Source: http://www.ilsb.uscourts.gov/opinions?field_opinion_date_value%5Bvalue%5D&field_opinion_judge_value=All&404%3Bhttp%3A%2F%2Fwww_ilsb_uscourts_gov%3A80%2Fopinions%3Ffield_opinion_date_value%5Bvalue%5D=&404%3Bhttp%3A%2F%2Fwww_ilsb_uscourts_gov%3A80%2Fopinions=
Timestamp: 2017-11-19 01:14:17
Document Index: 128226917

Matched Legal Cases: ['§523', '§ 1205', '§ 541', '§ 541', '§ 1329', '§ 523']

In re: Lisa and Daniel Garrett 17-40064
Summary: Creditor filed a motion to set off a potential award in debtors' favor in District Court litigation against creditor's claim in debtors' chapter 7 bankruptcy proceeding. Debtors objected on the basis that the creditor could not set off its potential debt to debtors against a debt that was discharged in bankruptcy. The Court held that debtors lacked standing to object. The Court further held that even assuming debtors had standing, setoff was appropriate. Debtors’ counter claims and third party claims in the District Court litigation became an asset of the bankruptcy estate, and the creditor had a right to set off its claim in the bankruptcy case against any recovery the estate might receive in the District Court litigation.
17-40064 View
In re: David and Misty Koshinski 16-31494
Summary: Debtors David and Misty Koshinski filed a chapter 7 petition on September 29, 2016 and an order of discharge was entered on January 18, 2017. On January 31, 2017, creditor Ross Signorino (“Signorino”) filed a motion to vacate the discharge order and/or for additional time to file a complaint to determine dischargeability of debt. He claimed that he did not receive notice of the chapter 7 in time to timely file a complaint objecting to dischargeability of debt. The authority relied on by Signorino’s counsel for vacating the discharge was unclear. The Court found no basis for doing so and accordingly, Signorino’s request to vacate the discharge order was denied. The Court granted Signorino’s request to file a dischargeability complaint under §523(a)(3), but reserved ruling on the issue of whether Signorino had timely notice or actual knowledge of the debtors’ chapter 7 case. The Court noted that should Signorino file a dischargeability complaint, issues of notice and knowledge would be litigated in that proceeding.
16-31494 View
In re: Karl and Jenna Blake 16-60425
Summary: This Chapter 12 case came before the Court on the Objection to Debtors' Motion to Use Cash Collateral filed by First Financial Bank. The Court granted Debtors' Motion to Use Cash Collateral. The Court found that while it concurred with other Courts that have held that a bare replacement lien on future crops is not sufficient to provide adequate protection for the use of a creditor's cash collateral pursuant to 11 U.S.C. § 1205, the facts before the Court in the instant case were distinguishable. In Blake, the Court found that Debtors' assignment of government payments, crop insurance proceeds and the provision of a priority administrative expense claim in favor of the bank, together with a replacement lien on 2017 crops, provided sufficient adequate protection to allow the Debtors to use the bank's cash collateral.
16-60425 View
In re: Scott R Hewitt 16-30375
Summary: Chapter 7 trustee sought turnover of post-petition voluntary separation incentive payments (VSI payments) payable to the debtor from the U.S. Department of Defense. Debtor opposed the motion on the basis that the payments were excluded from the bankruptcy estate under 11 U.S.C. §§ 541(a)(6) or 541(c)(2). Alternatively, debtor argued that even if the VSI payments constitute estate property, they were exempt under state law as retirement benefits. The Court found that based on the 7th Circuit’s decision in Matter of Haynes, 679 F.2d 718 (7th Cir. 1982), the VSI payments were excluded from the estate under § 541(a)(6). The trustee’s motion for turnover was denied.
16-30375 View
In re: Harley T Roehm 13-41385 & Sandra L Schlueter 14-40163
Summary: In 2 cases involving the same issue, the Court denied the Chapter 13 Trustee's motion to modify confirmed plans to increase the plan base. The Court held that after deducting the Trustee's fee, the benefit to the unsecured creditors from the additional payments they would receive is relatively small compared to the difficulty, if not hardship, of the debtors living and making additional payments with social security as their only source of income. The debtors had paid their respective plan bases off early in anticipation of reduced income. The Trustee sought modification to require the debtors to make additional payments to cover the remaining months under the terms of their confirmed plans pursuant to 11 U.S.C. § 1329. The Court found that the Trustee had failed to establish cause to modify the debtors' plans under the unique facts presented in each case.
13-41385 14-40163 View
In re: Alan Lee Presswood 12-60237
Summary: The Chapter 7 debtor objected to the Trustee’s proposed settlement of a class action lawsuit in which the debtor was the class representative and sole class member. The lawsuit was filed on February 25, 2015, nearly three years after the debtor filed his bankruptcy petition. Although the suit involved a prepetition claim, it was not initially scheduled or otherwise disclosed. Upon learning of the suit, the Trustee, moved to settle the estate’s interest in claims against the class action defendant for $10,000. The debtor objected on the grounds that the claim was worth no more than $500, was fully exempt, and that the settlement offer represented an attempt by the class action defendant to “buy off” the class represented in the pending litigation. The Trustee countered that the debtor had no standing to object to the settlement.
The Court agreed with the Trustee that a Chapter 7 debtor must have a pecuniary interest in the outcome of a case in order to object. However, in this case it was necessary to value the class action claim because, if it was worth no more than the claimed exemption, the estate would have no interest to settle.
Relying on In re Polis, 217 F.3d 899 (7th Cir. 2000), the Court found that when determining the fair market value of a legal claim in advance, it is necessary to multiply the amount of the judgment the plaintiff would recover if he litigated and won by the probability of prevailing. Because the evidence submitted in support of the settlement figure assumed the maximum possible recovery in the class action and did not adjust for uncertainty that this value would actually be realized, the Court determined that it did not accurately reflect the actual value of the claim. Accordingly, the debtor’s objection was sustained and the proposed settlement was not approved.
12-60237 View
In re: Deere and Company v Grabowski et al
Summary: Debtors/defendants Paul and Tonya Grabowski filed a Chapter 12 bankruptcy case on April 22, 2015. The Notice of Chapter 12 Bankruptcy Case, Meeting of Creditors, & Deadlines fixed the deadline to file a complaint to determine dischargeability of certain debts as July 27, 2015. On January 8, 2016, the Plaintiff, Deere and Company; John Deere, f.s.b. filed a Complaint to Determine Dischargeability of Debt pursuant to 11 U.S.C. §§ 523(a)(2)(a) and 523(a)(2)(B), alleging that the Defendants had sold its collateral years before the bankruptcy filing. The Defendants moved to dismiss the Complaint, arguing that it was time-barred pursuant to Federal Rules of Bankruptcy Procedure 4007(c) and 9006(b)(3), which require that a complaint to determine the dischargeability of a debt be filed “no later than 60 days after the first date set for the meeting of creditors,” unless the party seeking to object to dischargeability files a motion for an extension of time “before the time has expired.” The Plaintiff argued that its late-filed Complaint should be allowed pursuant to the doctrine of equitable tolling.
The Court determined that the facts did not justify applying the doctrine and granted the Defendants’ Motion to Dismiss. The Plaintiff became aware that its collateral had been sold on September 28, 2015, but did not file its complaint until almost four months later. Equitable tolling is only permitted “until the fraud or concealment is, or should have been, discovered.” Therefore, the Plaintiff’s Complaint was still filed too late.
16-04000 View