Judge Pamela S. Hollis - Opinions

05 B 54630, 06 A 00688

Plaintiff provided credit to patients of Debtor’s dental practice. Plaintiff failed to prove Debtor made fraudulent misrepresentations or perpetrated actual fraud by submitting “pre-billed” charge-slips for payment from Plaintiff and by “pre-billing” dental patients for work not yet performed because Plaintiff did not prohibit pre-billing and Plaintiff knew that charges were being pre-billed. Because Plaintiff failed to establish fraud, court did not reach alter-ego theory as to whether debtor was personally liable for debts of his corporate entities.

05 B 52582, 06 A 00511

In its original opinion, the court found that the plaintiff/creditor did not meet its burden of proof under 727(a)(4)(A), and debtor/defendant prevailed. Judgment also entered for the defendant on 523(a)(2)(B) count. On appeal, the district court affirmed the 523 finding, but determined that the creditor established a presumption of an intent to deceive under 727. Therefore, the bankruptcy court should have shifted the burden of proof to the defendant to prove that he lacked fraudulent intent. The proceeding was remanded. On remand, the bankruptcy court applied the district court's standard and found for the plaintiff.

In re: Gary Cole
November 15, 2007

06 B 08794, 06 A 01653

Creditor sued Chapter 7 debtor seeking denial of discharge under 11 USC 727 and exception from discharge of debt under 11 USC 523. Debtor did not list interest as president and owner of catering company on Schedule B to his bankruptcy petition. Debtor also failed to maintain and produce documentation of transactions relating to his interest in catering company. Held: Discharge denied under 11 USC 727(a)(4) and 11 USC 727(a)(3).

06 B 16620

Prepetition, movant purchased the unpaid real estate taxes due for Debtors' residence. Debtors filed for relief under Chapter 13 just prior to expiration of the redemption period. Debtors scheduled the tax debt for payment to the county, and confirmed a plan that provided for payment of the tax debt during the term of the plan. Movant sought relief from the stay to proceed in state court after expiration of the redemption period. HELD: Movant is a creditor and the tax debt is a secured claim that can be paid over time through a Chapter 13 plan. No cause to grant relief from stay and motion denied.

In Re: Stephen A. Weiss
October 23, 2007

07 B 06781

In this individual chapter 11, creditors moved for relief from stay based on purported underlying security interests in debtor's interests in various partnerships and LLCs. Creditors' interest arose out of an assignment of interests executed by debtor as security for two loans. Court found that under underlying operating agreements and Illinois law, debtor did not have authority to assign his interests without prior consent of other parties to the various agreements. Therefore, assignment was invalid. Accordingly, creditors did not have security interest and motion was denied.

03 A 02300

Chapter 7 trustee sued KPMG, whom debtor had retained to perform a valuation analysis for its employee stock purchase plan. The trustee sought over $20 million in damages, alleging that KPMG breached its contract with the debtor, committed professional malpractice, and aided and abetted debtor's directors and officers in the breach of their fiduciary duties. Held: Judgment for the defendants. After considering the numerous decisions made by KPMG in the exercise of its professional judgment, as well as the circumstances in which the valuation analysis was issued, court determined that KPMG was not negligent.

In Re: Darlene Williams
April 23, 2007

06 B 15945

Chapter 13 debtor sought to retain her car over secured creditor's objection. Since debtor was not entitled to a discharge pursuant to 11 USC 1328(f), plan had to provide that the creditor retain its lien until payment of "the underlying debt determined under nonbankruptcy law." 11 USC 1325(a)(5)(B)(i)(I)(aa). Secured creditor objected on the grounds that the plan failed to do so. The issue was whether that phrase meant that the debtor had to pay the contract rate of interest or whether a prime-plus-risk-factor rate of interest as described in Till v. SCS Credit Corp., 541 U.S. 465, 474 (2004), would be sufficient.
Held: Till and its prime-plus-risk-factor analysis does not apply to the interpretation of 1325(a)(5)(B)(i)(I)(aa). Plan must provide that Debtor pay the contract rate of interest.

05 B 52582, 05 B 52473, 06 A 00511, 06 A 00525

Creditor who supplied business sued father and son debtors on the guarantee they had executed for the business, asserting that the debt was nondischargeable because of misstatements in the financial statements that supported the guarantee. The supplier also sought denial of the son's discharge based on omissions from his schedules. Held: Judgment for the defendants on all counts. Creditor failed to prove by a preponderance of the evidence that it relied on the financial statements submitted with the guarantee, and there was no showing of an intent to deceive by the son.

01 B 26090, (Jointly Administered), 02 A 01680

Reconsideration sought of opinion granting summary judgment to insurers in declaratory judgment action. Movants argued that the court erred in finding that Florida Statute Section 627.426, which requires insurers to advise insureds within 30 days that a coverage defense would be raised, did not apply. Held: Motion denied. An insurer's determination that a notice of circumstances is insufficient to trigger coverage under a claims-made policy is not a coverage defense and so compliance with section 627.426 was not required.

01 B 26090, (Jointly Administered), 02 A 01680

Chapter 7 Trustee sued former directors and officers of debtor, then brought declaratory judgment action against D&O liability insurance carriers. Insurers had denied coverage for lack of notice. Parties filed six cross-motions for summary judgment on declaratory judgment action. Held: Purported "notice of circumstances" letter sent by debtor to insurers during policy period was deficient and did not constitute notice. Insurers had not waived their right to make that argument, neither were they estopped from making it. Insurers did not act in bad faith in denying coverage. The difference between claims made and occurrence liability policies is discussed.