Reported at 94 B.R. 157. Debtor filed a voluntary Chapter 11 petition, effecting a conversion of the existing involuntary Chapter 7 case. The date of commencement relates back to the Chapter 7 filing date and the transfer at issue therefore was post-petition and not avoidable.

Reported at 77 B.R. 716.  The debtors’ conversion of non-exempt assets into exempt assets prior to filing Chapter 12 was not in bad faith or forbidden by the Code. However, unless the debtors intended to use some of those exempt assets to fund their plan, the court may find bad faith.

On appeal, the district court reversed the bankruptcy court order regarding attorney fees as part of an allowed secured claim. The district court ruled that under § 506(b), attorney fee agreements are enforceable notwithstanding contrary state law.

Reported at 60 B.R. 791. An attorney fee provision in a guaranty agreement is void and unenforceable under Nebraska law and therefore cannot, in bankruptcy, constitute the basis for an award of attorney’s fees under § 506(b) as part of the creditor’s allowed secured claim.

Reported at 62 B.R. 102. A Chapter 11 bankruptcy trustee cannot exercise his powers under § 544 to take title to real property free and clear of the interest of a seller on contract whose deed was mistakenly recorded and whose claim was treated in the plan as a valid secured claim.

On appeal, the district court affirmed the order granting relief from stay. As to the debtors’ argument that they were not liable on the underlying note, the court ruled it had no jurisdiction because the matter should have been raised in state court.

Reported at 61 B.R. 696. The court granted the bank’s motion for relief from stay because debtors had no equity in the mortgaged property and no likelihood of an effective reorganization. Even if reorganization were feasible, the adequate protection offer was insufficient.

Reported at 62 B.R. 744. When a debtor is not in default pre-petition, a mortgage creditor cannot rely upon post-petition "defaults" to justify perfecting a security interest in rents and profits and obtain an order sequestering such rents and profits.

In a case filed under Chapter XI of the Bankruptcy Act, the district court affirmed the bankruptcy court’s finding of contempt against a party who violated the court-ordered stay against bringing a lawsuit against the debtor by seeking a determination of the title or right to possession of funds held by the bankruptcy court. The bankruptcy court’s finding that it had jurisdiction over the funds was not appealed and therefore was binding and not subject to collateral attack at the appellate stage.

The debtor filed this adversary proceeding to collect on account for services provided. The defendant demanded a jury trial and did not consent to the bankruptcy court’s jurisdiction. The lawsuit was a simple action to recover money owed to the debtor, so the defendant was entitled to a jury trial, and the lawsuit was filed in the bankruptcy court only because the plaintiff was a debtor in bankruptcy.