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Judge Janet S. Baer

15 B 05304, 15 A 00812
The Plaintiff filed an adversary complaint in the bankruptcy case of the Debtor, seeking a determination that a debt owed to the Plaintiff by the Debtor in connection with her car is not dischargeable and that the Debtor is not entitled to a discharge.  The car in question was impounded by the City of Chicago three times, the third time post-petition.  Experiencing financial difficulties and having no money to either repair and recover the car or get it towed from the impound lot, the Debtor filed an amended chapter 13 plan which provided for surrender of the car to the Plaintiff in full satisfaction of its claim.  The Plaintiff filed an objection to confirmation, arguing that surrender was not possible because the Debtor was not in possession of the car.  While the objection was pending, the title to the car was transferred from the Debtor’s name to a company in Illinois and then, later, two more times to other entities.  Subsequently, the Debtor converted her case to a case under chapter 7.  In its complaint, the Plaintiff argued that the debt is nondischargeable under § 523(a)(6) because the Debtor abandoned the car, knowing that it would be disposed of, and that her lack of action was willful and malicious in that it caused a total loss to the Plaintiff. The Plaintiff argued, similarly, that the Debtor is not entitled to a discharge under § 727(a)(2) because she intended to hinder, delay, and defraud the Plaintiff by “refusing” to retrieve the car from the impound lot.  The Court found that the Plaintiff failed to meet its burden to demonstrate that the Debtor’s actions were either willful or malicious as required by § 523(a)(6).  The Court further found that the Plaintiff did not prove that the Debtor intended to hinder, delay, or defraud the Plaintiff for purposes of § 727(a)(2).  Accordingly, the Court held that the debt at issue is not excepted from discharge under § 523(a)(6) and that the Debtor is entitled to her discharge.

15 B 35358, 15 A 00876
The Debtor filed an adversary complaint against Walsh Construction Company and the Clerk of the Circuit Court of Cook County, seeking:  (1) a determination that certain funds deposited with the Clerk pursuant to a judgment order entered by the Circuit Court are property of the bankruptcy estate, and (2) turnover of those funds to the Debtor.  Walsh filed a 12(b)(6) motion to dismiss the complaint.  The judgment order awarded Walsh $27,500,000 on its breach of contract claim against the Debtor, awarded the Debtor a total of about $8,300,000 on its breach of contract claim against Walsh and an interpleader claim filed by the Debtor’s subcontractor, and provided that the amounts awarded to the Debtor be set off against the amount awarded to Walsh.  The Court found that the Rooker-Feldman doctrine did not bar its jurisdiction over the adversary proceeding because the Court did not need to overturn the Circuit Court’s decision to determine the interests of the parties.  As to the substantive issue, the Court found that, based on applicable law and the language in the judgment order, the setoff was accomplished pre-petition, through and at the time of the entry of the order; the setoff therefore effectuated a transfer; the deposited funds were thus not property of the Debtor’s bankruptcy estate; and, as a result, the funds could not be turned over to the Debtor.  Accordingly, the Court held that the Debtor failed to state a claim upon which relief can be granted and, in fact, could not assert any set of facts establishing its entitlement to the relief it sought.  Therefore, the Court granted Walsh’s motion to dismiss the complaint, and the complaint was dismissed with prejudice.

Judge Timothy A. Barnes

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.

Judge Jack B. Schmetterer

14 B 11873

Judge A. Benjamin Goldgar

15 B 23651, 16 A 00014

Judge Jacqueline P. Cox

09 B 05868, 12 A 00430

Following the Supreme Court’s decision in Wellness International Network v. Sharif, the Seventh Circuit affirmed a 2010 order that this Court entered which found that a Trust that the Debtor (Sharif) administered was the Debtor’s alter-ego and therefore its assets were property of his bankruptcy estate.  Since the 2010 order, the Debtor, the Debtor’s sister, and, most recently, the Debtor’s other sister have made no less than 10 attempts to reclaim the Trust assets.  These attempts have been well documented in over 180 pages of orders and opinions from this Court, all of which have denied their requests.

Despite all of this, two of the Debtor's sisters recently brought motions seeking to recover the Trust assets. This opinion outlines the seven-year history of the parties' efforts to reclaim the Trust assets.  This latest attempt also failed.  This opinion includes an Order to Show Cause why the sisters, and their attorney, Maurice J. Salem, should not be sanctioned under Rule 9011 for bringing improper and frivolous motions.