On the trustee’s complaint to recover allegedly fraudulent transfers made by the debtors in repaying investors in what essentially was a Ponzi scheme, the court denied summary judgment, allowing the transferees to put on evidence of their good faith as a defense under the Uniform Fraudulent Transfer Act.
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The court granted summary judgment to the debtor in a revocation-of-discharge action brought by a creditor under § 727(a)(6). That section concerns the revocation of a discharge if a debtor refuses to obey a court order. In this case, the document at issue was a stipulation, not an order, so § 727(a)(6) was inapplicable. The plaintiff had standing to bring this action even though it wasn’t a party to the stipulation because § 727(c)(1) permits any creditor, trustee or U.S. Trustee to object to discharge.
The fees and expenses approved for the counsel to the unsecured creditors’ committee were administrative claims to be paid on the effective date of the debtor’s plan. The debtor did not timely pay those claims, so committee counsel obtained a text order granting its motion for a final order awarding administrative fees and expenses that must be paid under the plan. Counsel then attempted to get a writ of execution on that “judgment.” The court ordered a status hearing, and determined that the applicable factors weighed heavily in favor of a stay of execution, in light of possible irreparable harm to the debtor, substantial harm to other creditors, and the existence of assets protecting the value of counsel’s interest pending payment.
A judgment that purports to avoid the lien interest of the holder of the first deed of trust on the debtors’ residence is ineffective against the lienholder when the lienholder is not named as a party to the lawsuit. Even though the debtors thought the mortgage servicer, which they named as a defendant, held an interest in the property, they were aware of the original lender’s assignment to the current lienholder and should have provided an opportunity for it to protect its interest.
An unsecured junior lien on the debtor’s residential real estate may be avoided after the debtor completes Chapter 13 plan payments. The case law in the Eighth Circuit, interpreting Nobelman, permits wholly unsecured liens to be stripped off.
When the parties divorced, the court ordered the wife to pay $25,000 to the husband to equalize the division of the parties’ property. This debt is dischargeable in the wife’s Chapter 13 bankruptcy if she successfully completes her plan payments.
The court sustained the Nebraska Department of Health and Human Services’ objection to confirmation because the department’s claim is a domestic support obligation entitled to priority. The claim is for reimbursement of an overpayment of child support to the debtor for a child who was in foster care at the time, and under state law, the right to receive support payments was assigned to the department as reimbursement for the cost of care.
A mortgage holder’s notice to a Chapter 13 debtor of post-petition mortgage fees, expenses, and charges, filed pursuant to Bankruptcy Rule 3002.1, is not an amendment to the creditor’s proof of claim and will not be paid under the plan. Rather, it is a notice that the creditor will be seeking repayment of those expenses pursuant to the terms of the loan after the bankruptcy case is over. The debtor may file a motion to determine whether payment of the claimed expenses is required by the loan documents and applicable non-bankruptcy law.
The court denied the plaintiff’s motion for default judgment, ruling that, particularly where both parties are unrepresented by counsel, fundamental fairness requires the matter to be set for trial so the court can ascertain whether the elements of the cause of action have been sufficiently established.
The court sustained various objections to the debtor’s Chapter 11 plan on grounds of feasibility, lack of good faith, and improper classification of claims. Moreover, there is no precedent for allowing a Chapter 11 debtor who has no legal obligation on a note to modify the terms of that note via his plan.