The court granted an unopposed motion for summary judgment to avoid and recover preferential transfers from an unsecured creditor and to disallow the creditor’s claim until the preferences have been repaid.
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United States Courts Opinions (USCOURTS) collection is a collaborative effort between the U.S. Government Publishing Office (GPO) and the Administrative Office of the United States Courts (AOUSC) to provide public access to opinions from selected United States appellate, district, and bankruptcy courts.
The District of Nebraska offers a database of opinions for the years 1997 to current, listed by year and judge. For a more detailed search, enter the keyword or case number in the search box above.
The court dismissed the debtor’s fourth Chapter 13 case for cause and barred him from refiling for 180 days. In each of the cases, the debtor failed to timely file schedules, the statement of financial affairs, and a plan. His intent in filing bankruptcy is to delay or prevent his former wife from collecting a property equalization judgment awarded to her as part of the marital dissolution. This delay is prejudicial to creditors and is cause for dismissal under § 1307(c).
Cause for dismissal also exists because the debtor filed the bankruptcy petition in bad faith, failing to accurately state his debts and expenses, misrepresenting his assets, failing to comply with court orders, and attempting to manipulate the Bankruptcy Code.
Finally, the debtor is not an eligible Chapter 13 debtor because his only claimed income is a monthly Social Security payment of $1,000, which he does not commit to paying into a plan of reorganization. Even if the debtor were to fund his plan with Social Security income, it is insufficient to pay the $320,000 judgment owed to his former wife and his monthly $1,888 child support payments, so a plan would not meet the requirements of § 1322(a).
Because the debtor is a serial filer who consistently fails to comply with his obligations under the Bankruptcy Code, cause exists to bar the debtor from filing a bankruptcy petition for 180 days.
The court granted default judgment to the debtors, ordering that a wholly unsecured junior lien on the debtors’ residential real estate may be avoided after the debtors complete Chapter 13 plan payments.
The court granted the trustee’s motion for turnover of a motor vehicle titled in the debtors’ names but allegedly owned by the debtor’s sister. While the debtors argued that the court should discern a resulting trust in favor of the sister because she paid for the vehicle, the court found that Nebraska statutory law is clear and unambiguous in not recognizing a resulting trust in a motor vehicle.
Unexpected excess funds remain after the sale of farm equipment by the senior secured creditor. The Chapter 12 trustee proposes to pay the funds to unsecured creditors, but another creditor also claims rights to them, and the debtors would like to use them in their farming operation.
The court had granted relief from the automatic stay to sell the equipment because the evidence indicated the debtor sold the equipment to another creditor, so it was no longer property of the estate.
The buyer moved for summary judgment as to the proceeds, claiming superior rights as the owner of the equipment. However, the court denied the motion, finding that factual issues exist as to the terms of the parties’ sale and lease-back agreement. The law-of-the-case doctrine did not apply because the court had not ruled on the scope of the sale-lease agreement or the alleged breach of that contract when it ruled on the motion for relief from the stay. The creditor’s alternative argument regarding unjust enrichment also requires a factual inquiry.
The court denied summary judgment on the United States Trustee’s complaint seeking a denial of discharge under §§ 727(a)(2), (a)(4)(A), and (a)(4)(D). While the plaintiff proved that the debtor failed to disclose several bank accounts, gave incorrect balances for accounts that were disclosed, and failed to disclose a number of cash transfers, under circumstances that lead to a presumption of intent to deceive, the debtor should be given the opportunity to rebut that presumption at trial. Likewise, the plaintiff established that the debtor made false oaths in his bankruptcy schedules and Statement of Financial Affairs, but the question of whether those false oaths were made knowingly and fraudulently should be established at trial.
The bankruptcy court granted the defendant-debtor’s motion to dismiss the amended complaint as untimely, with no leave to further amend because the original complaint did not plausibly set forth a § 523(a)(6) claim or contain a § 727(a)(5) claim, so any additional amendment would not relate back.
The plaintiff obtained a judgment against the defendant’s company for willful retaliation after her employment was terminated. The company subsequently went out of business, and the judgment remained unpaid. The plaintiff sued the defendant and certain related entities to pierce the corporate veil and hold him personally liable for the judgment; she was awarded a judgment after she established that the defendant diverted corporate funds for improper uses, used the company for personal dealings, and committed fraud to contravene the plaintiff’s rights.
The defendant then filed a Chapter 7 bankruptcy petition, and the plaintiff filed an adversary proceeding seeking relief under § 523(a)(2) and (a)(6). The plaintiff amended the complaint, citing §§ 523(a)(6) and 727(a)(5), after the defendant moved to dismiss for failure to state a claim. The defendant again moved to dismiss.
The bankruptcy court granted the defendant’s motion to dismiss the amended complaint, finding that it was time-barred under Rules 4004(a) and 4007(c). The claims in the amended complaint did not “relate back” to the original complaint and therefore were not timely filed.
First, although both complaints referenced § 523(a)(6), the claims did not arise out of the same set of operative facts. The original complaint was based on allegations of fraudulent representations regarding the debtor’s assets, which were not sufficient to put the debtor on notice that the plaintiff was claiming a willful and malicious injury through retaliation for engaging in protected employment activity. One would need to interpret the original complaint broadly to conclude it was based on the plaintiff’s termination, discrimination, or retaliation, but Rules 4004 and 4007 require strict interpretation.
Moreover, the facts in the amended complaint establish that another employee of the company terminated the plaintiff’s employment, so the alleged “willful and malicious injury” was not caused by the debtor. Even though the state court found the debtor liable under an alter ego theory, the actions of another cannot be imputed to the debtor under § 523(a)(6).
Second, while a plaintiff may be allowed to amend a complaint that originally contained only a § 523 claim to include a § 727 claim, the amended pleading must arise out of the same conduct, transaction, or occurrence set forth in the original pleading. Here, the original complaint did not contain any allegations to support the plaintiff’s subsequent § 727(a)(5) claim that the debtor diverted or dissipated assets. As such, the newly pleaded facts were not tied to a common core of operative facts in the original complaint and could not justify relation back.
Accordingly, the amended complaint was dismissed, and the court found that any further amendment would be futile.
The court awarded sanctions in the form of attorneys’ fees to the debtor’s wife after determining that the debtor filed his Chapter 7 petition for an improper purpose. The evidence at trial showed that the debtor was not insolvent, was not under the weight of oppressive indebtedness, and did not required a fresh start. The debtor also knowingly and fraudulently represented his assets in his bankruptcy schedules, and the court found that “he did not intend to surrender his property for distribution as required in a Chapter 7 case.”
Instead, the court held, the debtor filed the bankruptcy case to delay his marital dissolution proceedings, increase the costs for his wife, and “attempt to obtain leverage or to change what debtor believed might involve an undesired outcome” regarding property settlement. As a result, the court awarded sanctions under Rule 9011 to the wife for fees “directly caused by the filing of the petition,” and the fees and costs in connection with presenting the motion for sanctions. The court ruled that the fees awarded were “warranted for effective deterrence by others similarly situated” and were reasonable in amount.
After a trial, the court denied the Chapter 12 debtors’ open-ended motion to use cash collateral because the debtors could not prove they had a sufficient equity cushion in land, equipment, and livestock available to the secured creditors. The overall equity cushion, which the court said was a more appropriate calculation because interest and attorney fees for senior secured creditors significantly affect the equity cushion for junior creditors, was less than six percent and was subject to erosion through depreciation, death loss, market volatility, and the debtors’ proposal to make interest-only payments to secured creditors.
There was also an unexplained discrepancy between the debtors’ motion and plan regarding how much cash the debtors had on hand and how much of it was cash collateral. The court refused to allow the debtors to use all of the cash collateral. It also was clear that the debtors would need more cash collateral than they were asking for because they had no other financing lined up for 2021, but they did not put on evidence to demonstrate they were reasonably likely to successfully reorganize.
The court said it would consider allowing a short-term use of cash collateral while the debtors work to get a plan confirmed if the debtors could file a proposed budget for cash collateral for the next two months; a statement of the projected value of replacement liens on livestock and crops; an accounting of all cash and cash collateral since the petition date; and all monthly bank records since the petition date.
The court also denied the bank’s motion for an order requiring the debtors to transfer cash collateral pursuant to § 363(e) because the court hadn’t authorized the use of any cash collateral. However, the court said it would consider conditioning the debtors’ future use of cash collateral on them making an adequate protection payment to the bank, including transfer of the cash collateral.
On stipulated facts, the court denied the creditors’ motions to approve a purported settlement or extend the deadline to file an adversary proceeding. The parties had already obtained an extension of time in which to file an adversary complaint while they negotiated the non-dischargeability of and a payment plan for the debts owed to these creditors. However, that extended deadline expired while the parties were close to, but had not yet completed, a settlement. Upon realizing the deadline had passed, the creditors moved to approve the settlement or obtain another extension of time to file a complaint.
The court denied the motion to approve and enforce the settlement, finding that no enforceable agreement was in place when the extended deadline expired, as there had not been an acceptance of the terms or a meeting of the minds by the deadline. Even if the agreement were enforceable, the court would not approve it under Rule 9019.
While the equitable doctrines of waiver, estoppel, and equitable tolling can be invoked against a statute of limitations defense when a untimely request for enlargement of time is made under Rules 4004 or 4007, there is a high bar to their applicability and the movants did not reach it. Therefore, there was no basis upon which to grant the belated motion for extension of the complaint deadline.