Judge Timothy A. Barnes - Opinions

Judge Timothy A. Barnes

17 B 10230
Upon the application of a state court-appointed receiver for allowance and payment of administrative expenses, held:  The receiver has established that, on the petition date, it was a custodian for the purposes of payment under 11 U.S.C. § 543(c)(2) and priority of payment under 11 U.S.C. § 503(b)(3)(E), and thus is entitled to assert a claim under both provisions.  As the receiver seeks payment from estate assets, the court applies the standard set forth in 11 U.S.C. § 503(b)(3)(E).  However, the receiver has not yet established that its claim meets that statute’s standards.  As a result, the receiver’s application is set for further hearing.

17 B 03148
Upon the application for administrative expense brought by a party to whom a prepetition assignee of the debtor’s assets for the benefit of creditors became obligated, held: while the movant is not entitled to seek reimbursement under the provision affording custodians administrative expenses, the movant is entitled to protection as a party to whom a custodian became obligated.  The court sets such protection as a right to expense reimbursement from the estate with administrative priority under 11 U.S.C. § 503(b).  The application is, therefore, GRANTED.

17 B 10230, 17 A 00401
Upon the motions of two adversary defendants to dismiss the complaint for failure to state a claim, held:  The complaint states a plausible claim for declaratory judgment of the plaintiff’s interest, as prepetition receiver of property of the estate, in such property.  As a result, each motion is DENIED.Upon the motions of two adversary defendants to dismiss the complaint for failure to state a claim, held:  The complaint states a plausible claim for declaratory judgment of the plaintiff’s interest, as prepetition receiver of property of the estate, in such property.  As a result, each motion is DENIED.

In re Jennifer Robinson
December 4, 2017

17 B 12405
Upon a tax purchaser’s motion for relief from stay in a chapter 13 case, arguing that the expiration of the state-law period for redeeming taxes prior to the debtor filing for bankruptcy case gives cause to modify the stay, held: The tax purchaser has not established the necessary elements of section 362(d)(1) or (d)(2) to be granted relief from stay. Because the tax purchaser has not obtained a tax deed, under Illinois law, the debtor remains the owner of the underlying real property even though the redemption period has expired prior to the commencement of the debtor’s case. The debtor therefore has the right to attempt to treat the tax purchaser’s claim and the debtor’s property in a chapter 13 plan. The existence of that right, under the facts at bar, trumps the tax purchaser’s desire to bolster its claim postpetition by acts proscribed by the automatic stay. The motion for relief from stay is, therefore, DENIED.

15 A 00819, 14 B 17886
Upon the chapter 7 trustee’s complaint under 11 U.S.C. § 363(h) seeking to sell all interests in real property held in a living trust in which the estate also has an interest, held: The trustee has established each element of section 363(h) to sell the real property free of the other interests therein. Therefore, judgment will be rendered in favor of the trustee and the trustee is authorized to sell the property.

17 B 05030
Upon the motion of a debtor statutorily without automatic stay protection to enforce the co-debtor stay, held: The debtor has standing to enforce the co-debtor stay regardless of whether or not she is protected by the automatic stay. As the postpetition judicial sale violated the co-debtor stay, the sale is void. The debtor has, however, failed to demonstrate an entitlement to damages. As a result, the debtor’s motion is GRANTED insofar as it seeks to have the sale and subsequent acts related thereto determined to be void but, in all other respects, is DENIED.

15 B 32968,16 A 00019

Upon the “no evidence” motion for summary judgment brought by Associated Bank, National Association, held: The movant has not established grounds for summary judgment under Federal Rule of Civil Procedure 56 as it has not established the absence of genuine issue of material fact in dispute.  There is a genuine issue of material fact concerning the debtors’ solvency on the date they closed a loan with the movant, and movant is therefore not entitled to judgment as a matter of law.  The motion is, therefore, DENIED.

14 B 14023, 16 A 00387
The matter before the court is whether, at the request of the debtor, the court should stay an adversary proceeding, brought by the United States Trustee, seeking a denial of discharge under 11 U.S.C. § 727. The debtor argues that the existence of parallel criminal investigations means that continuing the adversary is imprudent, as that might subject her to conflicting choices—namely to invoke a Fifth Amendment privilege against self-incrimination and face possible negative inferences arising therefrom, or to defend the adversary complaint and risk information therein being used in a criminal indictment. Held: In light of there being no actual pending criminal proceeding, the relevant standards as applied to the facts herein as they presently exist weigh in favor of continuing with the adversary. The motion to stay is, therefore, DENIED without prejudice.

08 B 10095
Upon the Motion for Entry of an Order (I) Enforcing Confirmation Order; (II) Directing Dismissal of State Court Claims; (III) Awarding Damages; and (IV) Granting Related Relief, brought by successor to the purchaser of assets in the above-captioned bankruptcy cases, held:  The movant has established that the claims brought in the state court actions are precluded by the confirmation order entered in this case.  The motion is, therefore, GRANTED as set forth in the attached Memorandum Decision.  A separate hearing on damages will follow.

15 B 32968
Upon the application from a class of former employees seeking allowance of an administrative expense claim for being terminated by the debtors in the above-captioned chapter 11 cases without notice as required by federal law and the liquidating trustee’s objection thereto, held: Despite the liquidating trustee’s claim that the debtors were liquidating and thus were excepted from the federal notice requirement, notice was required. As a result, the federal termination period applies and the damages relating thereto are postpetition damages. As a result, the application is GRANTED. The terminated employees’ administrative claim is allowed in an amount to be determined at a later hearing.