In re Donald Harry Allen, Case No. 12-24413 ABC; 11 U.S.C. § 522(b). Trustee's allegations concerning debtor's conduct in failing to turnover non-exempt property did not demonstrate "bad faith" in claiming exemptions such that exemptions would be denied.
Posted: 5/16/2013 8:02:32 AM
LAR MHP Holdings, LP v. Robert D. Mordini, Jr., et al (In re Robert D. Mordini, Jr.), Adv. Pro. No. 11-1920 ABC ("related to" jurisdiction under 28 U.S.C. § 1334(b)). The Court dismissed non-debtor plaintiff's state-law claims against other non-debtor entities for lack of subject matter jurisdiction. The Court ruled that the economic effect of litigation on the value of a separate non-debtor entity in which a debtor owns an equity interest is not sufficient to confer "related to" jurisdiction under 28 U.S.C. § 1334(b) on the bankruptcy court.
Posted: 5/3/2013 8:02:32 AM
In re Carter, Case No. 11-13475 ABC; (trustee's objection to claim under § 502(d))
The Court denied Chapter 7 trustee's objection to claim under § 502(d) because trustee had not obtained a judicial determination of the avoidability of the transfer from the debtor to the claimant.
Posted: 4/30/2013 3:33:06 PM
In re Castro, Case No. 11-17771 ABC; (court denied motion to open asset case to list previously unscheduled creditor)
In re Castro, Case No. 11-17771 ABC; 11 U.S.C. §§ 350(b), 523(a)(3). The Court denied debtors' motion to reopen their Chapter 7 "asset" case to add a creditor. Reopening to add a previously unscheduled creditor in this situation will not result in discharge of the debt unless creditor had notice or actual knowledge of the case in time to file a timely proof of claim. Posted: 4/26/2013 12:20:03 PM
"In re Andrew and Pamela Jaussi, Case No. 12-34062 ABC
Chapter 7 Trustee filed motion to sell real property free and clear of liens under 11 U.S.C. § 363(f)(1) and/or (3). Trustee proposed to sell property to holder of first deed of trust for less than the aggregate face amount of the first deed of trust plus two junior judgment liens. The Court denied the Trustee's Motion because neither § 363(f)(1) or (3) applied.
Posted: 3/19/2013 2:30:51 PM
Robertson B. Cohen, Chapter 7 Trustee v. Prudential Insurance Company, et al., Adv. Pro. No. 11-1481 ABC (In re Marlene Moosman, Case No. 10-32206 ABC); C.R.S. § 13-54-102(1)(l)(A).
The Court ruled in favor of the Chapter 7 trustee and against the debtor on cross-motions for summary judgment, construing the Colorado exemption of the cash surrender value of a whole life insurance policy to exclude increases in "cash value" of the policy during the 48-month period immediately preceding the bankruptcy. The debtor contended that because "cash surrender value" of the policy declined during that period, no exclusion from the exemption applied.
Posted: 7/6/2012 12:36:25 PM
- "In re: 11-1723-ABC Durwick v Nizhoni et al
In granting a summary judgment against plaintiff/debtor in this adversary proceeding; the Court ruledthat the postpetition vesting of title under C.R.S. § 38-38-501; following a prepetition public trusteeforeclosure sale; was not a voidable "transfer" for purposes of 11 U.S.C. § 549(a).
Posted: 6/6/2012 8:18:50 AM
In re Brundage-Bone Concrete Pumping, Inc, case 10-10758abc
In this ruling the Court denied lender/lessor's application for reimbursement of their legal expenses as a priority administrative expense claim, notwithstanding their important role in this Chapter 11 reorganization effort, concluding it did not amount to a necessary, "substantial contribution" under 11 U.S.C. sections 503(b)(3)(D) and 503(b)(4).
Posted: 5/18/2012 9:28:28 AM
- Diamond v. Vickery (In
re Terry Kenneth Vickery), Adv. Pro. No. 11-01164 ABC 11 U.S.C.
§§ 523(a)(2), (a)(4), and (a)(6), and collateral estoppel
Plaintiff judgment creditor's motion for summary judgment based
on issue preclusion was denied. The Court analyzed the
preclusive effects of Plaintiff's two judgments according to the
law of the forums in which they were rendered. With respect to
the judgment from the federal district court in California, the
Court could not determine from the jury verdict that the
elements necessary for nondischargeabilty under 11 U.S.C. §§
523(a)(2), (a)(4), or (a)(6) had been necessarily decided. With
respect to the Colorado judgment, issue preclusion did not apply
because the judgment was pending on appeal.
10/19/2011 5:40:42 PM
- In re Neil W. Elliot, Case No. 10-31663ABC; 11 U.S.C. § 522 (b)(1) and (3), C.R.S. § 38-41-207.
Trustee objected to Debtor's claim of "homestead proceeds" exemption for surplus funds from public trustee's foreclosure sale of Debtor's former residence which were held in a segregated bank account. Though Colorado's exemption statute for homestead proceeds explicitly refers only to proceeds from sale by owner or sale following levy and execution, the Court predicted that the Colorado Supreme Court would liberally construe the statute to apply to proceeds from public trustee sale. Debtor's exemption was upheld.
Posted: 5/12/2011 9:31:37 AM
Corona Sierra Colorado, Inc. v. Scott W. Brennan and Norma Louise Brennan, Adv. Pro No. 10-1486 ABC; 11 U.S.C. 523(a)(4); Colo. Rev. Stat. § 38-22-127; Colo. Rev. Stat. § 18-4-405
In its motion for summary judgment, Plaintiff sought to establish that a debt owed by Defendant pursuant to the Colorado Mechanics Lien Trust Fund Statute, Colo. Rev. Stat. § 38-22-127, was nondischargeable pursuant to 11 U.S.C. 523(a)(4). Plaintiff also sought treble damages, plus interest and attorneys' fees, pursuant to Colorado's Rights in Stolen Property Statute, Colo. Rev. Stat. § 18-4-405, along with a summary judgment that such award was nondischargeable.
The Court determined that – notwithstanding the statutory language limited to subcontractors, laborers, and suppliers – Plaintiff, a general contractor, had standing under the particular circumstances of this case to assert a claim under the Mechanics Lien Trust Fund Statute. The Court went on to determine that Defendant had committed defalcation while acting in a fiduciary capacity, rendering the debt owed by Defendant's company to Plaintiff nondischargeable pursuant to 11 U.S.C. 523(a)(4).
The Court also determined that, because Plaintiff had failed to provide evidence of a specific violation of Colorado's Civil Theft Statute, Colo. Rev. Stat. § 18-4-401, arising from Defendant's use of trust funds, Plaintiff had failed on summary judgment to establish a right to treble damages and attorneys’s fees under Colo. Rev. Stat. § 18-4-405.
- J. Hunter Banbury v. Bowen W. Banbury (In re Bowen W. Banbury), Adv. Pro. No. 10-1125 ABC; 28 U.S.C. §§ 157 and 1334.
In dischargeability litigation, Plaintiff sought to compel joinder of Debtor's wife and trustee of trust of which Debtor was beneficiary so that all claims raised in Debtor's answer and counter-claims could be resolved. The purely state-law claims between Plaintiff, the Debtor, and the parties sought to be joined were raised or could be raised by the parties in a state court lawsuit that was pending at the time Debtor filed bankruptcy. Because of the uncertainty regarding the extent of the Bankruptcy Court's jurisdiction over all claims sought to be litigated in the dischargeability proceeding, the Bankruptcy Court's inability to conduct a jury trial, and in the interest of judicial economy, the Court abstained from hearing the state law claims and granted relief from the automatic stay to allow these claims to be determined and liquidated by the state court. The Court reserved its concurrent jurisdiction to determine the dischargeability of any debt found to be owed by the Debtor to Plaintiff at the conclusion of the state court proceedings.
Posted:05/27/2010 7:15:30 AM
- Hill v. Gibson Dunn & Crutcher LLP (In re ms55, Inc.), Adversary Proceeding No. 04-1650 ABC.
11 U.S.C. §544. Chapter 7 trustee was unsuccessful in his claims against law firm for aiding and abetting and conspiring to breach fiduciary duties owed by directors and officers of debtor corporation to unsecured creditors. The Court found that, under Delaware law, directors and officers owed no duties to creditors. Even if Colorado law applied, limited duty of officers and directors of insolvent corporation not to favor their interests at the expense of general creditors' claims was not breached by the conduct of officers and directors in granting a security interest for antecedent debt to insider in connection with new loan which was intended to rehabilitate the debtor.
Posted: 12/10/2009 7:51:30 AM
In re Jennie Mae Smith, Case No. 10-36842 ABC; 11 U.S.C. §§ 327(e), 547(b)
Debtor's application for her counsel to be employed as special counsel to pursue a preference action against a creditor was denied because only the Chapter 13 Trustee may exercise avoidance powers in a case under Chapter 13, and the application to employ special counsel was not filed by or on behalf of the Chapter 13 Trustee.
Posted: 9/13/2010 7:58:01 AM
Summary of In re Rutt, 07-13448 ABC, Docket #76 (September 10, 2010). 11 U.S.C.§§ 1327 and 1329, post confirmation modification of Chapter 13 plan to strip off second mortgage against residence.
Debtor sought to modify his confirmed Chapter 13 plan to strip off the second mortgage of a secured creditor due to decline in the value of his residence. Debtor’s confirmed plan treated the creditor as fully secured and paid it directly in accordance with the terms of the loan. Judge Campbell adopted the reasoning of In re Nolan, 232 F.3d 528 (6th Cir. 2000), and In re Cruz, 253 B.R. 638 (Bankr.D.N.J. 2000), and denied Debtor’s motion. The Court held that section 1329 of the Code does not permit a reclassification of a creditor from secured to unsecured.
Posted: 9/13/2010 7:58:01 AM
In re: Sanchez, Case No. 09-36815 ABC.
Chapter 13 Trustee objected to confirmation of debtor's plan because in applying the "means test," the debtor deducted debt service on a "stripped off" junior mortgage. The Court sustained the objection and denied plan confirmation for debtor's failure to commit necessary "projected disposable income" to fund the plan as required by 11 U.S.C. § 1325(b).
In re Jerold and Monica Brown, Case No. 07-22718 ABC; 11 U.S.C. §§ 1325(b)(1)(B), 1325(b)(4)(October 10, 2008).
In a case involving debtors with income above the applicable median income, the Court sustained the Chapter 13 Trustee's objection to confirmation of a plan of a duration which was less than the 5 year "applicable commitment period." Under the agreed facts, debtors' "projected disposable income" was zero. Nevertheless, the Court denied confirmation of debtors' plan because it would not pay "allowed unsecured claims" in full during the 42 month period proposed in violation of 11 U.S.C. § 1325(b)(4)(B). The applicable commitment period is a fixed period of time which a plan must span even if the debtor has no "projected disposable income."
In re Christopher and Mindi Barajas, Case No. 08-13684 ABC; 11 U.S.C. §§ 1325(a)(3), 1325(b)(Transcript of Oral Ruling, August 11, 2008, Docket #57).
The Court denied confirmation of the Debtors' Chapter 13 plan based on failure of the Debtors to pay all of their "projected disposable income" into the plan. It was improper for the Debtors to deduct from their "current monthly income" the payment for a secured debt on a vehicle which the debtors surrendered to the secured creditor beyond the "reasonable time" for disposition of the collateral allowed the secured creditor under applicable state law; after that, there is nothing "contractually due" to a secured creditor on the loan. See, § 707(b)(2)(B)(iii)(I).
The Court also ruled that where the debtors had proposed payment of more than what was required by the "disposable income" definition in § 1325(b)(2), a § 1325(a)(3) good faith objection to confirmation, based only on the amount proposed to be paid under the plan, could not be sustained.
- In re Odom 08-25341 ABC
"Projected Disposable Income;" 11 U.S.C. 1325(b)(1)(B) and (b)(2).
Chapter 13 debtors proposed a plan to which they contributed slightly more income than they would be required to when using "current monthly income" as defined in 11 U.S.C. §101(10A) ("CMI"). An unsecured creditor objected arguing that debtors were not contributing all their projected disposable income to the plan. The creditor maintained that Debtors' actual monthly income, projected to be received during the term of the plan, was greater than CMI requiring debtors to pay more into their plan. Both debtors and creditor argued the holding of In re Lanning, 545 F.3d 1269 (10th Cir. 2008), petition for cert. filed 77 U.S.L.W. 3449 (Feb.03, 2009)(NO.08-998) to support their respective positions. The Court distinguished the facts of Lanning and denied confirmation holding that debtors must pay into the plan that which is actually available to them.
Posted: 6/25/2009 1:59:43 PM
| Other Opinions of Note:
- In re Shepard,
Case No.10-41987 ABC, Docket #53 , (September 16, 2011) 11
U.S.C. §524(c)(3) and (6).
Prior to the entry of the
discharge order, the Chapter 7 debtors and one of their
secured creditors ("Creditor") entered into a reaffirmation
agreement. Although debtors filed their case with the advice
and assistance of an attorney, the attorney had not signed
the declaration in support of the reaffirmation agreement.
Creditor and debtors, on their own behalf, filed a joint
motion to requesting a hearing to consider approval of the
reaffirmation agreement. The Court denied that request
because debtors were represented by an attorney during the
course of negotiating the reaffirmation agreement.
Following the entry of the discharge order, debtors'
attorney moved to withdraw from representing the debtors.
The court authorized the attorney's withdrawal. A month
later, Creditor and debtors filed a second joint motion
wherein they asserted that the debtors were then pro se and
requested the court to set a hearing to consider approval of
the same reaffirmation agreement under 11 U.S.C.
The Court denied the second joint
motion. The Court relied on its opinion in In re Shepard,
453 B.R. 416 (Bankr.D.Colo 2011) (Shepard I). In Shepard I,
the court explained its conclusion that an attorney
representing a Chapter 7 debtor is presumed to represent the
debtor during the course of negotiating a reaffirmation
agreement, regardless of whether he or she filed the
declaration required by section 524(c)(3). The court ruled
that the attorney's later withdrawal from representation of
debtors did not change the court's conclusion that the
attorney represented the debtors during the course of
negotiating the reaffirmation agreement. Thus, no hearing
could be set.
Posted: 10/6/2011 8:35:38 AM
Britney J. King v. 1602 LLP, et al., A.P. No. 10-1432 ABC (In re Britney J King,, Case No. 10-15870 ABC); 28 U.S.C. § 1334(b)
The Court dismissed Chapter 7 Debtor's claims for violation of the Fair Debt Collection Practices Act ("FDCPA"), 16 U.S.C. §1692, et. seq., and the Colorado Consumer Protection Act, C.R.S. § 6-1-101, et seq., for lack of subject matter jurisdiction. Where the alleged violations took place after Debtor's bankruptcy case was filed, the claims were not property of the Chapter 7 estate and their resolution could not "conceivably have any effect on the estate being administered in bankruptcy." Thus, the Bankruptcy Court did not have "related to" jurisdiction over these claims under the 10th Circuit's Gardner test.
Marvel Concrete, Inc. v. Helmke, Adv. Pro. No. 06-1264 ABC; 11 U.S.C. § 523(a)(4), C.R.S. § 38-22-127(5); C.R.S. §§ 18-4-401, 18-4-405.
The Court denied the debtors' motion for reconsideration of its order awarding treble damages to a creditor upon proof of the debtors' violation of the Colorado Mechanics' Lien Trust Fund Statute. The Court's finding that the debtors had the subjective hope and intent to keep their business open so that all creditors would eventually be paid did not negate its finding that they knowingly used the specific funds held in trust in a manner which was practically certain to deprive the creditor of the use and benefit of those trust funds, thereby satisfying the elements of the Colorado theft statute, C.R.S. § 18-4-401.
Simon E. Rodriguez v. Scott Whatcott, Adversary No. 07-1500 ABC (In re Christopher S. Walker, Chapter 7 Case No. 07-17102 ABC). §§ 547(b)(5) and 551.
Voidable preference. Where liens senior to a judgment lien sought to be avoided by a trustee under § 547(b) aggregate more than the value of the encumbered property, but one of the senior liens has previously been avoided by the trustee and preserved for the benefit of the bankruptcy estate pursuant to section 551, the previously avoided lien is excluded from the calculation in determining whether a transferee of an alleged preference thereby received more than he would receive in a Chapter 7 for § 547(b)(5) purposes.
In re Cheryl L. Perez, Chapter 7 Case No. 05-25535 ABC; 11 U.S.C. §§ 327-330; Bankruptcy Rules 2014 & 2016.
The Court denied special counsel to Chapter 11 debtor-in-possession's application for professional fees and costs for failure to comply with the Bankruptcy Code and Rules' disclosure requirements.
- In re Suchkova, 05-17862 ABC and In re Hounsom, 05-42529 ABC, slip op. (Bankr.D.Colo. February 8, 2006) (11 U.S.C.§ 363 sale motions; and Fed.R.Bankr.P. 6004 and 2002(c)(1)).
Judge Campbell issued an order authorizing the Chapter 7 trustee to sell property of the estate but did not issue the order pursuant to section 363(f) of the Code authorizing the sale free and clear of liens because the trustee had not alleged that the property to be sold was encumbered nor had he identified lienholders and served them with the notice and motion in the manner prescribed by either 2002(g) or 7004. If the property to be sold is unencumbered, the trustee must include that allegation in his motion. In addition, the notice pursuant to L.B.R. 202 must contain the information regarding the date and time of a public sale or terms and conditions of a private sale as required by F.R.Bankr.P. 2002(c)(1). Posted 02/09/06