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.
The District of Northern Illinois offers a database of opinions for the years 1999 to 2013, listed by year and judge. For a more detailed search, enter the keyword or case number in the search box above.
Judge Timothy A. Barnes
July 17, 2015
July 13, 2015
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.
June 22, 2015
13 B 30975, 13 A 01294
Upon the Defendant’s amended motion to dismiss the Plaintiff’s adversary complaint objecting to discharge of debt owed to A&H Caring Connections, Inc. (“A&H”) pursuant to 11 U.S.C. § 523(a)(2)(A) and (a)(6) and 11 U.S.C. § 727(a), the underlying interest having been assigned to the Plaintiff by A&H and the Defendant seeking dismissal of the complaint for failure to state a claim upon which relief can be granted on the grounds that the underlying assignment is void as a matter of public policy and in violation of Illinois law, held: For purposes of testing the sufficiency of the complaint under Federal Rule of Civil Procedure 12(b)(6), the Defendant has failed to satisfy his burden of showing the complaint is insufficient. The amended motion to dismiss is DENIED.
Judge Jacqueline P. Cox
July 14, 2015
13 B 36813
The Court held evidentiary hearings over three days on the objection of the successor lessor of a downtown commercial food court to the claims for rejection damages filed by certain food court tenants to determine the amount of damages due to them pursuant to 11 U.S.C. § 365(g) and (h). The Court also considered the good faith and fair dealing doctrine under Illinois contract law regarding the timing of the formation of the leases and the rejection of the leases under the Code as some of the leases were entered into within only a few months, weeks, or even days in the case of two tenants, before the motion to reject them was filed.
As of the petition date, Debtor Dearborn Retail, LLC, owned the food court space located at 201 N. Clark Street in Chicago. Subsequently, Garvey Court, LLC, an entity controlled by Bighorn Capital, Inc. acquired the property. The Court granted Debtor’s motion, in connection with the acquisition, to reject the leases of eighteen food court tenants. As part of the rejection order, Garvey Court agreed to assume the obligations, if any, to pay damages and/or termination fees that resulted from such rejections. Neither Debtor nor Garvey Court issued a notice of early termination pursuant to the leases.
Under the terms of an agreed claims resolution order, an evidentiary hearing was held to determine the amount of damages owed to tenants whose claims were not settled. Nine of the eighteen tenants filed proofs of claim, to which Garvey Court objected; one tenant settled before the hearing. The claimants generally sought damages for build-out costs, replacement rent, advertising/promotion for the new locations, moving costs, return of security deposits and attorneys’ fees. Garvey Court argued that the claimants could not recover any damages because of their failure to pay rent and the resulting termination of the leases because of such default. Alternatively, Garvey Court generally sought to limit the build-out and replacement rent damages to only a two-year period pursuant to the early termination provision.
The Court found that the rejection damages were not limited by the early termination provision because it was never triggered. The Court also found that build-out costs, replacement rent, etc. were the proximate result of the lease rejections. Individual orders were entered for each tenant.
July 9, 2015
14 MP 90007
The United States Trustee filed a Statement of Charges against Attorney Al-Haroon Husain charging him with violating applicable disciplinary rules by systematically altering documents, reusing debtors’ signatures, signing documents on behalf of clients and causing clients to sign incomplete documents. After a five-day hearing, the Court found that the U.S. Trustee proved by a preponderance of the evidence that Mr. Husain has committed the violations as charged.
Mr. Husain will be permanently suspended from the practice of law before the Bankruptcy Court for the Northern District of Illinois due to the nature and extent of his misconduct. The suspension is effective July 31, 2015 at 5:00 p.m. Mr. Husain is also ordered to refund the fees received from the clients listed in the Memorandum Opinion.
The Order will be reported to the Executive Committee of the District Court for the Northern District of Illinois and to the Illinois Attorney Registration & Disciplinary Commission.
Judge Jack B. Schmetterer
July 7, 2015
14 B 41914
12 B 40168, 14 A 00366
13 B 40865,15 A 00091
June 12, 2015
14 B 10105
Judge A. Benjamin Goldgar
June 15, 2015
13 B 44431 14 A 790