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Judge Jacqueline P. Cox

03 B 46296

Plaintiff in a state court alter ego action against two principals (and a Judgment Creditor of the debtor) of a corporate chapter 7 debtor filed a motion to dismiss the debtor’s case or in the alternative, lift the automatic stay to permit the state court action to proceed. Noting that corporate chapter 7 cases have very limited purposes and that they do not demand the type of reorganizational analysis required in a chapter 11 or chapter 13 case, the court held that the debtor’s case was filed in “bad faith” and dismissed it for “cause.” The court concluded that the case served only to stay Plaintiff’s collection efforts, was an unfair litigation tactic designed to delay the Plaintiff’s state court alter-ego claim and that it was an attempt to shift the dispute, which could be resolved in state courts, to a bankruptcy forum.

03 B 29854, 03 A 03732

Ex-wife of a solvent chapter 11 debtor, who was a resident of Texas, moved to dismiss his case for “cause” pursuant to 11 U.S.C. § 1112(b), alleging that the debtor did not file his case in good faith. She also requested dismissal, or transfer of the case for improper and inconvenient venue under 28 U.S.C. § 1408(1) and Bankruptcy Rule 1014(a), to the more convenient forum of the Northern District of Texas. The court found that the debtor’s case was filed with the intent to delay his ex-wife from exercising traditional state law collection rights stemming from a state court judgment while he was attempting to collaterally attack the state court judgment underlying her claim. The court held that “cause” existed under 11 U.S.C. § 1112(b) to dismiss the bankruptcy case because it was not filed in “good faith.” The court additionally held that “cause” existed under 11 U.S.C. § 349(a) for dismissal with a one year bar to refiling a bankruptcy case because the debtor’s behavior showed a tendency toward recycling his contentions and interpretations of law rejected by one court to another court (in either the state or federal system) that lacked appellate jurisdiction over the rulings of which he complained.

In re Mary Will
November 20, 2003

02 B 36426

Although finance company’s allowed secured claim was paid in full in a prior chapter 13 case, which was later converted into a chapter 7, it refused to release the lien. After receiving a discharge in the chapter 7 case, the debtor filed another chapter 13 case but did not schedule the finance company as a creditor because it was her belief that the debt had been extinguished in the prior case. Having no notice of the new case, the finance company repossessed the vehicle and claimed that a fully secured balance still existed. The debtor filed a complaint against the finance company for damages and turnover of the car and alleged a willful violation of the stay pursuant to 11 U.S.C. § 362(h). The finance company filed a motion to annul the automatic stay and objected to confirmation of the debtor’s chapter 13 plan. The court held that the finance company’s refusal to expeditiously return the car to the debtor once notified of the pending chapter 13 case was a willful violation of the automatic stay. As such, the motion to annul the automatic stay was denied. The debtor was granted costs and awarded attorney fees along with compensatory and punitive damages. The issue involving the objection to confirmation was not litigated.

Judge Jack B. Schmetterer

In re Berkshire Foods, Inc.
December 10, 2003

Judge Carol A. Doyle

Judge A. Benjamin Goldgar

Chief Judge Pamela S. Hollis

In re: Artra Group, Inc.
December 2, 2003

02 B 21522

An expert witness is not a "professional person" whose retention must be approved under 11 USC 327.