Judge Pamela S. Hollis - Opinions / Outlines

Judge Pamela S. Hollis

06 B 16620

Prepetition, movant purchased the unpaid real estate taxes due for Debtors' residence. Debtors filed for relief under Chapter 13 just prior to expiration of the redemption period. Debtors scheduled the tax debt for payment to the county, and confirmed a plan that provided for payment of the tax debt during the term of the plan. Movant sought relief from the stay to proceed in state court after expiration of the redemption period. HELD: Movant is a creditor and the tax debt is a secured claim that can be paid over time through a Chapter 13 plan. No cause to grant relief from stay and motion denied.

In Re: Stephen A. Weiss
October 23, 2007

07 B 06781

In this individual chapter 11, creditors moved for relief from stay based on purported underlying security interests in debtor's interests in various partnerships and LLCs. Creditors' interest arose out of an assignment of interests executed by debtor as security for two loans. Court found that under underlying operating agreements and Illinois law, debtor did not have authority to assign his interests without prior consent of other parties to the various agreements. Therefore, assignment was invalid. Accordingly, creditors did not have security interest and motion was denied.

03 A 02300

Chapter 7 trustee sued KPMG, whom debtor had retained to perform a valuation analysis for its employee stock purchase plan. The trustee sought over $20 million in damages, alleging that KPMG breached its contract with the debtor, committed professional malpractice, and aided and abetted debtor's directors and officers in the breach of their fiduciary duties. Held: Judgment for the defendants. After considering the numerous decisions made by KPMG in the exercise of its professional judgment, as well as the circumstances in which the valuation analysis was issued, court determined that KPMG was not negligent.

In Re: Darlene Williams
April 23, 2007

06 B 15945

Chapter 13 debtor sought to retain her car over secured creditor's objection. Since debtor was not entitled to a discharge pursuant to 11 USC 1328(f), plan had to provide that the creditor retain its lien until payment of "the underlying debt determined under nonbankruptcy law." 11 USC 1325(a)(5)(B)(i)(I)(aa). Secured creditor objected on the grounds that the plan failed to do so. The issue was whether that phrase meant that the debtor had to pay the contract rate of interest or whether a prime-plus-risk-factor rate of interest as described in Till v. SCS Credit Corp., 541 U.S. 465, 474 (2004), would be sufficient.
Held: Till and its prime-plus-risk-factor analysis does not apply to the interpretation of 1325(a)(5)(B)(i)(I)(aa). Plan must provide that Debtor pay the contract rate of interest.

05 B 52582, 05 B 52473, 06 A 00511, 06 A 00525

Creditor who supplied business sued father and son debtors on the guarantee they had executed for the business, asserting that the debt was nondischargeable because of misstatements in the financial statements that supported the guarantee. The supplier also sought denial of the son's discharge based on omissions from his schedules. Held: Judgment for the defendants on all counts. Creditor failed to prove by a preponderance of the evidence that it relied on the financial statements submitted with the guarantee, and there was no showing of an intent to deceive by the son.

01 B 26090, (Jointly Administered), 02 A 01680

Reconsideration sought of opinion granting summary judgment to insurers in declaratory judgment action. Movants argued that the court erred in finding that Florida Statute Section 627.426, which requires insurers to advise insureds within 30 days that a coverage defense would be raised, did not apply. Held: Motion denied. An insurer's determination that a notice of circumstances is insufficient to trigger coverage under a claims-made policy is not a coverage defense and so compliance with section 627.426 was not required.

01 B 26090, (Jointly Administered), 02 A 01680

Chapter 7 Trustee sued former directors and officers of debtor, then brought declaratory judgment action against D&O liability insurance carriers. Insurers had denied coverage for lack of notice. Parties filed six cross-motions for summary judgment on declaratory judgment action. Held: Purported "notice of circumstances" letter sent by debtor to insurers during policy period was deficient and did not constitute notice. Insurers had not waived their right to make that argument, neither were they estopped from making it. Insurers did not act in bad faith in denying coverage. The difference between claims made and occurrence liability policies is discussed.

01 B 19852

Chapter 13 Trustee moved to dismiss case where debtor would have to continue to make payments beyond 5 years in order to complete her plan. Held: Although the court cannot confirm or modify a plan which would extend beyond 5 years, the fact that payments will be made for more than 5 years does not per se require dismissal under 1307(c). With that in mind, the court considered the particular factual circumstances and determined that cause for dismissal did not exist under 1307(c). Motion to dismiss denied.

05 B 12554

Receiver appointed in District Court litigation sought authority to sell Chapter 11 Debtor's interest in a limited liability company to one of the LLC members. Third party objected and submitted an offer. Receiver changed tactics and filed a motion seeking approval of bid procedures. The LLC objected and engaged in extensive briefing with the third party over whether the LLC's Operating Agreement was an executory contract. Parties also disputed whether the right of first refusal held by the other members of the LLC was enforceable in bankruptcy. HELD: The Operating Agreement of this particular LLC is not an executory contract. The right of first refusal is neither an ipso facto clause nor a restraint on assignment, and is enforceable. The Receiver's motion for approval of bid procedures is granted.

03 B 16263, 03 A 02122

Debt owed by debtor contractor who took funds from customer but did not perform work and who forged insurance certificate found nondischargeable under 11 USC 523(a)(2)(A). Debtor's discharge denied under 11 USC 727(a)(4)(A) based on false testimony at meeting of creditors and during trial as well as false statements in schedules and statement of financial affairs. Discharge also denied under 11 USC 727(a)(3) and (a)(5).

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