: (1) a declaration that the Clerk's actions violated the stay; (2) an injunction prohibiting a tax sale and any further collection activities; and (3) compensatory damages and attorney fees under section 362(k). The County moved to dismiss the motion for failure to state a claim.

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opinion summary, case decided on November 07, 2006 , LexisNexis #1206-073

Illinois Dept of Revenue v. Envirodyne Indus.

Ruling
Bankruptcy court properly allowed debtor to offset prepetition income with postpetition losses for tax purposes.
Procedural posture

Plaintiff, the Illinois Department of Revenue, challenged an order of the bankruptcy court granting an objection by defendants, a taxpayer corporation and several of its subsidiaries, to the Department's proof of claim. The bankruptcy court found that the corporation could carry back its net operating losses from 1988 and 1989 to offset taxable income from prior tax years and held that no additional taxes were due.

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opinion summary, case decided on October 31, 2006 , LexisNexis #1206-083