Judge Cox

Judge Jacqueline P. Cox - Opinions / Outlines

Please note that the decisions listed below are not a complete inventory of all the judge's decisions, that the electronic versions are not documents of record, and that the official records are available at the clerk's office.

In re Dugar Claimant filed a claim against the Debtors’ estate for a breach of contract relating to a contract for home repair work. Each party claimed the other breached the contract. A two-day hearing was held. The Debtors testified that the claimant made work difficult for the Debtors while performing under the contract. She constantly complained about the work, insulted and made vulgar comments consistently to one of the co-debtors while he was trying to work. Events culminated when claimant told the Debtors that she refused to pay any more than the initial deposit for any work the Debtors had done or would do under the contract. The Debtors also brought in a subsequent contractor to testify whom the claimant had also hired to do work on her home. His testimony echoed the Debtors’ testimony. The Debtors met their burden of rebutting the claimant’s claim and the claim was denied. Issued :August 19, 2008	06 B 11328
In re Hearthside Baking Co., Inc. Official Unsecured Creditors’ Committee of Hearthside Baking Co., Inc., et al. v. Cohen, et al. Debtor corporation manufactured and sold cookies as the Maurice Lenell Cooky Company. Two brothers, Terry and Wayne Cohen, served as CEO and President and were sole directors of the company. The company was held in a trust with Wayne and Terry as beneficiaries. Defendants Blum and Gordon were co-trustees of the trust. A dispute formed between the brothers and Wayne filed suit in Cook County Chancery Court in March 2005 against Terry, Blum, and Gordon for Terry’s alleged looting of company assets and Blum and Gordon’s failure to properly investigate Wayne’s allegations. In January 2008, four creditors filed an involuntary petition against the Debtor. Except for a valuation proceeding that eventually became moot or abandoned, little progress was made in the Chancery Case. A committee of unsecured creditors was formed and was given authorization to prosecute causes of action and to intervene in the Chancery Court on behalf of the Debtor. Under this authority, the committee removed the Chancery Court case to this Court. Defendants Blum, Gordon, and Terry opposed removal of the case and filed motions before this Court disputing proper subject matter jurisdiction and for this Court to abstain from hearing the matter and remanding it back to the Chancery Court. The Court found proper “related to” jurisdiction and also denied the defendants’ motion for mandatory abstention, permissive abstention, and equitable remand pursuant to 28 U.S.C. § 1452(b). Further, the committee also filed its own adversary proceeding before this Court and sought to consolidate the removed Chancery Case with their adversary proceeding. This unopposed motion was joined by Wayne and was granted. Issued :August 04, 2008	08 B 01187 08 A 00237 & 08 A 00279
In re J.S. II, L.L.C., et al Chapter 11 debtor LLCs objected to the claim of one of its former managing member and agent. The claimant still maintains a membership interest in debtor LLC after being removed as managing member and agent in a state court proceeding prior to the bankruptcy case. Two other members were appointed by the state court as managers of the debtor LLCs. The debtor LLCs filed a counterclaim along with their objection for breach of contract, breach of fiduciary duty, and equitable subordination. In response, the claimant filed a third-party complaint for equitable subordination against the current managing members alleging commingling of assets, undercapitalization, and mismanagement. The debtor LLCs and managing partners each filed motions to dismiss arguing that the claimant lacked standing to bring the suit, violated the automatic stay by bringing the suit, violated the Barton doctrine that precludes bringing a suit against a trustee (or DIP) or its current management without leave of the Court, that the issue was barred by res judicata and collateral estoppel since undercapitalization issues were raised during a prior objection to a motion to sell property in a separate proceeding, and that the third-party action was improper and should have been filed as an adversary proceeding. The Court held that the claimant had standing to bring claim for equitable subordination and did not violate the automatic stay in doing so. Also, the Court held the Barton doctrine was not violated since the suit was for alleged acts occurring pre-petition. Further, Res judicata and collateral estoppel were inapplicable because the facts alleged at the sale motion objection differed from those alleged in the current third-party complaint. Finally, the Court dismissed the third-party complaint as improper under rule 7014 and directed the claimant to re-file his suit as an adversary proceeding as required by Fed.R.Bank.P. 7001(8), and Fed.R.Bankr.P. 3007(b), which was amended December 10, 2007 requiring that all actions for relief as provided by Rule 7001(8) must be brought via an adversary proceeding. The debtor LLCs were directed by separate order to re-file their counterclaim as an adversary proceeding as required by Rules 7001(8) and 3007(b). Issued :May 27, 2008	07 B 03856
In re J.S. II, L.L.C., et al. Pro se creditor purchased a home from a third party in the debtor’s real estate development project. The creditor filed a timely proof of claim alleging repair items and building code violations. She subsequently filed several other claims after the claims bar date passed arguing that each amended her previous timely filed claim. The Court found that her attempted amendments asserted new claims that did not relate back to her original claim and that the new claims could not satisfy the excusable neglect standard for allowing a claim filed after the claims bar date. The creditor’s timely filed claim was denied because the debtor successfully met its burden in objecting the claim. Issued :April 16, 2008	07 B 3856
In re J.S. II, L.L.C., et al Corporate creditor, through its vice president who is not an attorney, filed a claim against the debtor after the claims bar date passed. The debtor objected, arguing the claim was untimely filed. After obtaining counsel, the creditor argued that its claim should be allowed under the excusable neglect standard announced by the U.S. Supreme Court in Pioneer Inv. Services Co. v. Brunswick Assoc. L.P., 507 U.S. 380 (1993). The creditor specifically argued that when it filed its claim without counsel, it did not understand the complexities involved in filing a timely claim and that allowing its claim would have a de minimus impact on any potential distribution to the other creditors. The Court found that filing the claim without the aid of counsel was not excusable under the Pioneer test and that a sophisticated business entity, the creditor should have recognized when an attorney was needed. The Court also found that allowing the claim would prejudice both the debtor and the other creditors who timely filed their claims since it would affect any distribution made. Issued :February 20, 2008	07 B 03856
In re Mid City Parking, Inc. Arlow v. F.A.Y. Properties, Inc. Creditor trustee filed a complaint to recover five alleged transfers made to the defendant from the debtor two months prior to the bankruptcy case. Three of the transfers were disposed via summary judgment for the defendant. A hearing was held regarding the remaining two transfers. The Court found that the remaining two transfers were made while the defendant was insolvent. The defendant asserted that the transfers were made in the ordinary course of business. This was rejected because the defendant only offered the testimony of its president who could not testify to the industry standard, and therefore, was not an expert witness. The defendant then argued that the transfers were made as part of a lease that was assumed post-petition by the debtor. The Court agreed and entered judgment for the defendant on the two remaining transfers base on the Seventh Circuit’s ruling in In re Superior Toy & Mfg. Co., Inc., 78 F.3d 1169 (7th Cir. 1996). Issued :December 27, 2007	04 B 45177 06 A 01812
In re J.S. II, L.L.C., et al Chapter 11 Debtor brought a motion to sell certain real estate. One principal of the Debtor had expressed his disapproval of the sale of the real estate as proposed in the motion to sell. The Court required that all principals of the Debtor must approve the sale. Debtor then moved for reconsideration of this ruling or in the alternative for an appointment of a trustee with limited power or an examiner with expanded power. On reconsideration, the Court found that all principals did not need to consent to the sale of the real estate. The Court also denied the Debtor's request for the appointment of a Trustee with limited power or an examiner with expanded power. Issued :November 29, 2007	07 B 03856
In re Falconridge, LLC Prior to the debtor’s bankruptcy filing, the mortgagee obtained a judgment of foreclosure in state court against the debtor, the owner of an apartment building, and its sole member. The state court also appointed a receiver to maintain the property. The debtor thereafter filed a single-asset real estate bankruptcy case before the property could be sold at a sheriff’s sale. The mortgagee brought an emergency motion under 11 U.S.C. § 543(d) seeking to excuse the receiver from having to turnover the apartment building to the debtor in accordance with 11 U.S.C. § 543(b). The court found that the Debtor’s prior mismanagement of the property and questionable business practices negated the statutory obligation of a custodian to turnover assets to a debtor in bankruptcy. The court concluded that the interests of creditors would be better served if the receiver was excused from complying with 11 U.S.C. § 543(b). Issued :November 08, 2007	07-bk-19200
In re Swiontek Maxwell v. Barounis Plaintiff Trustee and the Defendant filed cross-motions for summary judgment on the Trustee's adversary complaint. The adversary complaint sought avoidance under 11 U.S.C. § 544(b) and § 5 of the Illinois Uniform Fraudulent Transfer Act of the Debtor's pre-peition transfer of real estate to his wife, the Defendant. Prior to the transfer, the Debtor and his wife held the real estate as tenants by the entirety. The Trustee's adversary complaint also sought authority under 11 U.S.C. § 363(h) to sell the real estate. The Defendant argued that avoidance of the transfer will restore the property to the tenancy by the entirety estate that existed prior to the transfer being made and operate to keep the real estate beyond the reach of the Trustee's avoidance power. The Trustee argued that the tenancy by the entirety estate will not be revived once the transfer is avoided because whatever “entirety” existed prior to the transfer was voluntarily extinguished by the Debtor once the transfer was made. Moreover, even if the tenancy by the entirety comes back into existence after avoidance, 11 U.S.C. § 522(g) prohibits an exemption from being claimed in the real estate. The court granted summary judgment in favor of the Trustee and against the Defendant on all counts of adversary complaint. Issued :October 03, 2007	04-bk-48014 05-ap-01624
In re Enyedi, et al. Debtors filed a chapter 7 bankruptcy case and obtained a discharge. The chapter 7 trustee filed a No Asset Report and the case was closed. Approximately 7 months later, the debtors’ case was re-opened for the purpose of disclosing 2 pre-petition causes of actions that were omitted from their bankruptcy schedules. The chapter 7 trustee previously assigned to the case was re-appointed as trustee. After the case was re-opened, the defendants involved in the one matter pending in state court (the other matter is a workers compensation claim) obtained an order dismissing the law suit with prejudice because the debtors failed to properly list it in the bankruptcy case. The chapter 7 trustee moved for an order of contempt against the defendants for violating the automatic stay. The court held that (1) the unscheduled lawsuit was never abandoned by the trustee and is still property of the estate protected by the automatic stay; (2) the trustee, not the debtors, hold the exclusive right to pursue the cause of action in state court; (3) the defendants violated the automatic stay and the state court order of dismissal is void ab initio; and (4) neither an order of contempt nor an award of damages were warranted based on the circumstances of the case. Issued :July 12, 2007	06 B 08771
In re: J.S. II, L.L.C., et al Chapter 11 debtors filed application to employ law firm as special litigation counsel to represent them in pending state-court litigation involving derivative claims and counterclaims the debtors’ principals filed against each other on behalf of certain debtors. The court overruled the objection from one of the debtors’ principal members and prior manager and held that the law firm’s employment was in the best interest of the estate and that the interests of the debtors’ controlling principals, who are defendants in the state court litigation, are not adverse to the estates’ interests. The court also noted that special counsel risked total denial of any requested compensation award if it failed to timely disclose the development of an adverse interest while representing the debtors. Issued :May 30, 2007	07 B 03856
In re Meridee Hodges The debtor objected to the claim of the Social Security Administration (SSA) that she owed it $38,878.40 for overpayment of disability benefits. The SSA's motion to dismiss the claim objection was granted because debtor did not exhaust her administrative remedies by first securing SSA's review of her position that she had not received more than she was entitled to. The Social Security Act allows review of SSA's final decisions via a civil action and deprives the courts of original jurisdiction of such matters. The court also found that even though the government violated the automatic stay by sending the debtor a demand letter after the bankruptcy petition was filed, it was questionable whether stay violation damages could be proven because the debtor pursued the government by filing its claim, objecting to it and seeking court review of the SSA's position. Issued :February 28, 2007	05 B 46676
In re James S. Economou Ft. Myers Historic, L.P. v. James S. Economou, et al An attorney was ordered to produce documents sought by subpoena in relation to his representation of 2 debtors. The court declined to order disclosure based on the common interest exception to the attorney- client privilege because the clients did not jointly seek the attorney's professional services. However disclosure was ordered based on a finding that the crime-fraud exception to the attorney-client privilege was applicable. Issued :February 28, 2007	05 B 13171 05 A 1582
In re Teknek, LLC Phillip Levey, Trustee v. Sheila Hamilton et al. In re Teknek, LLC; Phillip Levey, Trustee v. Sheila Hamilton et al. Defendants, who are citizens of the United Kingdom, moved to dismiss Trustee’s adversary complaint for lack of personal jurisdiction or, in the alternative, on grounds of forum non conveniens. The court found under Bankruptcy Rule 7004, 28 U.S.C. § 1334(b) and the Fifth Amendment of the United States Constitution that it could exercise personal jurisdiction over the defendants. The court additionally held that even though insolvency proceedings were pending in the United Kingdom for a foreign company with essentially the same ownership structure as the chapter 7 debtor and that the United Kingdom would provide an adequate alternative forum, the balancing of private and public factors was such that dismissal based on forum non conveniens would not be appropriate. Issued :October 16, 2006	05 B 27545 06 A 00412
In re Laura Flores Prior to the petition date, the debtor’s non-filing spouse obtained title to property for which he executed a note secured by a mortgage which included an anti-modification provision. He later transferred title to his wife who did not assume the payment obligations of the note or the mortgage. A default on the mortgage note ensued and the wife filed this chapter 13 case seeking to pay the arrears in her reorganization plan. Mortgagee filed a motion to lift the automatic stay citing the debtor’s lack of privity of contract. The court held that because of United States Supreme Court precedent which defines "claim" to include obligations for which a debtor has no personal liability, only in rem liability, the debtor’s interest in the property could be included in a chapter 13 plan. The court also held that inclusion of the debt in the debtor’s plan did not impermissibly modify the lender’s rights under § 1322(b)(2) but instead provided extra protection as it gives the lender an additional person from whom to seek satisfaction of the underlying obligation. The court noted that Illinois law may dictate that a creditor-debtor relationship exists between the debtor and Mortgagee based upon the Illinois Family Expense Act and under an Illinois Supreme Court case that held that a lender's acceptance of an interim grantee's payments makes the grantee the primary obligor on a debt. Issued :July 20, 2006	06 B 02169
In re Teknek, LLC Lawrence Fisher, Trustee v. Tekena USA, LLC et al. Defendant corporation and its four shareholders moved to vacate a temporary restraining order and the appointment of a receiver. Movants argued that the court committed legal error in justifying the receivership by applying facts pertaining to the alleged misdeeds of the other three defendants and that the court lacked subject matter jurisdiction to appoint a receiver because an appointment is a “noncore proceeding” that is merely “related to” the bankruptcy case in chief because all aspects of such appointment are governed by Illinois law. The court held that the appointment of an Illinois equity receiver was a core matter and the appointment of a limited receivership with oversight, auditing, and clearance authority was warranted to preserve value for whomever is ultimately entitled to it. The court additionally dissolved the TRO and concluded that grounds did not exist for preliminary injunctive relief. Issued :May 03, 2006	05 B 27545 06 A 00412
In re National Steel Corporation NSC Creditor Trust v. BSI Alloys Inc. Creditor’s Trust created under a confirmed chapter 11 plan moved for partial summary judgment on its adversary proceeding seeking avoidance under 11 U.S.C. § 547(b) of three pre-petition transfers the debtor made to the defendant. The defendant argued that the transfers fell within the “ordinary course of business” and “new value” exceptions of 11 U.S.C. § 547(c) and were not subject to avoidance. Finding that the “ordinary course of business” exception applied even though the payments were technically late according to a new contract negotiated during the preference period, the court denied the motion for summary judgment and entered judgment for the defendant on its motion for summary judgment. Issued :March 28, 2006	02 B 08699 04 A 01322
In re Mid-City Parking, Inc. Creditor requested an award of costs and attorneys’ fees it incurred when the debtor-in -possession filed a notice of appeal without first seeking a modification of the automatic stay imposed by 11 U.S.C. § 362(a). The court held that a trustee, or a debtor-in-possession, has the authority to unilaterally waive the protections of the automatic stay to proceed with acts of estate administration that would otherwise violate 11 U.S.C. § 362(a) if performed by anyone else. Creditor’s request was denied. Issued :October 31, 2005	04 B 45177
In re Otha Isaac Special Note: two related, successive opinions regarding Chapter 13 plan confirmation (August 25, 2005 and November 16, 2005) In re Otha Isaac Special Note: two related, successive opinions regarding Chapter 13 plan confirmation The holder of mortgages on three separate parcels of property owned by the debtor objected to confirmation of her chapter 13 plan because it incorrectly listed the amount of the arrears, failed to provide for the payment of property taxes and insurance premiums, failed to correctly list the monthly mortgage payments coming due during the term of the plan, and failed to make provisions for a balloon payment. Aside from the debtor’s willingness to correct discrepancies in the plan, the debtor argued that her plan was feasible because the balloon payment would be satisfied when due by either refinancing the mortgage or selling the property. The plan would also provide that the automatic stay would automatically be modified if the balloon payment was not made according to these terms. The court found the debtor’s plan to be unfeasible under 11 U.S.C. § 1325(a)(6) because its success hinged upon the occurrence of a speculative and contingent event in the distant future. Issued :August 25, 2005	05 B 13874
In re Diane Logan Central Credit Union of Illinois v Logan In re Dianne Logan Creditor brought an adversary proceeding against this chapter 7 debtor requesting that the debt the debtor incurred borrowing money from it to purchase a car be excepted from her discharge under 11 U.S.C. §§ 523(a)(2), (a)(4) & (a)(6). The seller of the car never registered the car’s title showing that it was transferred from the prior owner to himself and then to the debtor. Neither was the seller able to produce the title during the trial. Debtor testified that an unidentified person or company towed the car to an unidentified location after she abandoned it on the side of a road near her home because of mechanical problems. The court’s ruling in favor of the Creditor was based, in part, on the gaping holes, inconsistencies, and implausible nature of the debtor’s evidence and theory of what happened to the car. Issued :July 08, 2005	03 B 13825 04 A 01861
In re Lewis-Pride Claudette Lewis-Pride v Wells Fargo Bank Chapter 13 debtor sought to invalidate a mortgage on her residential real estate because she did not know or understand that she was entering into a mortgage transaction due to a medical condition. Court found against the debtor due to a lack of medical evidence relating to the debtor’s medical condition at the time the mortgage was created. Issued :June 06, 2005	04 B 06663 04 A 02415
In re Susan Mary Irons Drazin v. Irons The debtor’s former spouse initiated an adversary proceeding against the debtor to determine whether the debtor’s obligation under a marital settlement agreement to hold him harmless on certain joint liabilities was excepted from discharge under 11 U.S.C. §§ 523(a)(5) and (a)(15). On a motion for summary judgment, the court found that the debt owed by the debtor to her former spouse was nondischargeable under § 523(a)(5). Issued :May 17, 2005	04 B 02682 04 A 02054
In re Lugean Brooks Prior to the debtor’s bankruptcy filing, a “Consent Judgment of Foreclosure” was entered in a suit filed in state court to dispossess the debtor of his residence under the Illinois Mortgage Foreclosure Law. The property was purchased under an installment land contract. The debtor’s proposed chapter 13 plan attempted to cure his default under the installment land contract. The debtor filed a motion requesting the court to vacate its prior order denying confirmation of his chapter 13 plan. The debtor also moved to have his chapter 13 plan confirmed over the objection of the official title holders and the sellers under an installment land contract. The court denied the debtor’s motion and found that the debtor held merely a possessory interest in the property at the time of filing and did not possess a right to cure the default in a chapter 13 plan under 11 U.S.C. §§ 108(b) and 1322(c). Issued :March 30, 2005	04 B 39514
In re American Telecom Corporation After a corporate debtor’s chapter 7 case was dismissed on creditor’s motion, creditor moved under Bankruptcy Rule 9011 to be reimbursed from the debtor’s counsel for legal work its attorney performed in response to the debtor’s improperly filed voluntary petition. The court concluded that the debtor and its attorney violated Rule 9011(b)(1) of the Federal Rules of Bankruptcy Procedure by filing its chapter 7 case with the intent to delay, frustrate, and cause expense to the creditor. The court imposed a sanction under Bankruptcy Rule 9011(c) against the debtor’s counsel for the creditor’s attorneys fees. Issued :January 31, 2005	03 B 46296
In re Original IFPC Shareholders, Inc The United States Trustee filed a motion to dismiss or convert a chapter 11 case arguing that the case was not filed in good faith, that the debtor had no real need for bankruptcy reorganization, that the debtor’s plan was both unconfirmable and unfeasible, and that the true creditor body (as opposed to shareholders) would not be well served by continued prosecution of a trade-secret-misappropriation action in state court. The court concluded that “cause” existed under 11 U.S.C. §§ 1112(b)(1) and (b)(2) to dismiss the case due to the highly speculative nature of the state court action which was the debtor’s primary asset. The court alternatively found that “cause” existed that the chapter 11 case was filed in bad faith. Issued :November 19, 2004	04 B 13843
In re Griffin Through counsel, the chapter 7 debtors moved to redeem a vehicle under § 722. The court granted the motion but requested that counsel provide the court with additional information on the fee arrangement between the debtors and the debtors’ counsel. Supplemental documents revealed that (1) although the bankruptcy case was not filed until May 20, 2004, counsel began billing for the motion on February 8, 2004; and (2) a tripartite arrangement existed between the debtors, debtors’ counsel and a third party where the third party made a post-petition loan to the debtors to pay counsel for the pre-petition debt created by counsel’s pre-petition retainer agreement with the debtors and to redeem the vehicle from the secured creditor. The court found that the additional revenue from the redemption motion was not voluntarily disclosed to the court. The court concluded that counsel was not entitled to a fee for bringing the motion to redeem. Issued :August 26, 2004	04 B 19670
In re Martha StewardIra Bodenstein, U.S. Trustee v. Anson B. Shareef United States Trustee made a variety of legal challenges to a bankruptcy petition preparer’s conduct under various subsections of 11 U.S.C. § 110 in two separate chapter 7 cases. After conducting an evidentiary hearing, the court found that the bankruptcy petition preparer violated 11 U.S.C. § 110(b)(1), § 110(c)(1)-(2) and § 110(g)(1). The court imposed the maximum fine for each violation. The court also granted the United States Trustee’s request under 11 U.S.C. § 110(j) for an injunction permanently barring the defendant from operating as a bankruptcy petition preparer. Issued :July 23, 2004	04 A 02333 04 B 09265
In re Lillie Carter Prior to the debtor filing a chapter 13 bankruptcy, the debtor’s personal residence was purchased by a third party at a foreclose sale initiated by the holder of the second mortgage against the property. The debtor and the successful bidder entered into an oral agreement whereby the debtor could retain the fee simple interest in her personal residence in exchange for the purchase price paid plus interest. Both parties agreed to extend the state court order for possession, which normally accompanies a sale-confirmation order, several times between August and December of 2003. The successful bidder alleged that the debtor filed her chapter 13 case for the sole purpose of delaying or thwarting its pursuit of an order for possession that was likely to be issued by the state court in the foreclosure proceeding. The successful bidder requested relief from the automatic stay pursuant to 11 U.S.C. § 362(d)(1) or an order of dismissal with a 180-day bar against refiling pursuant to 11 U.S.C. §§ 1307(c) and 349(a) so that it could seek to have the debtor dispossessed from the property. The court concluded that under the totality of the circumstances, dismissal under 11 U.S.C. § 1307(c) and 11 U.S.C. § 349(a) was not appropriate, as the debtor had not abused the bankruptcy process. However, the court did hold that “cause” existed to grant relief from the automatic stay because the debtor no longer held an interest in the property. Issued :May 04, 2004	04 B 00114
In re Ockerlund Construction Company Prior to the debtor filing a chapter 13 bankruptcy, the debtor’s personal residence was purchased by a third party at a foreclose sale initiated by the holder of the second mortgage against the property. The debtor and the successful bidder entered into an oral agreement whereby the debtor could retain the fee simple interest in her personal residence in exchange for the purchase price paid plus interest. Both parties agreed to extend the state court order for possession, which normally accompanies a sale-confirmation order, several times between August and December of 2003. The successful bidder alleged that the debtor filed her chapter 13 case for the sole purpose of delaying or thwarting its pursuit of an order for possession that was likely to be issued by the state court in the foreclosure proceeding. The successful bidder requested relief from the automatic stay pursuant to 11 U.S.C. § 362(d)(1) or an order of dismissal with a 180-day bar against refiling pursuant to 11 U.S.C. §§ 1307(c) and 349(a) so that it could seek to have the debtor dispossessed from the property. The court concluded that under the totality of the circumstances, dismissal under 11 U.S.C. § 1307(c) and 11 U.S.C. § 349(a) was not appropriate, as the debtor had not abused the bankruptcy process. However, the court did hold that “cause” existed to grant relief from the automatic stay because the debtor no longer held an interest in the property. Issued :April 07, 2004	03 B 45189
In re AMERICAN TELECOM CORP Plaintiff in a state court alter ego action against two principals (and a Judgment Creditor of the debtor) of a corporate chapter 7 debtor filed a motion to dismiss the debtor’s case or in the alternative, lift the automatic stay to permit the state court action to proceed. Noting that corporate chapter 7 cases have very limited purposes and that they do not demand the type of reorganizational analysis required in a chapter 11 or chapter 13 case, the court held that the debtor’s case was filed in “bad faith” and dismissed it for “cause.” The court concluded that the case served only to stay Plaintiff’s collection efforts, was an unfair litigation tactic designed to delay the Plaintiff’s state court alter-ego claim and that it was an attempt to shift the dispute, which could be resolved in state courts, to a bankruptcy forum. Issued :February 03, 2004	03 B 46296
In re: Virgil LiptakLiptak v. Thornhill et al. Ex-wife of a solvent chapter 11 debtor, who was a resident of Texas, moved to dismiss his case for “cause” pursuant to 11 U.S.C. § 1112(b), alleging that the debtor did not file his case in good faith. She also requested dismissal, or transfer of the case for improper and inconvenient venue under 28 U.S.C. § 1408(1) and Bankruptcy Rule 1014(a), to the more convenient forum of the Northern District of Texas. The court found that the debtor’s case was filed with the intent to delay his ex-wife from exercising traditional state law collection rights stemming from a state court judgment while he was attempting to collaterally attack the state court judgment underlying her claim. The court held that “cause” existed under 11 U.S.C. § 1112(b) to dismiss the bankruptcy case because it was not filed in “good faith.” The court additionally held that “cause” existed under 11 U.S.C. § 349(a) for dismissal with a one year bar to refiling a bankruptcy case because the debtor’s behavior showed a tendency toward recycling his contentions and interpretations of law rejected by one court to another court (in either the state or federal system) that lacked appellate jurisdiction over the rulings of which he complained. Issued :January 22, 2004	03 B 29854 03 A 03732
In re Mary Will Although finance company’s allowed secured claim was paid in full in a prior chapter 13 case, which was later converted into a chapter 7, it refused to release the lien. After receiving a discharge in the chapter 7 case, the debtor filed another chapter 13 case but did not schedule the finance company as a creditor because it was her belief that the debt had been extinguished in the prior case. Having no notice of the new case, the finance company repossessed the vehicle and claimed that a fully secured balance still existed. The debtor filed a complaint against the finance company for damages and turnover of the car and alleged a willful violation of the stay pursuant to 11 U.S.C. § 362(h). The finance company filed a motion to annul the automatic stay and objected to confirmation of the debtor’s chapter 13 plan. The court held that the finance company’s refusal to expeditiously return the car to the debtor once notified of the pending chapter 13 case was a willful violation of the automatic stay. As such, the motion to annul the automatic stay was denied. The debtor was granted costs and awarded attorney fees along with compensatory and punitive damages. The issue involving the objection to confirmation was not litigated. Issued :November 20, 2003	02 B 36426
In re Sandra Lee Wright Unsecured creditor moved to file a tardy proof of claim and to be included in the debtor’s chapter 13 plan. The creditor alleged that notice of the proof of claim filing deadline was sent to an incorrect address. The court held that it lacked authority under the Bankruptcy Code or the Bankruptcy Rules to grant the creditor’s request to file a late claim. The court further held that the Due Process Clause did not provide an equitable exception to the otherwise strict terms of the chapter 13 claims bar date because the Bankruptcy Code, when construed as a whole, provides other forms of relief to creditors who do not have actual knowledge of a bankruptcy case in time to exercise procedural rights essential for protecting their claims. Issued :October 20, 2003	03 B 02687
In re Evelyn Watkins Secured creditor filed a motion requesting relief from the automatic stay in order to pursue its state law rights and remedies with respect to the debtor’s car that was stolen and totaled pre-petition. It additionally requested an order pursuant to Bankruptcy Rule 9013 directing the insurance company to pay it the full settlement amount in order to fulfill the pre-petition state-court judgment denying declaratory relief in favor of the debtor. The debtor argued that the attorneys’ fees incurred due to her attempt to collect the insurance proceeds should be paid out of the proceeds because her attorney is entitled to a superior equitable lien against the proceeds as a result of their contingency-fee agreement. The court held that full faith and credit must be afforded to the state court judgment in favor of the secured creditor on the issue. The court lacked subject-matter jurisdiction to consider the argument under the Rooker-Feldman doctrine. The court also held that the debtor could not claim a wild-card exemption in the insurance proceeds; nor could the debtor attempt to avoid the lien under 11 U.S.C. § 522(f)(1). The motion to modify the stay was granted. Issued :August 22, 2003	03 B 21660
In re: Fred Amoakohene A chapter 7 debtor moved to compel mortgagee to enter into a reaffirmation agreement that alleged, among other things, that his mortgage payments were current. Mortgagee filed a cross motion for modification of the automatic stay, which alleged a default on the mortgage, that the debtor had no equity in the real property and that the property was not necessary for an effective reorganization. The cross motions raised the legal issues of whether a chapter 7 debtor may retain his home against the objection of the mortgagee by simply remaining current on payments, or conversely, whether a mortgagee should be entitled to foreclose in pursuit of its in rem claim against real property only because the debtor-mortgagor obtained a chapter 7 discharge of personal liability. The court held that: (1) the debtor was required under 11 U.S.C. § 521 to elect between reaffirmation, redemption and surrender and then perform the intention within 45 days thereafter; (2) that the court could not force the Mortgagee to enter into a reaffirmation agreement; and (3) that relief from the automatic stay was appropriate and would not be much of an additional burden on the debtor. Issued :July 23, 2003	03 B 07231
In re Earsline Giddens Tax sale purchaser obtained a tax deed for property owned by the debtor and transferred the tax deed to a land trust for the benefit of a third party. The debtor’s interest was not recorded. The third party used this interest to secure a loan with a finance company. The finance company moved under 11 U.S.C. § 362(d) to annul the automatic stay in the debtor’s chapter 13 case for “cause” in order to validate the tax deed that was issued while the stay was in effect. The court held that: (1) as the holder of both the legal and equitable title to the real estate, the debtor had a property interest that became part of her bankruptcy estate in spite of the fact that her legal interest had not been recorded until 2 years after the pendency of a prior chapter 13 case; (2) the filing of the application for an order issuing the tax deed by the tax sale purchaser and the issuance of the tax deed were willful violations of the automatic stay because the tax purchaser knew of the debtor’s unrecorded interest due to her efforts to negotiate with the tax purchaser; and (3) that equity did not clearly favor annulment of the automatic stay. Issued :June 10, 2003	02 B 41591