In a "double debtor" scenario, secured creditor's perfected security interest in collateral in possession of debtor lapsed one year after collateral was transferred from secured creditor manufacturer to debtor. Because the manufacturer had filed its financing statement in an incorrect location, its security interest was unperfected, as well. Consequently, first and second secured creditors' interests were subordinate to third secured creditor with perfected security interest in debtor's collateral. (This decision is a court minute decision, only.)
Plaintiff filed a motion for summary judgment seeking a determination that obligations owed it were excepted from the debtors’ discharge, as well as a denial of the debtors’ discharge. The debtors had allegedly converted the plaintiff’s collateral by failing to account for missing livestock and feed. The court granted the motion, in part, finding the debtor husband’s judgment of nondischargeability in a prior bankruptcy case was nondischargeable in the current case. The court denied the motion, in part, finding issues of material fact, namely the debtors’ subjective intent, precluded the entry of summary judgment on the other counts.
Issue preclusion barred relitigation of state court judgments against chapter 7 debtor for assault and battery, as well as derivative claims for loss of society and companionship, making the judgments nondischargeable under sec. 523(a)(6).
Where a debtor converts the underlying bankruptcy case from one under Chapter 7 to one under Chapter 13 before the deadline for filing an answer to a 727 complaint objecting to discharge,the conversion does not moot the 727 cause of action. Rather, it renders that cause of action dormant. The appropriate disposition of the 727 adversary proceeding is for the court to stay the proceedings and close the adversary case, subject to a motion to reopen in the event that the underlying bankruptcy case reconverts to one under Chapter 7.
Equitable remand of removed state court litigation was not ordered when case involved core bankruptcy proceeding and interpretation of bankruptcy court's confirmation order. Plaintiff's request for a jury trial, if appropriate, could be accommodated.
Even though adversary proceeding involved alleged violation of state statute, mandatory abstention was not appropriate for core proceeding and when there was no pending state court action, and permissive abstention was denied when bankruptcy court would be called upon to interpret its confirmation order.
Chapter 13 debtor who voluntarily dismissed previous bankruptcy case in which secured creditors had moved for relief from the automatic stay was not eligible to be a debtor under sec. 109(g)(2). (This decision is a court minute decision, only.)
Chapter 7 trustee initiated an adversary proceeding seeking a determination that debtor’s interest in a trust was “property of the estate” and for turnover of the trust corpus for administration as an asset of the estate. The spendthrift provision restricted only involuntary transfer of debtor’s interest, not voluntary transfer of debtor’s interest, and therefore, the debtor had an absolute right to immediate payment of the principal, without restrictions. Accordingly, the court held that the trust did not contain a valid spendthrift clause under Arizona law, and, debtor’s interest in such trust was property of the bankruptcy estate. The adversary proceeding was dismissed and the trustee of the trust was ordered to turn over debtor’s beneficial interest in the trust corpus to the chapter 7 trustee for administration.
Court abstained from exercising jurisdiction over funds related to state court receivership.