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United States Courts Opinions

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 granted summary judgment to the plaintiffs in their action to except a debt from discharge under § 523(a)(2)(A). The plaintiffs purchased a house from the debtor and later discovered the basement suffered water damage, which the debtor had failed to disclose. The matter was arbitrated, with an award being entered in the plaintiffs' favor based on the debtor's knowing failure to disclose. The debtor then filed for bankruptcy protection before the arbitration award could be confirmed.
Collateral estoppel principles allowed the plaintiffs to rely on the arbitration findings to prove the fraudulent nature of the debtor's representations. The arbitration award established that the debtor knowingly made a false statement to the plaintiffs concerning water intrusion in the basement, the plaintiffs justifiably relied on the debtor's representations, and they suffered damage as a result. Therefore, the plaintiffs were entitled to judgment as a matter of law excepting this debt from discharge.

The court denied a pharmaceutical supplier's administrative expense claim based on alleged reclamation rights, finding that the supplier did not have a valid reclamation claim under § 546(c) or the right to exercise the equitable doctrine of asset marshaling.
The debtor and the supplier had entered into a stipulation concerning the supplier's right to assert its reclamation claim, but the agreed-upon conditions for pursuing that claim were not met. The terms of the stipulation required the supplier to establish that it had both an enforceable reclamation claim and enforceable marshaling rights as of the petition date. The court found the supplier's reclamation rights under § 546(c) were valueless and unenforceable because prior secured claims existed that exceeded the value of the pharmaceutical goods. The court also ruled that the supplier did not have the ability to use marshaling as a remedy because that would have required delaying the sale of the debtor's pharmacy assets in order to see if the lenders would have been paid in full from other assets. Such a tactic would have substantially reduced the sale price of the assets and resulted in an inequitable remedy for other creditors.
Finally, the court held that the supplier could not establish its claim outside the terms of the stipulation under § 507(b) (the supplier did not hold a secured claim that was inadequately protected), § 546(c) (there were no proceeds to which the supplier's claim could attach, so its right had no value), or § 503(b)(1)(A) (the supplier had no post-petition transaction with the debtor, and the supplier's valueless reclamation claims did "not morph into valuable post-petition administrative expense priority claims simply because the goods were sold").

On a request for payment of certain administrative expense claims filed by the debtor's landlords, the court addressed four questions:
1. Are the administrative expense claimants entitled to immediate payment of allowed administrative expense claims other than as set forth in the Confirmation Order? The court granted the request for immediate payment of § 365(d)(3) post-petition/pre-rejection lease obligations and ruled that the § 503(b)(1) claims for the costs of preserving the estate are simply entitled to § 507(a)(2) priority and would be paid in accordance with the terms of the plan.
2. Are the landlords are entitled to administrative expense claims for stub rent? The court extensively analyzed the Eighth Circuit Court of Appeals decisions of Burival and Wedemeier and determined that Burival, with its endorsement of the "billing date" approach to § 365(d)(3) obligations, did not overrule Wedemeier's use of "the reasonable rental value of the property" to provide a measure of the administrative claim for rent under § 503(b)(1). Therefore, the court ruled the landlords are entitled to an administrative expense claim under § 503(b)(1) for the debtor's use of the properties between the petition date and the date the first post-petition rent payment was due.
3. Are the landlords entitled to administrative expense claims for the prorated portion of base rent or additional rent items (e.g. taxes, utilities, etc.) billed or payable post-rejection but attributable to the post-petition/pre-rejection period? The court said, "Clearly, under Burival, such charges would constitute administrative expenses if billed to the tenant prior to rejection. However, if such items were not billed before lease rejection, the provisions of § 365(d)(3) – which address post-petition lease obligations – preempt the application of § 503(b)(1) to such charges." Because these post-petition charges were not billed during the post-petition/pre-rejection period, the landlords are not entitled to claim them as administrative expenses.
4. Are the landlords entitled to administrative expense claims for additional rent items attributable to the pre-petition period that become due or payable post-rejection? For the reasons stated in the preceding paragraph, the court also denied this request.

After a trial in this adversary proceeding, the court applied a two-step analysis to determine the validity of a landowner's claim under an oral lease agreement and that a portion of the debt should be excepted from discharge under § 523(a)(2)(A). The court found that the debtor made false representations to the landowner regarding his plans to pay the landowner's portion of the crop proceeds. The evidence did not support a finding of actual fraud by the debtor, however, because he "did not engage in deception, trickery or a scheme to deprive" the landowner of the proceeds.

The bankruptcy court granted the Chapter 7 trustee's motion for turnover of a vehicle which was titled only in the debtor's name, although the debtor claimed his non-debtor spouse also held a 50% ownership in it. The court ruled that the trustee's strong-arm powers under § 544 trump the non-debtor spouse's claim of an equitable interest in the vehicle, and noted that creditors and bankruptcy trustees need to be able to rely on certificates of title in order to ascertain valid ownership and security interests in vehicles.

The court granted the Chapter 7 trustee's objection to exemptions concerning the debtor's shares of his employer's stock incentive plan. The "retention shares" were part of his earnings, but they were not subject to garnishment and cannot be exempted under Neb. Rev. Stat. § 25-1558(1). The debtor owns the shares, subject to forfeiture if certain conditions are not met, and enjoys all the rights and benefits of ownership, so they are no longer wages and are simply personal property which is not under any special protection.
Because the retention shares were not fully vested on the petition date, the debtor may prorate their value for purposes of valuing his interest in the shares as property of the bankruptcy estate.

After a trial in two related adversary proceedings on complaints seeking denial of discharge under § 727 or the exception of a debt from discharge under § 523(a)(2)(B), the court ruled in favor of the debtors.
There was no evidence of intent to delay, defraud, or hinder a creditor or the trustee by concealing property of the estate, failing to disclose assets, or making a false oath. The debtors were able to adequately explain discrepancies in asset valuations between their bankruptcy schedules and prior financial statements, as well as why certain assets were not included in the schedules. Moreover, the lender's evidence failed to establish the debtors' intent to defraud or its own reliance on the allegedly false financial statements. Accordingly, the debtors should receive a discharge.

After a trial in two related adversary proceedings on complaints seeking denial of discharge under § 727 or the exception of a debt from discharge under § 523(a)(2)(B), the court ruled in favor of the debtors.
There was no evidence of intent to delay, defraud, or hinder a creditor or the trustee by concealing property of the estate, failing to disclose assets, or making a false oath. The debtors were able to adequately explain discrepancies in asset valuations between their bankruptcy schedules and prior financial statements, as well as why certain assets were not included in the schedules. Moreover, the lender's evidence failed to establish the debtors' intent to defraud or its own reliance on the allegedly false financial statements. Accordingly, the debtors should receive a discharge.

The bankruptcy court denied a secured creditor's motion for leave to pursue a surcharge under § 506(c) against the collateral of another secured creditor. Generally, only a trustee may seek a § 506(c) surcharge. However, creditors may pursue such a cause of action if they can establish derivative standing. To do so, the creditor must show (1) it petitioned the trustee to bring the claims and the trustee refused; (2) its claims are colorable; (3) it sought permission from the bankruptcy court to initiate an adversary proceeding; and (4) the trustee unjustifiably refused to pursue the claims. The bankruptcy court is charged with evaluating whether a trustee's reasons for not bringing a surcharge claim are unjustified.
Here, the court found the creditor lacked standing because it provided no evidence that its claims are colorable or that the trustee's refusal to pursue the surcharge was unjustified. In addition, the creditor had voluntarily agreed during the debtor's Chapter 11 case to provide fuel on an unsecured basis in exchange for a super-priority claim. The debtor's failed reorganization does not allow the creditor to "now come back and secure its obligation through the back door with a surcharge request."

The bankruptcy court granted summary judgment to the purchaser of the debtor's residence at a tax sale. The debtor claimed the treasurer's deed was a fraudulent transfer because the purchaser paid less than reasonably equivalent value to acquire the property, but the price paid at a forced sale is considered to be reasonably equivalent value as long as all of the state legal requirements are met. The debtor did not argue or produce evidence showing that the tax sale did not meet legal requirements.

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