Judge Jacqueline P. Cox - Opinions

Judge Jacqueline P. Cox

19 BK 28687, 22 AP 00019
The Trustee filed an Adversary Complaint seeking to invalidate a law firm’s statutory attorney’s fees lien and to limit its recovery of fees because its purported lien failed to meet the statutory requirement to disclose its interest, the fee that the client owed the firm.  In its Motion to Dismiss, the firm asserted that it complied with the statute.  The court disagreed with the firm and denied its motion, finding that it failed to disclose the fee that the client owed.

In re Gordon Green
March 9, 2022

21 B 06189
The Chapter 7 Trustee objected to the Debtor’s claim of exemption relating to a retirement plan organized under Canadian law. The court interpreted relevant federal and Illinois statutes in sustaining the objection.  Illinois law governs exemption of assets in bankruptcy for its residents who file for bankruptcy protection.  Illinois law provides that retirement plans defined as qualified in the Internal Revenue Code are exempt.  To qualify under the Internal Revenue Code a retirement plan has to be created or organized in the United States.

In re Robert M. Kowalski
November 12, 2021

18 BK 09130
A receiver appointed by a domestic relations judge seeks over $150,000 in administrative expenses for discovering assets that did not bring value to the bankruptcy estate.  The request was denied.

18 BK 09130, 19 AP 00626
The Trustee filed an adversary proceeding against Byline Bank alleging conversion and violation of the automatic stay because the bank cashed cashier’s checks for the Debtor and his sister that the Debtor purchased pre-petition. The sister, an attorney, claimed that the funds represented legal fees she earned representing the Debtor and entities he controlled.
The United States Attorney indicted the Debtor, his sister and others for bankruptcy fraud and other crimes. The court stayed the adversary proceeding to allow the criminal case to proceed first.  The Trustee filed a motion asking that his adversary proceeding proceed immediately.
The court denied the Trustee’s motion ruling, in part, that proceeding on this civil matter first could jeopardize the rights of the defendants in the criminal case to assert their Fifth Amendment right against self-incrimination because Byline Bank wants to depose them in this matter.

09 B 05868, 20 A 00399
This adversary proceeding is Debtor Richard Sharif’s latest attempt to undo a default judgment he caused to be entered in 2010 denying him a discharge and declaring a trust to be his alter ego, making it property of the bankruptcy estate.
He alleges that the Chapter 7 Trustee Horace Fox Jr., his attorneys, a child representative in his divorce case, his estranged wife and her former attorney are civilly liable to him for violating the Racketeer Influenced and Corrupt Organizations Act, conspiracy, breach of fiduciary duty and negligence for taking his trust and other property even though the interests in issue were declared to be property of the bankruptcy estate pursuant to a default judgment entered as a sanction for his failure to comply with his discovery obligations.
The case was filed in the District Court; it was transferred to this court.
The Amended Complaint has been dismissed with prejudice.

In re Jessie M. Knight
March 29, 2021

16 B 32994
The Debtor’s attorney has been ordered to submit an accounting of $8,300 received in settlement of a Motion for Sanctions.  A creditor refused to release title/lien on a vehicle where the underlying debt had been discharged in a completed chapter 13 case.  Because the Debtor’s attorney (or his firm) had entered into the Court-Approved Retention Agreement to represent the Debtor for a flat $4,000 fee, the attorney is not entitled to receive additional legal fees absent an application to the court for such.  No one has sought additional fees.

Joseph C. Sheehan
February 4, 2021

20 B 07130
The court denied a Chapter 11 debtor’s Motion Pursuant to Rule 2004 to examine individuals and entities in Ireland and the United Kingdom for two reasons:  (1) he had not served them according to the Hague Service Convention, noting that the rules that allow nationwide service by first class mail do not apply internationally and (2) the pending adversary rule disallows Rule 2004 examinations when a related adversary proceeding is pending.  The civil rules govern discovery once an adversary proceeding is commenced.

 19 B 08032 and 19 B 08037; 19 A 00740 (Consolidated with 19 A 00741)
Debtors Pramod Patel and Ankit Shah worked for several years for Plaintiff M S International, Inc. They left to work for their former employer’s competitor. They were found liable in a civil action in a California federal court for stealing their former employer’s trade secrets, based on their violations of two penal code provisions and fraud and deceit. They filed chapter 7 bankruptcy cases a few months later. M S International filed adversary complaints seeking to have the debts established in the prior litigation excepted from discharge under 11 U.S.C. section 523(a)(2)(A). Collateral estoppel was applied to bar relitigation of the prior court’s factual findings.

Summary judgment was entered by the bankruptcy judge in favor of Plaintiff M S International, Inc. The debts were found to be non-dischargeable actual frauds.

18 B 09130
The Federal Deposit Insurance Company objected to proofs of claim filed by attorneys who represented the Debtor’s spouse in a dissolution of marriage case. The state court awarded fees to the attorneys in connection with establishing support owed to the Debtor’s former spouse and their child. The state court defined the awards to the attorneys as non-dischargeable domestic support obligations. The FDIC argued that they were not domestic support obligations entitled to priority under Section 507 because they were payable to the attorneys, not to the Debtor’s former spouse or child.
The Seventh Circuit and other courts have found attorneys’ fee awards made in connection with dissolution litigation to be in the nature of domestic support obligations, not because a state court says they are domestic support obligations, but after analyzing the language and substance of the judgments in issue, the parties’ financial circumstances and the function served by the obligation.

The FDIC’s objections were overruled. The fee obligations were held to be domestic support obligations entitled to priority under section 507 of the Bankruptcy Code.

In re Marcella Marie Mance
February 6, 2020

19 B 33057
In reliance on a recent ruling in In re Wigfall, 606 B.R. 784, the court avoided the City of Chicago’s lien on the Debtor’s vehicle after finding that it was a judicial lien subject to avoidance under Section 522(f) of the Bankruptcy Code.  The City contended that it was a statutory lien which Section 522(f) did not apply to.  Its lien was authorized by statute but the City cannot immobilize and seize vehicles until it obtains quasi-judicial determinations that its ordinances have been violated.

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