Court found that the Debtors' right to a refund of prepaid private school tuition was property of the Debtors' estate at the time they filed bankruptcy, and that the Trustee's timing in seeking reimbursement for this asset was not unreasonable. The Court further found that the proper remedy is a judgment against the Debtors pursuant to 11 U.S.C. § 105 for the prepaid tuition which was an estate asset the Debtors dissipated by not timely seeking a refund. Specifically, the Court found that it would be an abuse of the bankruptcy process to allow the Debtors to prepay their children's tuition, fail to adequately disclose such prepayments on their schedules and statement of financial affairs, and then not reimburse the Trustee for those funds. Rice v. Johnson (In re Johnson),371 B.R. 380 (Bankr. E.D. Ark. 2007).
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Opinions
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Audrey R. Evans
Divorce-related debts that do not qualify as nondischargeable domestic support obligations under 11 U.S.C. § 523(a)(5) are nondischargeable in a chapter 7 case under 11 U.S.C. § 523(a)(15) as amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Douglas v. Douglas (In re Douglas), 369 B.R. 462 (Bankr. E.D. Ark.2007).
On Plaintiff's motion for attorneys fees and costs pursuant to Internal Revenue Code § 7430, Court awarded fees and costs (with adjustments) finding that Plaintiff had incurred the fees and costs in question even though Plaintiff had a contingency agreement with his counsel in which he would not be required to pay attorneys fees if attorney fees were not awarded by the court. The Court further found the government's position in the case was not substantially justified, and that Plaintiff's counsel was entitled to an enhanced hourly rate above that provided by the statute (although the Court did not award counsel's actual hourly rate). Seay v. Internal Revenue Service (In re Seay), 369 B.R. 423 (Bankr. E.D. Ark. 2007).
Upon trustee's complaint to revoke debtor's discharge pursuant to 11 U.S.C. § 727(d)(1), the Court found that the debtor obtained his discharge through fraud by falsifying his schedules and statement of financial affairs so as to hide his interest in certain vehicles and land. Dupwe v. Massey ( In re Massey), 2007WL 1173630 (Bankr. E.D. Ark. 2007).
Court found that Debtor proved by clear and convincing evidence that she had an oral contract to purchase real property, had possession of such property, had paid the bulk of the purchase price for the property, and had made improvements to the property such that the oral contract to purchase the property was enforceable under the part-performance exception to the statute of frauds. As such, Court found that Debtor had an equitable interest in the Property under Arkansas law when she filed bankruptcy, and that her rights to enforce that interest have not been conclusively cut off by either the state tax sale of the property or a subsequent quiet title action in State Court. Court granted relief from the automatic stay to both parties to allow all issues regarding the legitimacy of the tax sale and the quiet title action to proceed in State Court. In re Paro,362 B.R. 419 (Bankr. E.D. Ark. 2007).
Court held that a debt owed by business partners is nondischargeable under 11 U.S.C. § 523(a)(2)(A) where debtor knew, or should have known, of fraud. On a motion for summary judgment against joint debtors, the Court granted summary judgment against a debtor that knew of a forged guaranty prior to the partnership incurring indebtedness. However the Court denied summary judgment against his partner, and wife, where there was no evidence that the wife knew, or should have known, of the forgery. Helena Chemical Company v. Simmons (In re Simmons), 364 B.R. 673 (Bankr. E.D. Ark. 2007).
Judge Ben T. Barry
Debtors who moved from Arizona to Arkansas within 730 days required to use Arizona exemption statute, if available, under 522(b)(2) and (3); however, even though Arizona is an “opt-out” state, non-residents are not precluded from using federal exemptions.
Chapter 7 debtors who filed their petition in Arkansas (where venue was proper) were required to use Iowa exemptions because they had not been domiciled in Arkansas for 730 days prior to filing pursuant to 11 U.S.C. § 522(b). Iowa is an opt-out state. Because Iowa homestead exemption on its face is not territorial, the Court found that Iowa's homestead law would apply to the debtors homestead located in Arkansas.
Judge Richard D. Taylor
Court granted partial summary judgment because collateral estoppel doctrine precluded the Court from hearing complaint for false representations and willful and malicious injury as to certain debts.
Applicable commitment period under section 1325(b)(4) does not apply to above median family income debtor who has no projected disposable income under section 1325(b)(3), as determined by section 707(b)(2).