12 B 09458, 13 A 00389
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Judge Carol A. Doyle
January 14, 2015
December 16, 2014
14 B 10740, 14 A 00461
Judge Jacqueline P. Cox
January 13, 2015
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.
January 9, 2015
13 B 29753, 14 A 00674
In this Chapter 13 adversary proceeding, the Debtor-Plaintiff, Samuel Brimmage, alleges that the Defendants, Quatnum3 Group LLC and Elite Recovery Acquisition, LLC, violated the Fair Debt Collection Practices Act (FDCPA) by filing a proof of claim on a debt that is otherwise time-barred. Elite Recovery Acquisition is a national debt buyer and Quantum3 Group is its agent.
The Defendants moved to dismiss the adversary proceeding by arguing that 1) filing a proof of claim is not a debt collection action subject to FDCPA and 2) that if it was a debt collection action then it would be impossible to comply with both the Bankruptcy Code and the FDCPA, and that the Code should therefore control.
The Court denied the motion, concluding that filing a proof of claim is a form of debt collection. The Seventh Circuit has held that while the statutes do overlap, enforcement of both is possible where “any debt collector can comply with both simultaneously.” Randolph v. IMBS, Inc., 368 F.3d 726, 730 (7th Cir. 2004). Agreeing with a similar decision out of the Southern District of Indiana, the Court determined that the Defendants could easily comply with both the Code and the FDCPA by simply not filing a proof of claim on a time-barred debt. See also Patrick v. PYOD,LLC, 2014 WL 4100414 (S.D.Ind. 2014). As such, the Court will be able to enforce both the FDCPA and the Code in this situation.
December 17, 2014
13 B 38149, 14 A 00177
In this Chapter 7 adversary proceeding, Plaintiff Kenneth Wians, as Independent Administrator of the Estate of Clara Wians, filed a Motion for entry of Summary Judgment against Defendant Dennis Wians on a complaint seeking to except a debt from discharge under 11 U.S.C. § 523(a)(4). The Plaintiff alleged that the Defendant converted assets belonging to his elderly and disabled mother, while he held powers of attorney for healthcare and property.
In support of his Motion, the Plaintiff asserted that the doctrine of collateral estoppel precluded the Defendant from relitigating the issues previously resolved in a prior state court matter, which proceeded to final judgment, creating the $196,000 debt at issue herein.
The Court granted the Motion, finding that the prior state court order contained specific findings establishing that a fiduciary relationship existed between the Defendant and his mother, within the meaning of § 523(a)(4) and that Defendant committed acts of defalcation with the requisite state of mind, as required by the Supreme Court in Bullock v. BankChampaign N.A.,133 S. Ct. 1754, 1759 (2013).
Judge Jack B. Schmetterer
14 B 15420, 14 A 00514
November 24, 2014
14 B 02689, 14 A 00321
Judge Timothy A. Barnes
December 31, 2014
11 B 41555, 13 A 01243
Upon certain defendants’ motions to dismiss the Trustee’s fraudulent conveyance adversary complaint on statute of limitations grounds, the Trustee argues that it may rely on such longer statute of limitations as may be applicable to the IRS as an actual prepetition creditor of the bankruptcy estate.
Judge A. Benjamin Goldgar
12 B 10839, 12 A 00943