Judge Timothy A. Barnes - Opinions

Judge Timothy A. Barnes

16 B 05364
On the motion of creditor and contract counterparty seeking an order of this court compelling the contractual performance of debtor in foreign proceeding under 11 U.S.C. § 365(n)(4), held:  While, pursuant to the terms of the recognition order, 11 U.S.C. § 365 applies in the foreign proceeding, the application of 11 U.S.C. § 365(n)(4) is no different in such circumstances than it would be in a case under another chapter of the Bankruptcy Code.  Such application requires only such performance as provided in the contract, and the relief requested by movant is not provided for in the contract.  The motion is, therefore, DENIED.

11 B 38307, 14 A 00106
Upon the Chapter 7 Trustee’s adversary complaint under 11 U.S.C. §§ 727(d)(1) and (2), wherein the Chapter 7 Trustee seeks to revoke the debtor’s discharge as a result of, respectively, alleged failures to disclose a prepetition property interest and to disclose and turnover to the Trustee property of the estate acquired by the Debtor postpetition, held: Given the timing of the Complaint, the court lacks subject matter jurisdiction to determine the Chapter 7 Trustee’s 11 U.S.C. § 727(d)(1) prepetition property claim.  As to the 11 U.S.C. § 727(d)(2) postpetition property claim, the debtor acquired property of the estate within the applicable postpetition period but failed to both report and surrender all of that property to the Trustee.  The debtor’s discharge must, therefore, be revoked pursuant to 11 U.S.C. § 727(d)(2).

14 B 24420
Upon the third party tax purchaser’s motion for relief from the automatic stay, contending that the Debtors’ default under the provisions of the confirmed plan requiring payment to purchaser in full of its claim by a certain date was cause to lift the automatic stay, and the Debtors’ competing motion to modify the confirmed plan, seeking to extend the date under the plan to pay the tax purchaser, held: (i) the default under the confirmed plan constitutes cause to lift the automatic stay; and (ii) the Debtors’ proposed amendment is infeasible and inequitable. The tax purchaser’s motion for relief from stay is, therefore, granted and the Debtors’ motion to modify plan is denied.

15 B 42427
Upon a creditor’s motion seeking to dismiss a chapter 11 case, wherein the creditor alleged that the debtor filed its bankruptcy petition in bad faith because the case was filed on the eve of foreclosure and without the consent of the creditor, as a voting member of the debtor, held:  The creditor has not proved by a preponderance of the evidence that there is cause under 11 U.S.C. § 1112(b) to dismiss the case.  The amendment to the debtor’s operating agreement that required the creditor’s consent to file bankruptcy was void as against public policy.

14 B 31070, 15 A 00560
Upon the defendant’s motion to dismiss the debtor’s adversary complaint for failure to state a claim upon which relief may be granted, held: By predicating his claim against the defendant solely on the filing of a proof of claim but asserting no other indicia of deceptive behavior within the gambit of the Fair Debt Collection Practices Act or fraudulent intent, the debtor has failed to state a claim upon which relief may be granted under the Fair Debt Collection Practices Act. The filing of a proof of claim on a time-barred debt is not deceptive per se. The defendant is owed a debt that gives rise to a claim within the meaning of the Bankruptcy Code and is entitled to assert that claim. The court will not create a per se rule that potentially denies the defendant the due process built into the Bankruptcy Code and guaranteed by the Fifth Amendment to the United States Constitution. For similar reasons, the filing of a proof of claim on account of a time-barred debt is not a fraud on the court. The defendant’s motion to dismiss is GRANTED, without prejudice to the debtor’s ability to bring an action based on actual deceptive behavior, should such behavior exist.

14 B 01361, 14 A 00098
Upon creditor’s adversary complaint seeking a determination that debts allegedly owed by the debtor are nondischargeable under 11 U.S.C. § 523(a)(2)(A), wherein the creditor alleged that the debtor obtained construction services through false pretenses, false representation or actual fraud, held: While the debtor appears to be obligated on the debts, the creditor did not prove by a preponderance of the evidence that the debts were incurred by false pretenses, false representations or actual fraud. As a result, the debts are dischargeable. Judgment is entered in favor of the debtor.

13 B 30975, 13 A 01294
Upon a creditor’s complaint seeking a determination that a debt allegedly owed by the debtor to the creditor is nondischargeable under 11 U.S.C. § 523(a)(2) and (a)(6), wherein the creditor alleged that the debtor withheld monies from the creditor through false pretenses, false representations or actual fraud and that the debt was the result of willful and malicious injury by the debtor, and seeking a denial of the debtor’s discharge under 11 U.S.C. § 727(a)(4) and (a)(5), wherein the creditor alleged that the debtor failed to disclose all income in his bankruptcy petition and failed to account for a loss or deficiency of assets, held: The creditor has not proved by a preponderance of the evidence that a debt was incurred by false pretenses, false representation, or actual fraud or was the result of willful and malicious injury by the debtor as is required under 11 U.S.C. § 523(a)(2) and (a)(6). As a result, the debt is dischargeable. Likewise, the creditor has failed to prove by a preponderance of the evidence that the debtor knowingly and fraudulently concealed income or assets on his bankruptcy petition, elements of 11 U.S.C. § 727(a)(4). The creditor also failed to prove by a preponderance of the evidence that the debtor’s explanation as to any loss of assets or deficiency of assets to meet the debtor’s liabilities is unsatisfactory, pursuant to 11 U.S.C. § 727(a)(5). As a result, the debtor will not be denied a discharge on the grounds alleged. Judgment is entered in favor of the debtor on all counts.

In re David J. Hardesty
August 7, 2015

14 B 42906
Upon the chapter 7 Trustee’s objections to the Debtor’s claimed exemptions in (1) installment payments under a personal injury settlement agreement and (2) proceeds from a life insurance policy received post-petition following the death of the Debtor’s step-father, held: Under the terms of the marital settlement agreement, entered into by and between the Debtor and his ex-wife and incorporated into the state court divorce decree, the Debtor’s limited interest in and control over the installment payments is insufficient to bring the installment payments into the estate, therefore, the Trustee’s objection to the Debtor’s exemption in the personal injury settlement is OVERRULED. With respect to the life insurance proceeds, however, the Debtor has failed to establish that he is “dependent upon the insured” for the purposes of 735 ILCS 5/12-1001(f) and, therefore, cannot claim an exemption in the life insurance proceeds, thus, the Trustee’s objection to the Debtor’s exemption in the life insurance proceeds is SUSTAINED.

In re Mesha E. Ware
July 17, 2015

15B03414
Upon an objection to confirmation of the debtor’s chapter 13 plan, wherein a creditor alleged that the debtor could not comply with the requirements of “surrender” in section 1325(a)(5)(C) of the United States Bankruptcy Code as the debtor proposed to surrender a vehicle that had been previously stolen and that, therefore, could not be delivered to the creditor, held: “Surrender” in section 1325(a)(5)(C) does not always require the debtor to physically deliver the vehicle.  Because the Debtor proposes surrender in good faith, physical delivery is not required.  As a result, the creditor’s objection is overruled.

10 B 51428
Upon the creditor’s motion to allow claim under Federal Rule of Bankruptcy Procedure 9006, wherein the creditor sought to have the court allow its claim as a timely general unsecured claim when the claim was allegedly delivered directly to the office of the clerk of court rather than electronically filed and, despite being tendered to the clerk’s office prior to the claims deadline, not entered on the claims register until almost 4 years after the claims deadline, and where creditor sought to have the court enter an order amending the chapter 7 trustee’s previously approved final report, held:  Rule 9006 does not apply to the deadline to file claims in a chapter 7 case.  The claim was filed for purposes of Rule 3002 when the claim was entered on the claims register, almost 4 years after the claims deadline.  As a result, the claim is a tardily filed unsecured claim which would receive zero distribution even if the final report were to be amended and, thus, the creditor’s motion is denied.

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