Default judgment denied because a default had not been entered, an answer had been filed, the Debtor provided an acceptable reason for the delay in filing the answer, and an answer filed five days late constituted only a marginal failure to comply with the deadline for filing an answer. Not selected for publication
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Audrey R. Evans
Court was not collaterally estopped from finding that Debtor lacked intent required for a determination of nondischargeability pursuant to 11 U.S.C. § 523(a)(2)(A), where state court default judgment rested on the two independent grounds of (1) default and (2) fraud. In such circumstances, collateral estoppel applies only to findings that are essential to the judgment under both theories of liability that are the basis of the judgment. Fraudulent intent was not an element of default and therefore not essential to the judgment. After an evidentiary hearing, the Court found that Debtor lacked fraudulent intent and the debt was therefore dischargeable. First Security Bank v. Hudson (In re Hudson), 428 B.R. 866 (Bankr. E.D. Ark. 2010).
On creditor's complaint, the Court denied Debtors' discharge pursuant to 11 U.S.C. § 727(a)(4)(A) (false oath). Debtors filed petition and amended petition that failed to disclose numerous transfers listed in the complaint. When making eve-of-trial amendments disclosing the transfers, Debtors still failed to disclose a $33,000 race car, which the Court found Debtors both owned and controlled. Additional inaccuracies in the petition and testimony corroborated creditor's claim that Debtors knowingly and fraudulently made false oaths despite their contention that the mistakes on their original Petition and First Amended Petition were simply innocent omissions and errors. Watson v. Andrews (In re Andrews),428 B.R.855 (Bankr. E.D. Ark. 2010).
Judge Ben T. Barry
The Court granted the debtors' motion to refund the debtors' income tax refund, which the chapter 13 trustee held pre-confirmation. In chapter 13 cases, prior to confirmation, property of the estate remains in possession of the debtors. The Court overruled the trustee's objection to confirmation, in part, because the debtor's disposable income could not be determined from the record before the Court.
Writ of garnishment and resulting execution lien was a preferential transfer that could be avoided under 11 U.S.C. § 547. In the Fayetteville Division of the Western District of Arkansas, if a debtor is insolvent and the transfer diminishes the debtor’s estate, as a matter of law, any distribution to an otherwise unsecured creditor would result in the creditor receiving more than it would in a chapter 7 liquidation had the transfer not occurred.
Court denies creditor's motion for relief from stay for lack of adequate protection payments pre- and post-confirmation. Pre-confirmation, the debtors made the payments required by 11 U.S.C. 1326, as amended by General Order 32. Post-confirmation, the debtors made payments pursuant to their confirmed plan.
James G. Mixon
The Court held that a debt for legal fees owed to the attorney of the debtor's former spouse were in the nature of support and, therefore, entitled to priority treatment in the Chapter 13 plan, even though attorneys are not payees expressly named in the statute that requires priority treatment for support debt.
The Debtor, Vic Richmond, is liable for the debts incurred by JSR & Company because of fraud. Jill Richmond is liable for the debts of JSR & Company because she guaranteed JSR & Company’s note. Vic Richmond is liable for the debts incurred by Richmond & Company because of fraud. The discharge of the Debtors, Vic Richmond and Jill Richmond, is denied pursuant to 11 U.S.C. § 727(a)(4)(A) and 11 U.S.C. § 727(a)(5). Vic Richmond’s debts to the Bank are excepted from discharge pursuant to 11 U.S.C. § 523(a)(2)(A) and 11 U.S.C. § 523(a)(6). The discharge of Vic Richmond is also denied pursuant to 11 U.S.C. § 727(a)(3).
Judge Richard D. Taylor
Court denies debtor's discharge based on transfer of assets with intent to hinder, delay, and defraud creditors and false schedules.
The doctrine of collateral estoppel precludes the court from hearing issues previously decided by a state court and results in the nondischargeability of a debt pursuant to 11 U.S.C. § 523(a)(4).