7th Circuit Opinion Summaries courtesy of Justia.com
United States v. Rogan
Bankruptcy, Criminal Law, Government, White Collar Crime
River Road Hotel Partners, LLC v. Amalgamated Bank
Bloomfield State Bank v. United States
Bankruptcy, Real Estate & Property Law, Tax Law
Costello v. Grundon
Bankruptcy, Commercial Law, Securities Law
CDX Liquidating Trust v. Venrock Assocs., et al
Bankruptcy, Business Law, Securities Law
Reedsburg Util. Comm’n v. Grede Foundries, Inc.
Bankruptcy, Utilities Law
Kimbrell v. Brown
Bankruptcy, Injury Law
Posted in 101, 109(h), 11 U.S.C. § 707(b)(3), 11 U.S.C. section 365(a), 1112(b), 1307, 1308, 1322(b)(11), 1325(a)(5), 1325(a)(9), 1325(b), 1326(a)(1)(C), 1328, 15 USC 1692k(c), 2002, 28 U.S.C. 1927, 3017(d), 342, 362(c)(3)(A), 362(c)(3)(B), 362(c)(4)(A)(i), 363, 451, 22.214.171.124, 502(b)(6), 510, 521, 522, 523, 526(a), 527(a)(2), 528(a), 528(a)(4), 528(b)(2)(B), 547(b), 550, 550(a), 707, 727, 9019, 9023, 9037, adequate protection, adversary, amendment, appellate court, assets, attorneys, audit, automatic stay, automobile, avoidance, bad faith, bank, bankruptcy, Bankruptcy Rules, BAPCPA, blogging, blogs, bubble, business, business filings, call, case update, cash collateral, ch 13, ch 7, cir 7, consumer, current-events, IL, individual, ND, small business
Tagged Bankruptcy, Commercial Law, Criminal Law, law, Lawyers and Law Firms, Services, United States, United States bankruptcy court
Issued: January 20, 2011 by Judge Doyle
Case #: 09 B 46723, 10 A 01292
The Issue: Whether an individual creditor has standing under § 523(a)(4) to bring a direct action against directors of an insolvent corporation for breach of fiduciary duty.
The Story: Debtor owned a plumbing company. Plaintiff claimed that Debtor breached his fiduciary duty to creditors after the plumbing company became insolvent due to the diversion of company funds to pay for the Debtor’s personal debts. Creditor claimed that the debt was non-dischargeable in bankruptcy under Rule 523(a)(4). The court held that the individual creditor lacked standing. Also a good walk thru on Illinois law about “Special Circumstances Fiduciary Duty.”
Click here to view and download the opinion in .pdf format.
Posted in 523, accounts receivable, adversary, assets, bad faith, bankruptcy, Bankruptcy Rules, business, business filings, ch 7, chapter 7, cir 7, corporation, creditor, debt, discharge, fiduciary, fraud, fraudulent transfers, ND, opinion, property, secured, small business, Uncategorized, unsecured
Harris N.A. v. Gander Partners LLC ,(N.D.Ill.)
Issue: When an LLC is in Chapter 11 reorganization, can a creditor collect directly from the principals of the company instead?
Answer: Apparently not in the Northern District of Illinois
Upshot: Here, the Court upheld an injunction entered by the Bankruptcy Court after determining that
- The participation of these principles was essential to the company’s reorganization
- If these principles were distracted by this lawsuit the reorganization would likely fail
- Many other creditors would be harmed financially if this reorganization failed; and
- The creditor seeking to collect only faced only a temporary stay, anyway.
In the immortal words of Spock, circa Star Trek II, the needs of the many outweigh the needs of the few.
Posted in assets, attorneys, avoidance, bad faith, bankruptcy, business, business filings, case update, ch 11, ch 13, ch 7, cir 7, collateral estoppel, confirmed plan, consumer, corporation, credit, creditor, current-events, data, debt, discharge, ED, fiduciary, IL, individual, ND, opinion, research
Tagged liability of corporate principals
In re Lisa C. Davis, 08-16025
Issued December 16, 2010
By Judge Eugene Wedoff
The Issue: 11 USC 1325(b), introduced by BAPCPA in connection with the notorious hanging paragraph at 1325(a) – states that a plan of reorganization in Chapter 13 must commit all the debtor‘s discretionary income each month or pay creditors in full; or face dismissal. The issue in this case was whether 1325(b) requires the debtor to commit all discretionary income or pay all creditors in full when seeking to modify their confirmed Chapter 13 Plan.
The Upshot: No. 11 USC 1325(b) does not require the debtor’s full commitment of discretionary income or full payment of creditors when a confirmed plan is under consideration. When a debtor sought to modify her plan due to a change in circumstances that would have permitted her to pay less at the outset of the plan and shorten the plan’s commitment period if it had occurred before the initial plan was drawn up, the Court allowed her to use those lower numbers going forward regardless of whether the use of those figures satisfied 1325(b).
Ed. Note: Booyah! Chapter 13 debtors win.
Posted in 1322(b)(11), 1325(a)(5), 1325(a)(9), 1325(b), amendment, bad faith, bankruptcy, BAPCPA, ch 13, cir 7, confirmed plan, cramdown, current-events, disposable, ED, IL, income, judge, legislation, means test, median income, motion, ND, opinion, plan, research, wedoff
In re Braden J. Adolph, 09-32836
Issued: January 28, 2011
By: A. Benjamin Goldgar
The Issues: The proper use and interpretation of 11 USC 707(a) and (b), the dynamic duo of bankruptcy dismissal. Under consideration is the distinction between dismissal for cause via 707(a) and the presumption of abuse in 707(b).
The Upshot: Judge Goldgar engages in a close analysis of 11 USC 707 and determines that bad faith is not a reason to dismiss under 707(a) and only consumer debts can be excepted from discharge under 707(b) – especially in light of BAPCPA. In this case, where an Attorney seeks his fees from a business debtor of his Client, the Court finds him to be out of luck – not a consumer debt, and not a bad faith filing. Boom shakalaka.
Click here to view and download the opinion in .pdf format.
Posted in 707, bad faith, bankruptcy, Bankruptcy Rules, business, business filings, case update, ch 7, cir 7, consumer, corporation, current-events, data, debt, discharge, dismissal, docket, ED, fraudulent transfers, goldgar, IL, individual, judge, legislation, motion, motion to dismiss, ND, opinion, order, research, small business
Tagged Bankruptcy, Bankruptcy Abuse Prevention and Consumer Protection Act, Debt, law, Lawyers and Law Firms, Services, Title 11 of the United States Code, United States
Reed v. City of Arlington (Sep.17) (Cir. 5)
In a Chapter 7 case in which debtors omitted a pending $1 Million+ judgment from sworn statements and filings, district court’s order discharging debts and allowing the Trustee to collect on behalf of the Estate is reversed to protect the integrity of the judicial processes.
Deutsche Bank v. Tucker (Sep. 15) (Cr. 6)
Chapter 13 Debtor claims that she need only cure the amount of her mortgage default that is secured, and that all additional fees and expenses should be treated as unsecured. The bankruptcy court agreed, but the district court vacated and remanded. Following remand the bankruptcy court held that bank fees and advances allowed under the Note, Mortgage, and applicable State law, should be included in the cure amount set forth in the Chapter 13 Plan.
In re: Gebhart (Sept. 14) (Cir. 9)
Court may have property sold and any non-exempt equity distributed even if the property only rose in value after the filing date. In this case the value of debtors’ home increased during his Chapter 7 and the bankruptcy court’s order approving appointment of a broker was affirmed on appeal. The fact that the value of the debtor’s homestead exemption, plus encumbrances, had been equal to the market value of the residence at the time of filing did not prevent the trustee from taking advantage of the windfall.
Posted in adversary, amendment, assets, avoidance, bad faith, bankruptcy, Bankruptcy Rules, BAPCPA, ch 7, chapter 7, cir 5, cir 6, cir 9, confirmed plan, consumer, cramdown, current-events, data, discharge, dismissal, disposable, docket, due process, economics, economy, estate, Fed. R. Bankr. Proc., foreclosure, fraud, fraudulent transfers, individual, liability, Middle class, modification, mortgage, opinion, plan, property, reaffirmation, real property, state court, Westlaw
State-by-State Median Income thresholds as of November 1, 2010
can now be found online at the US Trustee site.
Click on the image below to be taken to the underlying chart on the UST’s Website.
Posted in administrative, Administrative Office of the Courts, attorneys, bad faith, bankruptcy, code, confirmed plan, Congress, consumer, conversion, current affairs, current-events, data, disposable, economy, Executive Office of the UST, Fed. R. Bankr. Proc., filings, government unit, IL, income, individual, IRS, jobs, labor, labor force, lists, means test, median income, Middle class, research, treasury department, trustee, UST