Plaintiff subcontractors filed motions for summary judgment on the grounds that the chapter 7 debtor general contractor breached his fiduciary duties under Wisconsin's theft by contractor statute and the resulting debt was nondischargeable under section 523(a)(4). Plaintiffs also argued a previous state court default judgment should be given preclusive effect. The motions were denied because the matter had not been actually litigated in state court and the bankruptcy court was required to assess the debtor's state of mind while acting in a fiduciary capacity.
The US Department of Agriculture, Rural Housing Service's motion for relief from the automatic stay to effectuate a setoff of the chapter 7 debtors' tax refund against a dischargeable loan guarantee loss claim obligation was granted.
Chapter 11 individual debtor filed counterclaims against the plaintiff bank for damages to the debtor's apartment complex while under the management and control of the bank. Bank's motion to dismiss counterclaims was granted because debtor, as guarantor, did not have standing under the guaranty; the claims against the bank belonged to the borrower, the debtor's LLC.
Although the chapter 7 debtor was assigned payment of joint credit card obligations under the parties' Marital Settlement Agreement, after the debtor stopped making payments and the default was reported negatively on her former spouse's credit report, the former spouse made the credit card payments. The court rejected the debtor's argument that, because the creditor had not sued or threated legal action against her former spouse, she was not liable to reimburse her former spouse for his "voluntary" payments. The debtor's responsibility to hold her former spouse harmless became a nondischargeable obligation under sec. 523(a)(15) when the judgment incorporating the MSA was granted.
Material facts in dispute precluded summary judgment in debtor's adversary proceeding to recover transfer of non-homestead property in real estate tax foreclosure allegedly done in violation of the automatic stay and for less than reasonably equivalent value.
Court granted relief from automatic stay under sec. 362(d)(3)(A) because single asset real estate debtor's proposed chapter 11 plan did not have reasonable possibility of being confirmed within reasonable time. Additional factor establishing "cause" for relief under sec. 362(d)(1) was prepetition stay waiver within forbearance agreement between debtor and secured lender.
State court's $500 sanction award and findings regarding frivolous and abusive nature of chapter 7 debtor's state law counterclaim against plaintiff did not encompass the requisite specific intent to cause willful and malicious injury under section 523(a)(6), precluding summary judgment.
Court recommended granting summary judgment dismissing adversary proceeding based upon ordinary course of business and new value defenses to the preference action. The Court took into account the seasonal variations in the debtor's business cycle when considering the parties' ordinary course of business.
Creditor was denied summary judgment and sec. 523(a)(3)(A) cause of action against chapter 7 debtors was dismissed. Although creditor had not received notice of bankruptcy in time to file a timely proof of claim in asset case, it had knowledge of bankruptcy case in time to file a tardy proof of claim and fully participate in the distribution under sec. 726(a)(2)(C), but chose not to do so.
Creditor's motion for summary judgment seeking an order requiring the marshaling of assets, namely by requiring another bank to liquidate the real property mortgaged by non-debtors prior to executing on the real property mortgaged by the chapter 12 debtors, in which creditor also had a secured interest, was denied.