The court sustained the trustee's objection to the debtor's claim that inherited annuities were exempt under s. 522(d)(10)(E). The annuities did not replace an income stream upon which the debtor relied prior to his grandmother's death; therefore, the payments were not "on account of" the death of the grandmother
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Opinions
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Judge Richard D. Taylor
A mortgage follows the originally collateralized debt until that debt is satisfied. In the absence of an express understanding of the parties through a future advance, all indebtedness, or cross collateralization clause, the original mortgage does not extend to other or additional indebtedness.
Chapter 13 debtors may not discharge post-petition debts by amending their schedules to include a post-petition creditor who has not filed and will not file a proof of claim under s. 1305.
Court sustained the trustee's objection to the debtors' amended exemptions and granted the trustee's motion for turnover of exempted property where debtors omitted assets from their schedules, violated their oath at the first meeting, and testified to owning unscheduled property.
Audrey R. Evans
Memorandum opinion entered January 26, 2007; oral ruling issued January 24, 2005. Bank sought to have its debt excepted from Debtors' discharge under sec. 523(a)(2)(B). Court granted Debtors' discharge despite a finding that Mr. Harris presented materially false written statements to the bank because the bank failed to prove that it reasonably relied on such statements. Twin City Bank v. Michael and Lucinda Harris (In re Harris) ,360 B.R. 267(Bankr. E.D. Ark. 2007).
Court found that Debtor-contractor committed defalcation while acting in a fiduciary capacity by spending bonded job receipts on job costs for which the surety was not liable. Court held that any use of the trust res (i.e., bonded job receipts) to cover the contractor’s own expenses, whether that be the cost of using his own equipment, the cost of maintaining full-time employees, or the contractor’s general overhead expenses was a breach of fiduciary duty. International Fidelity Insurance Co. v. Emery Joseph Fox (In re Fox),357 B.R. 770 (Bankr. E.D. Ark. 2006).
The Court found that St. Francis County met its burden of proof under 11 U.S.C. § 727(a)(3), and the Debtors were, therefore, not entitled to a discharge. The Court also found that St. Francis County, as an unsecured creditor, lacked standing to bring the Complaint to set aside fraudulent transfers under the Bankruptcy Code, and that because the remaining state law fraudulent transfer claims did not have any effect on the administration of the bankruptcy estate, the Court did not have "related to" jurisdiction over the remaining state law fraudulent transfer claims. St. Francis County Farmers Assoc. v. Jerry Wright and Audrey Wright, Wright Land Co. (2:05-ap-1087) and St. Francis County Farmers Assoc. v. Jay Gardner Wright and Mary Rush Wright (2:04-ap-1289) (In re Wright), 353 B.R. 627 (Bankr. E.D. Ark. 2006). (The two adversary proceedings were consolidated for trial). Affirmed on appeal to the Eastern District of Arkansas.
Court found that IRS was equitably estopped from assessing a tax based on a disallowed loss in the 1982 tax year after it assessed and collected a tax for the 1995 tax year based on the validity of the same loss. Court held 1982 assessment invalid, and directed the IRS to refund Plaintiff’s bankruptcy estate $6,928 in previously withheld tax refunds with interest. Seay v. Internal Revenue Service (In re Seay), 353 B.R.614 (Bankr. E.D. Ark. 2007).
In the context of the construction business, the Court found that Hydro Temp, who was the supplier of heating and cooling units, met its burden of proof on each of the three elements of the ordinary course of business exception. Based on this finding, the Trustee was not entitled to avoid the transfer (payment for the heating and cooling units) as preferential under 11 U.S.C. § 547(b) for the benefit of the unsecured creditors, and judgment was entered in favor of Hydro Temp. M. Randy Rice v. Hydro Temp Corp. (In re GS Inc.),352 B.R.858 (Bankr. E.D. Ark. 2006).
Interpreting new § 1328(f) enacted by the Bankruptcy Abuse Prevention and Consumer Protection Act, Court determined that § 1328(f)(2) did not bar the Debtor from receiving a discharge in her current Chapter 13 case. Although the Debtor had received a Chapter 13 discharge within two years of the current case’s filing, that discharge was not received in a case filedunder Chapter 13 within two years of the current case’s filing. In re West, 352 B.R. 482 (Bankr. E.D. Ark. 2006).