In a dispute over the rights to money recovered in a South Dakota bankruptcy case, the court ruled that, although the funds were not property of the Nebraska debtor's bankruptcy estate, the Nebraska bankruptcy trustee was entitled to be compensated for his efforts to recover the money from the South Dakota debtor and litigate its ownership because his actions were reasonable. As between the trustee and the creditors to whom the recovered funds were ultimately awarded, the equities favor the trustee and the recovered funds may be surcharged for his fees and expenses.
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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 bankruptcy court denied the debtors' motion to reopen their Chapter 7 bankruptcy case to list a judgment creditor and determine the dischargeability of that debt. Under § 523(a)(3), the state court that issued the judgment has concurrent jurisdiction to determine the debt's dischargeability because discharge is an affirmative defense, so there is no reason to have the bankruptcy court involved as well.
The court previously ruled that traceable insurance proceeds for the fire loss of the debtor's home were exempt under the homestead exemption. The debtor then used the proceeds to purchase non-homestead tangible property. The court ruled that the proceeds lost their exempt status upon their use for something other than buying a new homestead or repairing the damaged homestead.
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.
The court sustained the confirmation objection of the debtor's former spouse, finding that the debtor's obligation to pay a joint debt and a portion of his former wife's attorney's fees were non-dischargeable support obligations that needed to be accounted for in the plan of reorganization. Likewise, the Collett provision in the parties' dissolution decree, whereby an additional modicum of alimony was awarded subject to modification if the debtor failed to pay any portion of the property settlement or marital debt assigned to him, rendered the property settlement debt a non-dischargeable support obligation as well.
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.
The court granted the defendants' motion to alter or amend the portion of a fraudulent transfer summary judgment order concerning the plaintiff's entitlement to a presumption of intent to defraud. The court denied the motion to alter or amend with regard to the applicable standard of good faith under the Nebraska Uniform Fraudulent Transfer Act.
The debtors previously entered into a stipulation settling a motion for stay relief filed by the creditor holding liens on numerous rental properties owned by the debtors. The stipulation contained a provision that any attempt by the debtors to modify its terms without the creditor's express written consent would be an event of default which would automatically terminate any stay or injunctive provision of the Bankruptcy Code. The debtors later moved to modify the amount of adequate protection payments, based on changed circumstances. The creditor deemed this an event of default and moved for relief from the stay.
The court denied the debtors' motion to modify the adequate protection payments, finding unconvincing evidence of changed circumstances. The court also denied the creditor's motion for relief, finding that the default provision in the stipulation gave the creditor too much power at the expense of the debtors' rights under the Bankruptcy Code. "Although the stipulation was negotiated in good faith, and approved by this court, it is the function of the court to determine if there is cause for relief from the automatic stay. The parties cannot negotiate away the authority of the court or the right of a debtor in bankruptcy to request relief from the court."
The debt resulting from a limited liability company manager's unauthorized use of company funds was non-dischargeable under § 523(a)(4). The debtor admitted to acting in a fiduciary capacity as the manager, and his misappropriation of funds constituted defalcation by a fiduciary. The court also awarded pre- and post-judgment interest on the debt.
The court sustained a creditor's objection to confirmation of the debtor's Chapter 13 plan on the basis of the proposed post-confirmation interest rate on the debt. The court ruled that the debtor should pay the contract rate of 8.5 percent, rather than the formula rate of 5.25 percent, because of the significant degree of risk the creditor will face. The debt was delinquent on the petition date, the debtor had not made payments pursuant to the plan, and there would be delays and possible additional costs before the creditor could collect if the case was dismissed.