In this case, the debtor attempted to avoid the nonpossessory nonpurchase-money liens of a secured creditor because they impaired the debtor’s tools of the trade and wild card exemptions. The creditor responded by requesting relief from the automatic stay. The court found that the debtor’s truck, boat, and trailer were tools of the debtor’s fishing guide trade, but the debtor’s ATV and tractor were not. In ruling, the court avoided the creditor’s liens on the tools of the trade to the extent the liens impaired the exemptions, and granted relief from the stay on the ATV and tractor for lack of equity. It also granted relief from the stay for cause for the remaining value of the creditor’s liens on the tools of the trade.
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Opinions
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Judge Ben T. Barry
The debtor's dilatory performance of a contract to customize the creditor's vehicle was not sufficient to find the debt non-dischargeable under section 523(a)(2).
The plaintiffs filed a complaint against the debtor under §§ 523(a)(2)(A) and (a)(6) to determine the dischargeability of a debt relating to the construction of a residence and a subsequent settlement agreement and to deny the debtor a discharge under §§ 727(a)(3) and (a)(5) . The Court granted the plaintiffs’ complaint under § 523(a)(2)(A), finding that the debtor falsely represented his knowledge and experience as a builder and his knowledge about the quality of the home at issue. However, the Court found that the plaintiffs failed to meet their burden of proof regarding the remaining causes of actions and denied the additional requests for relief.
The court denied the debtor’s motion to sell property owned by the debtor and a co-owner (ex-spouse) for failure to prove that partition was impracticable, sale of only the undivided interest would realize significantly less than a sale of the entire property, and the benefit to the estate would outweigh the detriment to the co-owner. (§ 363(h))
In a pre-BAPCPA chapter 11 case, the Court found that the net income interest created in a testamentary trust was protected by a valid spendthrift provision, and, as such, was not property of the debtor's bankruptcy estate.
The plaintiffs filed a complaint against the debtor to determine the dischargeability of a debt related to the construction of a residence and a subsequent settlement agreement. After finding that the Court could not look behind the settlement agreement because there was no underlying debt in this case, the Court denied the plaintiffs’ complaint under § 523(a)(2) for failing to prove that they entered the settlement agreement based on the debtor’s false representation, false pretense, or actual fraud. The Court also found that the plaintiffs failed to prove that the debtor caused a deliberate or intentional injury to the plaintiffs under § 523(a)(6) when they entered into the settlement agreement.
Court denied debtors' motion regarding whether the debtors' exemptions precluded the chapter 7 trustee from selling certain real property because the issues presented were not ripe for determination, not before the Court in the correct procedural posture, or not noticed to the correct parties.
Audrey R. Evans
Court adopted Judge James G. Mixon’s opinion in In re Johnson, 407 B.R. 364 (Bankr. E.D. Ark. 2009), holding that where assignor has a perfected security interest in a vehicle under Arkansas’ certificate of title statute prior to its assignment, the assignee remains perfected against creditors of and transferees from the original debtor, even if the assignee takes no action to change the name on the certificate of title. Further, the Court found that because no “new” lien was created by an assignment, Defendant was not required to release the lien and comply with the requirements of A.C.A. § 27-14-909. Gaines v. Ford Motor Credit Corp. (In re Gaines), 414 B.R. 494 (Bankr. E.D. Ark. 2009).
James G. Mixon
The Court found that pursuant to 11 U.S.C. 1112(b)(4) cause existed to dismiss the case; cause included unauthorized use of cash collateral, a consistent pattern of failure to maintain insurance, failure to pay taxes, co-mingling of personal and business assets, the Debtor's continued loss of money, and filing operating reports late.
The Court found that Arkansas law does not require an assignee's name to appear on the certificate of title to maintain perfection of an existing lien in a vehicle. Therefore, the assignee has a perfected lien in the vehicle and the motion for abandonment and relief from the automatic stay was granted.