The bankruptcy court found that a debtor’s pre-petition disclaimer of an inheritance did not relate back to the date of death to prevent the property from becoming part of the bankruptcy estate. Instead, the disclaimer constituted a transfer and a trial was necessary to determine whether the transfer was made with intent to hinder, delay, or defraud creditors, which would warrant a denial of discharge.
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The court entered summary judgment for the plaintiff on a § 523(a)(2)(A) cause of action because the plaintiff established a prima facie case in its motion and supporting materials. The debtor’s response did not comply with the local procedural rule for opposing a motion for summary judgment, so the record did not demonstrate a genuine issue of material fact for trial.
In Judge Mahoney's final opinion, the court found after a trial on the trustee’s complaint that there were no preferential or fraudulent transfers in the debtor’s payments to its managing member. The debtor was solvent during the two years preceding bankruptcy, and there was no evidence of actual or constructive fraud in the transfers.
A default judgment entered against the debtor in state court on breach of contract, fraudulent inducement, and unjust enrichment causes of action established the elements necessary for the bankruptcy court to find the debt non-dischargeable under 11 U.S.C. § 523(a)(2)(A).
The court granted an unsecured creditor’s motion for relief from previous orders that had altered the terms of the debtor’s confirmed Chapter 11 plan without proper notice or opportunity to object. The debtor’s proposal to use proceeds earmarked in the plan for unsecured creditors to instead pay administrative expense claims, with no formal notice to the unsecured creditors and without fully advising the court that the proposal would modify the plan, should not have been permitted. The court vacated the previous orders and directed the debtor to file an accounting and pay the proceeds to the unsecured creditors in accordance with the plan.
In an Arkansas case in which Judge Mahoney sat by designation, the judgment debt at issue was non-dischargeable under 11 U.S.C. § 523(a)(4). The court issuing the judgment specifically found that the debtor had committed fraud and breached his fiduciary duties in the performance of his duties as a bankruptcy trustee. These findings brought the debtor’s conduct within the scope of “defalcation” as defined by the Supreme Court in Bullock v. BankChampaign, N.A., 133 S. Ct. 1754 (2013).
Transfers made to the defendants in repayment of their loans to the debtors’ principal, who was conducting a Ponzi scheme, were not avoidable as fraudulent. After a trial on the matter, the court found that the defendants received less than they loaned; they acted in good faith; and they gave reasonably equivalent value for the transfers.
In a dispute about the value of the debtors’ vehicle, the lender’s NADA report was more credible than the debtors’ appraisal. The court found the value to be nearly equal to the amount of the lender’s claim. Because the debtors had used a lower valuation in their plan, the court gave them time to file an amended plan.
In the trustee’s declaratory judgment action to determine competing ownership interests in an asset, the court denied the defendant’s motion for summary judgment because both of her contentions – jurisdiction and statute of limitations – have previously been decided and the matter should move forward on the merits.
After a trial, the court found the debtor’s payments on a promissory note were fraudulent and preferential transfers because the note’s proceeds were used to purchase an asset held in the debtor’s wife’s name to put it beyond the reach of his creditors. The purchase of the asset (an interest in a limited liability company managed by the debtor) occurred outside the statute of limitations, so it was not avoidable. Under §§ 550 and 551, the trustee was entitled to recover the value of the note payments. In light of Stern v. Marshall constraints on a bankruptcy court’s authority to enter final judgments, the court’s findings of fact and proposed conclusions of law were sent to the district court for entry of judgment.