http://www.cob.uscourts.gov Opinions - U.S. Bankruptcy Court en-us Tue, 18 Jun 2013 21:30:41 MDT Copyright: (C) 2013 U.S. Bankruptcy Court Debtor sought dismissal of plaintiff's claim under 11 U.S.C. § 523(a)(4), arguing plaintiff had failed to adequately plead fraudulent intent for an embezzlement claim. The Court denied the motion, holding that the requisite mental state required to establish a claim for embezzlement is "animus furandi" or intention to steal. An embezzlement claim does not require use of the word "fraud," nor allegations that a debtor made an intentional misrepresentation, as is the case for a claim under § 523(a)(2). Rather, as demonstrated by the historical development of embezzlement, such claim requires misappropriation of property accompanied by the intent to permanently deprive. http://www.cob.uscourts.gov/opinions.asp Tue, 11 Jun 2013 13:37:57 MDT Former Chapter 7 trustee and his counsel filed a motion to reconsider the Court's order converting the debtors' case from Chapter 7 to Chapter 13. In the alternative, the trustee sought reconversion of the case to Chapter 7 pursuant to § 1307(c). The issue of bad faith is a question of fact determined by the totality of the circumstances, and this includes both pre-petition conduct and post-petition conduct during the Chapter 7 case. This Division adopted a shifting burden of proof for Marrama bad faith conversion hearings consistent with the conversion procedures set forth in L.B.R. 1017 1. The Court determined the initial burden should be on the debtor seeking to convert a case from Chapter 7 to demonstrate (1) the case has not been previously converted, and (2) the debtor is eligible to be a debtor under the new chapter. If the debtor establishes these requirements, the burden shifts to the objecting party to establish the debtor is seeking the conversion in bad faith. Based on the evidence presented in this case, the Court concluded the debtors satisfied their initial burden of proof, and the trustee did not satisfy his burden of proving the debtors sought conversion in bad faith. Therefore, the Court denied the motion to reconsider. http://www.cob.uscourts.gov/opinions.asp Fri, 31 May 2013 11:15:46 MDT The Debtor purchased the assets of a pool hall and sports bar business from the Creditor. Debtor made a cash down payment and the Creditor took a promissory note for the balance of the purchase price. Debtor granted Creditor a blanket lien against all of its assets to secure repayment of the note. The Debtor defaulted and Creditor commenced legal proceedings in state court. Thereafter, Debtor filed its petition under chapter 11 in order to reorganize its business. The Creditor filed its motion for relief from stay and a separate motion to prohibit use of cash collateral only 31 days following the petition date. The Debtor's post-petition operations were unprofitable and, in just two months, over $25,000 of new unpaid tax debt had resulted from the Debtor's operations. Under the circumstances, even at a very early point in the Debtor's reorganization efforts, the Court could not find a likelihood of successful reorganization or that the Creditor's interest in its collateral was adequately protected. The Court granted the Creditor's motions to lift the stay and to prohibit use of cash collateral. http://www.cob.uscourts.gov/opinions_notpublished.asp Tue, 28 May 2013 09:17:36 MDT