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.
You are here
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.
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.
The court denied the debtor's motion to avoid the fixing of a non-possessory, non-purchase-money lien on his vehicle for two reasons: failure to properly serve the creditor, and failure to demonstrate that the vehicle is a tool of the trade or whether he is even claiming it is.
The court explained that federal law, rather than state law, determines the availability of lien avoidance under § 522(f), pursuant to Cleaver v. Warford (In re Cleaver), 407 B.R. 354 (B.A.P. 8th Cir. 2009). "At its essence, Cleaver holds that the bankruptcy court must first look to see if the creditor has a nonpossessory, non-purchase money security interest in a tool of the trade as defined by federal law. If so, the bankruptcy court then looks to state law to determine if the lien impairs an exemption to which the debtors would have been entitled. The exemption can be any exemption to which the debtors would have been entitled and does not need to be a tool of the trade exemption." *4.
The motion was denied without prejudice.
The court denied summary judgment on a creditor's § 523(a)(2)(A) complaint to except a debt from discharge. The evidence, viewed in the light most favorable to the debtor, showed material issues of fact concerning the nature and terms of the agreement between the parties, specifically as to whether it was a land lease or a crop-share agreement, as well as to the amount of the debt owed to the landowner. These factual issues cannot be decided on summary judgment and should be determined at trial.
After a trial, the court sustained the debtor's objection to the claim of an over-secured lender and reduced the fees and expenses included in the claim to a reasonable amount. The claim included fees for late charges, appraisals of collateral, and environmental assessments. The evidence indicated the late charges were improperly calculated, so they were reduced. The lender's standard operating procedures require appraisals and environmental assessments, but the court noted those requirements are not unrestricted. The court found the loan servicer's decision to order formal appraisals and reports at will, especially while the debtor was attempting to work out a loan modification, was unreasonable. Neither party was entitled to attorneys' fees in connection with the claim objection and its defense.
After a trial, the court denied a discharge to a debtor who omitted assets and pre-petition asset sales and payments from his bankruptcy schedules and statement of financial affairs. The court found these omissions and misstatements to constitute false oaths and to be material. The court also found intent based on "the sheer volume of misstatements and omissions [which] demonstrates, at a minimum, reckless indifference to the truth." Because the debtor's omissions and misstatements were numerous and were corrected only after a creditor made the effort to dig them out, they rendered the schedules unreliable and the court accordingly denied the debtor a discharge under 11 U.S.C. § 727(a)(4)(A).
The court ruled on summary judgment in a preference action that a "payment rights purchase and sale agreement" executed between the debtor and a funding company during the preference period was a sale of receivables and not a loan. After analyzing U.C.C. law on general intangibles and payment intangibles, the court determined the assets sold were in fact accounts and not intangibles, and the creditor's interest was unperfected, so the assets were property of the bankruptcy estate. The funding company's argument that the transfers were in the ordinary course of business required an inquiry into the facts, so the matter was set for trial.
The court granted summary judgment to a creditor owed a debt arising from damages and injuries resulting from an assault committed by the debtor. The state court judgment established the elements of willfulness and maliciousness under § 523(a)(6), so the debt is excepted from discharge.