Published at 376 B.R. 274. The trustee could not establish each of the necessary elements of a preference under § 547 or a fraudulent transfer under § 548, so the monetary transfers made to insiders within one year of the petition date were not avoidable.
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Opinions
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The court denied a creditor’s motion for summary judgment in an adversary proceeding seeking to except a debt from discharge under § 523(a)(2)(B). The creditor asserted the debtor intentionally overstated her income when she applied for and obtained a personal loan. The debtor argued that the amount in the loan application was what she reasonably expected to earn based on previous years’ income. The court held that genuine issues of material fact existed as to whether the debtor intentionally overstated her income, whether she knowingly included her business income with her personal income, whether she intended to deceive the creditor, and whether the creditor reasonably relied on her representations concerning her income.
Debtor, who was in the process of divorcing when she purchased a car, was the sole owner of the vehicle. Her joint debtor ex-husband cannot claim an exemption in the car. The trustee was entitled to claim the value remaining after the allowed exemptions.
The court denied an application to employ counsel for the Chapter 11 trustee because proposed counsel had an actual conflict of interest, having previously represented the largest unsecured creditor in the case as well as the creditors' committee.
The court denied debtors' motion to strip off a lien on their home. They had refinanced for more than the home's purchase price, so the additional funds on the second lien could not take "purchase money security interest" priority over the senior lien.
The bank obtained its purchase money security interest in debtor's vehicle within 910 days of the petition date, so § 1325(a)(9) precludes bifurcation of the claim. The bank is deemed fully secured and may collect attorney fees and interest.
The Bankruptcy Code's automatic stay provision does not prohibit the perfection of a lien on a motor vehicle within 30 days after the debtor obtains possession of the vehicle, and the trustee may not avoid such a lien that was timely perfected.
The court denied the motion of certain creditors to conduct a Rule 2004 exam of the Chapter 11 trustee concerning his distribution of funds because there was no good cause shown. There simply were insufficient funds to pay these creditors' claims.
The court denied creditors' motion to compel production of documents because the creditors are on a futile quest to find non-existent funds with which to pay their claims. All of the money went to the secured lender, with none left for unsecured claims.
The Chapter 7 trustee's actions in operating the debtor's business were not improper or in violation of the Bankruptcy Code. The moving creditors' disagreement with some of the trustee's business decisions do not constitute cause to remove him.