OpinionsSeveral years before filing a chapter 11 bankruptcy petition, the debtor hired the Jansson Munger & McKinley Ltd. law firm to represent it in defending against patent claims and to press counterclaims against its adversary. The firm represented the debtor in the litigation through dismissal of all claims, but the debtor didn't timely pay the firm's bills. The parties' engagement agreement required immediate payment of monthly invoices, but, although the debtor made partial payments through April 2018, it owed the firm more than $1.3 million when the litigation ended in June 2019. The debtor filed its bankruptcy petition on February 4, 2025, listing the firm as an unsecured creditor with a claim of about $1.3 million that was liquidated and undisputed. The firm filed a proof of claim for the same amount to which another creditor objected. The objecting creditor contended that the claim was barred in substantial part by Wisconsin's six-year statute of limitations, Wis. Stat. §893.43(1), because the monthly invoices were due on receipt and most of them were more than six years old when the debtor filed its bankruptcy case. The court overruled the claim objection. It opined that under governing Wisconsin law the firm's breach of contract claim for the total amount of unpaid legal services did not accrue until the firm's duty to continue representing the debtor in the litigation ended with the dismissal of all claims in June 2019, less than six years before the debtor filed its bankruptcy petition. In re Wisconsin & Milwaukee Hotel, LLC, Case No. 24-21743 (May 2026) -- Judge G.M. Halfenger The chapter 11 debtor filed a motion under Federal Rule of Civil Procedure 60(b)(5) to modify the court's May 2024 order that required the debtor to make monthly payments to its principal secured creditor as a condition for the debtor’s use of the secured creditor's cash collateral. The creditor objected, contending that the motion was untimely under Rule 60(c) and failed to make the showing required for modification under Rule 60(b)(5). The court concluded that, while the debtor filed its motion within a reasonable time as required by Rule 60(c), the debtor was not entitled to relief under Rule 60(b)(5) because the court concluded that the debtor had not experienced a significant change in circumstances warranting relief under that rule. Although the court denied the debtor's motion, it modified the May 2024 order to discontinue all monthly payments after the May 2026 payment because "continuation of the Order's monthly payment term has no ongoing equitable purpose or function beyond the commencement of the May 26 confirmation hearing." Id. at 15. In re Wisconsin & Milwaukee Hotel, LLC, Case No. 24-21743 (May 2026) -- Judge G.M. Halfenger The court entered an opinion and order approving the debtor's request to conduct an auction sale of equity in the reorganized debtor and to approve related auction procedures. The court determined, among other matters, that, under the circumstances presented, a creditor holding a claim secured by property not including equity interests was not entitled to credit bid at the auction sale of interests in the reorganized debtor. In re Wisconsin & Milwaukee Hotel LLC, Case No. 24-21743 (April 2026) (April 2026) -- Judge G.M. Halfenger Lenders, secured creditors who seek to enforce their security interests in the chapter 11 debtor’s hotel, appealed to the District Court the court’s denial of immediate relief under section 362(d)(2) from the automatic stay imposed by section 362(a). Lenders moved the bankruptcy court under Federal Rule of Bankruptcy Procedure 8007(e) to suspend further proceedings in that court and contended that their appeal divests the court of jurisdiction to conduct further proceedings until their appeal is concluded. The court ruled that (1) it retains jurisdiction to conduct further proceedings, including on confirmation and related matters, and (2) a suspension of those proceedings is not warranted. Lee v. Hang (In re Hang), Case No. 24-23470, Adv. No. 24-2130 (March 2026) -- Judge R.M. Blise The plaintiffs filed an adversary complaint against the debtor-defendants seeking to have a debt declared nondischargeable under 11 U.S.C. § 523(a)(2)(A). The plaintiffs unwittingly invested money in a non-debtor third-party's fraudulent investment scheme, and those funds were subsequently given to the debtor-defendants in the form of a below-market mortgage loan on property purchased by the debtor-defendants. The parties filed cross motions for summary judgment. The Court determined that there were material questions of fact as to the intent element and the amount of money allegedly obtained by fraud, so neither party sustained their burden on summary judgment on the nondischargeability claim. The plaintiffs also filed a motion to amend their complaint to add claims for a declaration related to the mortgaged property and for a declaration that the debtor-defendants could not invoke a homestead exemption. The Court denied the plaintiffs' motion because the debtor-defendants would be prejudiced by a late amendment to the complaint. The Court also determined that the amendment would be futile because any objection to the claimed homestead exemption was untimely, the plaintiffs did not sufficiently plead that they owned the property at issue, and ownership of the property was irrelevant to a determination of nondischargeability. Lee v. Vang (In re Vang), Case No. 24-24067, Adv. No. 24-2153 (March 2026) -- Judge R.M. Blise The plaintiffs filed an adversary complaint against the debtor-defendants seeking to have a debt declared nondischargeable under 11 U.S.C. § 523(a)(2)(A) and to have the Court declare that the debtor-defendants could not invoke a homestead exemption. The plaintiffs unwittingly invested money in a non-debtor third-party's fraudulent investment scheme, and those funds were subsequently given to the debtor-defendants in the form of a below-market mortgage loan on property purchased by the debtor-defendants. The parties filed cross motions for summary judgment. The Court determined that there were material questions of fact as to the intent element and the amount of money allegedly obtained by fraud, so neither party sustained their burden on summary judgment on the nondischargeability claim. The Court granted the debtor-defendants’ motion with respect to their homestead exemption because the plaintiffs’ claim was not timely filed under 4003(b) and an objection to an exemption should be filed in the main case, not an adversary proceeding. The plaintiffs also filed a motion to amend their complaint to add another claim for a declaration related to the mortgaged property. The Court denied the plaintiffs' motion because the debtor-defendants would be prejudiced by a late amendment to the complaint, and the amendment sought relief the Court could not grant. Ahmed v. Pathan (In re Pathan), Case No. 24-23022, Adv. No. 24-2116 (March 2026) -- Judge R.M. Blise The plaintiff sought a determination that a $100,000 loan the plaintiff gave the debtor-defendant to use solely for business expenses related to the debtor-defendant's gas stations was nondischargeable. After trial, the Court concluded that the plaintiff met his burden of proof under 11 U.S.C. § 523(a)(2)(A). The plaintiff presented sufficient evidence to prove that he loaned money to the debtor-defendant under false pretenses because the debtor-defendant falsely suggested that he would use all the loan proceeds for business purposes. Of the $100,000 loan, the debtor-defendant used $47,112.57 for personal expenses, and the Court granted the plaintiff's request for a declaration of nondischargeability as to that portion of the debt. In re Frick, Case No. 25-25157 (March 2026) -- Judge G.M. Halfenger After the chapter 13 trustee objected to confirmation of the amended unconfirmed plan, the debtor's counsel purportedly withdrew the preconfirmation plan amendment. The trustee then submitted and the court mistakenly entered an order with respect to the debtor's payments to the trustee, superseding a previous order, requiring the debtor to make those payments in the amounts proposed in the plan as originally filed, rather than in the amounts specified in the plan amendment. A preconfirmation amendment to a chapter 13 plan cannot be withdrawn because the plan as amended "becomes the plan", 11 U.S.C. §1323(b), and this court's rules require that all parties be given notice of any changes to the plan, which is typically not required when a party withdraws a filed document. See In re Reed, No. 18-26531, 2018 WL 6975202 (Bankr. E.D. Wis. Nov. 8, 2018). Moreover, reverting to the unconfirmed plan as originally filed would not meaningfully address the trustee's objection to plan confirmation, which is that the debtor lost her job, leaving the trustee to doubt whether she "will be able to make all payments under the plan", 11 U.S.C. §1325(a)(6). The court deemed the attempted withdrawal of the plan amendment ineffective, vacated the mistakenly entered order with respect to the debtor's payments to the trustee, ordered the debtor to show cause why the court should not sustain the trustee's objection to plan confirmation and dismiss this case for cause under 11 U.S.C. §1307(c), and advised the trustee to not submit a proposed payment order in the future if a chapter 13 debtor tries to withdraw a preconfirmation plan amendment. Ballard Spahr LLP v. Official Committee of Equity Security Holders, No. 25-2134 (7th Cir. 2026) (February 2026) -- Seventh Circuit Court of Appeals Greenpoint Tactical Income Fund (“GTIF”), an investment fund focused on gems and fine minerals, filed for bankruptcy in October 2019. In the ensuing proceedings, the law firm Ballard Spahr LLP filed a claim for $236,717 in unpaid legal fees. Michael Hull, who controlled one of the two limited liability companies (“LLC”) that served as GTIF’s managing members, incurred those Ballard fees. Ballard, however, insisted GTIF was on the hook for Hull’s outstanding balance. The bankruptcy and district courts below thought otherwise, granting and affirming summary judgment to the Official Committee of Equity Security Holders (“Equity Committee”), which objected to Ballard’s claim. Affirmed. Moodie v. Olson, Adv. Proc. No. 25-02090 (January 2026) (January 2026) -- Judge G.M. Halfenger Creditor-plaintiff filed an adversary complaint alleging that the debtor-defendant owes her unliquidated debts that are excepted from a chapter 7 discharge by §523(a)(2) & (4). The defendant filed a motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). After plaintiff filed an amended complaint, the defendant conceded that the §523(a)(2) claim was well pleaded but contended that the amended complaint failed to state a §523(a)(4) claim for which relief could be granted. The defendant argued in part that the §523(a)(4) claim—a claim that the defendant owed plaintiff a debt for defalcation while acting in a fiduciary capacity—is governed by Rule 9’s requirement that fraud be pleaded with particularity. Denying the motion to dismiss, the court concluded that plaintiff’s claim did not require, and was not based on, allegations of fraud for purposes of Rule 9. The court further concluded that plaintiff’s §523(a)(4) claim, premised on an alleged knowing violation of the fiduciary duties imposed by Wis. Stat. §§779.02(5), was otherwise well pleaded. |