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Judge Timothy A. Barnes

13 B 37655, 14 A 00100
Upon the creditor’s adversary complaint objecting to the Debtor’s discharge under 11 U.S.C. § 727(a)(7), wherein the creditor alleged that the Debtor violated 11 U.S.C. §§ 727(a)(2), (3) and (4)  in the bankruptcy case of the company of which the Debtor was sole member and president by permitting checks made out to the company to be deposited into the Debtor’s father’s account, by failing to secure the company’s books and records and by making false oaths for failing to list the same checks and other payments to the Debtor’s father on the company’s bankruptcy documents, held:
  The creditor failed to prove the Debtor’s requisite intent, elements of 11 U.S.C. §§ 727(a)(2) and (4), by a preponderance of the evidence.  The creditor also failed to prove that the disappearance of the Debtor’s business records due to a break-in caused the trustee in the company’s bankruptcy case to be unable to ascertain the company’s financial condition, or that the destruction was unjustified under the circumstances of the case, elements of 11 U.S.C. § 727(a)(3).  As a result, judgment is entered in favor of the Debtor.


Judge A. Benjamin Goldgar

12 B 19952, 12 A 01195

14 B 26441, 14 A 00710

14 B 29989

Judge Jacqueline P. Cox

13 B 01449, 13 A 01050
Prepetition, the parties to the medical malpractice suits participated in a mediation conference presided over by a former Chief Judge of the Circuit Court of Cook County, Illinois. The mediation was successful, and resulted in the entry of a July 21, 2008 settlement order in state court.  Prior to the mediation session, one Plaintiff's claim proceeded to trial in state court, where a jury returned a verdict of $30,000,000 against the Debtor and other defendants.

The crux of the Complaint is that the Debtor falsely stated that the settlement would be secured by property at 1101 Dodge, Evanston, Illinois (“Dodge Property”) in violation of 11 U.S.C. § 523(a)(2)(A) which excepts from discharge debts incurred fraudulently under certain circumstances.  The Debtor did not arrange for the Dodge Property to be titled in a land trust as required by the 2008 court order.  The Plaintiffs also allege that the Debtor wilfully and maliciously injured them in violation of 11 U.S.C. § 523(a)(6).

The Court entered judgment in favor of the Plaintiffs, finding that the Debtor intentionally misled the Plaintiffs when he represented that he would pledge the Dodge Property to secure the settlement amount, and that fraud created the debt.  In so ruling, the Court relied, in part, on Dr. Eisenstein's admission at trial that he had no intention of having the property placed into a land trust to secure payment of the $1.275 million settlement until a formal settlement agreement got executed.  The July 21, 2008 order did not condition the settlement on the entry of a subsequent agreement.


11 B 41826
In this post-confirmation Chapter 11 proceeding, Michael Bahary & Steven Bahary Partnership (“the Reorganized Debtor”) filed a Motion for a Rule to Show Cause requiring Napleton Enterprises, LLC (“Napleton”) and its counsel to show cause why they should not be held in contempt for suing to enforce Napleton’s purported Right of First Refusal as to certain real property (the "Grand Avenue Property") in a state court action regarding transactions that ensued in this bankruptcy case in 2012. The Reorganized Debtor asserted that Napleton’s actions were inconsistent with the terms of the confirmed Amended Plan of Reorganization and in violation of the Bankruptcy Code’s discharge injunction, set forth in 11 U.S.C. § 524(a)(2).  
Pursuant to the Reorganized Debtor's Confirmed Plan, the Reorganized Debtor surrendered the Grand Avenue Property to Banco Popular by executing a Deed in Lieu of Foreclosure to satisfy Banco Popular’s secured claim. Napleton was not scheduled as a creditor in the Reorganized Debtor’s bankruptcy.
In the offending state court action, Napleton alleged that its Right of First Refusal was an executory contract that survived confirmation of the Plan because its claim was not scheduled therein by the Debtor and it did not get notice of the bankruptcy case.  Napleton also asserted that the Deed in Lieu of Foreclosure was a “bona fide” offer that gave it a basis to exercise its Right of First Refusal.  
The Court issued the Rule to Show Cause, and determined that although Napleton was not included in the Debtor’s bankruptcy schedules, Napleton is neither a debtor, a trustee, an indenture trustee nor a creditor to whom a debt is owed as defined by 11 U.S.C. § 101 (10) (creditor is defined as an entity who holds a claim against the debtor or the bankruptcy estate).  Napleton is neither a creditor/claim holder nor a party to an executory contract because its Right of First Refusal remained inchoate because no third party made a bona fide offer, which it could match within five days.  
The Court denied Napleton’s request to alter or amend its prior December 29, 2014 judgment under Federal Rule of Bankruptcy Procedure 9024.


Judge Donald R. Cassling

In re Victor J. Fini
February 6, 2015

13 B 47450

Judge Carol A. Doyle