http://www.cob.uscourts.gov Opinions - U.S. Bankruptcy Court en-us Mon, 23 Nov 2009 07:34:07 MDT Copyright: (C) 2009 U.S. Bankruptcy Court The Trustee brought an adversary proceeding against the Debtor, his wife, and a company owned by the Debtor. The Trustee sought a declaratory judgment that property ("Property") placed in a trust ("Trust") - specifically, Debtor's residence and the proceeds of a sale of a Range Rover - were property of the estate. The Trustee further sought turnover of the Property and authority to sell the turned-over property.<br><br> The Court concluded that the Property placed in a spendthrift trust wherein the settlor and beneficiary were the same person was invalid under Colorado. Relying on the Restatement(Second) of Trusts and In re Alagna, 107 B.R. 301 (Bankr. D. Colo. 1989), the Court concluded that where, as here, the Debtor was plainly and unambigously named as settlor and beneficiary, the Trust was not valid. The Court further concluded that the Trust created by the Debtor and his wife was a "sham trust" because of the dominion and control that they exercised over the Trust and because of the disregard for formalities of the trust. In effect, the Debtor and his wife used the Trust assets - the Property - as their own. Consequently, the Court concluded that the Trust Property was property of the estate and must be turned over to the Trustee for sale consistent with 11 U.S.C. &sect; 542. The Court further concluded that, alternatively, the imposition of a constructive trust was appropriate here to prevent unjust enrichment. Because (a) the Debtor retained possession of his real property, (b) the transfers of assets was concealed, (c) the value of consideration for certain transfer was not the reasonable equivalent to the asset transferred, and (d) the Debtor was insolvent or became insolvent soon after the transfer, the imposition of a constructive trust was appropriate also. http://www.cob.uscourts.gov/opinions.asp Fri, 4 Sep 2009 15:46:08 MDT The two chapter 13 plans presented to the Court for confirmation contained language that has become new boilerplate "additional provisions" inserted into plans routinely in this district. In spite of no pending objections, the Court refused to confirm a plan that includes an additional provision purporting to strip liens on personal property (other than vehicles) without either identifying the specific property involved or the affected creditors, without any notice or separate motion, and without any grounds stated for avoidance of the liens. The Court held this provision fails to provide due process to lien holders. But the Court allowed other "additional provisions," establishing a procedure by which the debtors may determine if they have cured their mortgages and are current on their obligations before they emerge from chapter 13, holding these provisions do not impermissibly modify the rights of the mortgage holders. http://www.cob.uscourts.gov/opinions_notpublished.asp Fri, 4 Sep 2009 07:32:38 MDT On remand from the District Court, the Bankruptcy Court concluded that where a Debtor had used a false Social Security number to procure debt, file bankruptcy, and seek a discharge using a false Social Security number, where the Complaint seeking denial of discharge was not going to be pursued by the United States Trustee, the Court would Order the Debtor to provide notice of the impending dismissal of the discharge complaint to all the creditors in his case. Moreover, the Court ordered the Debtor, to the extent possible, to notify the person whose Social Security number was used of the bankruptcy case, the adversary proceeding, and dismissal.<br><br> Relying, as the District Court did, on the <i>Peterson-Marone Const., LLC v. McKissack (In re McKissack)</i>,decision, the Court concluded that creditors in the Debtor's bankruptcy case could object to the dismissal of this case and substitute as party-plaintiff. Moreover, the Court concluded that the unknown person who actually was issued the Social Security number fraudulently used by the Debtor was a party in interest in this case and could be substituted as a party in interest or could even intervene in this action as a right. http://www.cob.uscourts.gov/opinions.asp Thu, 3 Sep 2009 09:53:04 MDT The Court considered confirmation of the chapter 13 plans filed in these four cases. In each case, the home mortgage creditor had objected to language in the proposed plan that set forth procedures: 1) for the creditors' accounting for payments made under the provisions of the plan; 2) for adjudicating disputes relating to mortgage fees and expenses; and 3) insuring that debtors receive timely notice from mortgage creditors of changes to the amount of the mortgage payments. The Court will allow plan language to address each of those issues so long as the language used complies with the Bankruptcy Code and does not create procedures that are unduly burdensome. In each case, confirmation of the proposed plan was denied, and the Court discusses the reasons for the denials. http://www.cob.uscourts.gov/opinions.asp Thu, 16 Jul 2009 07:05:59 MDT "Projected Disposable Income;" 11 U.S.C. 1325(b)(1)(B) and (b)(2).<br><br> 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. &sect;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. http://www.cob.uscourts.gov/opinions.asp Thu, 25 Jun 2009 13:59:43 MDT