The court found that the debtors’ joint case consisted of two separate debtors with two separate estates being jointly administered. As such, the debtors were only able to claim the exemptions to which they would be entitled individually. The court disagreed with the debtors’ argument that Arkansas marital dissolution laws establish the wife’s equitable interest in her husband’s property. However, the court did find that, under Arkansas law and the facts presented, the wife had an equitable interest in a vehicle that was titled solely in her husband’s name.
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Judge Ben T. Barry
The debtors initially filed a voluntary chapter 7 case, then converted the case to a chapter 13 case, then converted the case to a small business chapter 11 case. In accord with § 348(a), the court found that the requirement under § 1121(e) for a debtor to file a plan and disclosure statement within 300 days in a small business case runs from the date the initial petition was filed, not the date the case was converted to a small business chapter 11 case. Because this case was filed more than 300 days earlier, the court granted the UST’s motion to dismiss or convert.
The court found that in accordance with §§ 365(d)(1) and 502(g)(1), the debtor’s unpaid post-petition rent was treated as a pre-petition claim for the period of time between the filing of the petition and the trustee’s rejection of the lease that occurred statutorily 60 days after the date the petition was filed. However, because the debtor remained in the premises after the trustee rejected the lease and the lease was no longer property of the estate, any further damages as a result of the breach of the lease would be the debtor’s personal obligation outside the confines of her bankruptcy case.
A § 526(a)(6) action was brought against the debtor to determine the dischargeability of a debt that arose from a U.S. District Court jury verdict finding that the debtor had used excessive force that resulted in a man's death. Based on the facts entered into evidence, the Court found that the plaintiffs did not meet their burden of proving a willful and malicious injury under § 523(a)(6). Accordingly, the debt is eligible for discharge.
The underlying adversary proceeding is based on an alleged violation of the automatic stay; specifically, the defendant filed a motion for incarceration of the debtor during the pendency of the debtor’s bankruptcy case. The court denied the movant’s motion for summary judgment because there remained questions of fact for the court to determine whether the motion for incarceration was a continuation of a state court civil contempt action or whether the motion changed the nature of the civil contempt action to criminal contempt, either in whole or in part.
The debtor's sons objected to the chapter 7 trustee's motion to sell property, arguing that the property was held in a resulting trust for the benefit of one of the sons and, therefore, the subject property was not property of the estate. The Court found that while a resulting trust had been established, it was later terminated. Accordingly, the Court found that the subject property was property of the estate and granted the trustee's motion to sell.
Audrey R. Evans
Order Granting Motions to Appoint Trustee. Court found cause to appoint a Chapter 11 trustee pursuant to 11 U.S.C. § 1104(a)(1), and that the appointment of a trustee was in the best interests of the creditors and the estate pursuant to § 1104(a)(2). Specifically, the Court found that a trustee must be appointed in this case to serve as a neutral fiduciary and the estate’s sole representative due to the distrust created by the various actions of certain insiders and related parties, their disrespect for the Debtor’s fiduciary duties to all its creditors, the acrimony that exists between the Debtor and its creditors, particularly the Southwest Trustee, and the dishonesty and lack of transparency as to who controls this Debtor.
James G. Mixon
The individual Chapter 11 plan could not be confirmed because: (1) it failed to comply 11 USC § 1123 and did not specify the name of several of the creditors and the class to which the creditor was assigned and how the creditor would be treated; (2) it failed to comply with 11 USC § 1122 because not all of the claims that were classified together were substantially similar; (3) it was is not proposed in good faith as it cannot do what it proposes to do. Finally, once the claims were properly classified, an impaired class was deemed to have rejected the plan and the plan would have to be crammed down. The Court, adopting the broad view, found that pursuant to 11 USC §§ 1129(b)(2)(B)(ii) and 1115 the absolute priority rule does not apply to an individual Chapter 11.
Recording of the lease between the debtor and city provided constructive notice of debtor's pre-bankruptcy conveyance of property to the city and a repurchase option; state agency's subsequent recording of mortgage in the debtor's equitable interest in the property precluded Chapter 7 trustee from becoming a hypothetical bona fide purchaser entitled to avoid state agency's mortgage lien.
Judge Richard D. Taylor
Successful state court action did not satisfactorily translate, on the basis of collateral estoppel, to a denial of discharge or determination of dischargeability. The elements of each discharge-related cause of action were not proven. The underlying judgment related to misappropriation of assets and did not mirror the required elements.