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Opinions

Notice: Not all of the Judges Opinions will be made available on this site. Individual Judges have the option of specifying that all, some or none of their opinions be posted.

Judge Ben T. Barry

The debtor filed a motion for contempt against a creditor that would not turnover funds withheld from the debtor’s tax refund after the debtor received his discharge. Although the debtor scheduled the creditor on his petition, the debtor used an incorrect address. The debtor argued that the “no-asset rule” makes the errant listing irrelevant because the debt would have been discharged regardless in this no-asset case. The creditor argued that it deserved the opportunity to assert the non-dischargeability of its debt under § 523(a)(2) for fraud. The court found that § 523(a)(3)(B) was applicable in this instance and denied the debtor’s motion for contempt.

The Court granted the debtor's oral Rule 15(b) motion made at trial and, upon consideration of the debtor's additional ground for objection to the creditor's PACA claim, sustained that objection by finding that the creditor had failed to preserve its PACA trust rights under 7 U.S.C. 499e(c)(3) when it did not include the payment terms in its invoices.

The court found that property a chapter 13 debtor received as a result of a Missouri beneficiary deed when her mother died was not property of the estate in the debtor's converted chapter 7 case pursuant to § 348(f).

The Court sustained the debtor's objection to a creditor's 503(b)(9) claim for administrative expenses on the basis that the creditor did not file a claim by the Court-ordered deadline. The Court found that the creditor did not prove excusable neglect under Rule 9006, was not entitled to amendment of its PACA claim to reflect the administrative expense, and had not established an informal proof of claim through its PACA claim and correspondence with the debtor.

The court overruled the debtor’s objection to the creditor’s PACA claim finding that the creditor was not an agent of the debtor when the parties agreed that the creditor would provide shipping; the agreement changed the parties alleged FOB contract to an FOB sale at delivered price contract. The court also recognized that state law controlled as to the amount of interest the creditor could charge.

In this chapter 9 case, the Court found that a regional solid waste district created pursuant to Arkansas Code Annotated 8-6-701 was not specifically authorized by the state of Arkansas to be a debtor as required by 109(c)(2). Because the district was not eligible to be a debtor under 109, the Court dismissed the case under 921(c). As a second basis for dismissal, the Court found that the district had not filed the case in good faith because it had opted not to collect a statutorily authorized service fee that would have generated revenue for the district.

The court overruled the debtor’s objection to the creditor’s PACA claim finding that freight and fuel surcharges were sums owing in connection with the parties’ produce transaction and, therefore, covered under the PACA trust. The court also found that the portion of the federal regulation purporting to give guidance to what charges could be included as a “sums owing” under the statute was contradictory to the statute. Finally, the court found that interest on the pre-petition claim was also a “sums owing” related to the PACA transaction and covered under the PACA trust, but recognized that state law controlled as to the amount of interest the creditor could charge.

Audrey R. Evans

In this Chapter 7 case, the Debtors formed a joint venture to conduct their farming operations; the Court previously held that the joint venture was not a separate legal entity. On competing motions for summary judgment, the Court held that the joint venture could grant legally enforceable security interests in property owned by the Debtors individually and that the creditors had perfected security interests in the Debtors' rice and farming equipment with the exception of certain vehicles for which the creditors' names were not listed on the certificates of title. Specifically, the Court found that financing statements filed in the name of the joint venture were not seriously misleading and the creditors filed financing statements in the appropriate location. The Court also determined that a portion of the Debtors' rice crop designated as the "landlord's share" under a lease agreement was subject to a landlord's lien and therefore belonged to the Trustee, as the successor-in-interest to the landlord. The Court further found a post-petition transfer of funds to a creditor was avoidable under 11 U.S.C. § 549, but that the Court must decide a factual issue to determine whether the creditor had a security interest in those funds and to calculate the amount of the Bank's secured claim under 11 U.S.C. §§ 502(h) and 506(a). The Court also denied summary judgment on other issues which required additional findings of fact, including: surcharge, preferential transfers, disallowance of claims, equitable subordination, and violation of the automatic stay. Bank of England v. Rice et al. (In re Webb), 2014 WL 5472568 (Bankr. E.D. Ark. Oct. 23, 2014).

The Court granted the Debtors’ motion to disgorge the standing Chapter 13 trustee’s percentage fee when the Debtors’ case had been dismissed prior to the confirmation of a plan. The Court found that 28 U.S.C. § 586(e) does not unambiguously provide for the retention of percentage fees in such cases. Section 586(e) specifies how the percentage fee is to be collected and it must be read in conjunction with 11 U.S.C. § 1326(a), the provision governing the circumstances under which the percentage fee must be returned to the debtor. In re Dickens, 513 B.R. 906 (Bankr. E.D. Ark. 2014).

Judge Richard D. Taylor

When a case is dismissed without a confirmed plan, the standing chapter 13 trustee may remit funds on hand to the debtor and insist that attorneys comply with section 503(b) before deducting any outstanding fees

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