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Judge A. Benjamin Goldgar

14 B 26441, 14 A 00710

14 B 29989

Judge Jacqueline P. Cox

13 B 01449, 13 A 01050
Prepetition, the parties to the medical malpractice suits participated in a mediation conference presided over by a former Chief Judge of the Circuit Court of Cook County, Illinois. The mediation was successful, and resulted in the entry of a July 21, 2008 settlement order in state court.  Prior to the mediation session, one Plaintiff's claim proceeded to trial in state court, where a jury returned a verdict of $30,000,000 against the Debtor and other defendants.

The crux of the Complaint is that the Debtor falsely stated that the settlement would be secured by property at 1101 Dodge, Evanston, Illinois (“Dodge Property”) in violation of 11 U.S.C. § 523(a)(2)(A) which excepts from discharge debts incurred fraudulently under certain circumstances.  The Debtor did not arrange for the Dodge Property to be titled in a land trust as required by the 2008 court order.  The Plaintiffs also allege that the Debtor wilfully and maliciously injured them in violation of 11 U.S.C. § 523(a)(6).

The Court entered judgment in favor of the Plaintiffs, finding that the Debtor intentionally misled the Plaintiffs when he represented that he would pledge the Dodge Property to secure the settlement amount, and that fraud created the debt.  In so ruling, the Court relied, in part, on Dr. Eisenstein's admission at trial that he had no intention of having the property placed into a land trust to secure payment of the $1.275 million settlement until a formal settlement agreement got executed.  The July 21, 2008 order did not condition the settlement on the entry of a subsequent agreement.


11 B 41826
In this post-confirmation Chapter 11 proceeding, Michael Bahary & Steven Bahary Partnership (“the Reorganized Debtor”) filed a Motion for a Rule to Show Cause requiring Napleton Enterprises, LLC (“Napleton”) and its counsel to show cause why they should not be held in contempt for suing to enforce Napleton’s purported Right of First Refusal as to certain real property (the "Grand Avenue Property") in a state court action regarding transactions that ensued in this bankruptcy case in 2012. The Reorganized Debtor asserted that Napleton’s actions were inconsistent with the terms of the confirmed Amended Plan of Reorganization and in violation of the Bankruptcy Code’s discharge injunction, set forth in 11 U.S.C. § 524(a)(2).  
Pursuant to the Reorganized Debtor's Confirmed Plan, the Reorganized Debtor surrendered the Grand Avenue Property to Banco Popular by executing a Deed in Lieu of Foreclosure to satisfy Banco Popular’s secured claim. Napleton was not scheduled as a creditor in the Reorganized Debtor’s bankruptcy.
In the offending state court action, Napleton alleged that its Right of First Refusal was an executory contract that survived confirmation of the Plan because its claim was not scheduled therein by the Debtor and it did not get notice of the bankruptcy case.  Napleton also asserted that the Deed in Lieu of Foreclosure was a “bona fide” offer that gave it a basis to exercise its Right of First Refusal.  
The Court issued the Rule to Show Cause, and determined that although Napleton was not included in the Debtor’s bankruptcy schedules, Napleton is neither a debtor, a trustee, an indenture trustee nor a creditor to whom a debt is owed as defined by 11 U.S.C. § 101 (10) (creditor is defined as an entity who holds a claim against the debtor or the bankruptcy estate).  Napleton is neither a creditor/claim holder nor a party to an executory contract because its Right of First Refusal remained inchoate because no third party made a bona fide offer, which it could match within five days.  
The Court denied Napleton’s request to alter or amend its prior December 29, 2014 judgment under Federal Rule of Bankruptcy Procedure 9024.


13 B 29753, 14 A 00674
In this Chapter 13 adversary proceeding, the Debtor-Plaintiff, Samuel Brimmage, alleges that the Defendants, Quatnum3 Group LLC and Elite Recovery Acquisition, LLC, violated the Fair Debt Collection Practices Act (FDCPA) by filing a proof of claim on a debt that is otherwise time-barred. Elite Recovery Acquisition is a national debt buyer and Quantum3 Group is its agent.
The Defendants moved to dismiss the adversary proceeding by arguing that 1) filing a proof of claim is not a debt collection action subject to FDCPA and 2) that if it was a debt collection action then it would be impossible to comply with both the Bankruptcy Code and the FDCPA, and that the Code should therefore control.
The Court denied the motion, concluding that filing a proof of claim is a form of debt collection. The Seventh Circuit has held that while the statutes do overlap, enforcement of both is possible where “any debt collector can comply with both simultaneously.” Randolph v. IMBS, Inc., 368 F.3d 726, 730 (7th Cir. 2004). Agreeing with a similar decision out of the Southern District of Indiana, the Court determined that the Defendants could easily comply with both the Code and the FDCPA by simply not filing a proof of claim on a time-barred debt. See also Patrick v. PYOD,LLC, 2014 WL 4100414 (S.D.Ind. 2014). As such, the Court will be able to enforce both the FDCPA and the Code in this situation.

Judge Donald R. Cassling

In re Victor J. Fini
February 6, 2015

13 B 47450

Judge Carol A. Doyle

Judge Jack B. Schmetterer