Source: http://montanabankruptcyreporter.com/members/2009_main.html
Timestamp: 2019-11-12 10:19:07
Document Index: 481804092

Matched Legal Cases: ['§ 362', '§ 546', '§ 545', '§ 549', '§ 362', '§ 546', '§ 362', '§ 362', '§ 1334', '§ 1334', '§ 1452', '§ 362', '§ 1334', '§ 1334', '§ 1452', '§ 586', '§ 506', '§ 1334', '§ 506', '§ 157', '§ 506', '§ 1307', '§ 506', '§ 506', '§ 1334', '§ 506', '§ 157', '§ 1129', '§ 1334', '§ 157', '§ 1129', '§ 522', '§ 157', '§ 522', '§ 362', '§ 522', '§ 524', '§ 362', '§ 33', '§ 27', '§ 1334', '§ 157', '§ 1322', '§ 1322', '§ 157', '§ 1322', '§ 101', '§ 1325', '§ 1334', '§ 157', '§ 101', '§ 362', '§ 1334', '§ 157', '§ 727', '§ 523', '§ 1334', '§ 157', '§ 1325', '§ 1334', '§ 157', '§ 1325', '§ 25', '§ 1334', '§ 157', '§ 1334', '§ 157', '§ 1334', '§ 157', '§ 522', '§ 522', '§ 522', '§ 1334', '§ 157', '§ 1334', '§ 157', '§ 157', '§ 1334', '§ 157', '§ 1334', '§ 157', '§ 1327', '§ 105', '§ 1128', '§ 157', '§ 157']

Montana Bankruptcy Reporter 2009 Decisions
Decisions of 2009
Aznoe Agribiz - Objection to Claim - September 24, 2009
Case No. 09-60528-12
In this Chapter 12 case, on August 12, 2009, the Debtor Aznoe Agribiz, Inc. (hereinafter “Aznoe” or “Debtor”) filed an Objection (Docket No. 59) to Proof of Claim No. 9 filed by Kernaghans Service, Inc. (“KSI”) on the grounds KSI perfected its statutory agricultural lien post-petition in violation of the automatic stay, 11 U.S.C. § 362(a), and that its lien is voidable under 11 U.S.C. § 546(b), 11 U.S.C. § 545, and 11 U.S.C. § 549. KSI filed a response contending that its post-petition perfection of its secured claim did not violate the stay by operation of § 362(b)(3), that it was entitled to perfect its lien post-petition under § 546(b)(1)(A) and is not voidable. The parties agreed to submit the Debtor’s Objection on stipulated facts and briefs, which have been filed and reviewed by the Court together with applicable law. This matter is ready for decision. This memorandum contains the Court’s findings of fact and conclusions of law.
Bassett Chapter 13 Confirmation - February 26, 2009
Case No. 08-61507-13
Pending in this Chapter 13 case is confirmation of the Debtors’ Chapter 13 Plan, filed December 1, 2008, to which objections were filed by Valley Bank of Kalispell (“Valley Bank”), Provident Financial, Inc. (“Provident”) and Chase Home Finance, LLC (“Chase”). The hearing on confirmation was held after due notice at Missoula on January 15, 2009, at which the parties appeared represented by counsel. At the conclusion of the parties’ cases-in-chief the Court took the matter under advisement. After review of the record and applicable law, this matter is ready for decision. For the reasons set forth below the objections will be overruled and Debtors’ Chapter 13 Plan will be confirmed by separate Order.....
BLX Group Appoint Trustee - October 20, 2009
Case No. 09-61893-11
In this Chapter 11 bankruptcy, on shortened notice, a hearing was held October 2, 8 and 9, 2009, in Butte on: (1) the Emergency Motion for Appointment of Trustee filed September 22, 2009, at docket entry no. 6, by petitioning creditor Marc S. Kirschner, as Trustee of the Yellowstone Club Liquidating Trust (“YCLT”), together with the responses thereto filed by CIP Yellowstone Lending LLC (“CIP”) on September 29, 2009, and Palm Desert National Bank on September 30, 2009; (2) CIP’s Emergency Motion to Modify Automatic Stay, pursuant to 11 U.S.C. §§ 362(d)(1) and (2), Fed. R. Bankr. P. 4001 and 9014, and Mont. LBR 4001-1 to Foreclose on Collateral filed September 25, 2009, at docket entry no. 16, together with the objections thereto filed by YCLT, Palm Desert National Bank, Stephan Baden, Jon Peddie and Timothy L. Blixseth (“Blixseth”); (3) Blixseth’s Expedited Motion to Dismiss Involuntary Petition for Lack of Subject Matter Jurisdiction or, alternatively, to Transfer Venue to Central District of California filed September 30, 2009, at docket entry no. 51, together with YCLT’s objection thereto; (4) the Emergency Motion of Yellowstone Club Liquidating Trust for Leave to File Adversary Proceeding filed October 5, 2009, at docket entry no. 94, together with CIP’s objection thereto; and (5) YCLT’s Emergency Motion for Rule 2004 Examinations filed September 29, 2009, together with CIP’s objection thereto. YCLT and its Trustee, Marc S. Kirschner, were represented at the hearing by attorney Shane P. Coleman of Billings, Montana; CIP was represented at the hearing by Paul D. Moore, Barry D. Green, and Kevin J. Renna of Boston, Massachusetts, Michael R. Lastowski of Wilmington, Delaware and Benjamin P. Hursh of Missoula, Montana; Palm Desert National Bank was represented by David J. Dietrich of Billings, Montana; Blixseth was represented by Philip H. Stillman of Olivenhain, California and Daniel D. Manson of Butte, Montana; and Mark E. Noennig of Billings, Montana appeared on behalf of First Bank. Richard J. Samson, Samuel Byrne, Steven Smith, Karen Moller, Debbie Duneman, Raymond Dozier, Marc S. Kirschner and Chris Charnas testified. YCLT’s Exhibits 1 through 13, YCLT’s Exhibits 16-21, CIP’s Exhibits A, B, C, D, G, I, J, K, L and M, and Blixseth’s Exhibit 100 were admitted into evidence.
BLX Group Motion To Appoint Trustee - October 15, 2009
In this involuntary proceeding, on shortened notice, a hearing was held October 2, 8 and 9, 2009, in Butte on: (1) the Emergency Motion for Appointment of Trustee filed September 22, 2009, at docket entry no. 6, by petitioning creditor Marc S. Kirschner, as Trustee of the Yellowstone Club Liquidating Trust (“YCLT”), together with the responses thereto filed by CIP Yellowstone Lending LLC (“CIP”) on September 29, 2009, and Palm Desert National Bank on September 30, 2009; (2) CIP’s Emergency Motion to Modify Automatic Stay, pursuant to 11 U.S.C. §§ 362(d)(1) and (2), Fed. R. Bankr. P. 4001 and 9014, and Mont. LBR 4001-1 to Foreclose on Collateral filed September 25, 2009, at docket entry no. 16, together with the objections thereto filed by YCLT, Palm Desert National Bank, Stephan Baden, Jon Peddie and Timothy L. Blixseth (“Blixseth”); (3) Blixseth’s Expedited Motion to Dismiss Involuntary Petition for Lack of Subject Matter Jurisdiction or, alternatively, to Transfer Venue to Central District of California filed September 30, 2009, at docket entry no. 51, together with YCLT’s objection thereto; (4) the Emergency Motion of Yellowstone Club Liquidating Trust for Leave to File Adversary Proceeding filed October 5, 2009, at docket entry no. 94, together with CIP’s objection thereto; and (5) the YCLT’s Emergency Motion for Rule 2004 Examinations filed September 29, 2009, together with CIP’s objection thereto. YCLT and its Trustee, Marc S. Kirschner, were represented at the hearing by attorney Shane P. Coleman of Billings, Montana; CIP was represented at the hearing by Paul D. Moore, Barry D. Green, and Kevin J. Renna of Boston, Massachusetts, Michael R. Lastowski of Wilmington, Delaware and Benjamin P. Hursh of Missoula, Montana; Palm Desert National Bank was represented by David J. Dietrich of Billings, Montana; Blixseth was represented by Philip H. Stillman of Olivenhain, California and Daniel D. Manson of Butte, Montana; and Mark E. Noennig of Billings, Montana appeared on behalf of First Bank. Richard J. Samson, Samuel Byrne, Steven Smith, Karen Moller, Debbie Duneman, Raymond Dozier, Marc S. Kirschner and Chris Charnas testified. YCLT’s Exhibits 1 through 13, YCLT’s Exhibits 16-21, CIP’s Exhibits A, B, C, D, G, I, J, K, L and M, and Blixseth’s Exhibit 100 were admitted into evidence.
This Memorandum of Decision memorializes the Court’s oral ruling made October 9, 2009, on Blixseth’s Motion to Dismiss and sets forth the Court’s findings of fact and conclusions of law. The Court will enter a separate memorandum of decision and order with respect to the other matters heard on October 2nd, 8th and 9th.
Canton Motion for Remand - March 17, 2009
Case No. 08-61683-11
In this adversary proceeding the Defendant/Debtor James Canton filed a notice of removal of this case, which originated as a state court mortgage foreclosure proceeding, to this Court from the Montana Twenty-First Judicial District Court, Ravalli County, Cause No. DV-08-109, on January 2, 2009, on the grounds that Defendant filed a bankruptcy case. On January 16, 2009, Plaintiffs Donald R. Dammel, N. Richard Higgins, Andrew William Taylor, Guenzler Family Trust, Tim L. Guenzler, Jack C. Downes, Gail L. Downes, Ed Engel, Donald F. Byrnes, and Jacqueline G. Byrnes (“Plaintiffs”) filed a motion for abstention and to remand this case back to state court, together with a supporting brief, based upon mandatory abstention, 28 U.S.C. § 1334(c)(2), and alternatively based on discretionary abstention under § 1334(c)(1). Plaintiffs seek to have the foreclosure proceeding remanded back to state court under 28 U.S.C. § 1452(b), but they admit that, even if remanded, the foreclosure proceeding is subject to the automatic stay.
Defendant filed an objection to abstention and remand, and supporting brief, and the matter was set for hearing at Missoula on March 12, 2009. Plaintiffs filed a reply brief and were represented at the hearing by attorneys Brian J. Smith (“Smith”) and Kathryn S. Mahe. The Debtor was represented by attorney Gregory W. Duncan (“Duncan”). No testimony was admitted, but Exhibits (“Ex.”) A, B, C, D, E, F, G, H, I, J, K, L, M, N, P, Q, R, and S were admitted. Argument of counsel was heard. Smith advised the Court that the foreclosure proceeding, while it was pending in state court, had not yet been set for a settlement conference or for trial and was stayed. Smith further clarified that if the case is remanded to state court the automatic stay will remain in place, and that Plaintiffs request abstention and remand only in order to preserve their rights, so that if the case is dismissed they will not have to commence foreclosure proceedings from the beginning. Duncan stated that the Debtor has initiated Adversary Proceeding No. 09-00020 against some of the same Plaintiffs in this Court, and that he anticipates filing another adversary proceeding involving the Plaintiffs. Duncan argued that abstention and remand should not be granted because of the risk of conflicting decisions by this Court and the state court. That risk is nonexistent, and the Court overrules Debtor’s objections and grants Plaintiffs’ motion for abstention and remand, for the reasons set forth below. The foreclosure proceeding will be remanded to the state court, where it will be stayed under 11 U.S.C. § 362(a).
Canton-Dammel v. Canton - Motion for Remand - March 17, 2009
In this adversary proceeding the Defendant/Debtor James Canton filed a notice of removal of this case, which originated as a state court foreclosure proceeding, to this Court from the Montana Twenty-First Judicial District Court, Ravalli County, Cause No. DV-08-110, on December 31, 2008, on the grounds that Defendant filed a bankruptcy case. On January 16, 2009, Plaintiffs Donald R. Dammel, Tereal M. Dammel, Anthony A. Dammel, Dana D. Dammel, Carole S. Romey, Andrew William Taylor, Quality Water Works, Inc., Essex Ventures LLP, James D. Caras, James S. Caras, Lorna K. Caras, Kathryn Veazey WM R. Caras, Trustee, James S. & Lorna K. Caras Revocable Trust, Tripp Lumber Company Employee Retirement Plan, and The Weeks Alaska Community Property Trust (“Plaintiffs”) filed a motion for abstention and to remand this case back to state court, together with a supporting brief, based upon mandatory abstention, 28 U.S.C. § 1334(c)(2), and alternatively based on discretionary abstention under § 1334(c)(1). Plaintiffs seek to have the foreclosure proceeding remanded back to state court under 28 U.S.C. § 1452(b), but they admit that, even if remanded, the foreclosure proceeding is subject to the automatic stay.
Card and Wilson - Application for Compensation - June 25, 2009
Case No. 05-65161-12
In the above-captioned Chapter 12 cases Gary S. Deschenes (“Deschenes”) of the law firm of Deschenes & Sullivan, of Great Falls, Montana, attorney for the above-named Debtors, filed on March 10, 2009, an “Application for Professional Fees and Costs” (“Application”) (Docket No. 431) requesting an award of attorney’s fees in the total amount of $82,145.00 and reimbursement for costs in the sum of $2,737.61. Deschenes also filed a Notice of his Application stating that the parties-in-interest had been served in conformity with Mont. LBR 2002-4. The Notice informs the parties that they have ten (10) days to file a response and request a hearing, and that if no response and request for hearing are timely filed, “the Court may grant the relief requested as a failure to respond by any entity shall be deemed an admission that the relief requested should be granted.” No objections have been filed. The U.S. Trustee has not filed a response to Deschenes’ Application pursuant to 28 U.S.C. § 586(a)(3)(
Card - Over secured Creditor Fees - June 22, 2009
In the above-captioned Chapter 12 cases an Application for Oversecured Creditors Attorney Fees and Costs (“Application”) (Docket No. 347) was filed on December 7, 2007, by creditor Paul E. Harper Trust (“Harper Trust”), seeking an award of professional fees for its attorney Harold V. Dye (“Dye”) and his firm Dye & Moe, P.L.L.P., of Missoula, Montana, in the amount of $53,480.00, plus costs in the amount of $30,031.11 which include expert witness fees. Debtors filed an objection that the amounts requested are not reasonable under 11 U.S.C. § 506(b), and a hearing on the Application was held at Missoula on March 12, 2009 . Dye
1The Application had been held in abeyance pending Harper Trust’s appeal of the Order confirming Debtors’ Chapter 12 Plan. That Order was affirmed by a decision of the district court docketed in this case on February 5, 2009 (Docket No. 419). appeared in support of his Application, and submitted the determination of the reasonableness of his fees to the Court. Debtors were represented by attorney Gary S. Deschenes (“Deschenes”), who testified and made oral argument. The Chapter 12 Trustee James D. Volk (“Volk”) appeared and stated that he “totally agreed” with Deschenes’ argument that a lot of the activity by Harper Trust was unnecessary because it wanted to foreclose on and recover its collateral consisting of Debtors’ ranch property in Potomac, Missoula County, Montana. Volk advised the Court that the Debtors are current in payments due under their confirmed Plan, and had one payment remaining under the Plan . No exhibits were admitted. At the conclusion of the hearing the Court took the matter under advisement.
This Court has jurisdiction of this case under 28 U.S.C. § 1334(a). Harper Trust’s Application for professional fees from the estate under § 506(b) is a core proceeding under 28 U.S.C. § 157(b)(2).
After review of the Application and the record, for the reasons set forth below Debtors’ objection will be sustained in part and overruled in part by separate Order. The expert witness fees requested as costs in the Application will be disallowed for failure to file a separate application for compensation under Mont. LBR 2016(a), (e) and LBF 17, and Dye will be awarded reasonable fees in the amount of $40,000 and costs in the amount of $2,116.61 as part of Harper Trust’s oversecured claim under § 506(b).
Cavanaugh-Broadwater County v. Bank of the Rockies - October 26, 2009
Case No. 08-61002-11
On July 26, 2009, Defendant Bank of the Rockies, N.A. (“Bank”) filed a motion for summary judgment, doc. 171 with supporting documents, together with a supporting brief, doc. 172, and a separate statement of undisputed facts, doc. 173, requesting judgment on the following grounds: (1) Broadwater County does not have a lien on the ten (10) lots that are secured by Bank of the Rockies; (2) Broadwater County has no contractual or statutory right to a lien on the lots that serve as collateral for Bank of the Rockies; (3) Broadwater County has no bases for an injunction against Bank of the Rockies to prevent foreclosure; and (4) Broadwater County has no bases to assert a breach of contract claim with respect to Bank of the Rockies.
On September 4, 2009, Plaintiff Broadwater County, a political subdivision of the State of Montana (“County”), filed a brief in opposition, doc. 182, together with a statement of disputed and additional facts with attached exhibits, doc. 183. The County in opposition to the Bank’s motion argues that the Court should abstain from ruling on the motion for the reasons stated in the County’s Motion to Remand, and there are genuine issues of material fact that prevent a summary judgment.
On October 6, 2009, the parties argued their respective positions before the Court, after which the Court took the motion under advisement. The parties also argued two other motions involving a motion by the County to remand and a motion by the Bank to compel. The Court will issue separate orders on the other two motions, which are also under advisement. The Court will also issue a separate confirmation order in the main case after Debtor and the Bank file a stipulation to be approved by the Court.
As historic background, this adversary proceeding commenced when Defendant Steve Cavanaugh Limited Partnership removed a pending civil case from the Montana First Judicial District Court, Broadwater County, as Case No. DV-08-41, entitled Broadwater County vs. Donald Neu and Janette Neu et al., to this Court after Debtor filed a chapter 11 bankruptcy petition on July 25, 2008. On October 16, 2008, the County filed an amended complaint, doc.
29. Mediation attempts have occurred in this adversary proceeding with partial success. Prior to the filing of the amended complaint, the Bank filed an answer and amended counterclaim, doc. 19, to the original complaint. After the County filed the amended complaint, the Bank also filed an amended answer, doc. 42, to the amended complaint and incorporated by reference its amended counterclaim, doc. 19.
After considering the motion, briefs, statement of undisputed facts and statement of disputed facts and additional facts, the Court is ready to issue its decision. This memorandum contains the Court’s findings of fact and conclusions of law.
Cavanaugh - Objection to relief from Stay - June 1, 2009
Four (4) motions to modify stay (Docket Nos. 86, 87, 88 and 89) filed by secured creditors who are named below, and the Debtor-in-Possession’s (“DIP”) objections thereto are pending in this Chapter 11 case. The Court held a hearing on these 4 consolidated motions after notice at Missoula on May 7, 2008. The parties appeared represented by counsel. Attorney James A. Patten (“Patten”) of Billings, Montana, represented the DIP. Attorney William E. Hileman, Jr. (“Hileman”) of Whitefish, Montana represented the moving creditors. DIP’s principal partner Steven Cavanaugh (“Cavanaugh”) testified, as did MAI appraisers J. Michael Joki (“Joki”) and Dennis C. Hoeger (“Hoeger”) regarding the value of the creditors’ collateral, which consists of vacant lots. Exhibits (“Ex.”) 1 through 19, A, C, and D were admitted into evidence without objection. After the conclusion of the parties’ cases-in-chief the Court took the 4 motions to modify stay under advisement. After review of the record and applicable law, for the reasons set forth below the creditors’ motions to modify stay will be granted by separate Orders.
Chabot - Motion to Convert - April 13, 2009
Case No. 08-61317-7
In this Chapter 13 case, after the Chapter 13 Trustee, Robert G. Drummond, of Great Falls, Montana, filed a motion to convert the case to Chapter 7 (Docket No. 20), Debtor Theresa Chabot (“Theresa” or “Debtor”), of Whitefish, Montana, filed a motion to dismiss under 11 U.S.C. § 1307(b) (Docket No. 21). The Chapter 13 Trustee and Office of U.S. Trustee through the Assistant United States Trustee, Neal G. Jensen, of Great Falls, Montana, both objected and the U.S. Trustee filed a motion to convert the case to Chapter 7 (Docket No. 47) on the grounds the Debtor filed the case in bad faith. Hearings were held on the motions1 at Missoula on January 15, 2009, and on March 12, 2009. At the conclusion of the parties’ cases-in-chief the Court took the motions to dismiss and convert under advisement. After review of the record and applicable law, for the reasons set forth below the Chapter 13 Trustee’s and U.S. Trustee’s motions to convert will be granted, Debtor’s motion to dismiss will be denied, and this case will be converted to a case under Chapter 7 based upon bad faith by the Debtor.
Davis - Fees - January 28, 2009
Case No. 07-60653-13
In accordance with the Memorandum of Decision entered in the above-referenced bankruptcy on this same date, IT IS ORDERED that R. Clifton Caughron of Debt Relief Law, PLLC's Application for Professional Fees and Costs filed November 13, 2008, is granted in part, and denied in part; and R. Clifton Caughron and Debt Relief Law, PLLC are awarded total fees and costs of $355.81 ($2,155.81 less $1,800.00 paid by Debtors prepetition), which amount shall be treated as an administrative expense of this Chapter 13 bankruptcy. None of the denied fees will be owed by Debtors following completion of their Chapter 13 plan.
Duncan - Approve Compromise - March 16, 2009
Case No. 07-61053-7
In this Chapter 7 case the Trustee Darcy M. Crum (“Crum”) filed on October 24, 2008, a Motion for Approval of Compromise Settlement (Docket No. 251) with John Fayle (“Fayle”), a creditor who filed Proof of Claim No. 26 and the Plaintiff in Adversary Proceeding No. 0800060. Objections were filed by the Montana Department of Revenue (“DOR”) (Docket No. 252). After notice a hearing on the Trustee’s Motion was held at Missoula on February 12, 2009. Crum appeared and testified, represented by attorney John P. Paul. The DOR was represented by attorney Lynn Hamilton Butler (“Butler”) and special assistant attorney general Keith Jones. Fayle was represented by attorney James H. Cossitt (“Cossitt”). The Debtors were represented by attorney Harold V. Dye, who withdrew Debtors’ objection to Fayle’s Proof of Claim and supported the Trustee’s proposed settlement. Exhibits (“Ex.”) 1, 2, A, B, C, and D were admitted. After the conclusion of the parties’ cases-in-chief the Court heard argument from counsel regarding the elements required for approval of settlements, then took the matter under advisement. This matter is ready for decision. For the reasons set forth below the Court will enter a separate order overruling the DOR’s objections, granting the Trustee’s Motion and approving the settlement with Fayle of Adv. No. 08-60 and Proof of Claim No. 26.
Duncan - Interim Fees - June 8, 2009
Pending in this Chapter 7 case, which was converted from Chapter 11 on August 18, 2008, is the “Amended First Interim Application for Professional Fees” (“Application”) (Docket No. 331) filed on January 21, 2009, by Lynn Hamilton Butler (“Butler”) of Brown McCarroll, L.L.P., Austin, Texas, an attorney employed by the Montana Department of Revenue (“DOR”), which requests an award of attorney fees under 11 U.S.C. § 506(b) in the amount of $13,447.50 as an oversecured creditor. Objections were filed by the Trustee and the Debtors. A hearing on the Application was held at Missoula on February 12, 2009. Butler appeared and testified, and gave oral argument in support of his Application. The Trustee Darcy M. Crum appeared. Debtors were represented by attorney Harold V. Dye of Missoula. The Court took judicial notice of the entire file docketed in this case. At the conclusion of the parties’ cases-in-chief the Court heard argument from the Trustee, after which the Court deemed the Application submitted and took it under advisement. After review of the record and applicable law, for the reasons set forth below the DOR’s Application is denied on the grounds that Butler’s attorney fees are not reasonable under § 506(b) because of the lack of any objection to allowance of the DOR’s Proofs of Claim.
This Court has jurisdiction of this case under 28 U.S.C. § 1334(a). Butler’s Application for professional fees from the estate under § 506(b) is a core proceeding under 28 U.S.C. § 157(b)(2).
Duncan - Motion to Sell - May 14, 2009
The following contested matters are pending in this Chapter 7 case: (1) the Trustee’s second motion (Docket No. 340) for authority to sell personal property, vehicles, and boats free and clear of liens, filed February 6, 2009, and Debtors’ objection thereto; and (2) the Debtors’ motion to determine their homestead exemption and to compel the Trustee to release homestead proceeds (Docket No. 337) and objections thereto filed by the Trustee, by the Montana Department of Revenue (“DOR”), and by the United States of America, Internal Revenue Service (“IRS”). Hearing on these matters was held at Missoula on March 12, 2009. The Trustee Darcy M. Crum appeared. Debtors were represented by attorney Harold V. Dye (“Dye”), and Debtor Gregory B. Duncan testified. The IRS was represented by assistant U.S. Attorney Victoria Francis. The DOR was represented by attorneys Keith Jones and Lynn Hamilton Butler (“Butler”). Debtors’ Ex. 2, a seller’s statement from an $8,000,000 sale of estate real property to Birch Point Properties, LLC, was admitted into evidence. The Court was asked to take judicial notice of Debtors’ Schedule C and the fact that no objection was filed to allowance of the Debtors’ homestead exemption. After the parties concluded their cases-in-chief the Court took both matters under advisement. For the reasons set forth below the Trustee’s second motion to sell property free and clear of liens will be granted and Debtors’ objection overruled, and Debtors’ motion to determine homestead exemption and compel the Trustee to release homestead proceeds will be denied by separate Order.
Edra Blixseth - Motion to Convert - May 29, 2009
Case No. 09-60452-11
In this Chapter 11 bankruptcy, after due notice, an expedited hearing was held May 29, 2009, on the United States Trustee's (“UST”) Motion to Convert to Chapter 7 filed May 11, 2009, at docket entry number 131, together with Debtor's response thereto filed May 21, 2009, at docket entry number 159.1 Attorney Daniel P. McKay of Great Falls, Montana appeared at the hearing on behalf of the UST. Debtor was represented at the hearing by her attorney of record, Gary Deschenes of Great Falls, Montana. In addition to the foregoing appearances, Jane Mersen of Bozeman, Montana appeared at the hearing on behalf of Stockman Bank of Montana; Harold
Edra Blixseth - Motion to Modify
Frazure - Professional Fees - January 16, 2009
In this Chapter 13 bankruptcy case, after due notice, a hearing was held December 9, 2008, in Butte on the Application for Professional Fees and Costs (“Application”) filed by attorney R. Clifton Caughron (“Caughron”) on October 23, 2008, whereby Caughron seeks an award of fees and costs in the amount of $29,893.93, less the sum of $1,800.00 previously paid by Debtors, leaving a balance of $28,093.93. Attorney R. Clifton Caughron, of Helena, Montana, appeared at the hearing in support of the Application. No appearance was made in opposition to the Application, but Debtors filed written opposition to the Application on November 4, 2008, objecting to $11,714.38 of the requested fees. Just prior to the hearing on December 9, 2008, Caughron filed a Stipulation between Debtors and Caughron whereby Caughron agreed to voluntarily limit his total fee request to $19,500. The aforementioned Stipulation is approved in accordance with this Memorandum of Decision, which Memorandum of Decision sets forth the Court’s findings of fact and conclusions of law with respect to Caughron’s Application.
Hand - Confirmation of Plan - May 5, 2009
Case No. 08-61264-11
In this Chapter 11 bankruptcy case, confirmation of the Debtors-in-Possession’s (“DIP”) Chapter 11 Plan of Reorganization, filed December 15, 2008 (the “Plan”) (Docket No. 27), the objection thereto (Docket No. 62) and a motion to modify stay (Docket No. 31) filed by secured creditors Jack & Gail Downes, Ed Engel, Cheryl Fraser, Gregg Fraser, Tim. L. Guenzler, Guenzler Family Trust, Max & Marianne Johnson, Susan Piedalue, Corey & Kathy Richwine, Linda L. Roberts, Karl Roesch, Carole S. Romey, Ronan Telephone Company Employee Profit Sharing Plan, The Ogle and Worm, Attorneys at Law, Profit Sharing Plan, and Shirley Unruh (together referred to as the “Secured Creditors”) are pending. A hearing on these matters was held on February 12, 2009. The parties appeared represented by counsel. Testimony of witnesses was heard, and competing appraisals of the DIP’s real property offered by the DIP (Ex. 1) and the Secured Creditors (Ex. A) were admitted into evidence. At the conclusion of the hearing the Court closed the record and took the matters under advisement. After review of the record and applicable law, for the reasons set forth below, this Court sustains the objection to confirmation filed by the Secured Creditor based upon the “fair and equitable” requirement of 11 U.S.C. § 1129(b)(2)(A)(i)(ii), and orders this case dismissed1.
This Court has jurisdiction in this Chapter 11 bankruptcy under 28 U.S.C. § 1334(a). Confirmation of the DIP’s Plan is a core proceeding under 28 U.S.C. § 157(b)(2)(L). At issue is the valuation of the DIP’s real property that is the security for the Secured Creditors’ claim, and whether DIP’s Plan satisfies the requirements of § 1129(b)(2)(A)(i)(II). This Memorandum of Decision includes the Court’s findings of fact and conclusions of law.
Hettick-Crum v. Tromlinson - February 25, 2009
Trustee/Plaintiff Darcy M. Crum (“Crum”) initiated this adversary proceeding to recover property of the estate. Several matters are pending, including: Defendant Employers Mutual Casualty Company’s (“EMC”) motion to determine that claims against EMC are non-core proceedings and to refer them to the federal district court (Docket No. 9) and demand for jury trial (Docket No. 10); EMC’s motion to dismiss counts Four and Five of Plaintiff’s complaint under FED. R. BANKR. P. 7012(b), incorporating FED.R.CIV.P. 12(b)(6), for failure to state a claim upon which relief can be granted (Docket No. 11); EMC’s motion for summary judgment (Docket No. 12); Defendant Petit, Hock & Strauch, P.L.L.P.’s (“PHS”) motion for summary judgment (Docket No. 40) and its demand for jury trial (Docket No. 23); and Defendant Kaye Tomlinson’s (“Tomlinson”) motion for summary judgment (Docket No. 48). The Plaintiff Crum filed objections to the motions to dismiss and motions for summary judgment, and also filed a motion to strike (Docket No. 58) certain paragraphs submitted in support of PHS’ motion for summary judgment.
A hearing on the jury demands and EMC’s motion to determine non-core matters and to refer to district court was held at Missoula on November 13, 2008, and hearings on the other pending motions were held at Missoula on December 11, 2008. The parties were represented at the hearings by counsel1, and have had the opportunity to submit briefs, responses and replies in support of their positions, as well as oral argument, which have been reviewed by the Court together with the record and applicable law. These matters are ready for decision.
Hughes-Heghes v. Walker - Judgment - July 21, 2009
In this adversary proceeding trial was held at Missoula on July 16, 2009. The Plaintiff Charles R. Hughes appeared and testified, represented by attorney Craig D. Martinson of Billings, Montana. The Defendant Robert A. Walker (“Roberta”) appeared pro se and testified, and she was assisted in presenting her case by her spouse Dale E. Walker (“Dale”). Exhibits were admitted into evidence. At the conclusion of the trial the Court found that the Kubota Backhoe in Roberta’s possession, which is the subject of the Plaintiff’s complaint, is property of the Plaintiff’s bankruptcy estate. The Court found that the value of the Kubota backhoe is $3,000, and ordered Roberta to make the Kubota backhoe with hitch and two buckets available at an appropriate time and place in the near future where the Plaintiff can pick it up. In the alternative, the Court stated that if the backhoe was not turned over it would enter judgment against Roberta for the value of the backhoe and attachments, $3,000.
Hughes-Valley Bank v. Hughes - Summary Judgment - August 20, 2009
In this Chapter 7 case the Debtor filed on April 13, 2009, a motion (Docket No. 38) to avoid judicial lien of Wendell and Linda Anderson (together “Andersons”) based upon 11 U.S.C. § 522(f)(1)(A). Andersons filed an objection, and filed a renewed motion to modify stay (Docket No. 33) to foreclosure their judicial lien against the Debtor’s real property and other available assets, to which Debtor objected. After due notice hearing on these matters was held at Missoula on July 16, 2009. Andersons were represented by attorney Jon R. Binney of Missoula, and Linda Anderson (“Linda”) testified. Debtor William C. Houston (“Houston”) appeared and testified, represented by attorney Harold V. Dye of Missoula. The Trustee Richard J. Samson also testified. Exhibits (“Ex.”) A, B, C, D, 1, 2, 3, 4, 5, and 6 were admitted into evidence without objection, and the Court left the record open for submission of a deposition of appraiser Jack McLeod (“McLeod”). At the conclusion of the parties’ cases-in-chief the Court granted the parties time to file simultaneous briefs, after which the matter would be taken under advisement. The parties’ briefs have been submitted and reviewed by the Court, together with the record (including McLeod’s deposition at Docket No. 67) and applicable law. These motions are ready for decision. For the reasons set forth below Debtor’s motion to avoid lien will be granted in part and denied in part, and Andersons’ motion to modify stay will be granted by separate Order.
This Court has jurisdiction in this case under 28 U.S.C. 1334(a). Both Debtor’s motion to avoid lien and Wendell’s motion to modify stay are core proceedings under 28 U.S.C. § 157(b)(2). At issue is the extent to which Andersons’ judicial lien impairs the Debtor’s homestead according to the formula set forth at § 522(f)(2)(A)1, and whether Wendell showed adequate cause to lift the stay under 11 U.S.C. § 362(d)2. The main contention between the parties involves what the value of Debtor’s interest in his homestead would have been in the absence of any liens under § 522(f)(2)(A).
Jarvar-Jarvar v. Title Cash - Summary - December 18, 2009
Case No. 04-62762-7
Pending in this adversary proceeding are cross motions for partial summary judgment filed by the Plaintiff against Defendant Title Cash of Montana, Inc. (“Title Cash”), and by Title Cash. A hearing on both motions was held at Missoula on October 8, 2009. The parties appeared represented by counsel. Attorneys James H. Cossitt (“Cossitt”) of Kalispell, Montana, appeared representing the Plaintiff and Thane Johnson (“Johnson”) of Kalispell appeared representing Title Cash. After hearing argument of counsel the Court took the motions under advisement at the conclusion of the hearing. The parties’ motions and responses have been reviewed by the Court, together with the record and applicable law. These matters are ready for decision.
Plaintiff’s motion seeks partial summary judgment establishing Title Cash’s liability under Count I (civil contempt for violating 11 U.S.C. § 524(a)(2) discharge injunction and the automatic stay at 11 U.S.C. § 362(a)) of the First Amended and Substituted Complaint (hereinafter the “Complaint ”), and Count IV (unfair and deceptive practice in violation of the Montana Unfair Trade Practices and Consumer Protection Act of 1973 (hereinafter the “CPA”), MONTANA CODE ANNOTATED (“MCA”) § 33-14-101, et seq.), with the amount of damages to be determined at trial. Title Cash’s opposes Plaintiff’s motion contending that there are genuine issues of material fact, and moves for summary judgment barring Plaintiff’s CPA claim under the 2-year statute of limitations of MCA § 27-2-211(1).
This Court has jurisdiction of this adversary proceeding under 28 U.S.C. § 1334. Title Cash admits that this Court has jurisdiction to hear all claims and that this is a core proceeding under 28 U.S.C. § 157(b)(2)(A). This Memorandum includes the Court’s findings of fact and conclusions of law under FED. R. BANKR. P. 7052 (applying FED. R. CIV. P. 52) in adversary proceedings
Knecht - Chapter 13 Confirmation - March 12, 2009
Case No. 08-61666-13
In this Chapter 13 bankruptcy, after due notice, a hearing was held February 17, 2009, in Billings on confirmation of the Debtor's First Amended Chapter 13 Plan (hereinafter the “Plan”) filed February 12, 2009, together with the Trustee’s objection thereto. The Debtor Richard D. Knecht (“Richard”) appeared at the hearing and testified, represented by attorney James A. Patten of Billings, Montana (“Patten”). The Chapter 13 Trustee, Robert G. Drummond of Great Falls, Montana, appeared at the hearing in opposition to confirmation based upon 11 U.S.C. § 1322(b)(1) alleging the Richard’s Plan unreasonably discriminates among unsecured creditors because Richard proposes to pay approximately $36,744.00 on his student loan debt over the life of the Plan, but pay nothing to other general unsecured creditors. No exhibits were offered into evidence, but the Court takes judicial notice of the record in this case. The parties have both filed post-hearing briefs and the matter is now ready for decision. After reviewing the record and applicable law, and for the reasons set forth below, the Trustee’s objection to confirmation is sustained and confirmation of Richard’s Plan is denied.
Richard’s Plan provides for payments of $1,810.00 per month for 60 months, for total plan payments of $108,600.00 over the life of Richards's Plan. The Trustee filed an Objection to confirmation of Richard's Plan on February 13, 2009, arguing that “Debtor is attempting to separately classify the Department of Health and Human Services separate and apart from the class of general unsecured creditors. The Debtor’s classification may not be reasonable and may be prohibited by 11 U.S.C. § 1322(b)(1).”
This is a core proceeding under 28 U.S.C. § 157(b)(2)(L) involving confirmation of a plan. At issue is whether Richard’s Plan discriminates unfairly against the class of unsecured claims in violation of § 1322(b)(1). This Memorandum of Decision sets forth the Court’s findings of fact and conclusions of law.
Leach - Confirmation of Chapter 13 Plan - February 26, 2009
Case No. 08-61028-13
The confirmation of the Debtors’ amended Chapter 13 Plan is pending to which the Trustee objects on the grounds the Debtors deducted the cost basis of two motor vehicles, which they sold within 6 months before the date they filed their bankruptcy petition, from the sale proceeds in calculating their current monthly income (“CMI”) under 11 U.S.C. § 101(10A) and disposable income under 11 U.S.C. § 1325(b). After a hearing the Court granted the parties time to file briefs, which were filed on November 3, 2008 and which have been reviewed by the Court together with the record and applicable law. The matter is ready for decision. For the reasons stated below the Trustee’s objection is sustained in part and overruled in part, and confirmation the Debtors’ amended Plan will be denied by separate Order.
This Court has jurisdiction in this Chapter 13 case under 28 U.S.C. § 1334(a). Confirmation of Debtors’ Plan is a core proceeding under 28 U.S.C. § 157(b)(2)(L). This Memorandum of Decision includes the Court’s findings of fact and conclusions of law. At issue is whether debtors may deduct the cost basis from the proceeds of the sale of debtors’ vehicles when calculating their CMI under § 101(10A). The Court concludes that the deduction of the cost basis from the proceeds of the sale of Debtors’ vehicles is unnecessary as the proceeds from the sale of the 1999 Hyundai and 1996 Neon are not income for purposes of computing CMI.
The hearing on confirmation was held after due notice at Great Falls on October 24, 2008, with the Debtors represented by attorney D. Randy Winner of Great Falls and Debtor Louis Morton Leach (“Louis”) testifying. The Chapter 13 Standing Trustee Robert G. Drummond appeared. No exhibits were admitted.
Lee - Motion for Turnover - January 28, 2009
Case No. 08-61713-13
In this Chapter 13 bankruptcy, after due notice, a hearing was held January 13, 2009, in Butte on Debtors' Motion for Turnover [and] Demand for Attorney Fees and Costs filed December 16, 2008, together with Helena Title Loans, Inc.'s objection thereto. Debtors were represented at the hearing by their attorney of record, Gregory W. Duncan of Helena, Montana. Helena Title Loans was represented at the hearing by attorney Scott H. Clement of Helena, Montana. Debtors' Exhibits D, F, J, K, and L, and Helena Title Loans' Exhibit 1 were admitted into evidence without objection and debtor Dawn Michelle Lee (“Lee”), Kathleen Glover and Kim Hammond testified. This Memorandum of Decision sets forth the Court's findings of fact and conclusions of law.
Long - Creditor Misconduct Damages - January 9, 2009
In this Chapter 7 case the Debtor filed a Motion for Enforcement of Automatic Stay (“Motion”) on October 21, 2008, against creditor Mountain West Bank (“MWB”) alleging civil contempt by MWB, violations of the discharge injunction and willful violations of the automatic stay under 11 U.S.C. § 362(k) by failing to dismiss a state court civil action against the Debtor, and seeking actual damages, punitive damages, costs and attorney’s fees. A hearing on Debtor’s Motion was held at Missoula on December 11, 2008. Debtor was represented by his attorney Jeffrey Greenwell (“Greenwell”) of Kalispell, Montana, and his co-counsel James H. Cossitt (“Cossitt”) testified. MWB was represented by attorney Jonathan Motl, and its co-counsel Amy Randall (“Randall”) testified. Exhibits (“Ex.”) 1, 2, 3, 4, 5, and 6 were admitted into evidence by stipulation. At the conclusion of the parties’ cases-in-chief the Court heard closing argument from counsel, then took the matter under advisement. After review of the record and applicable law by the Court, the matter is ready for decision. For the reasons set forth below Debtor’s Motion will be denied.
This Court has jurisdiction of this Chapter 13 case under 28 U.S.C. § 1334(a). Debtor’s Motion is a core proceeding under 28 U.S.C. § 157(b)(2). This Memorandum of Decision sets forth the Court’s findings of fact and conclusions of law.
Moore-Budget Finance v. Moore - Judgment - November 13, 2009
Case No. 09-60770-7
In this adversary proceeding the Plaintiff Budget Finance (“Budget”) seeks denial of the Debtor/Defendant Matthew Earl Moore’s (“Moore”) discharge under 11 U.S.C. § 727(a)(2)(A), and seeks exception of its claim from Defendant’s discharge under 11 U.S.C. § 523(a)(6) for willful and malicious injury by the Defendant to Budget by removing bench seats, tires and wheels, lug nuts, hubcaps and a battery from Budget’s collateral, a 2003 Chevrolet G3500 van, VIN 1GAHG39&131140992 (hereinafter the “van”). Moore, pro se, answered denying the material allegations of the complaint. Trial of this adversary proceeding was held at Missoula on October 19, 2009, and at the conclusion the Court took the matter under advisement. After review of the record and applicable law, Judgment will be entered for the Defendant dismissing both claims for relief asserted in Budget’s complaint and this adversary proceeding.
This Court has jurisdiction of this cause under 28 U.S.C. § 1334(b). This is a core proceeding under 28 U.S.C. §§ 157(b)(2)(I) and (J). This Memorandum of Decision includes the Court’s findings of fact and conclusions of law pursuant to F.R.B.P. 7052.
Budget was represented at the hearing by attorney James C. Bartlett (“Bartlett”) of Kalispell, Montana. The Defendant Moore appeared pro se by videoconference from Warm Springs, Montana. Budget’s Exhibits (“Ex.”) 1, 2, 3, 4, 5, and 6 were admitted into evidence without objection. Budget’s president Dennis Green (“Green”) testified, as did auto repair shop owner Robbie Torgerson (“Torgerson”) regarding the condition of the van. Moore testified by narrative. His spouse and coDebtor Leslie M. Moore (“Leslie”) testified, as did his brother-in-law Ashley Geiser (“Geiser”).
Mosser - Motion to Dismiss
MxSparran - Confirmation of Chapter 13 Plan - March 27 ,2009
Case No. 08-61606-13
Pending in this Chapter 13 case is confirmation of the Debtor’s Plan, filed December 3, 2008 (Docket No. 11). The Standing Chapter 13 Trustee Robert G. Drummond, of Great Falls, Montana, filed objections and appeared in opposition to confirmation at the hearing held at Missoula on February 12, 2009. The Debtor James Stephen McSparran (“Debtor”) appeared and testified, represented by attorney Daniel S. Morgan (“Morgan”) of Missoula, Montana. No exhibits were admitted. At the conclusion of the parties’ cases-in-chief the Court took the matter of confirmation under advisement. After review of the record and applicable law, this matter is ready for decision. For the reasons set forth below a separate Order will be entered denying confirmation of the Debtor’s Chapter 13 Plan for failure to satisfy his burden of proof under 11 U.S.C. § 1325, with leave to file amendments.
This Court has jurisdiction in this case under 28 U.S.C. § 1334(a). Confirmation of Debtor’s Plan is a core proceeding under 28 U.S.C. § 157(b)(2)(L). The Trustee stated at the hearing that his objections listed in paragraphs 3, 4, and 5 of his objection (Docket No. 14) have been resolved, but he continues to object based on paragraphs 1 and 2 that the Debtor’s Plan fails to satisfy the “disposable income” requirement of 11 U.S.C. § 1325(b). Debtor’s counsel described the issue as the nondebtor spouse’s payment of the parties’ second home mortgage payment in Montana. This Memorandum includes the Court’s findings of fact and conclusions of law.
Parr - Objection to Exemptions - October 26, 2009
Case No. 09-60408-7
In this Chapter 7 bankruptcy, after due notice, a hearing was held September 22, 2009, in Billings on the Trustee’s objection to claim of exemption filed May 14, 2009. The Chapter Trustee, Joseph V. Womack of Billings, Montana, appeared at the hearing in prosecution of his objection. Debtor Kimberli Rae Parr (“Kimberli”) appeared at the hearing personally and with attorney Craig D. Martinson of Billings, Montana. Debtor Donald William Parr (“Donald”) appeared at the hearing pro se. Both Kimberli and Donald testified and the Trustee’s Exhibits 1, 3 and 4, and Kimberli’s Exhibits A, B and D were admitted into evidence without objection. At the conclusion of the hearing, the Court took the matter under advisement. This Memorandum of Decision sets forth the Court’s findings of fact and conclusions of law.
Reardon - Exemptions - February 19 ,2009
Case No. 08-60861-7
In this Chapter 7 case the Trustee Richard J. Samson (“Samson”) filed on September 4, 2008, an objection to the Debtor’s claim of exemption in a 2007 Dodge Grand Caravan with a wheel chair conversion kit (hereinafter the “Van”), which she claimed as exempt as a “professionally prescribed health aid” under MONT. CODE ANN. (“MCA”) § 25-13-608(1)(a). The Debtor filed a response, and a hearing on the Trustee’s objection was scheduled to be held after due notice at Missoula on November 11, 2008. Samson and Debtor’s attorney Gregory E. Paskell appeared at the hearing and stated that they agreed to submit the matter on stipulated facts and briefs, based upon which the Court vacated the hearing. The parties filed a Statement of Agreed Facts, then filed a Stipulation on January 12, 2009, with letters from the Debtor’s physician and from Debtor’s physical therapist, and have filed their briefs, which have been reviewed by the Court together with the record and applicable law. This matter is ready for decision.
At issue is whether the Trustee has satisfied his burden of proof under F.R.B.P. 4003(c) to show that Debtor’s exemption in the Van is not properly claimed. For the reasons set forth below the Trustee’s objection will be overruled by separate Order.
This Court has jurisdiction in this Chapter 7 case under 28 U.S.C. § 1334(a). The Trustee’s objection to Debtor’s claim of exemption in the Van is a core proceeding under 28 U.S.C. § 157(b)(2)(B). This Memorandum of Decision includes this Court’s findings of fact and conclusions of law pursuant to F.R.B.P. 7052 (applying FED. R. CIV. P. 52).
Rizzotto - Motion to Modify - August 11, 2009
Case No. 09-60965-11
In this Chapter 11 bankruptcy, after due notice, a hearing was held July 28, 2009, in Billings on the Motion to Modify Stay, or in the alternative, Motion for Adequate Protection filed by Bank of the West (the “Bank”) on June 15, 2009. The Bank was represented at the hearing by James A. Patten of Billings, Montana. Debtor was represented at the hearing by Jon R. Binney of Missoula, Montana. The Court heard testimony from Henry Malkin and Anthony Shoupe and the Bank's Exhibit 1 was admitted into evidence without objection. At the conclusion of the hearing, the Court granted the parties additional time to file post-hearing briefs. The Bank filed its post-hearing brief on August 4, 2009, and Debtor filed her post-hearing brief on August 5, 2009. The matter is thus ready for decision.
This Court has original and exclusive jurisdiction of this Chapter 11 bankruptcy case under 28 U.S.C. § 1334(a). The pending matter is a core proceeding under 28 U.S.C. § 157. This Memorandum of Decision sets forth the Court’s findings of fact and conclusions of law. For the reasons discussed below, the Court finds in favor of the Bank.
Saarel - Motion for Relief from Stay - July 2, 2009
Case No. 08-61684-11
In this Chapter 11 bankruptcy, after due notice, a hearing was held June 22, 2009, in Butte on: (1) the Motion to Modify Stay filed by Brian Gorman, Carolyn Dunn Gorman, SHAK Properties, LLC, Dennis Slonaker, Christian A. Terfloth and Carolyn M. Newsom (collectively “the Gorman Group”) on March 16, 2009 (docket entry no. 32); (2) the Motion to Dismiss filed April 14, 2009, by Brian Gorman, Carolyn Dunn Gorman, SHAK Properties, LLC, Dennis Slonaker, Christian A. Terfloth, Carolyn M. Newsom, Richard D. Wallace, Daryl Purdy, and Rocky Mountain Concrete, Inc., Employee Profit Sharing and Trust, Richard D. Wallace, Trustee (docket entry no. 65); (3) the Motion to Modify Stay filed March 16, 2009, by Rocky Mountain Concrete, Inc., Employee Profit Sharing Plan and Trust, Richard D. Wallace Trustee (“RMC”) (docket entry no. 34), together with the Amended Motion to Modify Stay filed by the same said creditor on May 28, 2009 (docket entry no. 96); (4) the Motion to Modify Stay filed by John V. Stoneman (“Stoneman”) on March 19, 2009 (docket entry no. 39); and (5) the Motion to Modify Stay filed by Richard Wallace and Daryl Purdy (“Wallace/Purdy”) on March 16, 2009 (docket entry no. 36). Attorney James A. Patten (“Patten”) of Billings, Montana, represented the Debtors at the hearing. Attorney James J. Screnar (“Screnar”) of Bozeman, Montana represented the moving creditors. Debtor Douglas A. Saarel (“Saarel”), Richard Wallace and Brian Gorman testified, as did appraisers Pard Cummings (“Cummings”) and Randy K. Roberston (“Robertson”) regarding the value of the moving creditors’ collateral, which consists of unimproved acreage. RMC’s Exhibits 1a, 1b, 1c, 1d, 1e, Stoneman’s Exhibits 2a, 2b, 2c, 2d, 2e, Wallace/Purdy’s Exhibits 3a, 3b, 3c, 3d, the Gorman Group’s Exhibits 4a, 4b, 4c, 4d, and Debtors’ Exhibits A, B and C were admitted into evidence without objection. After the conclusion of the parties’ cases-in-chief the Debtors requested permission to submit a post-hearing brief. The Court granted the parties through July 1, 2009, to file simultaneous post-hearing briefs. The deadline for filing briefs has expired and the motions are now ready for decision. After review of the record and applicable law, and for the reasons set forth below, the creditors’ motions to modify stay will, by separate Orders, be granted as to Wallace/Purdy and the Gorman Group and denied as to RMC and Stoneman.
This Court has original and exclusive jurisdiction of this Chapter 11 bankruptcy case under 28 U.S.C. § 1334(a). The contested motions to modify stay are core proceedings under 28
U.S.C. § 157(b)(2)(G). This Memorandum of Decision sets forth the Court’s findings of fact and conclusions of law.
Shields - Avoid Lien - March 24 ,2009
Case No. 08-61066-13
In this Chapter 13 case the Debtors filed on September 23, 2008 (Docket No. 27) a motion to avoid a judicial lien of Allegra Ltd (“Allegra”) pursuant to 11 U.S.C. § 522(f)(1)(A), alleging that the market value of the Debtors’ interest in their homestead is the amount of $629,100.00. Allegra filed an objection (Docket No. 30) contending that the value of the homestead is between $880,000 and $930,000, and therefore that Debtors cannot satisfy their burden under the formula set forth at § 522(f)(2)(A). A hearing on Debtors’ motion was held after due notice at Missoula on February 12, 2009. Debtors and Allegra appeared represented by counsel. Testimony of witnesses was heard and Exhibits (“Ex.”) 1, 2, 3, 4, 5, 6, 7, A, B, C, and D were admitted into evidence without objection. At the conclusion of the parties’ cases-in-chief the Court took the matter under advisement. After review of the record and applicable law, the matter is ready for decision. For the reasons set forth below Allegra’s objection will be overruled, Debtors’ motion to avoid lien will be granted, and Allegra’s judicial lien will be avoided entirely under §§ 522(f)(1)(A) and (f)(2)(A), based on the appraisal prepared by certified Member of the Appraisal Institute (“MAI”) appraiser Thomas G. Stevens (“Stevens”), Ex. 7. The Court rejects the appraisal valuation of the Debtors’ homestead offered by Allegra from MAI appraiser Kraig P. Kosena (“Kosena”), Ex. B, and the Comparable Market Analysis (“CMA”) prepared by realtor Laurie Sorum (“Sorum”), Ex. A
This Court has jurisdiction in this case under 28 U.S.C. § 1334(a). Debtors’ motion to avoid Allegra’s lien to the extent it impairs Debtors’ exemption is a core proceeding under 28 U.S.C. § 157(b)(2)(K) and F.R.B.P. Rule 4003(b). This Memorandum of Decision includes the Court’s findings of fact and conclusions of law.
Debtors Jon O’Neal Shields (“Jon”) and Christina M. Shields (“Christina”) (together “Debtors” or “Shields”) both appeared at the hearing and testified, represented by attorney Daniel S. Morgan (“Morgan”) of Missoula, Montana. Allegra was represented by attorney Quentin M. Rhoades (“Rhoades”) of Missoula, Montana. MAI appraisers Stevens and Kosena each testified, as did real estate agent Sorum.
Snyder - Confirmation of Liquidating Plan - November 13, 2009
Case No. 09-61571-13
After due notice a hearing was held at Missoula on October 8, 2009, on the motion to modify stay filed by the Estate of Earl M. Pruyn (“Pruyn”) on September 14, 2009, and Debtor’s objection thereto, and on confirmation of Debtor’s Chapter 13 Plan (Docket No. 9) which provides for a cure-by-sale of Debtor’s residence at 1532 and 1532 ½ Dickinson Street, Missoula, Montana , payment of allowed secured claims on or before August 11, 2011, and objections thereto filed by Pruyn and the Chapter 13 Trustee. The parties appeared represented by counsel. Testimony of witnesses was heard and exhibits were admitted. The Court took judicial notice of the Schedules. At the conclusion of the parties’ cases-in-chief the Court granted the parties time to file simultaneous briefs, which have been filed and reviewed by the legal description of Debtor’s residence is a portion of the NE1/4 of Section 14, Township 13 North, Range 19 West, Principal Meridian, Montana, more particularly described as Parcel 2 of COS 5692.
Court together with the record and applicable law. These matters are ready for decision. For the reasons set forth below a separate Order shall be entered denying Pruyn’s motion to modify stay, denying confirmation of Debtor’s Chapter 13 Plan and granting Debtor time to file an amended Plan in accordance with her concessions made at the hearing.
This Court has exclusive jurisdiction in this Chapter 13 case under 28 U.S.C. § 1334(a). Pruyn’s motion to modify stay is a core proceeding under 28 U.S.C. § 157(b)(2)(G), and confirmation of Debtor’s Plan is a core proceeding under 28 U.S.C. § 157(b)(2)(L). This Memorandum of Decision includes the Court’s findings of fact and conclusions of law.
The Debtor Linda Josephine Snyder (“Linda” or “Debtor”) appeared and testified, represented by attorney Daniel S. Morgan (“Morgan”) of Missoula. Debtor also called realtor Tom Dauenhauer (“Dauenhauer”), whose employment by Debtor to sell her residence was approved by the Court on September 24, 2009, to testify. Pruyn was represented by attorney Martin S. King (“King”) of Missoula. Pruyn’s Exhibits (“Ex.”) 1, 2, 3, 7, and 8 were admitted, as were Debtor’s Ex. A and B.
Snyder - Motion to Modify - November 13, 2009
After due notice a hearing was held at Missoula on October 8, 2009, on the motion to modify stay filed by the Estate of Earl M. Pruyn (“Pruyn”) on September 14, 2009, and Debtor’s objection thereto, and on confirmation of Debtor’s Chapter 13 Plan (Docket No. 9) which provides for a cure-by-sale of Debtor’s residence at 1532 and 1532 ½ Dickinson Street, Missoula, Montana , payment of allowed secured claims on or before August 11, 2011, and objections thereto filed by Pruyn and the Chapter 13 Trustee. The parties appeared represented by counsel. Testimony of witnesses was heard and exhibits were admitted. The Court took judicial notice of the Schedules. At the conclusion of the parties’ cases-in-chief the Court granted the parties time to file simultaneous briefs, which have been filed and reviewed by the
The legal description of Debtor’s residence is a portion of the NE1/4 of Section 14, Township 13 North, Range 19 West, Principal Meridian, Montana, more particularly described as Parcel 2 of COS 5692.
Sportland Inc. - Modify to Stay - March 6, 2009
Case No. 08-61395-11
After due notice, hearing was held at Missoula on January 16, 2009, on the motion to modify stay1 filed on October 22, 2008 (Docket No. 24), by Textron Financial Corporation (“Textron”), and Debtor’s objection thereto. Textron was represented at the hearing by attorney Matthew J. Cuffe of Missoula, Montana. The Debtor was represented by attorney Harold V. Dye of Missoula. Debtor’s vice president William Scullion (“Scullion”) testified. Debtor’s Exhibits (“Ex.”) A, A-1, and Textron’s Ex. 1, 3, 4, 5, 6, 7, 8, and 9, all were admitted into evidence without objection. At the conclusion of the parties’ cases-in-chief the Court took Textron’s motion under advisement. After review of the record and applicable law, the matter is ready for decision. For the reasons set forth below, Textron’s motion to modify stay is denied.
This Court has jurisdiction in this Chapter 11 case under 28 U.S.C. § 1334(a). Textron’s motion to modify stay is a core proceeding under 28 U.S.C. § 157(b)(2)(G). This Memorandum Textron’s motion to modify stay was combined with a motion to prohibit use of cash collateral and require segregation, for an accounting of cash collateral sold-out-of-trust units. Docket No. 24. Textron’s motions to prohibit use of cash collateral, for an accounting and segregation were the subject of the Court’s Order entered on October 27, 2008, Docket No. 40, which noted that the Debtor has established a separate cash collateral account for Textron at Farmers State Bank. includes the Court’s findings of fact and conclusions of law.
Stellingwerf - Chapter 13 Settlement - June 10, 2009
Case No. 05-61594-13
In this Chapter 13 bankruptcy, after due notice, a hearing was held April 24, 2009, in Great Falls on: (1) the Chapter 13 Trustee's Motion for Order Authorizing Settlement filed January 14, 2009, at docket entry no. 85; (2) the Chapter 13 Trustee's Final Application for Professional Fees and Costs filed January 26, 2009, at docket entry no. 93; and (3) the Chapter 13 Trustee's Amended Motion to Modify Confirmed Chapter 13 Plan filed March 17, 2009, at docket entry no. 115. The Chapter 13 Trustee, Robert G. Drummond of Great Falls, Montana, appeared at the hearing in support of his Motions and Application. Debtors Patrick and Vicki Stellingwerf appeared at the hearing pro se. Attorney Fredric A. Bremseth (“Bremseth”), debtor Patrick Stellingwerf (“Patrick”), debtor Vicki Stellingwerf (“Vicki”) and the Chapter 13 Trustee testified. The Trustee's Exhibits 1, 2, 3 and 4 were admitted into evidence without objection.
Stokes - Motion to Convert - September 21, 2009
Case No. 09-60265-11
The following contested matters are pending in this Chapter 11 bankruptcy case: (1) the Debtor John Patrick Stokes’ (“Stokes” or “Debtor”) motion to lift stay (Docket No. 58) seeking to proceed with his appeal of judgment in the Montana Supreme Court Case No. DA 09-0049, but to continue the stay of execution of judgment; and (2) the Office of United States Trustee’s (“UST”) motion to convert this case to Chapter 7 filed on April 22, 2009 (Docket No. 24). Stokes filed objections and a motion to dismiss the UST’s motion for lack of jurisdiction, and Stokes appeared pro se and testified at the hearing in opposition to the UST’s motion which was held after due notice at Missoula on August 13 and 14, 2009. Debtor’s motion to lift stay was heard on July 16, 2009, and held in abeyance pending the decision on the UST’s motion. Other witnesses testified and exhibits were admitted at the hearing on August 13 and 14, 2009, as described in detail below. At the conclusion of the parties’ cases-in-chief the Court took the UST’s motion to convert under advisement. After review of the record and applicable law, this matter is ready for decision. For the reasons set forth below the Court will enter a separate Order overruling the Debtor’s objections and granting the UST’s motion, and converting this case to Chapter 7 of the United States Bankruptcy Code. Debtor’s motion to lift the stay will be denied without prejudice.
Tamke - Chapter 13 Confirmation - July 22, 2009
Case No. 09-60833-13
In this Chapter 13 bankruptcy, after due notice, a hearing was held July 14, 2009, in Butte on: (1) confirmation of Debtor's Amended Chapter 13 Plan filed June 7, 2009; and (2) the Motion to Modify Stay filed by Peoples Bank of Deer Lodge on June 18, 2009. Attorney Daniel R. Sweeney of Butte, Montana, represented the Debtor at the hearing. Attorney John Grant of Helena, Montana represented the Peoples Bank of Deer Lodge. The Chapter 13 Trustee, Robert G. Drummond of Great Falls, Montana, also appeared at the hearing. Debtor Douglas Shane Tamcke testified as did Mark Anderson, a Senior Credit Officer at the Peoples Bank of Deer Lodge. The Peoples Bank of Deer Lodge's Exhibits A through K and Debtor's Exhibit 1 were admitted into evidence without objection.
This Court has original and exclusive jurisdiction of this Chapter 13 bankruptcy case under 28 U.S.C. § 1334(a). The pending matters are core proceedings under 28 U.S.C. § 157. This Memorandum of Decision sets forth the Court’s findings of fact and conclusions of law
Uylaki - Relief from Stay - September 14, 2009
Case No. 09-61157-13
In this Chapter 13 case, after due notice hearing was held at Missoula on September 10, 2006, on the motion to modify stay filed on August 6, 2009, by Debtor’s former spouse Rita Shipley Uylaki (“Rita”) (“Rita”) (Docket No. 21), which is filed based on 11 U.S.C. §. 362(d)(1) for “cause” seeking relief from the stay to continue with collection and enforcement of the Stipulated Amended Property Settlement Agreement in their divorce, and continue with contempt proceedings against the Debtor. The Debtor filed an objection was represented at the hearing by attorney Daniel S. Morgan (“Morgan”) of Missoula. Rita was represented by attorney Robert Erickson of Missoula. Debtor’s Exhibit (“Ex.”) A, and Rita’s Ex. 1, 2, and 3 were admitted by stipulation. The Court heard argument from counsel, and directed Rita’s counsel to refile Ex. 3, after which the matter would be deemed submitted and taken under advisement. Ex. 3 has been resubmitted and reviewed by the Court together with the record and applicable law. The matter is ready for decision. Because Rita’s claim arose prepetition, and she was served with notice of this Chapter 13 case and Debtor’s Plan, which was confirmed, the Court exercises its discretion and denies Rita’s motion to modify stay. This memorandum contains the Court’s findings of fact and conclusions of law.
Westcott - Late File - June 30, 2009
Case No. 08-61470-13
In this Chapter 13 case the Trustee filed on April 28, 2009, a motion (Docket No. 26) to vacate the Order confirming Debtor’s Plan (Docket No. 23), and a notice of late-filed claim (Docket No. 30) objecting to Proof of Claim No. 9 filed by the Debtor on behalf of Rock Creek Financial, Inc. (“Rock Creek Financial”), which is provided for in the Plan. Debtor filed responses in opposition on the grounds that he filed Claim 9 for Rock Creek Financial which is paid through the confirmed Plan, that confirmation of Debtor’s Plan binds the Trustee and the Debtor under 11 U.S.C. § 1327, and that the confirmed Plan’s treatment of Rock Creek Financial’s secured claim constitutes an informal proof of claim which can be amended by a later filed proof of claim, citing In re Holm, 931 F.2d 620, 623 (9th Cir. 1991). Hearing on these matters was held at Missoula on June 18, 2009. The Chapter 13 Trustee appeared. Debtor was represented by attorney Edward A. Murphy of Missoula. The parties agreed to submit the matters on stipulated facts. The Court granted the parties time to file their stipulation of facts, which has been filed and reviewed by the Court together with the record and applicable law. These matters are ready for decision. For the reasons set forth below the Trustee’s objection to late filed claim is sustained, and the Trustee’s motion to vacate confirmation Order is granted.
Yellowstone Mountain Club - Bidding Process - February 8, 2009
In the above-referenced jointly administered Chapter 11 bankruptcies, after due notice, a hearing was held February 10, 2009, in Butte on:
1. CrossHarbor Capital Partners, LLC's “Objection and Motion for Reconsideration of Order for 2004 Examination and to Quash Related Subpoenas Under Local Rule 9013-1(f)(2)(BB) & Request Court Find Good Cause Under 9029(1)(a)(3) to Set This Matter for Hearing With Less Than 20 Days Notice As Required Under 9013(1)(e)” filed January 26, 2009, at docket entry no. 309, together with Credit Suisse's response thereto filed February 3, 2009, at docket entry no. 324;
2. Credit Suisse's “Emergency Motion for Prepetition Lenders for Order Under 11
U.S.C. §§ 105, 361, 362, 363 and 364 Compelling Immediate Commencement of Marketing Process” filed January 27, 2009, at docket entry no. 311, together with the objection and responses thereto filed by the Debtors on February 5, 2009, CrossHarbor Capital Partners and CIP Yellowstone Lending, LLC on February 5, 2009, and the Official Committee of Unsecured Creditors filed February 6, 2009;
1. Credit Suisse's “Emergency Motion of Prepetition Lenders Pursuant to Bankruptcy Rules 7026 and 9014 and Local Rule 9014-1 for Order Authorizing Prepetition Lenders to Seek Expedited Discovery” filed January 28, 2009, at docket entry no. 314, together with the response of CrossHarbor Capital Partners and CIP Yellowstone Lending, LLC filed February 6, 2009;
2.The Debtors' “Motion for Approval of Bidding and Solicitation Procedures Regarding Proposed Sale of 100% of the Equity Interests in the Debtors Pursuant to a Plan of Reorganization” filed February 3, 2009, at docket entry no. 322, together with the objections and responses of the Ad Hoc Group of Class B Unit Holders, Highland Capital Management, L.P., Credit Suisse, the Office of the United States Trustee, Normandy Hill Capital, L.P., and the Official Committee of Unsecured Creditors, all filed February 6, 2009, and the objection of Timothy L. Blixseth filed February 8, 2009; and
3.Credit Suisse's “Emergency Motion of Prepetition Lenders for Appointment of Examiner” filed February 3, 2009, at docket entry no. 326, together with the responses filed thereto by the Debtors, CrossHarbor Capital Partners, CIP Yellowstone Lending, LLC, and the Official Committee of Unsecured Creditors on February 6, 2009.
Yellowstone Mountain Club-Blixseth v. Credit Suisse v. Unsecured Creditors - Motion to Bifurcate - June 11, 2009
In this Adversary Proceeding, trial was originally scheduled to commence at 09:00 a.m. on Wednesday, April 22, 2009. However, after considering Timothy L. Blixseth's (“Blixseth”) Expedited Motion to Bifurcate and Continue Trial of Claims Regarding Blixseth filed April 21, 2009, at docket entry no. 203, the Court continued the trial date to Wednesday, April 29, 2009. The Debtors were represented at the trial in this Adversary Proceeding by Tom Hutchinson, Troy Greenfield, Connie Sue Martin and David A. Ernst of Seattle, Washington, and James A. Patten of Billings, Montana; Credit Suisse was represented by Mark S. Chehi, Robert S. Saunders and Joseph O. Larkin of Wilmington, Delaware, George A. Zimmerman, Evan R. Levy and Jeremy M. Falcone of New York, New York, Edward J. Meehan of Washington, D.C. and Shane Coleman of Billings, Montana; the Official Committee of Unsecured Creditors was represented by J. Thomas Beckett, Chris P. Wangsgard, Derek Langton, Sean D. Reyes and Mark W. Dykes of Salt Lake City, Utah, and James H. Cossitt of Kalispell, Montana; and Blixseth was represented by Michael J. Flynn of Boston, Massachusetts, Joseph M. Grant of Houston, Texas, and Joel E. Guthals of Billings, Montana.
The Court heard expert testimony from David Abshier, John Hekman, Kent Mordy and Christopher Donaldson. The Court heard fact testimony from Blixseth, Michael W. Doyle, Stephen R. Brown, Moses Moore, Brad Foster, Samuel T. Byrne, Edra Blixseth, Steve Yankauer, and Robert Sumpter. The testimony of the following witnesses was submitted through deposition transcript: Jeff Barcy, Dean R. Paauw and William G. Griffon. Prior to commencement of trial on April 29, 2009, the Official Committee of Unsecured Blixseth listed George Mack as a trial witness in his Amended List of Witnesses filed April 27, 2009. Blixseth testified at trial that George Mack was in Missoula at the time of trial and available to testify. However, Blixseth did not call George Mack as a witness. After trial, a question arose regarding the admission into evidence of George Mack's deposition. Because George Mack was available to testify, but was not called, the Court declines to consider George Mack's deposition under Fed.R.Civ.P. 32(a), made applicable to this proceeding by F.R.B.P. 7032. For the reasons just stated, and because Stephen R. Brown testified, the Court will similarly not consider the deposition testimony of Stephen R. Brown.
Creditors (“Committee”), the Debtors and Credit Suisse filed a proposed Final Pretrial Order on April 27, 2009, at docket entry no. 238. Blixseth participated in drafting the aforementioned proposed Final Pretrial Order but then proposed additional changes that could not be timely reviewed and approved by the Committee, Debtors and Credit Suisse. Thus, Blixseth instead filed his own proposed Final Pretrial Order on April 27, 2009, at docket entry no. 241. After hearing comments from counsel and after considering both proposed Final Pretrial Orders, the Court made some of Blixseth's proposed adjustments to the proposed Final Pretrial Order submitted by the Committee, Debtors and Credit Suisse and entered a Final Pretrial Order on April 29, 2009, at docket entry no. 257. The Final Pretrial Order approved by the Court supercedes the pleadings filed by the parties and governed the course of the trial. Following the trial in this matter, the Court entered a Partial and Interim Order on May 12, 2009, and following entry of the Partial and Interim Order, Credit Suisse, the Debtors, the Committee and Cross Harbor Capital Partners, and its affiliates, entered into a global settlement that negates many claims in this Adversary Proceeding and also vacates the Court's May 12, 2009, Partial and Interim Order.
Yellowstone Mountain Club - Confirmation of Plan
In the above-referenced Chapter 11 bankruptcies, a hearing under 11 U.S.C. § 1128(a) and Bankruptcy Rule 3020(b)(2) was held May 18, 2009, in Butte on approval of the Debtors’ Second Amended Joint Plan of Reorganization filed April 3, 2009, at docket entry no. 691. The Debtors were represented at the confirmation hearing by James A. Patten of Billings, Montana and Richard G. Birinyi of Seattle, Washington; Credit Suisse was represented by Mark S. Chehi and Joseph O. Larkin of Wilmington, Delaware, Evan R. Levy of New York, New York, and Shane Coleman of Billings, Montana; the Official Committee of Unsecured Creditors (“UCC”) was represented by J. Thomas Beckett of Salt Lake City, Utah, and James H. Cossitt of Kalispell, Montana; CrossHarbor Capital Partners LLC (“CrossHarbor”) was represented by Paul D. Moore and Barry D. Green of Boston, Massachusetts; the Yellowstone World Club (“YCW”) and its members were represented by John L. Amsden of Bozeman, Montana; the Ad Hoc Committee of Yellowstone Club members was represented by Jonathan B. Alter of Hartford, Connecticut; the Ad Hoc Group of Class B Unit Holders was represented by Clark T. Whitmore of Minneapolis, Minnesota; the Montana Department of Revenue (“MDOR”) was represented by attorney Teresa Whitney of Helena, Montana; the Internal Revenue Service (“IRS”) was represented by Assistant U.S. Attorney Victoria L. Francis of Billings, Montana; and Timothy L. Blixseth and Desert Ranch, LLP were represented by Joel E. Guthals of Billings, Montana. Ronald Greenspan, Brad Foster, Samuel T. Byrne, Steve Lehr and Edra Blixseth testified and the Debtors' Exhibit A, B and C were admitted into evidence without objection.
Yellowstone Mountain Club - Reconsideration - June 2, 2009
At Butte in said District this 2nd day of June, 2009. In the above-referenced Chapter 11 bankruptcies, Robert Sumpter (“Sumpter”), through counsel, filed on May 21, 2009: (1) an Amended Motion to Amend Schedule 1.87 (Membership Assumption Schedule) at docket entry number 934; and (2) an Amended Motion for New Trial or to Alter or Amend Judgment (Rule 9023) and for Relief from Judgment or Order (Rule 9024) at docket entry number 935. The aforementioned motions all stem from this Court's Order of May 18, 2009, wherein the Court overruled Sumpter's objection to confirmation of the Debtors' Chapter 11 Plan.
A hearing on Sumpter's motions was held June 1, 2009, in Butte. Attorney Stephen C. Mackey of Billings, Montana appeared at the June 1, 2009, hearing on behalf of Sumpter; James A. Patten of Billings, Montana appeared on behalf of the Debtors; and Paul D. Moore of Boston, Massachusetts appeared on behalf of CrossHarbor Capital Partners, LLC and CH YMC Acquisition LLC. Sumpter and Matt Kidd testified and Sumpter's Exhibits 1 through 6 and the Debtors' Exhibits A through D were admitted into evidence without objection.
Yellowstone Mountain Club - Show Cause - January 16, 2009
In the above-referenced Chapter 11 bankruptcies, which are being jointly administered pursuant to an Order dated November 13, 2008, a hearing was held January 13, 2009, in Butte on: (1) the Court's Order to Show Cause entered December 17, 2008, which ordered Debtors, Credit Suisse and other parties in interest to appear before the Court and show cause why the Court should not lift the automatic stay to allow Credit Suisse or another party to proceed with enforcement of three Promissory Notes in the approximate stated amount of $275,000,000; (2) on the objections of Credit Suisse, the Official Committee of Unsecured Creditors (the “Committee”), the Ad Hoc Committee of Yellowstone Club Members, the Ad Hoc Group of Class B Unit Holders (“Class B Group”) and Michael Snow to this Court's approval of Debtors' Application to Approve Employment of attorney Doug James as special legal counsel to pursue collection of three Promissory Notes; and (3) approval of the Stipulation of Credit Suisse, as Agent, and Official Committee of Unsecured Creditors Regarding Enforcement of and Collection on Promissory Notes filed January 9, 2009. The following appearances were made at the January 13, 2009, hearing: James A. Patten of Billings, Montana, for the Debtors; Daniel P. McKay of Great Falls, Montana, for the Office of the U.S. Trustee; Mark S. Chehi and Robert S. Saunders of Wilmington, Delaware, Evan R. Levy of New York, New York, and Shane Coleman of Billings, Montana, for Credit Suisse, Cayman Island Branch (“Credit Suisse”); John Grant of Helena, Montana, and Jonathan B. Alter of Hartford, Connecticut, for the Ad Hoc Committee of Yellowstone Club Members; Matthew J. Cuffe of Missoula, Montana, and Clark T. Whitmore of Minneapolis, Minnesota, for the Class B Group; Paul D. Moore of Boston, Massachusetts, for CrossHarbor Capital Partners (“CrossHarbor”); J. Thomas Beckett of Salt Lake City, Utah, and James H. Cossitt of Kalispell, Montana, for the Committee; Jon Doak of Billings, Montana , for James T. Murphy, Murphy Family Limited Partnership and the Edwards Law Firm; and Joel E. Guthals of Billings, Montana, for Timothy Blixseth. The Debtors' Exhibits 1 through 4, Credit Suisse's Exhibits 1 through 4 and the Committee's Exhibits 1, 1A, 5 and 6 were admitted into evidence. Doug James, Edra Blixseth and Louis Pistecchia testified.
Yellowstone Mountain Club-Snow v. BLX - Motion to Dismiss - September 8, 2009
In this Adversary Proceeding, after due notice, a hearing was held August 11, 2009, in Butte on the Defendant Timothy L. Blixseth's (“Blixseth”) “Motion to Dismiss Adversary Proceeding for Lack of Subject Matter Jurisdiction, or in the alternative, to Determine Noncore Proceedings, to Abstain, and for Stay” filed April 3, 2009, at docket entry no. 15, together with the objections thereto by the Plaintiffs, also referred to as Class B shareholders, and Marc S. Kirschner, as Trustee of the Yellowstone Club Liquidating Trust. Joel E. Guthals of Billings, Montana appeared at the hearing to prosecute Blixseth's Motion. The Plaintiffs were represented at the hearing by Mary L. Knoblauch of Minneapolis, Minnesota and Marc. S. Kirschner was represented by Shane P. Coleman of Billings, Montana. The Court heard argument from counsel, but no witness testimony or exhibits were offered. At the conclusion of the hearing, the Court took the matter under advisement and it is now ready for decision. This Memorandum of Decision sets forth the Courts findings of fact and conclusions of law.
Yellowstone Mountain Club - Stay Pending Appeal
Yellowstone Mountain Club - Stay Pending Appeals - November 12, 2009
In the above-referenced Chapter 11 bankruptcy proceedings, after due notice, a hearing was held October 6, 2009, in Butte on the Application for Allowance and Payment of Administrative Expense Claim (“Application”) filed August 17, 2009, at docket entry no. 1197, by Greg LeMond, Jorge V. Jasson, David L. Morris, Sacia B. Morris and Sacia Enterprises, Inc. (Collectively the “LeMond Group”), together with the Debtors’ objection thereto. James A. Patten of Billings, Montana appeared on behalf of the Debtors and Trent M. Gardner of Bozeman, Montana appeared on behalf of the LeMond Group. The Court heard argument from counsel, but no witness testimony was heard and no exhibits were offered into evidence.
Following the October 6, 2009, hearing, the Debtors and the LeMond Group entered into a Joint Motion for Approval of Compromise Settlement that was filed with the Court on October 16, 2009. The aforementioned Joint Motion states that the Debtors and the LeMond Group “have come to an agreement fixing and allowing LeMond claim for administrative expense in the amount of $50,000. This amount reflects a compromise between the parties of a disputed claim and constitutes neither a concession nor an admission by either as to the merits of claim. This compromise is made to avoid uncertainty, risk, and to allow the administration of the estate to proceed without delay.” Local counsel for the Official Committee of Unsecured Creditors, James H. Cossit of Kalispell, Montana, filed an objection to the Joint Motion for Approval of Compromise Settlement on October 25, 2009, and the matter is currently scheduled for hearing on December 10, 2009, in Butte.
This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding under 28 U.S.C. § 157(b). This Memorandum of Decision sets forth the Court’s findings of fact and conclusions of law.