The chapter 7 debtor’s ex-wife sought a determination that certain obligations assigned to the debtor in the parties’ pre-petition Martial Settlement Agreement (“MSA”) were non-dischargeable under 11 U.S.C. section 523(a)(15)—specifically, the debtor’s obligation to make certain payments toward the parties’ marital debt (the “marital debt payments”), and his obligation to hold his ex-wife harmless for payment of the second mortgage on the parties’ residence. In reviewing the language of the MSA and considering the agreement as a whole, the court concluded that the MSA required the debtor to make the marital debt payments directly to his ex-wife (not to the underlying creditors, as the debtor suggested), and that those debts were nondischargeable under section 523(a)(15). The court also concluded that the debtor’s hold harmless obligation on the second mortgage created a new, nondischargeable debt, and granted the plaintiff’s motion for summary judgment.
In re Poivey, Case No. 17-26408 (January 2018) -- Judge B.H. Ludwig
The court concluded that the debtors' interest in certain mineral rights is property of the estate not subject to exclusion under 11 U.S.C. §541(b)(4).
In re Patrick and Angela Sabec, Case No. 17-23264 (January 2018) -- Judge G.M. Halfenger
The chapter 13 debtors filed a motion to limit notice of their request to amend their unconfirmed chapter 13 plan contending that the amended plan did not adversely affect any other parties in interest. The court denied the motion. The court's order explains that Interim Local Rule 3015(c)(3) requires debtors to serve all plan amendments on all creditors in order to reduce substantially the administrative cost in determining whether the debtor properly served the plan. The order states that the court "will reserve orders limiting notice to those rare instances in which some final amendment that likely has no detrimental effect on creditors is needed to achieve confirmation."
In re Green Box NA Green Bay, LLC, Case No. 16-24179 (December 2017) -- Judge B.E. Hanan
After the failure of the debtor’s confirmed chapter 11 plan, the debtor’s largest secured creditor moved to dismiss the case. Another creditor objected, urging conversion to chapter 7. The debtor conceded that “cause” to dismiss or convert the case existed under 11 U.S.C. section 1112(b), but argued that dismissal was warranted. In deciding between the two options, the court considered whether a chapter 7 trustee in a converted case would be able to administer any assets for the benefit of unsecured creditors. The court found that the debtor had no unencumbered liquid assets to fund a chapter 7 administration, and there was little to no evidence that a chapter 7 trustee would be able to find or recover any “hidden” assets of the debtor (or pay for the necessary investigation), as one creditor had asserted. As a result, dismissal, rather than conversion, was in the best interest of the creditors and the estate.
Marks Family Trucking, LLC v. United States (In re Marks Family Trucking, LLC) (December 2017) -- Chief Judge S.V. Kelley
Civil forfeiture action against debtor's truck that was used to transport illegal drugs is not stayed under the police powers exception to the automatic stay. Debtor will be able to make ownership claim to truck in the forfeiture proceeding.
In re Hansen (November 2017) -- Chief Judge S.V. Kelley
Penalty owed to the Wisconsin Department of Workforce Development for failure to maintain worker's compensation insurance did not fall into the exception to discharge for excise taxes or for penalties owed to and for the benefit of a governmental unit.
Adv. Proc. No. 17-2187, George v. Novoselsky (October 2017) -- Judge G.M. Halfenger
The defendant filed a motion for recusal, abstention, dismissal and a request for trial by jury. The court denied the requests for recusal, dismissal and abstention. The court struck the defendant’s jury demand because the plaintiff’s claim under 11 U.S.C. sec. 549 is not one for which the Seventh Amendment to the U.S. Constitution preserves the right to a jury trial.
Van Eperen v. Baycare Health System, Adversary No. 16-2412 (September 2017) -- Judge B.E. Hanan
The court concluded that, for purposes of an avoidance action under section 547(b), a transfer of funds garnished under the Wisconsin garnishment statute occurred at the time the funds were conveyed to the creditor, not when they were deducted from the debtor's paycheck.
Ignacio Mendiola, Case No. 17-23628 (September 2017) -- Judge B.H. Ludwig
After the Chapter 13 debtor filed his sixth petition in six years, secured creditor was granted in rem relief from stay and debtor was barred from filing another case for 180 days.
In re Bethe, Case No. 11-25388 (September 2017) -- Judge G.M. Halfenger
Section 1328(a) of title 11 provides that the court shall grant a debtor a discharge when, among other requirements, the debtor has completed “all payments under the plan”. Direct-pay maintenance payments on long-term debt provided for in a chapter 13 plan are “payments under the plan” for purposes of section 1328(a). Debtors who fail to make such payments are not entitled to a discharge.