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Judge Janet S. Baer

17 B 11668
The chapter 13 trustee filed a motion to dismiss the case of Christopher V. Pratola pursuant to 11 U.S.C. § 1307(c).  The trustee asserted that there was cause for dismissal because Pratola owed educational debt of approximately $591,223 which exceeded the noncontingent, liquidated, unsecured debt limit of $394.725 set forth in 11 U.S.C. § 109(e).  Pratola argued that the educational debt was contingent and not subject to the debt limit because it was being paid under an income-based repayment plan.  The income-based repayment plan required monthly payments based on discretionary income and provided for the forgiveness of any remaining balance upon completion of a twenty-five year term.  The Court found that the educational debt was noncontingent for purposes of § 109(e) because it existed before the date of the filing of the petition and no future event needed to take place to fix its existence or amount.  Nevertheless, the Court found that there was no cause for dismissal under § 1307(c). After reviewing the relevant statutory language and case law, and determining that neither clearly required dismissal of the case, the Court examined the legislative history of § 109(e). The debt limits were created to stop owners of large business from filing under chapter 13 instead of chapter 11, not to preclude individuals with large amounts of educational debt from filing under chapter 13.  Accordingly, the Court denied the trustee’s motion to dismiss for lack of cause under § 1307(c).

16 B 29319, 17 A 00176
Mark Simon filed an adversary complaint against Constantino Joseph Boccarsi and Cari Ann Coglianese (the “Debtors”), seeking a determination that a debt owed to him by the Debtors by virtue of the entry of a state court default judgment was not dischargeable pursuant to §§ 523(a)(2)(A), (a)(4), and (a)(19).  Simon subsequently filed a motion for summary judgment on his securities fraud claim under § 523(a)(19).  He argued that the state court judgment was for securities fraud and that, thus, collateral estoppel barred the relitigation of his claim.  The Debtors contended that neither element required under § 523(a)(19) had been satisfied.  According to the Debtors, they did not commit securities fraud and the fact that the state court judgment was entered in default insulated the judgment from a finding of nondischargeability.  Based on the plain language of the statutory exception, the legislative history, and the reasoning in Meyer v. Rigdon, 36 F.3d 1375 (7th Cir. 1994), the Court found that the default judgment had preclusive effect in the nondischargeability action, because § 523(a)(19) preempted common law collateral estoppel.  The Court further found that the undisputed facts demonstrated that the two requirements of § 523(a)(19) had been satisfied through the entry of the judgment in the state judicial proceeding.  As such, the Court granted Simon’s motion for summary judgment and entered judgment in his favor.

Judge Timothy A. Barnes

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.

Judge Jack B. Schmetterer

In re Charnette Walker
December 20, 2017

17 B 33957

In re Charnette Walker
December 12, 2017

17 B 33957

In re Frank Villasenor
December 5, 2017

17 B 15830

17 B 18090

Judge Jacqueline P. Cox

17 B 22517
The movants sought dismissal of this Chapter 11 case for cause alleging that the Debtor is an instrumentality of the Village of Lombard, and as such is not allowed to seek bankruptcy relief as a governmental unit.  The Debtor was incorporated by Lombard to construct and operate a hotel and convention center which has been managed under the Westin flag for several years. The court denied the motions to dismiss finding that Lombard did not control the Debtor and that the Debtor did not perform municipal functions, relying in part on an Illinois Appellate Court ruling denying the Debtor’s efforts seeking a tax exemption as a governmental body.