Subscribe to All Opinions12 B 30720, 12 A 01689
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.
Judge A. Benjamin Goldgar
Judge Jack B. Schmetterer
12 B 21010, 12 A 01021
Judge Carol A. Doyle
12 B 33300, 12 A 01614
Judge Donald R. Cassling
Judge Jacqueline P. Cox
In re GAC Storage El Monte, LLC, et al.
March 19, 2013
March 19, 2013
11 B 40944 (jointly administered)
In this memorandum opinion, the Court denied confirmation of the Debtor’s Third Amended Plan of Reorganization. The Court noted that to satisfy the Bankruptcy Code’s requirement that the Debtor’s Plan be fair and equitable, a plan must propose an interest rate adequate to assure the realization of the Bank’s claim. In this case, the Court determined that the interest rate advanced by the Debtor did not sufficiently capture the risk that the Debtor would not satisfy the Bank’s claim. The Court also determined that the Plan was not feasible because the Debtor failed to prove that the property would increase in value enough to give the Debtor sufficient equity to facilitate refinancing at the end of 7 years to fund a balloon payment to the Bank. Also, relying on the Seventh Circuit’s decision in In re Castleton Plaza, LP, No. 12-2639, 2013 WL 537269, and Bankruptcy Code Section 101(31)(B), the Court held that the nature of the plan warrants application of the absolute priority rule as the plan gave the Debtor’s insider preferential access to an investment opportunity in the Reorganized Debtor without allowing others to compete for that opportunity. The Court also granted the Bank’s request for relief from the automatic stay because the Debtor failed to show that there is a reasonable possibility of a successful reorganization.
Judge Janet S. Baer
In re: Brenda K. Rogers
March 14, 2013
March 14, 2013
10 B 57906
Counsel for the Debtor filed an amended fee application in this chapter 13 case. Notwithstanding counsel’s agreement to the flat fee pursuant to the Court-Approved Retention Agreement, he sought approval of a fee of $23,379, which was $19,879 over the court-authorized flat fee. The issue before the Court was whether this case presented “extraordinary circumstances” that would warrant the additional fee. In reviewing both the history of activity in the case and counsel’s itemized time records, the Court found certain services to be extraordinary and granted fees of $14,140 in addition to the $3,500 flat fee, as well as $323 for reimbursement of expenses. The Court denied fees as to the remaining amounts requested in the amended fee application.
Judge Pamela S. Hollis
08 B 31707, 11 A 02415
Debtors/Plaintiffs filed for relief under Chapter 13 and confirmed their plan. They fell behind on plan payments, attempted to catch up, then voluntarily dismissed their case. The Chapter 13 Trustee was left holding a sum of money at dismissal. Debtors filed an adversary proceeding seeking turnover of the funds. The Chapter 13 Trustee argued that she must distribute the funds to creditors. Debtors filed a motion for judgment on the pleadings, since no facts were in dispute. HELD: The funds must be returned to the Debtors. 11 U.S.C. 1326(a)(2), which instructs trustees to distribute certain payments to creditors in accordance with the plan, applies only to preconfirmation payments. Postconfirmation, trustees must make payments under the plan pursuant to 1326(c). At dismissal, however, 349(b)(3) revests property of the estate in the entity in which such property was vested immediately before the commencement of the case, which in the case of funds paid into the plan, held by the Chapter 13 Trustee and not yet distributed, is the Debtors.
09 B 26595, 09 A 01045
Debtor/Defendant had a successful remodeling and construction business. He and Plaintiff, a salaried and less-successful tool and die designer, became close friends. When Plaintiff sold his home and found himself with some extra cash, they agreed to invest in new construction. Defendant chose the location, acted as the general contractor and arranged for construction financing. Plaintiff put up the money and his name alone was on the title and loan. The house was completed just in time for the real estate market to crash. The bank foreclosed and got a deficiency judgment against Plaintiff, who asked Defendant where all the money had gone. Defendant could only account for about three-quarters of the funds. Plaintiff sought a finding that Defendant's debt was nondischargeable under 523(a)(2) and (a)(4). Following a multi-day trial, the parties briefed the issues and Plaintiff dropped the 523(a)(2) count. HELD: The parties had a fiduciary relationship because of the difference in knowledge and power which gave Defendant a position of ascendancy over Plaintiff. The debt was caused by Defendant's defalcation while acting in a fiduciary capacity, and is nondischargeable pursuant to 523(a)(4)