An unsecured creditor in a Chapter 7 case may include post-petition attorneys’ fees in its proof of claim, but it may not recover post-petition interest.
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The court granted summary 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 debtor and the Nebraska Department of Health & Human Services had entered into a pre-petition agreement settling a lawsuit under the False Medicaid Claims Act, and the debtor had paid a portion of the settlement amount. In the debtor’s bankruptcy, the Department filed a complaint to determine the dischargeability of the balance of the settlement amount under 11 U.S.C. § 523(a)(2)(A).
In cross-motions for summary judgment, the debtor conceded the non-dischargeability of the balance owed. The dispute was whether the Department was entitled to treble damages under its complaint in the state court litigation.
The bankruptcy court determined the settlement agreement was clear as to the parties’ rights and remedies upon a payment default – entry of a judgment for the balance due under the agreement. The evidence did not support the Department’s claim for additional damages under the complaint, particularly since the Department had agreed to dismiss the state court complaint with prejudice as part of the settlement.
An agricultural production input supplier filed a financing statement to perfect its statutory lien against the debtors’ crops and crop proceeds, but the financing statement did not contain the information required by the Nebraska agricultural production inputs lien statutes, so the lien was unperfected. Under the Uniform Commercial Code’s priority rules, a perfected security interest has priority over a conflicting unperfected agricultural lien, so a lender’s prior perfected security interest took priority in the available proceeds.
The court refers the adversary proceeding to federal district court because the complaint alleges state-law non-core claims over which the bankruptcy court does not have authority to enter a final judgment and because the defendant has requested a jury trial, which will not occur in bankruptcy court.
After a trial on a complaint by a creditor alleging non-dischargeability of a debt under 11 U.S.C. § 523(a)(4) arising from the financial problems of an LLC in which the creditor and the debtor were members, the court ruled in the debtor’s favor. There was no evidence of a technical or express trust as required by § 523(a)(4), nor did the evidence show that the debtor acted in bad faith or with the intent to cause the creditor harm.
The court denied confirmation of a Chapter 12 plan because the plan proposed to treat one partially secured creditor as fully secured, which unfairly discriminated against general unsecured creditors.
Deere & Company holds a fully secured claim and an unsecured claim. To settle Deere’s motion for relief, the debtor agreed, inter alia, to provide for full payment of the entire debt in the plan, and the court approved that stipulation. After the plan was filed, an unsecured creditor objected to confirmation. The court agreed with the objecting party that the treatment of Deere’s claim foundered on the four-part unfair-discrimination test. The court also clarified that approval of the parties’ stipulation simply approved the agreement between Deere and the debtor and did not excuse the debtor’s obligation to comply with § 1222.
This adversary complaint was filed to object to the amount, validity, and extent of a secured claim held by an assignee of the original lender. On summary judgment, the plaintiff argued that one of the promissory notes at issue is unsecured and unenforceable because no agreements securing that note had been assigned to the claimant. The assignee argued that all of the loans made to the debtors were cross-collateralized, so it holds a beneficial security interest in instruments securing other loans even though no formal assignment of those security interests was made. The court denied summary judgment, holding that the original lender, which still holds the security interests in which the assignee is also claiming an interest, is a necessary party to the litigation.
The court granted summary judgment to the debtor in a non-dischargeability action under § 523(a)(4) brought by a defendant in a state-court lawsuit filed by a creditor of the debtor. The debtor had purchased cattle from the state-court plaintiff, a livestock auction company, for resale to the state-court defendant, a cattle feeding operation. The cattle feeder paid the debtor for the cattle, but the debtor’s check to the auction company was dishonored and remains unpaid. When the auction company sued the cattle feeder in state court to recover payment for the animals, the cattle feeder specifically denied that the debtor had acted as its agent and fiduciary, but it filed this adversary proceeding to protect itself in the event it was held liable in the state-court litigation.
The evidence submitted on the summary judgment motion did not support a finding that the parties had a technical or express trust that would give rise to a fiduciary relationship as required under § 523(a)(4), nor that there was any intentional wrongdoing by the debtor.
The court denied the debtor’s motion for a temporary restraining order to stop a foreclosure sale of certain real estate. In evaluating the Dataphase factors, the court questioned the debtor’s standing and found no likelihood of success on the merits because the debtor admittedly had not paid the mortgage for more than three years and tendered no performance or cure at this time.