Judge Timothy A. Barnes - Opinions

Judge Timothy A. Barnes

15bk32968
Upon the adversary defendants’ motion for leave to file counterclaims against the liquidating trustee, held:  The Barton doctrine, which requires a party to seek leave to file claims against a trustee in a bankruptcy case, is inapplicable when the claims are brought in an adversary proceeding in the appointing court.  Therefore, the motion for leave to file counterclaims is DENIED as unnecessary.

In re Elton Tabor
April 11, 2018

15 B 26544
Upon the United States Trustee’s motion for sanctions brought pursuant to 11 U.S.C. § 105, held:  The United States Trustee has shown by a preponderance of the evidence the need to address the circumstances discussed herein in a proceeding under 11 U.S.C. § 105.  The motion is granted and counsel is sanctioned in the matter set forth herein.

17 B 03148
Upon the application for administrative expense brought by prepetition assignee for the benefit of creditors on behalf of its counsel, held: The assignee is entitled to compensation for its counsel under 11 U.S.C. § 503(b)(4), the provision affording administrative expenses for professional services rendered for a superseded custodian. Upon application of the standards relating thereto, the application is, therefore, GRANTED in the manner set forth herein.

16 B 36934
Upon the motion for civil contempt brought by a creditor, alleging that the debtor and debtor’s manager violated bankruptcy court orders by transferring property of the bankruptcy estate without court authority, held: The movant has established under section 105 of the Bankruptcy Code clear and convincing evidence of civil contempt by the debtor and the debtor’s manager by proving that the nonmoving parties knowingly violated court orders. The motion is, therefore, GRANTED.

In re Talecia Gilliam
March 28, 2018

17 B 18368
Upon the application of the debtor’s counsel under the court’s flat fee agreement, wherein the debtor’s counsel filed a form chapter 13 plan with a modification to the priority distributions of creditors to elevate the priority of counsel’s payments, held:  The debtor’s counsel has violated the rules applicable to disclosure regarding agreements pertaining to its own compensation and, therefore, no longer qualifies to seek the flat fee.  The application is DENIED in part; specifically, counsel’s compensation is reduced as a sanction for failure to disclose the agreement.  The application is also continued with respect to a further determination regarding reasonableness.

17 B 27961
Upon the application of the debtor’s counsel under the court’s flat fee agreement, wherein the debtor’s counsel filed a form chapter 13 plan with a modification to the priority distributions of creditors to elevate the priority of counsel’s payments, held:  The debtor’s counsel has violated the rules applicable to disclosure regarding agreements pertaining to its own compensation and, therefore, no longer qualifies to seek the flat fee.  The application is DENIED in part; specifically, counsel’s compensation is reduced as a sanction for failure to disclose the agreement.  The application is also continued with respect to a further determination regarding reasonableness.

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.

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