Court overruled Chapter 13 Trustee's objection to claim where creditor had proven that its lien was recorded on the subject vehicles' certificates of title in accordance with Arkansas' Vehicle Titling Statute although creditor subsequently lost those titles. The Court held that once the requirements of the Arkansas' Vehicle Titling Statute were met, the creditor had perfected its security interest; there is no requirement that it be able to produce a copy of the title, and no provision under Arkansas law causing it to lose its perfection upon losing the titles. In re Hill, 313 B.R. 290 (Bankr. E.D. Ark. 2004).
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Opinions
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Audrey R. Evans
Creditor's alleged failure to attach writing to proof of claim did not render claim invalid. The Court found no cause to reconsider allowed claim where Debtors presented no evidence to dispute the merits or validity of the claim, and failed to justify a two-year delay in moving for reconsideration of the claim. Additionally, the Debtors do not have standing to object to the transfer of a claim under Rule 3001, and accordingly, no alleged deficiency in the claim transfer can serve as cause for reconsideration of a claim under § 502(j). Not selected for publication.
The Court found the granting of a discharge would be a substantial abuse under 11 U.S.C. 707(b) where Debtor testified dishonestly, omitted his minor child from his Schedule and Statement of Financial Affairs, and accumulated $44,000 in credit card debt within the two months prior to the bankruptcy filing. Based on these facts, the Court found Debtor acted in bad faith and dismissed Debtor's case. Not selected for publication.
The sequential exercise of the trustee’s powers under 11 U.S.C. §§ 547 and 544 permits avoidance of defendant-banks' interests in real properties when the banks obtained mortgages on those properties from entities (either the Debtor or one of her companies) which were not the record owners of the properties. First, the Court avoided the banks' lis pendens and certain quitclaim deeds, all filed on these properties within the preference period, as preferential transfers under 11 U.S.C. § 547. Then, the Court avoided any remaining equitable interest held by the banks by applying 11 U.S.C. § 544 and Arkansas real property law, finding that the trustee stepped into the shoes of a bona fide purchaser of these properties at the time of the bankruptcy filing. Accordingly, any remaining equitable interest held by the banks was avoided in accordance with the trustee's "strong-arm" powers. Rice v. First Arkansas Valley Bank and Regions Bank (In re May), 310 B.R. 405 (Bankr. E.D. Ark. 2004).
Debtors' applications to incur debt granted. The Court found that certain government payments to farmers under the Farm Security and Rural Investment Act of 2002 are earned independent of whether crops are planted or not. But, in light of Arkansas law requiring central filing to perfect liens on accounts or general intangibles, such as rights to payment under this Act, the Court ruled that the creditor failed to properly perfect its interest in those payments by filing its lien only locally. As the payments were not subject to another lien, the Court allowed the Debtors to pledge them as collateral. In re Stevens, 307 B.R. 124 (Bankr. E.D. Ark. 2004).
Debtor held in criminal contempt for filing 10th bankruptcy petition in willful violation of a prior court order dismissing Debtor's 9th bankruptcy petition and prohibiting any further bankruptcy filings by Debtor for a two-year period. In re Webb, 308 B.R. 357 (Bankr. E.D. Ark. 2004).
The Court found that the automatic stay protected Debtors' equitable interest in real property even though it was titled in the name of a Limited Liability Company ("LLC") created by one of the Debtors. The Debtors did not intend for title to be held solely in the name of the LLC and only created the LLC because they believed it was a requirement for closing on the property. In re Ealy, 307 B.R. 653 (Bankr. E.D. Ark. 2004). Affirmed on appeal by United States District Court for the Eastern District of Arkansas (Wright, J.) and the Eighth Circuit Court of Appeals.
Judge Richard D. Taylor
Bank’s alleged reliance on fraudulent financial statement not reasonable for purposes of § 523(a)(2)(B) when all loans were in default prior to debtors’ submission of the financial statement to the bank and only one loan was renewed after the bank received the financial statement. Bank found to have reasonably relied on financial statement for the renewal of one loan because former bank president assisted debtors in filling out the financial statement, and debtors did not rebut the bank’s reliance
To be a "debtor engaged in business" as that term is defined under 11 USC s 1304(a) requires that the debtor be self-employed AND incur trade credit. If both prongs are not met, the debtor is not required to file operating reports as required under s 1304(c).
If a creditor receives notice of a plan sufficient to satisfy the requirements of due process, with a sufficient description of the debtor's treatment of the creditor's lien under the plan, the principles of res judicata will control and the plan will be binding on all parties regardless of an unobjected to proof of claim.