A lender was not obligated to release its pre-petition lien when the debtors filed bankruptcy, so the lender is not subject to a finding of civil contempt or sanctions for its failure to do so. Its failure to timely file an amended UCC financing statement releasing some of the collateral, and thereby causing harm to the debtors, was negligent, but not willful.

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.

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.

The first lien holder of a single-asset real estate debtor moved to dismiss the case for cause under § 1112(b)(4), alleging that the president of the debtor's owner was acting in the interests of himself and his other related companies, and not those of the debtor. Because the court found no evidence of cause such as illegal dealings, poor maintenance, lack of equity, or significant cash flow problems, it denied the motion to dismiss.

The court agreed that this adversary proceeding, which had been referred from district court upon a party's bankruptcy filing, should be returned to district court to determine liability for fraud related to the sale of securities. The third-party indemnification and contribution claims against the debtor could be severed and held in abeyance in the bankruptcy court pending the outcome of the district court litigation.

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 court granted the Chapter 7 trustee's requests for payment of fees and expenses for professionals retained to assist him with his duties as administrator of the debtor's ERISA plans. The bankruptcy court has jurisdiction to authorize payments from the ERISA plan assets as well as from the bankruptcy estate assets, and estate assets may be used to compensate the professionals if the U.S. Department of Labor subsequently reviews the matter and determines the payments should not have been made from plan assets.

The super-priority administrative expense claim granted to the IRS in exchange for the debtor's use of cash collateral in its Chapter 11 case did not survive the case's conversion to Chapter 7. The IRS's lien was subordinated by the terms of § 724(b).

The court denied the debtor's proposed use of cash collateral from the sale of cattle because the creditor was not adequately protected. The debtor's cash flow estimates were not reliable as there was no evidence of the future market value of the animals or even the actual number of animals on hand at the time of the hearing.

The debtors do not have standing to challenge the assignment of their mortgage, so that count of their complaint was dismissed. The dispute over payments made to a junior lienholder after the senior lien had been stripped off (but which was later reinstated) is not a matter for the bankruptcy court to decide. However, the debtors did incur additional expenses in attempting to ascertain the validity and priority of the liens, and they may go forward on that count of their complaint.