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Judge A. Benjamin Goldgar

In re Rade Petrovic
November 16, 2016

16 B 18969

Judge Timothy A. Barnes

11 B 38875, 12 A 00155
Upon remand from the District Court for the Northern District of Illinois reinstating the plaintiff’s motion for summary judgment, held:  The plaintiff has established grounds for summary judgment under Federal Rule of Civil Procedure 56.  The debtor’s admissions establish that the debt she owed to the plaintiff arose when she, as trustee for an express trust, misappropriated funds from the trust to the detriment of the plaintiff, a beneficiary of the trust.  Such debt is nondischargeable under 11 U.S.C. § 523(a)(4).  The plaintiff’s motion for summary judgment is, therefore, GRANTED as to the statutory elements of 11 U.S.C. § 523(a)(4) and all alternative counts are mooted thereby.  The court abstains from hearing the only remaining aspect of the complaint—the value of the plaintiff’s claim.

12 B 49658
Upon the partial remand from the District Court for the Northern District of Illinois of the motion of the state taxing authority seeking monetary adequate protection following a sale of the debtors’ assets under 363(f), held:  The District Court directs this court to determine the issues of quantification and recovery of the state taxing authority’s adequate protection claim.  Because the state taxing authority has failed to demonstrate either a realizable claim or a source of recovery, the remaining aspects of the state taxing authority’s motion are DENIED.  In accord, all the remaining aspects of the secured lender’s competing motion are, therefore, GRANTED and the chapter 7 trustee is authorized to pay the remaining proceeds to the secured lender.

15 B 18583, 15 A 00826
Upon a creditor’s amended complaint seeking to deny discharge for the debtor on two counts under 11 U.S.C. § 727(a)(2)(A) and (a)(4)(A), wherein the creditor alleged that the debtor made prohibited prepetition transfers and failed to disclose certain assets on his bankruptcy petition, held: In regard to the 11 U.S.C. § 727(a)(2)(A) count, the creditor has not proven by a preponderance of the evidence that the debtor acted with actual intent to hinder, delay, or defraud creditors with respect to the alleged prepetition transfers. In regard to the 11 U.S.C § 727(a)(4)(A) count, the creditor has not proven by a preponderance of the evidence that the debtor acted with fraudulent intent when failing to disclose certain assets on his bankruptcy petition. As a result, the debtor will not be denied a discharge on the grounds alleged. Judgment is entered in favor of the debtor on all counts.

Judge Janet S. Baer

13 B 25078, 13 A 01332
In the three counts that remain at issue in the adversary complaint filed by plaintiff John H. Sammarco in the bankruptcy case of debtor-defendant David L. Dini, Sammarco sought a determination that Dini is not entitled to a discharge pursuant to various provisions of 11 U.S.C. § 727(a). In Count I, Sammarco alleged that Dini’s discharge should be denied under § 727(a)(2) because Dini transferred two vehicles less than one year prior to filing his bankruptcy petition with the intent to hinder or delay Sammarco. In Count V, Sammarco objected to Dini’s discharge pursuant to § 727(a)(7), arguing that Dini knowingly made fraudulent statements in the bankruptcy schedules of his former company National Telerep Marketing Systems, Ltd. ("NTMS") while his individual bankruptcy case was pending. Finally, in Count VII, Sammarco alleged that Dini is not entitled to his discharge under § 727(a)(4), because Dini knowingly and with fraudulent intent made false statements in connection with the debt that he owes to his friend Keith Creel (the "Creel debt"). The Court found that Sammarco failed to meet his burden to establish the elements required under the applicable provisions of § 727(a). Specifically, the Court found that the evidence did not establish that Dini intended to hinder or delay Sammarco by transferring his interest in the vehicles. The Court further found that the issue of whether Dini knowingly and with fraudulent intent made false statements in NTMS’s bankruptcy schedules was previously litigated and that Sammarco is, thus, precluded from litigating that issue again. As for the allegation in connection with the Creel debt, the Court concluded that the record did not support a finding that Dini’s statements regarding that debt were false for purposes of § 727(a)(4). Accordingly, the Court held that Dini’s discharge will not be denied.

15 B 19829, 15 A 00550
The Plaintiff filed an adversary complaint against the Debtor seeking a determination that the debt owed to the Plaintiff by the Debtor in connection with an unsecured loan is not dischargeable pursuant to §§ 523(a)(2)(A) and (a)(2)(B).  The Plaintiff argued that the loan was procured by false pretenses with respect to the purpose of the loan and through actual fraud because the Debtor had not intended to repay the loan.  The Plaintiff also argued that the Debtor misrepresented her financial condition by failing to disclose a new mortgage obligation when the loan was made.  The Court found that the Plaintiff failed to meet its burden to demonstrate fraud under any of its arguments.  Accordingly, the Court held that the debt at issue is not excepted from discharge under §§ 523(a)(2)(A) or (a)(2)(B).

Judge Donald R. Cassling

Judge Jacqueline P. Cox

14 B 11526
In this matter an attorney retained under a Court-Approved Retention Agreement ("CARA") in a Chapter 13 case initially failed to seek fees for pursuing a Motion for Damages for a violation of the automatic stay and instead decided that she was entitled to $3000 in fees in addition to the $4000 flat fee.
This court ruled that the CARA requires attorneys to pursue damages and injunctions for violations of the automatic stay and the discharge. The opinion covers attorneys' duties under Section 329 of the Bankruptcy Code  and Federal Rule of Bankruptcy Procedure 2017  to disclose initial and subsequent fee agreements.