Judge LaShonda A. Hunt - Opinions

Judge LaShonda A. Hunt

Debtors voluntarily converted their case to chapter 7 prior to the Court confirming a chapter 13 plan or ruling on the fee application of chapter 13 counsel. The chapter 13 trustee and counsel disagreed over what should happen to the remaining funds in the now-terminated chapter 13 estate, with the Trustee arguing they belonged to Debtors, and counsel arguing they should first be used to satisfy the allowed chapter 13 fee award.  Applying the Supreme Court's decision in Harris v. Viegelahn, 575 U.S. 510, 135 S.Ct. 1829, 191 L. Ed. 2d 783 (2015), the Court agreed with the Trustee and ordered the funds be returned to Debtors.

Subchapter V debtor’s proposed plan of reorganization drew objections on multiple grounds from its largest unsecured creditor and from a minority shareholder.  Following a contested confirmation hearing, the Court sustained the objections in part and held that the plan did not meet the requirements for nonconsensual confirmation under 11 U.S.C. § 1191.

21bk07972, 21ap00111
Subchapter V debtor sought to subordinate creditor’s unsecured claim to all other unsecured creditors under 11 U.S.C. § 510(b).  Following a trial, the court held that the debtor failed to meet its burden of establishing that the creditor’s claim arose from the purchase or sale of securities of the debtor or an affiliate of the debtor.

Debtors reopened their chapter 7 bankruptcy case and moved for a finding of civil contempt against an individual creditor and counsel who represented him post-discharge in state court collection actions to recover pre-petition debts.  Following a contested hearing, the Court found Respondents in contempt for violating the discharge injunction and entered sanctions of punitive damages, attorney fees, and injunctive relief.

16bk34329, 18ap00290
Chapter 7 Trustee sought to avoid an indirect transfer by Debtor to gratuitously repay a debt he did not owe. Following a trial, the Court holds the Trustee did not meet his burden of establishing an avoidable transfer of Debtor’s property interest under 11 U.S.C. § 544, or demonstrate actual or constructive fraud under Illinois fraudulent transfer law. Judgment will be entered in favor of Defendants.

19bk32364, 20ap00063
Defendant/debtor incurred a pre-petition debt to Plaintiff for violations of the Perishable Agricultural Commodities Act (“PACA”).  Defendant moved for summary judgment on the legal question of whether a PACA trust establishes fiduciary duties for purposes of the non-dischargeability analysis under 11 U.S.C. § 523(a)(4).  Adopting the minority viewpoint, the Court concludes that it does not.

In re: Isidro M. Alcantar
September 10, 2021

Chapter 7 debtor who already received his discharge moved to convert to a chapter 13 and repay his discharged debts without seeking to vacate the discharge order.  Relief was denied because debtor could not demonstrate statutory eligibility to be in a chapter 13 or good-faith motives.

Debtors reopened their chapter 7 case and moved for a finding of civil contempt against the Illinois Department of Revenue for collecting state tax debts they contend were discharged.  The motion will be denied, as the court finds the tax liability, interest, and four of the five assessed penalties nondischargeable pursuant to 11 U.S.C. §§ 523(a)(1)(B)(i) and 523(a)(7)(B).  Regarding the one discharged penalty, IDOR’s collection efforts were objectively reasonable and for such an inconsequential amount that neither a finding of contempt nor the imposition of sanctions is warranted.


17bk16894, 18ap00764
Plaintiff sought to revoke the chapter 7 discharge of debtor/defendant, his former business partner who omitted information from his Statement of Financial Affairs about company assets he possessed at the time of the bankruptcy filing.  Following a trial, the court held that plaintiff failed to meet his burden of proof with respect to fraudulent intent as required under 11 U.S.C. § 727(d)(1).

Chapter 7 Trustee sought turnover of proceeds from debtors’ prepetition sale of their homestead, that they failed to reinvest before the one-year time limit expired.  Because the Trustee did not timely object to the exemption and the snapshot rule governs, the motion to compel turnover of funds is denied.