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Judge Jacqueline P. Cox - Opinions
Description | Date Issued |
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In re Tiffany Armstrong 14 B 18107 The Court concluded that Oasis failed to present any newly discovered evidence and failed to show that the Court made a manifest error of law in reaching its decision. |
11/07/2014 |
In re Luis Medina, Jr. 14 B 27755 The Court also imposed a one-year bar to refiling under 11 U.S.C. § 349(a), finding that the successive filings were an intentional abuse of the protections afforded debtors under the Bankruptcy Code. |
11/07/2014 |
In re Castle Home Builders, Inc., et al. 11 B 19428 (jointly administered) The Court granted the Motion, finding that Everhome’s refusal to conform its payment coupons and loan files to the economic terms of the Confirmed Plans some 15 months after confirmation, were done in blatant disregard of bankruptcy law and the terms of the Reorganized Debtor’s Plans. The Court determined that Everhome’s conduct warranted the imposition of sanctions in the amount of $100,000 and ordered that Everhome pay the Reorganized Debtor $35,839 in attorneys' fees. |
10/21/2014 |
In re Arturo Vazquez 13 B 32174 Trustee David Leibowitz objected, arguing that the child tax credit does not qualify as a “public assistance benefit” under the Illinois statute which allows debtors to exempt such. In 2003 a bankruptcy court ruled that the nonrefundable portion of the child tax credit was not a public assistance benefit because it was available to higher income taxpayers and that the refundable additional child tax credit was a public assistance benefit that could be exempted because it benefited lower income taxpayers. The Illinois statute does not limit or condition the exemption. The Court overruled the Trustee’s objection, rejecting the argument that the Illinois statute was meant to benefit lower income individuals only and declined to make the policy choice that a debtor who claimed five personal exemptions/dependents on his tax return while reporting income of $68,824 was too affluent to benefit from the child tax credit. The Illinois exemption statute provides for the exemption of public assistance benefits, without regard to whether they are refundable or are available only to lower income debtors. The Court explained that it is the role of the legislature, rather than the court, to limit the availability of the exemption. |
09/08/2014 |
Estate of Stanley Cora v. John C. Jahrling (In re John C. Jahrling) 12 B 50628, 13 A 00688 A judgment for $26,000 was entered in state court against the debtor in 2007 on a legal malpractice claim. The Court entered judgment in favor of the Plaintiff on Count I, and determined that Jahrling’s conduct in representing Cora in the sale of his home without talking to him to discern what Cora wanted and how to accomplish his goal, was a gross deviation from the standard of conduct that a law-abiding person as well as any Illinois attorney would observe in Jahrling’s situation. The court also found that Jahrling acted recklessly and in brazen disregard of his fiduciary duty when he ignored his basic duty to communicate with the client, to prepare for the engagement and to pursue his client’s interests diligently. The Court entered Judgment in favor of the debtor-defendant on the remaining counts, finding that Plaintiff failed to meet its burden of proof on claims under section 523(a)(6) for wilful and malicious injury and section 727 for failure to maintain records and to account for a deficiency or loss of assets. |
08/21/2014 |
Philip V. Martino, Trustee v. Eugenia Miszkowicz, Mark Miszkowicz and Miszkowicz Investment Limited Partnership (In re Steven Miszkowicz and Connie Gipple) 11 B 40844, 13 A 00927 |
07/24/2014 |
In re Veronica Aguilar and Jose E. Aguilar; Robert J. Sargis v. Veronica and Jose E. Aguilar 10 B 38275, 13 A 00299 |
06/09/2014 |
In re Daniel Adam Zarco, Sr. 13 B 25463 |
03/25/2014 |
Morris Senior Living, LLC, Morris Real Estate Holdings II, LLC 12 B 05364 |
01/24/2014 |
In re Brown’s Chicken & Pasta, Inc.; Popgrip, LLC v. Brown’s Chicken & Pasta, Inc. and Howard Korenthal, not individually but solely as Liquidating Trustee of Brown’s Chicken & Pasta, Inc., Joli Inc., Life A.B., LLC and Just Toni’s v. 09 B 49094, 11 A 2395 |
12/16/2013 |
In re Edison Mission Energy, et al. 12 B 49219 (jointly administered) |
11/19/2013 |
In re 1555 Wabash LLC 11 B 51502 Evans Construction Company (“Evans”) filed a secured Mechanics Lien claim in the amount of $398,937.00 which represented amounts that were owed directly to Evans’ subcontractors. The Lender, Debtor's successor, objected to the claim, asserting a setoff for amounts paid directly to subcontractors and for amounts paid to correct construction work alleged to be defective. The Court reduced Evans claim to reflect amounts proven to be paid directly to subcontractors. However, after hearing the testimony of several witnesses, the Court determined that the Lender’s assertion that Evans produced faulty work was not supported by the evidence, as the defects complained of were explicitly contracted for by the parties. |
06/19/2013 |
In re Shelia L. Martin 09 B 42237 In this Chapter 13 proceeding, the Court granted the Debtor’s motion for sanctions, after a Mortgagee continued to collect the mortgage payments from both the Debtor and the Trustee despite the Court’s approval of a loan modification agreement. The Court’s opinion highlights the importance of parties examining whether loan modifications necessitate a subsequent chapter 13 plan amendment to accurately provide for treatment of mortgage arrears. |
04/26/2013 |
In re GAC Storage El Monte, LLC, et al. 11 B 40944 (jointly administered) In this memorandum opinion, the Court denied confirmation of the Debtor’s Third Amended Plan of Reorganization. The Court noted that to satisfy the Bankruptcy Code’s requirement that the Debtor’s Plan be fair and equitable, a plan must propose an interest rate adequate to assure the realization of the Bank’s claim. In this case, the Court determined that the interest rate advanced by the Debtor did not sufficiently capture the risk that the Debtor would not satisfy the Bank’s claim. The Court also determined that the Plan was not feasible because the Debtor failed to prove that the property would increase in value enough to give the Debtor sufficient equity to facilitate refinancing at the end of 7 years to fund a balloon payment to the Bank. Also, relying on the Seventh Circuit’s decision in In re Castleton Plaza, LP, No. 12-2639, 2013 WL 537269, and Bankruptcy Code Section 101(31)(B), the Court held that the nature of the plan warrants application of the absolute priority rule as the plan gave the Debtor’s insider preferential access to an investment opportunity in the Reorganized Debtor without allowing others to compete for that opportunity. The Court also granted the Bank’s request for relief from the automatic stay because the Debtor failed to show that there is a reasonable possibility of a successful reorganization. |
03/19/2013 |
In re GAC Storage Lansing, LLC, et al. 11 B 40944 (jointly administered) In this memorandum opinion, the Court denied confirmation of the Debtor’s Amended Plan of Reorganization. The Court noted that to satisfy the Bankruptcy Code’s requirement that the Debtor’s Plan be fair and equitable, a plan must propose an interest rate adequate to assure the realization of the Bank’s claim. In this case, the Court determined that the interest rate advanced by the Debtor did not sufficiently capture the risk that the Debtor would not satisfy the Bank’s claim. The Court also determined that the Plan was not feasible because the Debtor failed to prove that the property would increase in value enough to give the Debtor sufficient equity to facilitate refinancing at the end of 7 years to fund a balloon payment to the Bank. The Court also granted the Bank’s request for relief from the automatic stay because the Debtor failed to show that there is a reasonable possibility of a successful reorganization. |
01/10/2013 |
In re Andres Gacharna and Catherine E. Lindsay 12 B 08807 In this Chapter 13 proceeding, the Court sustained Creditors’ objection to confirmation of Debtors’ Plan, holding that the Debtors’ obligations under a Settlement Agreement with a former employer (including a non-compete clause) were non-monetary in nature, and therefore were not a "claim" for bankruptcy purposes. Only claims for money can be discharged. The Settlement Agreement included language that the non-monetary provisions of Articles 3 and 4 were the essence of the agreement and that should the Debtors fail to perform the duties prescribed in those provisions, injunctive relief would be appropriate to require the Debtors to perform the duties. The Court also noted that the provision governing attorney’s fees was not a compensation remedy, but was designed to make the prevailing party whole after the resolution of disputes. |
10/19/2012 |
In re 4100 West Grand LLC; 4100 West Grand LLC v. TY Grand LLC 11 B 42873, 11 A 02278 4100 West Grand LLC, debtor in possession, filed this adversary proceeding against defendant, TY Grand LLC, to avoid and recover a transfer alleged to be fraudulent pursuant to 11 U.S.C. §§ 544, 548 and 740 ILL. COMP. STAT. §§ 160/5 and 160/6. As a threshold matter, the Court relied on the Stern v. Marshalldecision and its progeny in determining that the Court had authority to enter a final judgment in the adversary, as the proofs of claim filed by the defendant made clear that their resolution depended on the outcome of the debtor’s fraudulent conveyance claims. Proof of claim no. 3-5 provided that if TY Grand did not prevail in the litigation, its secured claim would be $2,722,170.34. If TY Grand prevailed, it would have no claim against the Debtor. Because the fraudulent conveyance cause of action was resolved in the process of ruling on the proofs of claim, the bankruptcy court has authority to enter a final order herein. Stern v. Marshall, —U.S.—, 131 S.Ct. 2594, 2620 (2011). In the alternative, should a reviewing court find that this court lacked authority to enter a final order, the Court held that its memorandum opinion may serve as its proposed findings of fact and conclusions of law under section 157(c)1. This adversary proceeding was initiated after TY Grand LLC recorded a deed in lieu of foreclosure for Property valued at $1.115 million after 4100 West Grand LLC defaulted under the terms of the parties’ Forbearance Agreement. During the forbearance period, TY Grand also received cash payments in the amount $485,000. Pursuant to the terms of the agreement, after the recording of the deed, TY Grand LLC waived its right to sue for non-monetary defaults under the agreement, as well as the deficiency amount of $2,510,123.90. The Court entered judgment in favor of TY Grand, holding that 4100 West Grand LLC received reasonably equivalent value in exchange for the transfer. The Court determined that TY Grand LLC received value in the amount of $2,310,000, which amount represents the value of the Property transferred ($1.115 million); $485,000 in cash payments; and a claim under the Forbearance Agreement worth approximately $710,000; whereas the Debtor received a release of a $2.5 million debt |
10/16/2012 |
In re Computer World Solutions, Inc. Attorney Daniel A. Zazove and the Perkins Coie law firm filed a Motion and Application for Allowance of Compensation as Debtor's Attorney. Chapter 7 Trustee Steven Radtke and Robert Stein, a defendant in a related adversary, objected to Counsel’s Application for Compensation, arguing that subsequent to the entry of the retention order, Zazove and Perkins Coie received other compensation from an Assignee or Fifth Third Bank without leave of court as required by 11 U.S.C. § 330(a)(1). Mr. Zazove argued that those funds were for services rendered to the Assignee for the Benefit of Creditors, not the bankruptcy estate. Over Stein’s objection, the Court granted Counsel’s application for compensation. In the spirit of abstention, the Court declined to require the Assignee to submit to bankruptcy court jurisdiction after he was excused from the Section 543 delivery requirement. Bankruptcy Code Section 330(a)(1) governs compensation to professionals retained by a bankruptcy estate; it has no application to the payment of an assignee’s attorney for legal services rendered in the operation of an assignment for the benefit of creditors. |
08/24/2012 |
In re Lancelot Investors Fund, L.P., et al Defendants in eleven Lancelot-related (08-B-28225) adversary proceedings brought 17 motions for summary judgment arguing that each matter involved the straightforward application of Bankruptcy Code Sections 546(e) and (g) “safe harbor” limitations on a trustee’s avoidance powers and for that reason they were entitled to summary judgment as a matter of law regarding payments and transfers made to them. The Trustee resisted the imposition of summary judgment on two major grounds: that the safe harbor provisions do not shield payments and transfers tainted by Ponzi Scheme fraud and that avoiding the payments and transfers would not materially impact the financial markets. The Defendants suggested that the Trustee’s arguments look beyond the plain statutory text of the safe harbor provisions by reading exceptions into the Code. The Court granted summary judgment as to the Counts alleging preferential transfers and constructive fraudulent transfers under Bankruptcy Code Sections 548(a)(1)(B), 550 and 544 as well as under Illinois law, but denied summary judgment as to the actual fraudulent transfer claims asserted under Section 548(a)(1)(A). The safe harbor provisions specifically prohibit the recovery of preferential transfers, constructively fraudulent transfers and claims based on state law. The provisions do not protect actual fraudulent transfer claims. The Court declined to expand the plain meaning of the statute, and noted that Congress did not exempt all fraudulent transfers from safe harbor protection, only those involving actual fraud, claims that allege that a debtor acted “with actual intent to hinder, delay or defraud any entity” to which the debtor was indebted. Before submitting Orders on these matters, the Court invited the parties to submit supplemental briefs on whether the Orders resolve core matters on which this court may enter final orders in light of the Supreme Court’s ruling in Stern v. Marshall, 131 S.Ct. 2594 (2011) and the recent Seventh Circuit Court of Appeals ruling in Ortiz v. Aurora, 665 F.3d 906 (7th Cir. 2011). |
03/07/2012 |
In re: Vance Shaf (10 B 51226); Dr. Duncan Dinkha v. Vance Shaf and V.E.K. Homes, LLC (11 A 00664) The Plaintiff filed an adversary proceeding seeking a finding that a debt reflected by a judgment in the amount of $75,000 is not dischargeable under 11 U.S.C. §§ 523(a)(2)(A), 523(a)(4)(A), and 523(a)(2)(6). The complaint alleged in part that the Defendant, a real estate developer, accepted two installment payments from the Plaintiff when he knew that he could not comply with the Plaintiff’s request to occupy the premises at the time contracted for. The Court entered judgment for the Plaintiff on the section 523(a)(2)(A) claim in the amount of $75,000 and found that the Defendant’s failure to disclose long-standing zoning problems which he knew would cause the delay in the construction of a custom built home was done with the intent and purpose of deceiving the Plaintiff. |
01/17/2012 |