OpinionsThe United States trustee moved to dismiss the chapter 11 debtor-in-possession's case for cause under 11 U.S.C. section 1112(b). The motion was later joined by three secured creditors. The court examined six different grounds for cause, and concluded that the movants had not met their burden to show that there was cause to dismiss the case, so it denied the motion. The court also ordered the debtor to file amended monthly operating reports and disclosures relating to its previous legal proceedings by a date certain. In re Lucia Vargas, Case No 16-23199 (September 2016) -- Judge B.E. Hanan The court sustained the creditor's objection to the debtor's motion for referral to the MMM Program based on the creditor's inability to modify a loan on which the debtor was not the borrower (and without the participation of the borrower), but explained the purpose of this district's MMM Program, and noted the limited circumstances in which the court will consider sustaining such an objection. In re Reinhart, Case No. 16-21042, 559 B.R. 217, 559 B.R. 217 (September 2016) -- Judge B.E. Hanan The chapter 13 trustee objected to plan confirmation contending that the debtor's chapter 13 plan failed to pay all disposable income under 11 U.S.C. section 1325(b). The trustee contended that the debtor's reimbursements from his employer for mileage and meal expenses, but not the corresponding expenses, constituted income which must be factored into the debtor's calculation of current monthly income. The court agreed with the trustee and sustained her objection, concluding that the broad language defining current monthly income under 11 U.S.C. section 110(10A) encompassed reimbursements, without regard to their corresponding expenses. The court also concluded that the debtor's corresponding expenses in association with the reimbursement income are properly deducted when calculating the debtor's disposable income on Form 122C-2 of the Means Test. World’s Foremost Bank v. Del Aguila (In re Del Aguila), 556 B.R. 917 (September 2016) -- Judge S.V. Kelley Summary judgment denied for credit card nondischargeability claim where questions of fact existed about whether items were luxury goods and whether debtor incurred charges with intent not to repay them. In re Sternat, Case No. 15-21681 (August 2016) -- Chief Judge G.M. Halfenger The debtor filed a motion under 11 U.S.C. section 522(f)(1)(A) to avoid a judicial lien on his residence held by his ex-wife. The debtor's ex-wife argued that the U.S. Supreme Court's holding in Farrey v. Sanderfoot prevented the debtor from avoiding her lien. The court concluded that the debtor's ex-wife's lien attached to the debtor's pre-existing interest in the residence, and, therefore, Farrey v. Sanderfoot did not apply. The court also concluded that the divorce court's judgment does not give rise to an avoidable equitable lien. In re Brittany King, Case No. 16-24784 (July 2016) -- Chief Judge G.M. Halfenger The chapter 13 debtor filed a motion requesting that the court approve a loan for the purchase of a vehicle. The court held that the Bankruptcy Code delegates oversight of chapter 13 debtor consumer transactions to the chapter 13 trustee. The court denied the debtor's motion but took no view on whether the chapter 13 trustee should exercise her discretion to approve the debtor's proposed consumer credit transaction. In re Gouthro, Case No. 12-35699 (June 2016) -- Chief Judge G.M. Halfenger The court overruled the debtors' meritless objection to the trustee's affidavit of default. The objection neither (1) disputed the veracity of the trustee's affidavit of default nor (2) argued that the debtors could establish excusable neglect to justify an expansion of the time to perform under Federal Rule of Bankruptcy Procedure 9006(b)(1). The order provides notice that similar meritless objections to affidavits of default risk sanctions under 11 U.S.C. section 105(a) and Federal Rule of Bankruptcy Procedure 9011(c). In re James Burke, Case No. 16-23732 (June 2016) -- Chief Judge G.M. Halfenger The chapter 13 debtor's case was automatically dismissed pursuant to 11 U.S.C. section 521(i) because the debtor failed to file his Statement of Financial Affairs. The debtor filed a motion to vacate the dismissal. He based the motion on the fact that the court's deficiency order did not advise him that he failed to file the Statement of Financial Affairs. The motion contended that counsel relied on the order to determine which additional documents he needed to file. The court denied the motion and explained that it is the debtor's duty to comply with section 521. Because the debtor neither timely filed the information required by section 521(a) nor moved to extend the time before section 521(i)'s 45-day deadline expired, the case was dismissed by operation of law, and the court had no authority to vacate that dismissal. In re Gelhaar, Case No. 15-20540 (June 2016) -- Chief Judge G.M. Halfenger Decision and order discussing the best-interests-of-creditors test under 11 U.S.C. section 1325(a)(4). In re Perez (June 2016) -- Judge S.V. Kelley Chapter 13 debtor who worked at car dealership not required to include value of demo vehicle in her current monthly income. |