You are here

Judge Timothy A. Barnes - Opinions

Description Date Issued
In re Equipment Acquisition Resources, Inc.; William A. Brandt, Jr., solely in his capacity as Plan Administrator for Equipment Acquisition Resources, Inc. v. ICON EAR, LLC and ICON EAR II, LLC

09 B 39937, 11 A 02239
Upon the Defendant’s motion to dismiss the Chapter 11 Plan Administrator’s adversary proceeding, seeking to avoid and recover as fraudulent transfers lease payments transferred from Debtor to Defendant that purportedly were part of fraudulent scheme, held: (i) the claims in the Amended Complaint clearly provided the elements of a Ponzi-type scheme and thus provided a theory out of which a constructive trust may arise under Illinois law; and (ii) while the in pari delicto doctrine may be available in the context of a claim for constructive trust, there are no allegations in the count in question that the Plan Administrator also participated in the alleged fraud, only that such a fraud existed.  Motion to dismiss denied.

09/30/2012
In re Equipment Acquisition Resources, Inc.; William A. Brandt, Jr., as Plan Administrator for Equipment Acquisition Resources, Inc. v. U.S. Bancorp, Inc. & Lyon Financial Services, Inc. d/b/a U.S. Bancorp Manifest Funding Service

09 B 39937, 11 A 02196
Upon the Defendants’ motion to dismiss the Chapter 11 Plan Administrator’s adversary proceeding, seeking to avoid and recover as fraudulent transfers lease payments transferred from the Debtor to the Defendant that purportedly were part of fraudulent scheme, held: (i) the Defendants’ interpretation of the interplay between sections 11 U.S.C. §§ 544 and 546 with respect to the statute of limitations to avoid fraudulent transfers was not well founded as the overwhelming majority of opinions in this circuit interpreting such interplay go against the Defendants’ assertions; (ii) that the Debtor may have received “reasonably equivalent value” was not fatal to cause of action to avoid lease payments as actually, and not just constructively, fraudulent transfers; (iii) allegations in complaint did not establish “good faith and for value” defense on face of complaint for purposes of 11 U.S.C. § 548(c); but (iv) the Plan Administrator failed to adequately allege Ponzi-type scheme and to explain how challenged payments were used to further alleged scheme and harm the Debtor’s other creditors.  Motion to dismiss granted.

09/30/2012
In re Equipment Acquisition Resources, Inc.; William A. Brandt, Jr., solely in his capacity as Plan Administrator for Equipment Acquisition Resources, Inc., v. Alliance Commercial Capital, Inc.

09 B 39937, 11 A 02198
Upon the Defendant’s motion to dismiss the Chapter 11 Plan Administrator’s adversary proceeding, seeking to avoid and recover as fraudulent transfers lease payments transferred from the Debtor to the Defendant that purportedly were part of fraudulent scheme, held: Based on a relationship between the party that received notice of the Original Complaint and the Defendant, and the Defendant’s past relationship with the Debtor, the Defendant should have known that it was the proper party and failed to identify itself until after the expiration of the statute of limitations. The Second Amended Complaint, adding the Defendant satisfied Fed. R. Civ. P. 15(c) and thus related back to the Original Complaint for purposes of satisfying the two-year statute of limitations imposed by 11 U.S.C. § 546.  Motion to dismiss denied.

09/28/2012
In re Equipment Acquisition Resources, Inc.; William A. Brandt, Jr., solely in his capacity as Plan Administrator for Equipment Acquisition Resources, Inc., v. American Bank, FSB

09 B 39937, 11 A 02200
Upon the Defendant’s motion to dismiss the Chapter 11 Plan Administrator’s adversary proceeding, seeking to avoid and recover as fraudulent transfers lease payments transferred from the Debtor to the Defendant that purportedly were part of fraudulent scheme, held: (i) allegations in complaint did not establish “good faith and for value” defense on face of complaint for purposes of 11 U.S.C. § 548(c); (ii) the Plan Administrator did not have to identify a specific unsecured “triggering creditor” that was in existence at time of challenged transfers in order to state cause of action to avoid transfers as actually fraudulent to creditors under Illinois law, in exercise of 11 U.S.C. § 544(b) strong-arm powers due to scores of unsecured claimants; but (iii) the Plan Administrator failed to adequately allege Ponzi-type scheme and to explain how challenged payments were used to further alleged scheme and harm the Debtor’s other creditors.  Motion to dismiss granted.

09/28/2012
In re Equipment Acquisition Resources, Inc.; William A. Brandt, Jr., solely in his capacity as Plan Administrator for Equipment Acquisition Resources, Inc., v. Comerica Leasing, a Division of Comerica Bank

09 B 39937, 11 A 02218
Upon the Defendant’s motion to dismiss the Chapter 11 Plan Administrator’s adversary proceeding, seeking to avoid and recover as fraudulent transfers lease payments transferred from the Debtor to the Defendant that purportedly were part of fraudulent scheme, held: (i) allegations in complaint did not establish “good faith and for value” defense on face of complaint for purposes of 11 U.S.C. § 548(c); (ii) the Plan Administrator did not have to identify a specific unsecured “triggering creditor” that was in existence at time of challenged transfers in order to state cause of action to avoid transfers as actually fraudulent to creditors under Illinois law, in exercise of 11 U.S.C. § 544(b) strong-arm powers due to scores of unsecured claimants; but (iii) the Plan Administrator failed to adequately allege Ponzi-type scheme and to explain how challenged payments were used to further alleged scheme and harm the Debtor’s other creditors.  Motion to dismiss granted.

09/28/2012
In re Equipment Acquisition Resources, Inc.; William A. Brandt, Jr., solely in his capacity as Plan Administrator for Equipment Acquisition Resources, Inc., v. IBM Credit, LLC

09 B 39937, 11 A 02227
Upon the Defendant’s motion to dismiss the Chapter 11 Plan Administrator’s adversary proceeding, seeking to avoid and recover as fraudulent transfers lease payments transferred from the Debtor to the Defendant that purportedly were part of fraudulent scheme, held: (i) that the Debtor may have received “reasonably equivalent value” was not fatal to cause of action to avoid lease payments as actually, and not just constructively, fraudulent transfers; but (ii) the Plan Administrator failed to adequately allege Ponzi-type scheme and to explain how challenged payments were used to further alleged scheme and harm the Debtor’s other creditors.  Motion to dismiss granted.

09/28/2012
In re Equipment Acquisition Resources, Inc.; William A. Brandt, Jr., solely in his capacity as Plan Administrator for Equipment Acquisition Resources, Inc., v. KLC Financial, Inc.

09 B 39937, 11 A 02222
Upon the Defendant’s motion to dismiss the Chapter 11 Plan Administrator’s adversary proceeding, seeking to avoid and recover as fraudulent transfers lease payments transferred from the Debtor to the Defendant that purportedly were part of fraudulent scheme, held: (i) that the Debtor may have received “reasonably equivalent value” was not fatal to cause of action to avoid lease payments as actually, and not just constructively, fraudulent transfers; (ii) allegations in complaint did not establish “good faith and for value” defense on face of complaint for purposes of 11 U.S.C. § 548(c);  (iii) the Plan Administrator did not have to identify a specific unsecured “triggering creditor” that was in existence at time of challenged transfers in order to state cause of action to avoid transfers as actually fraudulent to creditors under Illinois law, in exercise of 11 U.S.C. § 544(b) strong-arm powers due to scores of unsecured claimants; but (iv) the Plan Administrator failed to adequately allege Ponzi-type scheme and to explain how challenged payments were used to further alleged scheme and harm the Debtor’s other creditors.  Motion to dismiss granted in part and denied in part.

09/28/2012
In re Equipment Acquisition Resources, Inc.; William A. Brandt, Jr., solely in his capacity as Plan Administrator for Equipment Acquisition Resources, Inc., v. Leasing One Corporation

09 B 39937, 11 A 02224
Upon the Defendant’s motion to dismiss the Chapter 11 Plan Administrator’s adversary proceeding, seeking to avoid and recover as fraudulent transfers lease payments transferred from the Debtor to the Defendant that purportedly were part of fraudulent scheme, held: (i) that the Debtor may have received “reasonably equivalent value” was not fatal to cause of action to avoid lease payments as actually, and not just constructively, fraudulent transfers; (ii) the Plan Administrator did not have to identify a specific unsecured “triggering creditor” that was in existence at time of challenged transfers in order to state cause of action to avoid transfers as actually fraudulent to creditors under Illinois law, in exercise of 11 U.S.C. § 544(b) strong-arm powers due to scores of unsecured claimants; but (iii) the Plan Administrator failed to adequately allege Ponzi-type scheme and to explain how challenged payments were used to further alleged scheme and harm the Debtor’s other creditors.  Motion to dismiss granted in part and denied in part.

09/28/2012
In re Equipment Acquisition Resources, Inc.; William A. Brandt, Jr., solely in his capacity as Plan Administrator for Equipment Acquisition Resources, Inc., v. Pentech Financial Services, Inc.

09 B 39937, 11 A 02231
Upon the Defendant’s motion to dismiss the Chapter 11 Plan Administrator’s adversary proceeding, seeking to avoid and recover as fraudulent transfers lease payments transferred from the Debtor to the Defendant that purportedly were part of fraudulent scheme, held: (i) allegations in complaint did not establish “good faith and for value” defense on face of complaint for purposes of 11 U.S.C. § 548(c); (ii) the Plan Administrator did not have to identify a specific unsecured “triggering creditor” that was in existence at time of challenged transfers in order to state cause of action to avoid transfers as actually fraudulent to creditors under Illinois law, in exercise of 11 U.S.C. § 544(b) strong-arm powers due to scores of unsecured claimants; but (iii) the Plan Administrator failed to adequately allege Ponzi-type scheme and to explain how challenged payments were used to further alleged scheme and harm the Debtor’s other creditors.  Motion to dismiss granted.

09/28/2012
In re Equipment Acquisition Resources, Inc.; William A. Brandt, Jr., solely in his capacity as Plan Administrator for Equipment Acquisition Resources, Inc., v. People’s Capital and Leasing Corp.

09 B 39937, 11 A 02233
Upon the Defendant’s motion to dismiss the Chapter 11 Plan Administrator’s adversary proceeding, seeking to avoid and recover as fraudulent transfers lease payments transferred from the Debtor to the Defendant that purportedly were part of fraudulent scheme, held: (i) allegations in complaint did not establish “good faith and for value” defense on face of complaint for purposes of 11 U.S.C. § 548(c); (ii) the Plan Administrator did not have to identify a specific unsecured “triggering creditor” that was in existence at time of challenged transfers in order to state cause of action to avoid transfers as actually fraudulent to creditors under Illinois law, in exercise of 11 U.S.C. § 544(b) strong-arm powers due to scores of unsecured claimants; but (iii) the Plan Administrator failed to adequately allege Ponzi-type scheme and to explain how challenged payments were used to further alleged scheme and harm the Debtor’s other creditors.  Motion to dismiss granted.

09/28/2012
In re Equipment Acquisition Resources, Inc.; William A. Brandt, Jr., solely in his capacity as Plan Administrator for Equipment Acquisition Resources, Inc., v. PlainsCapital Leasing, LLC

09 B 39937, 11 A 02236
Upon the Defendant’s motion to dismiss the Chapter 11 Plan Administrator’s adversary proceeding, seeking to avoid and recover as fraudulent transfers lease payments transferred from the Debtor to the Defendant that purportedly were part of fraudulent scheme, held: (i) the Defendant could not assert res judicata challenge to adequacy of confirmed plan’s reservation clause; (ii) the plan’s reservation clause effectively preserved fraudulent transfer claims asserted pursuant to state law under 11 U.S.C. § 544(b); but (iii) the Plan Administrator failed to adequately allege Ponzi-type scheme and to explain how challenged payments were used to further alleged scheme and harm the Debtor’s other creditors.  Motion to dismiss granted.

09/28/2012
In re Equipment Acquisition Resources, Inc.; William A. Brandt, Jr., solely in his capacity as Plan Administrator for Equipment Acquisition Resources, Inc., v. Suntrust Leading Corporation

09 B 39937, 11 A 02201
Upon the Defendant’s motion to dismiss the Chapter 11 Plan Administrator’s adversary proceeding, seeking to avoid and recover as fraudulent transfers lease payments transferred from the Debtor to the Defendant that purportedly were part of fraudulent scheme, held: (i) the defense of in pari delicto was unavailable to the Defendant because the claims were not claims that the Debtor could itself have asserted outside of bankruptcy; (ii) the Defendant did not conclusively establish the 11 U.S.C. § 547(c)(2) “ordinary course of business” defense and the Plan Administrator was not required to preemptively please facts negating the defense; but (iii) the Plan Administrator failed to adequately allege Ponzi-type scheme and to explain how challenged payments were used to further alleged scheme and harm the Debtor’s other creditors.  Motion to dismiss granted.

09/28/2012
In re Equipment Acquisition Resources, Inc.; William A. Brandt, Jr., solely in his capacity as Plan Administrator for Equipment Acquisition Resources, Inc., v. TD Banknorth Leasing Corporation

09 B 39937, 11 A 02582
Upon the Defendant’s motion to dismiss the Chapter 11 Plan Administrator’s adversary proceeding, seeking to avoid and recover as fraudulent transfers lease payments transferred from the Debtor to the Defendant that purportedly were part of fraudulent scheme, held: (i) the Plan Administrator did not have to identify a specific unsecured “triggering creditor” that was in existence at time of challenged transfers in order to state cause of action to avoid transfers as actually fraudulent to creditors under Illinois law, in exercise of 11 U.S.C. § 544(b) strong-arm powers due to scores of unsecured claimants; but (ii) the Plan Administrator failed to adequately allege Ponzi-type scheme and to explain how challenged payments were used to further alleged scheme and harm the Debtor’s other creditors.  Motion to dismiss granted.

09/28/2012
In re Equipment Acquisition Resources, Inc.; William A. Brandt, Jr., solely in his capacity as Plan Administrator for Equipment Acquisition Resources, Inc., v. The CIT Group/Equipment Financing, Inc.

09 B 39937, 11 A 02203
Upon the Defendant’s motion to dismiss the Chapter 11 Plan Administrator’s adversary proceeding, seeking to avoid and recover as fraudulent transfers lease payments transferred from the Debtor to the Defendant that purportedly were part of fraudulent scheme, held: (i) that the Debtor may have received “reasonably equivalent value” was not fatal to cause of action to avoid lease payments as actually, and not just constructively, fraudulent transfers; (ii) allegations in complaint did not establish “good faith and for value” defense on face of complaint for purposes of 11 U.S.C. § 548(c); (iii) the Plan Administrator did not have to identify a specific unsecured “triggering creditor” that was in existence at time of challenged transfers in order to state cause of action to avoid transfers as actually fraudulent to creditors under Illinois law, in exercise of 11 U.S.C. § 544(b) strong-arm powers due to scores of unsecured claimants; but (iv) the Plan Administrator failed to adequately allege Ponzi-type scheme and to explain how challenged payments were used to further alleged scheme and harm the Debtor’s other creditors.  Motion to dismiss granted.

09/28/2012
In re Grazina Sinkuniene; Anthony Stelmokas v. Grazina Sinkuniene

10 B 10717, 10 A 01418
Upon the Debtor’s motion for sanctions and attorney’s fees against the Plaintiff for continued prosecution of nondischargeability adversary despite failing to allege sufficient grounds in an amended complaint, held: although the Plaintiff violated Rule 9011 and did not act reasonably in commencing and continuing this adversary proceeding, the Debtor’s motion for sanctions failed to set forth the basis for her request for sanctions as it lacked the requisite legal arguments and citations to relevant facts to support the Debtor’s request for sanctions.  Motion for sanctions denied.

09/27/2012
In re LaVergne Briggs

12 B 14853
Upon the Mortgagee’s motion for relief from stay and, in the alternative, to dismiss, held: (i) the standards have been met to grant relief from stay pursuant to 11 U.S.C. § 362(d)(1) since the Debtor has not provided any evidence as to adequate protection other than the Debtor’s plan payments to the Chapter 13 Trustee, including a series of late payments made on the date of the evidentiary hearing; (ii) the Debtor had filed a total of ten individual bankruptcy cases during a period of seven years, generally timed to precede a state court foreclosure action or the appointment of a receiver; and (iii) grounds exists for the court to enter an in rem relief order pursuant to 11 U.S.C. § 362(d)(4), as the Debtor’s petition for bankruptcy was found to be part of a scheme to delay or hinder the mortgagee’s collection efforts.  Motion for relief from stay with in rem relief granted.

08/30/2012

Pages