Source: https://mattlindblom.wordpress.com/2015/08/
Timestamp: 2019-04-19 20:23:43+00:00

Document:
The Seventh Circuit affirms the dismissal of the debtors’ chapter 7 petition for cause under 11 U.S.C. § 707(a). The movant had obtained a large arbitration award against the debtors and the debtors failed to make an effort to pay the award. They continued incurring monthly living expenses of $11,100 with monthly income of $9,500. The court finds that “cause” under § 707(a) is not restricted to the three procedural defects listed in that section. Cause existed here because the debtors failed to make any effort to pay creditors when they had the means to do so. “What the Schwartzes failed to do was pay as much of their indebtedness as they could without hardship. Their action was deliberate and selfish, and provides good cause for denying the discharge.” Opinion below.
In re JW Resources, Inc.
The bankruptcy court overrules the unsecured creditors committee’s objection to the proposed break-up fees (totaling $375,000) in asset purchase agreements that the debtors entered into with a proposed stalking horse bidder. The court reviews the various approaches to determining the reasonableness of break-up fees, as well as the benefits in permitting them. The court ultimately concludes the fees here are based on the sound business judgment of the debtors and the committee failed to present compelling evidence or arguments in opposition. Opinion below.
The bankruptcy court approves the final fee applications of the Chapter 11 professionals following conversion to Chapter 7. The secured lenders objected on a number of grounds. The court first determines that certain funds should be turned over to the Chapter 7 trustee despite the lenders’ prepetition liens. The court also determines the requested fees are reasonable and for actual and necessary services. Finally, the court determines that the fees are within the authorized “carve-out” amounts and can be paid from the lenders’ collateral, despite the fact that the lenders had appealed certain earlier orders on fee applications based on procedural issues. Opinion below.
The district court affirms the bankruptcy court’s order avoiding the mortgage foreclosure deficiency judgment liens on the debtor’s residence. The creditor had obtained a deficiency judgment following foreclosure of its mortgage lien and filed a judgment lien for the deficiency, which encumbered the debtors’ residence. The debtors moved to avoid the lien under 11 U.S.C. § 522(f) and the bankruptcy court granted the motion. The creditor appealed, arguing that § 522(f)(2)(C), which provides that judgments arising out of mortgage foreclosures are not avoidable, applied to the deficiency judgment lien. The court recognizes the split in authority on the issue, but ultimately concludes that § 522(f)(2)(C) merely provides that judgments in foreclosure actions (i.e. sale orders enforcing the mortgage lien) cannot be avoided such that the mortgage lien is avoided. The section does not apply to deficiency judgment liens. Opinion below.
The bankruptcy court holds that the creditor may not proceed with a damages hearing in state court, as the liability judgment has already been discharged in the bankruptcy. The creditor requests that the court allow her to challenge the dischargeability of the debt, despite the fact that the deadline for filing complaints to determine dischargeability has already passed. The court finds no basis to permit the late challenge. The creditor had notice of the bankruptcy and simply filed to timely file a complaint. Opinion below.
The bankruptcy court grants the trustee’s motion to dismiss the Chapter 13 based on the debtor having secured claims in excess of that allowed under 11 U.S.C. § 109(e). The debtor argued that her schedules, which listed secured debt less than the 109(e) threshold, should control on the issue of her eligibility. The court holds that it may review other items in the record to determine eligibility. For reasons including that the debtor failed to include prepetition interest on her mortgage debt and listed certain debts as unliquidated and contingent when they almost certainly were not, the court finds that the debtor is not eligible for Chapter 13. Opinion below.
The bankruptcy court grants in part the motion to restrict access to filings with personally identifiable information. The court finds that the motion fails to comply with Bankruptcy Rule 9013, which requires motions to state both the relief sought and the grounds therefore with particularity. The court states that “particularity is not the same thing as verbosity.” The motion fails to state exactly which pleading the movant is asking to redact. The court quotes a Seventh Circuit opinion: “Judges are not like pigs, hunting for truffles buried in briefs.” Opinion below.

References: § 707
 § 707
 § 522
 § 522
 § 522
 § 109