In this short opinion, the Court dismissed an involuntary chapter 7 case because the petitioning creditor and the alleged debtor were the same individual. The Court found that 11 U.S.C. § 303 does not permit one person to act in these two capacities and an involuntary petition may not be filed voluntarily.
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Judge Bianca M. Rucker
The Court found that the debtor’s debt to Simmons Bank was not incurred through false pretenses or false representations under § 523(a)(2)(A) and was not the result of a willful and malicious injury under § 523(a)(6). As a result, the Court held that the debt in question was dischargeable.
This case was filed as a chapter 7 and converted to a chapter 13 on the debtors’ motion over the chapter 7 trustee’s objection. Two law firms and a real estate agent employed by the chapter 7 trustee prior to the case’s conversion filed proofs of claim and applications for administrative expenses, seeking priority treatment in the chapter 13. The debtors objected, arguing that the charges in the claims and applications were excessive and unreasonable, and that the work performed was unnecessary. The Court disallowed the claim of the real estate agent and denied the associated application for administrative expenses because the fees sought by the agent were premised upon unusual payment terms that were not included in the trustee’s application to employ the agent, which prevented the debtors from having notice of the terms. The Court held in abeyance the remaining claims and applications filed by the law firms until the chapter 13 case progressed to a point that would allow the Court to determine whether the work performed by the law firms when the case was a chapter 7 resulted in a benefit to the chapter 13 estate that was proportional to the fees and expenses charged by the firms.
The Court denied the debtor’s motion to avoid lien under 11 U.S.C. § 522(f) because the underlying state court order was not a judgment and, therefore, did not give rise to a lien under Arkansas law.
Judge Richard D. Taylor
A chapter 13 trustee may, but is not obligated, require the entry of an order awarding administrative fees prior to distributing retained funds to debtor’s counsel.
A claim, or right to payment, immediately implicates a debt, or liability, for bankruptcy attendant purposes.
Plaintiff, the beneficiary of a state court judgment based on breach of contract, did not prove any further damages or the judgment balance nondischargeable based on evidence of additional conduct sufficient to meet the standard of a willful and malicious injury.
Chief Judge Phyllis M. Jones
Court held debtor’s objection to claim is sustained in part and overruled in part, finding that parts of the claim, which primarily arose from judgments entered against the debtor in favor of his ex-wife for attorney’s fees and costs awarded in the former spouses’ state court domestic relations case, are in the nature of support and as such are nondischargeable domestic support obligations entitled to priority treatment pursuant to 11 U.S.C. § 507(a)(1)(A). Court found other parts of the claim were not proven to be in the nature of support and as a result are not domestic support obligations entitled to priority status.
Court held “abandonment” of a claim is not a proper basis for disallowing an otherwise allowed claim. If disbursement checks remain unpaid, the Trustee should treat the funds as unclaimed funds under Section 347(a) of the Bankruptcy Code.
Chapter 7 Debtor’s actions in his prior Chapter 11 case did not support an objection to discharge under Section 727(a)(7) as the Debtor cannot be an insider of himself. U.S. Trustee’s objection to the Debtor’s discharge under Section 727(a)(2), (a)(3), (a)(4), and (a)(7) was denied.