13 B 27271
Upon the court’s issuance, sua sponte, of an order to show cause as to why the bankruptcy case of debtor Violeta Jakovljevic-Ostojic should not be dismissed for cause pursuant to 11 U.S.C. § 707(a), held: the Debtor’s actions demonstrate a lack of good faith in filing this case and have resulted in an unreasonable delay that is prejudicial to creditors. The court therefore dismisses this case pursuant to 11 U.S.C. § 707(a).
Judge Timothy A. Barnes - Opinions
Judge Timothy A. Barnes
September 17, 2014
13 B 27271
September 11, 2014
11 B 38875, 12 A 00155
Upon the Debtor’s motion to vacate the court’s summary judgment order, held: The Debtor failed to establish sufficient grounds under Federal Rule of Civil Procedure 59 or 60 to set aside or modify this court’s previous grant of summary judgment based, in part, on a state court judgment. Further, the Debtor failed to show that a transfer of personal property made in alleged satisfaction of the state court judgment, but made prior to the Debtor entering into the judgment, satisfied the judgment for purposes of Federal Rule of Civil Procedure 60(b)(5). The court therefore denies the Debtor’s motion to vacate.
August 18, 2014
13 B 39194
Upon the Motion of Leticia Zaragoza for Relief from the Automatic Stay Pending Arbitration, brought by Leticia Zaragoza (the “Movant”), held: The Movant has failed to demonstrate cause for relief from stay under 11 U.S.C. § 362(d). The Movant’s assertion that the Chicago Board of Trade (the “CBOT”) is better suited to determine the Movant’s claim against the bankruptcy estate is not supported by the arguments of the parties. Further, the Movant’s assertion that a claim against the Debtor arising out of a pending arbitration matter before the CBOT is outside this court’s constitutional authority under the reasoning of Stern v. Marshall is inapposite to the actual holding of Stern and is not well taken. Nothing within Stern’s holding stands for the proposition that this court may not determine the propriety of a claim asserted against the bankruptcy estate. Such a function lies at the heart of bankruptcy jurisdiction, and is squarely within this court’s authority. The court therefore denies the Movant’s request, without prejudice to the Movant’s ability to reassert the request, if appropriate, should the circumstances underlying the request have changed materially.
May 21, 2014
12 B 49658
Upon the Motion for Allowance of Secured Claim and Turnover of Collateral Proceeds, brought by United Central Bank (“UCB”), and the Cross Motion for Partial Turnover of Proceeds of Sales, brought by the Illinois Department of Revenue (“IDOR”), to determine the higher priority claim in the proceeds from a section 363 sale, held: UCB is entitled to a claim secured in the entire amount of the proceeds of the sale. IDOR has secured, priority unsecured and general unsecured claims, all of which are lower in priority to UCB’s secured claim. IDOR’s right to assert transferee liability is an “interest” for purposes of a section 363(f) sale, potentially entitling IDOR to adequate protection under section 363(e). As IDOR’s interest is, however, subordinate to that of UCB’s secured claim and IDOR’s claim is therefore “out of the money,” there is no harm from which IDOR is entitled to protection. The court therefore grants UCB’s request for allowance of secured claims and turnover of collateral proceeds and denies the IDOR’s request for partial turnover.
May 8, 2014
13 B 31265
Upon the Construction and General Laborers’ District Council of Chicago and Vicinity’s and the Laborers’ Pension and Welfare Funds’ objection to the Debtor’s application pursuant to 11 U.S.C. § 1113 to reject all collective bargaining agreements to which it was a party, held: The Debtor, having sold substantially all of its assets prior to commencing bankruptcy, has demonstrated sufficiently that rejection of all collective bargaining agreements is necessary for a valid “reorganization,” as that term must be interpreted in section 1113 in a liquidating chapter 11 case. The court therefore grants the Debtor’s motion to reject its collective bargaining agreements.
April 10, 2014
10 B 44866, 13 A 01048
Petitioners, as trustees for a family trust created by the debtor, move for abstention or remand of an Illinois state court proceeding to dissolve the family trust that had been previously removed to this court by the chapter 7 trustee. The chapter 7 trustee, in turn, seeks a determination from this court that the state court proceeding is void, as the proceeding was commenced after the commencement of the bankruptcy case and without relief from the automatic stay. Held: While the dissolution of a trust against which an estate has a claim may not violate the automatic stay, per se, under the facts of this case, a stay violation did occur. While the state court, not this court, is the proper tribunal with authority to order the dissolution of the family trust, the state court proceeding is invalid as having been commenced in violation of the automatic stay and the request for abstention or remand is therefore moot.
10 B 44866, 13 A 00631
After the trustee filed a motion for default judgment against one of multiple adversary defendants for failure to file a timely answer in response to an amended complaint, the defendant filed two answers; one to the original complaint and another one to the amended complaint. The trustee moved for the court to strike both answers as untimely and filed without leave or excuse. The bankruptcy court held that: (i) the defendant failed to file an answer within the prescribed time period; (ii) the defendant failed to challenge service in its first responsive pleading and thus has waived the defense of insufficient service; (iii) the defendant failed to show that its untimely answer is excusable pursuant to Federal Rule of Bankruptcy Procedure 9006(b)(1); (iv) the answers will therefore be stricken; (v) service of the motion for default judgment satisfies the due process requirement; and (vi) after having held three hearings on the motion for default judgment and having stricken the answers, it is proper to enter a default judgment against the defendant. Accordingly, the court grants both of the trustee’s motions.
March 26, 2014
13 B 28123
The Chapter 7 trustee filed an objection to the exemption that the debtor claimed in her interest in her former husband’s retirement plan pursuant to section 12-1006 of the Illinois Code of Civil Procedure. The parties disagreed on whether the debtor had the right to obtain the funds for her immediate consumption. The debtor argued, alternatively, that the retirement plan was excluded from the bankruptcy estate under 11 U.S.C. § 541(c)(2). Held: The debtor’s interest in the retirement plan is property of the estate. However, the debtor satisfied the requirements for exemption under Illinois law. The debtor’s ability to take an immediate distribution did not defeat the retirement nature of the retirement plan, as the distribution is to be made pursuant to a qualified domestic relations order in a way as to preserve the retirement nature of the funds. The court therefore overrules the trustee’s objection to the claimed exemption.
December 9, 2013
13 B 42168
The chapter 13 trustee filed a motion to dismiss the Debtor’s chapter 13 case pursuant to 11 U.S.C. § 1307. The Trustee alleged that the Debtor failed to meet the requirements under 11 U.S.C. § 109(h)(1) because the Debtor did not receive counseling during the 180-day period preceding the date of filing of the case. Held: The Debtor meets the requirements under 11 U.S.C. § 109(h)(1), as the Debtor received credit counseling the date of the filing of the petition. The plain language of section 109(h)(1) permits a debtor to receive credit counseling on the date of the petition. Credit counseling received on that date, though after the time of the filing of the petition, satisfies the requirements of section 109(h)(1). The court therefore denies the motion to dismiss.
November 26, 2013
13 B 18697
The Debtor brought a motion for contempt sanctions against Ahad Real Estate, LLC, Beach Business Bank, Macon Group, LLC and the receiver John Flanders Kennedy for alleged violations of the automatic stay of 3680 Riverside Drive, Macon, GA 31210. The court finds that the Debtor, as the movant and the party on whom the primary burden falls, failed to carry that burden as to establishing that an interest in 3680 Riverside Drive, Macon, GA 31210 became property of the Debtor’s bankruptcy estate, so as to afford that interest the protections of the automatic stay and allow the Debtor to seek damages arising from an alleged violation of those protections. The Debtor failed to show that the foreclosure and transfer of title of 3680 Riverside Drive, Macon, GA 31210 that occurred on February 5, 2013 did not divest the Debtor of its interests, if any. The court also finds that the Debtor’s allegations against the Receiver for coercion of funds are likewise unsubstantiated. The court therefore denies the motion for contempt sanctions against all parties.