Category Archives: WIS

Reedsburg Util. Comm’n v. Grede Foundries (7th Cir.)

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Wisconsin smelting plant owed more than $1.3 million in delinquent utility charges to the local municipal utility when it filed for Chapter 11. Months later, despite the Automatic Stay, a utility company implemented a process pursuant to Wisconsin Statutes and Local Ordinances 66.0809 and 66.0627 by which the plant’s unpaid utility bills became a lien against the Debtor‘s property. Both the Bankruptcy and District Courts found that none of the exceptions to the Automatic Stay applied to make their actions. They were, in fact, a violation of the Stay.  The 7th Circuit Court of Appeals affirmed, holding that no exception to the Stay applied and the offending utility company creditor did not obtain a pre-petition security interest in the plant’s property by providing services or by giving notice in the form of billing. Finally, the 7th Circuit agreed with the District Court that the utility bills produced did not amount to a “tax or special assessment” that would have exempted them from the operation of the Stay.

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In re Richie, 353 B.R. 569 (Bkrtcy.E.D.Wis. 2006). (Pepper, Judge).
Debtor who lacks the ability to repay creditors because she has not engaged in a broad employment search, does not wish to work outside her chosen field, does not wish to work within her chosen field outside of southeastern Wisconsin, and takes this position at the expense of her creditors, abuses the provisions of Chapter 7. Court concluded that it must look at the debtor’s ability to repay creditors at the time of the hearing on a motion to dismiss — if the inability to repay is self-imposed, then the court may consider this fact in its assessment of the “totality of circumstances.”

In re Balcerowski, 353 B.R. 581 (Bkrtcy.E.D.Wis. 2006) (Pepper, Judge)
Debtor calculated disposable income using the 6-month average of what had actually been deducted from his paycheck and trustee objected that for many debtors the amount actually withheld for taxes often exceeds what the taxpayer is ultimately required to pay (hence year-end tax refunds) creating artificially low disposable income figure. Court agreed and also noted that the amount actually deducted from each paycheck is within the control of the debtor. Accordingly, Court ruled that debtor must deduct its best estimate of what should be deducted, not the actual average of what has been deducted in the relevant 6 month period.

In re Grydzuk, 353 B.R. 564 (Bkrtcy.N.D.Ind. 2006) (Klingeberger, Judge)
Debtor’s chapter 13, filed less than 4 years prior to subsequent chapter 13 filing, then converted to chapter 7 in which a discharge was granted, was deemed filed as a chapter 7 within the 4-year period prior to subsequent chapter 13 filing prescribed by 11 U.S.C. § 1328(f)(1); thus debtor was not eligible for a discharge. Had the case been deemed filed as a chapter 13, the time period at issue is only 2 years; since the original chapter 13 was filed more than 2 years before filing the subsequent chapter 13, debtor would have been eligible for discharge under 11 U.S.C. § 1328(f)(2).