Opinions

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.

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Chief Judge Bruce W. Black

Judge Timothy A. Barnes

12 B 48031
Mortgagee bank brought a motion to dismiss for bad faith and a motion for relief from stay on three investment properties of the Debtor. Bank contended the infeasibility of the Debtor’s proposed plan, along with the Debtor’s conduct, including filing three bankruptcies within a year, established sufficient grounds to warrant cause for dismissal. In regards to the relief for stay, the bank alleged that the Debtor’s failure to pay delinquent taxes and the pending expiration of tax redemption period demonstrated that the bank inadequately protected. The bank also reasoned that with respect to two of the properties, grounds exists to grant relief from the stay because there was no equity in the properties and the Debtor did not have a reasonable possibility of confirming a reorganization plan. The Bankruptcy Court held that: (i) the Debtor’s conduct, while troubling, did not warrant cause for dismissal under section 1112(b); and (ii) the failure of the Debtor to confirm a plan that proposes to pay all delinquent taxes in full prior to expiration of the tax redemption period will result in the bank being inadequate protected and thus failure to do so will cause sufficient grounds to arise to grant relief from stay on the three investment properties.

In re Debra A. Morrow
June 26, 2013

12 B 26246

Condo association brought motion for relief from stay eight days after debtor’s chapter 13 plan was confirmed. Condo association alleged that an unexecuted prepetition order for possession and a default in postpetition, but preconfirmation, direct payments to creditor constituted lack of adequate protection. The court denied the motion and condo association filed a motion to reconsider.
The Bankruptcy Court held that: (i) the res judicata effect of the order confirming a plan precludes a creditor from seeking relief from stay immediately following confirmation of a plan when the basis of the relief is based on grounds that could have been raised preconfirmation; and (ii) the existence of a creditor’s unexecuted, prepetition order for possession does not extinguish a debtor’s actual possessory interest and does not constitute grounds for relief from stay.

11 B 27030, 12 A 01057

State court judgment creditor brought a complaint seeking declaratory judgment that three bank accounts that were the subject of or created by state court orders were not property of the Debtor’s estate. State court judgment creditor filed motioned for summary judgment. The Bankruptcy Court held that: (i) the parties consented to judgment on one account; (ii) summary judgment in favor of state court judgment creditor was appropriate as to a second account because funds were deposited to restore previously depleted trust funds, and as such were not property of the estate; and (iii) summary judgment in favor of bankruptcy estates was appropriate as to the third account because, even though the state court orders requiring the creation of the account described the account as an “escrow” account, the nature of such orders did not clearly indicate the precise legal obligation for which the account was established, the condition upon which the funds would be released, or the beneficiary of the account.

Judge A. Benjamin Goldgar

Judge Jack B. Schmetterer

Judge Donald R. Cassling

In re LHC, LLC
July 16, 2013

13 B 7001

Judge Janet S. Baer

12 B 07352, 12 A 00765

The debtors filed an adversary proceeding to determine the nature and extent of creditor’s lien on their residence. The Court found that the creditor’s third priority lien was wholly unsecured and thus subject to being stripped off the debtors’ residence and treated as an unsecured claim. The Court found that the sales comparison approach was the appropriate method of valuation in this case and held that the petition date was the relevant date for valuation.

Judge Jacqueline P. Cox

In re 1555 Wabash LLC
June 19, 2013

11 B 51502

Evans Construction Company (“Evans”) filed a secured Mechanics Lien claim in the amount of $398,937.00 which represented amounts that were owed directly to Evans’ subcontractors. The Lender, Debtor's successor, objected to the claim, asserting a setoff for amounts paid directly to subcontractors and for amounts paid to correct construction work alleged to be defective. The Court reduced Evans claim to reflect amounts proven to be paid directly to subcontractors. However, after hearing the testimony of several witnesses, the Court determined that the Lender’s assertion that Evans produced faulty work was not supported by the evidence, as the defects complained of were explicitly contracted for by the parties.

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