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Judge Ben T. Barry

In this involuntary chapter 7 case, a creditor and the chapter 7 trustee objected to the debtor’s claim of Florida exemptions, alleging that Florida was not the debtor’s domicile during the relevant look-back periods under 11 U.S.C. § 522(b)(3)(A).  The court overruled the objections, finding that the fact that the debtor intermittently resided in Tennessee, where he also owned or leased property, did not defeat the debtor’s claim that Florida was his domicile during the 910 days prior to the filing of his involuntary petition.  In making its decision, the court looked to objective indicators that the debtor intended to make Florida, rather than Tennessee, his domicile, including: the debtor’s ownership of property and physical presence in Florida, Florida voter registration, Florida driver’s license, Florida utility payments, and application for a Florida homestead exemption.             

The chapter 11 debtor filed an adversary proceeding against the Small Business Administration in which the debtor alleged that the SBA had violated 11 U.S.C. § 525(a) and the Administrative Procedure Act by adopting a rule that precluded debtors in bankruptcy from participating in the Paycheck Protection Program under the CARES Act.  In this order, the court denied the debtor’s motion for a preliminary injunction because it found that the debtor was unlikely to succeed on the merits of its claims and had failed to show a threat of irreparable harm. 

In this chapter 13 case, the debtor proposed in his plan to cure an arrearage owed to the creditor holding a mortgage on his residence.  The mortgage creditor filed an objection to confirmation and a motion for relief from stay premised upon the contention that the residence was not property of the debtor’s bankruptcy estate because a mortgagee’s deed transferring the property to the mortgage creditor had been recorded at the conclusion of a statutory foreclosure sale six days before the debtor filed his petition.  The debtor argued that the residence remained property of his estate because the foreclosure sale was defective due to the mortgage creditor’s failure to state the specific default for which foreclosure was made in its Notice of Default and Intent to Sell as required by Arkansas Code Annotated § 18-50-104(b)(4).  Whether the notice must disclose the specific default that occurred under the terms of the mortgage agreement or, alternatively, merely state that a default occurred was an issue of first impression in Arkansas.  The court certified the question to the Arkansas Supreme Court and it concluded that the statute requires disclosure of the specific default.  Based upon the Arkansas Supreme Court’s answer to the certified question, this court held that the statutory foreclosure sale was subject to being set aside and, as a result, the debtor had an interest in the residence on the date he filed his bankruptcy petition.  Because the foreclosure sale had not been conducted in accordance with applicable nonbankruptcy law, the debtor was entitled to cure the arrearage through his plan under 11 U.S.C. § 1322(c)(1).  Accordingly, the court overruled the creditor’s objection to confirmation and denied its motion for relief from stay.           

In this chapter 11 case, the court overruled a creditor’s objection to the debtor’s homestead exemption because the objection was untimely under Rule 4003(b)(1).  However, because the court found that the debtor’s contradictory statements on Schedule C had created uncertainty regarding the amount of the debtor’s homestead exemption, the court granted the creditor’s motion to compel the debtor to amend the schedule pursuant to Rule 1009(a).               

Here, the court overruled the chapter 7 trustee’s objection to the debtors’ amended exemptions.  The trustee argued that the debtors should not be permitted to amend their schedules to elect state exemptions after having previously elected federal exemptions to which the trustee had not objected.  However, the court found that Law v. Siegel and the unambiguous language of Rule 1009(a) authorized the debtors’ amendment to their exemptions.  The court also found that the debtors’ mobile home was part of their homestead under Arkansas law.  In addition, the court found that the creek that divided a portion of the acreage that the debtors claimed as their homestead was not navigable and therefore did not destroy the contiguous nature of the property.

Judge Richard D. Taylor

Fact intensive case where the debtor did not adequately account, as per the court’s order, for the disposition of post-petition insurance proceeds converted to cashier’s checks and then cashed.

Mortgaged property subject to a statutory foreclosure has not been sold sufficient to avoid the consequences of section 1322(c) until such time as the entire process is complete.  Regardless, cause may still exist to lift the automatic stay.

Chief Judge Phyllis M. Jones

Court found that dealership agreement between Debtor and Kubota was an assumable executory contract.  Although the agreement included financing as one payment option, Kubota was not required to extend financing to the Debtor under the agreement.  Therefore, the Court found the agreement was not a contract to make a loan, or extend debt financing or financial accommodations within the meaning of Section 365(c)(2).  In addition, Court denied Kubota’s motion for relief from stay.

Court found that car creditor whose claim was bifurcated by the Debtor’s confirmed plan was entitled to payment of insurance proceeds after the destruction of the vehicle only in the amount of the balance owed on the creditor’s secured claim under the terms of the confirmed plan.  The Court also found, however, that the creditor would retain its lien on the balance of the insurance proceeds pursuant to Section 1325(a)(5)(B)(i) until either the Debtors receive their discharge or the claim under nonbankruptcy law is paid in full.

Trustee’s objection to confirmation overruled.  In determining the amount unsecured creditors would receive in a hypothetical chapter 7 liquidation for purposes of the best interests of creditors test of Section 1325(a)(4), parties should consider: (1) the estimated costs of sale associated with liquidating each asset; (2) the estimated costs of administering the chapter 7 estate, including a chapter 7 trustee’s statutory fee; and (3) any other factors that may be appropriate on a case-by-case basis.