OpinionsThe State of Wisconsin Department of Justice moved to reopen this chapter 11 case, which has been closed since 2016 (following plan confirmation and full administration of the bankruptcy estate), to request access to hard copies of approximately 1,500 proofs of claim and related documents filed and maintained under seal pursuant to a 2011 protective order. The court denied the State's motion to reopen the case (and struck, as improperly filed, the State's motion for access to sealed records) because the State failed to show cause for reopening the case as required by §350(b) of the Bankruptcy Code: the State offered no substantial bankruptcy-related purpose for seeking access to the documents at issue (and several plainly non-bankruptcy-related purposes), and the court concluded that, even if it had, the relevant factors set forth in governing caselaw weigh decisively against reopening the case, including that the State is not entitled to relief from the protective order because there is no applicable legal authority for granting it such relief. In the alternative, the court denied the State's request for access to the sealed filings based on the lack of legal authority for the requested relief and because disclosure of the documents to persons other than those authorized by the protective order, which includes neither the State nor its employees, is not warranted under the circumstances. In re Kumm, Case No. 23-22866 (August 2024) -- Chief Judge G.M. Halfenger The chapter 7 debtor moved to reopen his bankruptcy case to pursue an adversary proceeding seeking a determination that the debt he owed to the Department of Education was not excluded from discharge by section 523(a)(8). The court initially denied the motion, determining that the debtor had not made a showing of why reopening the case was necessary to file the adversary proceeding to request a determination of dischargeability. The debtor filed a “renewed” motion to reopen, asserting that the Department of Education was requiring the debtor to reopen his case before the Department would conduct a review of his federal student loans under the Department’s internal procedures. The court construed the “renewed” motion as a motion for reconsideration and denied that motion, determining that there were no grounds to grant relief under Federal Rule of Civil Procedure 60(b) from the final order denying the motion to reopen, and concluding, among other things, that the court has jurisdiction over a section 523(a)(8) adversary proceeding regardless of whether the underlying bankruptcy case is open or closed. Although denying the motion for reconsideration, the court reopened the case sua sponte, ruling that Federal Rule of Bankruptcy Procedure 4007(b) authorizes (though does not require) reopening to file a complaint requesting a declaration of dischargeability and the Department’s refusal to evaluate the debtor’s student loan debt under its internal procedures unless the bankruptcy case is open adequately amounted to cause under section 350(b) to reopen. In addition to reopening the case, the court ordered as follows: "For all cases and adversary proceedings assigned to the author of this decision and order, the Clerk is directed to reopen any closed bankruptcy case of a debtor who files a complaint requesting a judgment declaring a student loan debt to be dischargeable and reclose the case after entry of judgment or a final order in the resulting adversary proceeding. The Clerk is directed not to await a motion to reopen. In such instances, the court will reopen all the cases sua sponte based on the reasoning of this decision and order." In re Greenpoint Asset Management II LLC, Case No. 21-25900 (June 2024) -- Chief Judge G.M. Halfenger The court entered an opinion and order denying debtor Greenpoint Asset Management II, LLC’s motion to reconsider the court’s March 18, 2024 order determining that there was cause to convert or dismiss the debtor’s chapter 11 case, and determined that dismissal was in the best interests of creditors and the estate. In re Weylock, Case No. 18-30208 (April 2024) -- Chief Judge G.M. Halfenger The chapter 13 debtors filed an objection to a mortgage creditor's response to the trustee's notice of final cure payment. The court construed the creditor's response to state that the debtors are current on postpetition payments for purposes of 11 U.S.C. §1322(b)(5), despite the outstanding postpetition fees, charges, and expenses listed in the response, and declined to act on the debtors' objection, which should have been filed (if at all) as a motion for a determination of final cure and payment under Federal Rule of Bankruptcy Procedure 3002.1(h). In re Goldapske, Case No. 19-23754 (March 2024) -- Chief Judge G.M. Halfenger The debtors filed a motion to modify the confirmed chapter 13 plan, purporting in relevant part to merely clarify the plan's existing terms: that payments under the plan began 30 days after the petition was filed. The trustee objected to the debtors' proffered construction of the plan, arguing that payments under the plan began after the plan was confirmed, and further objected to modification of the confirmed plan in accordance with the debtors' motion. The court agrees with the trustee's reading of the confirmed plan's terms and that 11 U.S.C. §1329(a) does not permit the modification of a confirmed plan to change the plan's effective date, i.e., the beginning of the period for payments under the plan, for purposes of 11 U.S.C. §1322(d), and the applicable commitment period, for purposes of 11 U.S.C. §1325(b). But the debtors' motion might instead be construed as a permissible request to reduce the time for payments under the confirmed plan, so the court afforded the trustee additional time to supplement her objection to the motion. Williams v. City of Milwaukee (In re Williams), Adv. Proc. No. 11-02527 (February 2024) -- Chief Judge G.M. Halfenger The court entered a decision and order denying the pro se debtor’s request for relief from orders entered in his closed adversary proceeding. In re Greenpoint Tactical Income Fund LLC, Case No. 19-29613 (February 2024) -- Chief Judge G.M. Halfenger The court confirmed the debtor's chapter 11 plan in May 2022. In August 2023 the debtor's former managing members moved the court to compel the reorganized debtor to pay amounts the former managing members asserted they were due under the plan. The court granted the motion in part and denied it in part, declaring that the former managing members had administrative claims that are due and owing but denying other requests for relief, including a request to compel the reorganized debtor to make the required payments. In re Arrow Express, Inc., Case No. 95-24187 (February 2024) -- Chief Judge G.M. Halfenger Unclaimed Funds Recovery Services VII Inc. ("UFRS") filed a petition under 28 U.S.C. §2042 for the release of unclaimed funds, purportedly as the successor claimant to a creditor in this chapter 7 case. The court denied the petition, and UFRS moved for reconsideration. UFRS then filed another petition under §2042, purportedly as the successor claimant to another creditor in the case. The court denied both UFRS's motion for reconsideration and UFRS's second petition for the release of unclaimed funds because UFRS has not appeared by counsel and corporations are not ordinarily permitted to appear in and seek relief from a federal court except by counsel. In re Greenpoint Tactical Income Fund LLC, n/k/a Alluvium Fund LLC, Case No. 19-29613 (December 2023) -- Chief Judge G.M. Halfenger 1. In a single consolidated request for relief, H Informatics LLC filed an application for allowance of administrative expenses under 11 U.S.C. §503(b)(1)(A) and debtor Greenpoint Tactical Income Fund, n/k/a Alluvium Fund LLC ("Fund") moved for approval under Federal Rule of Bankruptcy Procedure 9019 of the Fund's compromise of H Informatics' administrative expense claim. The United States trustee and the U.S. Securities and Exchange Commission objected. The court denied the motion to compromise, determining that the existing record did not afford an adequate basis from which the court could determine whether the compromise bore a reasonable relationship to the amount that H Informatics could be allowed under 11 U.S.C. §503(b)(1)(A). With respect to H Informatics' application for allowance of administrative expenses, the court noted that if H Informatics was required to have its employment approved under 11 U.S.C. §327, then it would not be permitted to apply for compensation under 11 U.S.C. §503(b)(1)(A). The court concluded that an evidentiary hearing was required to determine whether H Informatics was a "professional person", thus required to have its employment approved under 11 U.S.C. §327. The court further reasoned that even if H Informatics is not a professional person under §327, the existing record did not allow the court to determine the "actual, necessary costs and expenses of preserving the estate", necessitating an evidentiary hearing to determine the extent to which the court should allow H Informatics' administrative expense claim under 11 U.S.C. §503(b)(1)(A). 2. The court denied H Informatics' motion in limine and for summary judgment based on its denial of the motion to compromise. Behm v. McGill (In re McGill), Adv. Proc. No. 22-02073 (October 2023) -- Chief Judge G.M. Halfenger Plaintiffs sued the debtor-defendant seeking a declaration that the debt owed to them by the debtor-defendant is not dischargeable pursuant to 11 U.S.C. section 523(a)(2)(A) or (B). After a trial on the merits, the court concluded that the plaintiffs failed to meet their burden to prove that the debt owed to them was not dischargeable under section 523(a)(2)(A) or (B). The court also noted that while the complaint referred to section 727(a)(2)(A), (a)(3), (a)(4)(A) and (a)(5), and further requested an order denying the debtor-defendant’s discharge, none of the complaint’s allegations or the evidence at trial supported a claim for the denial of discharge. |