The debtor's objection to a claim was granted and the claim was disallowed because the documentary evidence overwhelmingly indicated the promissory notes at issue were not the obligation of the debtor, but rather of the debtor's general partner.
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The court granted the plaintiff’s motion to dismiss an amended complaint in intervention for lack of standing. The debtor, Earl Brice Equipment, leased heavy equipment to a related company, M & S Grading, that also was in bankruptcy. During the pendency of the bankruptcy cases, M & S made adequate protection payments to creditors holding liens on the equipment of Earl Brice Equipment. Eventually, both debtors ceased operations and the equipment was sold. One of the lienholders filed this adversary proceeding to determine the extent and validity of competing liens in the proceeds.
The intervenors were the union benefit plans of M & S employees (“the Plans”). The Plans pursued claims in the M & S case for benefit plan contributions that were withheld from employees’ paychecks but not delivered to the Plans. The Plans intervened in the adversary proceeding and claimed an interest in the proceeds of the equipment sale on the theory that a statutory trust was created for the benefit of the M & S employees and the Plans when M & S withheld funds from the employees’ paychecks.
The court ruled the intervenors lacked legal standing in the adversary because they had not shown “a recognized interest in the subject matter of the litigation that might be impaired by the disposition of the case and will not be adequately protected by the existing parties.” An economic stake was not enough to constitute a legally protectable interest. In addition, the intervenors did not establish a nexus between the funds withheld by M & S and the proceeds in which the Plans were claiming an interest.
A lender filed a motion for summary judgment to except a debt from discharge under § 523(a)(6) because the debtors allegedly converted collateral and proceeds of collateral by selling the collateral and depositing the proceeds into their personal account. The court denied the motion because the debtors’ intent is a material fact when willfulness and maliciousness are elements of the cause of action, and is difficult to establish on summary judgment.
The creditor obtained judgment liens on the debtor's real property within 90 days propr to the petition date. Those liens were transfers on account of an antecedent debt made while the debtor was insolvent, so they were avoidable as preferences.
The court denied summary judgment in a case to force dissolution of the debtor for breach of fiduciary duty to its partners because factual questions remained about the debtor's alleged misconduct. Also, the plaintiff could move to appoint a trustee.
Genuine issues of material fact exist on avoidable preference and fraudulent transfer including existence of antecedent debt, whether debt restructure is a legitimate supervening purpose and whether reasonably equivalent value was received.
The bank's motion for relief was denied because the debtor provided sufficient evidence of the likelihood of a successful reorganization. Specific issues regarding feasibility of the debtor's plan would be addressed at the confirmation hearing.
The court denied the bank's motion for relief to foreclose its liens. There was an equity cushion in the property. Moreover, the property was necessary for the reorganization of a related entity, so it was necessary for the debtor's reorganization.
After a trial upon remand, the court determined the scope and valuation of the debtor's fixtures, the extent and priority of competing security interests in said fixtures, and the appropriate distribution of sale proceeds among secured creditors.
A "delayed deposit services business" that advanced cash to debtor holds an unsecured claim. Debtor's check was deemed dishonored under the UCC upon filing bankruptcy, so creditor can enforce either the check or the debt, neither of which is secured.