OpinionsThe chapter 11 debtor requested confirmation of its fourth amended chapter 11 plan. Computershare Trust Company, N.A. (Computershare) and Wisconsin & Milwaukee Hotel Funding LLC (Funding) (collectively, Lenders) voted to reject the plan and objected to its confirmation. The Lenders argued that the debtor failed to prove that the plan complied with 11 U.S.C. §1129(a)(3), (11), and (b). The court found the evidence sufficient to meet (a)(3)'s good-faith and (a)(11)'s feasibility requirements. The court also concluded that the plan (1) complied with §1129(b)(2)(A) as to Computershare's class, because (i) it allowed Computershare to retain its liens and (ii) it provided deferred payments that met §1129(b)(2)(A)(i)(II)'s conditions, and (2) complied with §1129(b)(2)(B) as to Funding's unsecured claim. The Lenders contended that the plan was not "fair and equitable" to them for reasons not listed in §1129(b)(2). After reviewing the statute, the relevant case law, and the history of the "fair and equitable" requirement, the court ruled that the Lenders did not identify any grounds for ruling that the plan's treatment was not "fair and equitable" within the meaning of §1129(b)(1) (apart from the conditions stated in §1129(b)(2), which the court found that the plan satisfied). Funding also argued that the plan violated §1129(b)(1), contending that the plan discriminated against it unfairly because it pays the class containing Funding's unsecured claim less than the class containing the unsecured claims held by insiders. The court determined that the plan's distinct treatment of Funding's claim—a claim based on the debtor's guaranty of a loan Funding made to one of the debtor's owners, enforceable only by foreclosing an out-of-the-money junior lien on the debtor's hotel—was not, under these circumstances, unfair discrimination within the meaning of §1129(b)(1). Wittman v. United States Department of Education (In re Wittman), Ch. 13 Case No. 26-21568-kmp, Adv. No. 26-2048 (Bankr. E.D. Wis. Sep. 30, 2026) (September 2026) -- Chief Judge K.M. Perhach Thirteen days after filing her Chapter 13 bankruptcy case, a debtor filed an adversary proceeding seeking a determination that her student loans were dischargeable under 11 U.S.C. § 523(a)(8). The defendant moved to dismiss the complaint without prejudice, arguing that the adversary proceeding was not ripe for adjudication. The Court determined that as a matter of prudential ripeness, the debtor’s request for an undue hardship determination was not sufficiently developed to warrant judicial resolution at this stage of her Chapter 13 case. The fact that the defendant had stipulated to dischargeability of student loans early on in another Chapter 13 case did not alter the Court’s conclusion that this adversary proceeding was not presently ripe for judicial determination, and the Court rejected the debtor’s arguments based on judicial estoppel and the Administrative Procedure Act. State of Wisconsin, Dept. of Workforce Dev. v. Chebii (In re Chebii), Adv. No. 24-02142 (September 2026) -- Judge R.M. Blise The debtor's company failed to obtain required worker's compensation insurance, and one of the company's workers was injured in a serious accident. The Wisconsin Department of Workforce Development sought a declaration of nondischargeability as to the debtor's liability to reimburse the Department for costs incurred in connection with the resulting claim against the Department's Uninsured Employers Fund. The Department claimed the reimbursement debt is nondischargeable under 11 U.S.C. § 523(a)(1)(A), which excepts from discharge certain tax debts, including excise taxes under 11 U.S.C. § 507(a)(8)(E), and 11 U.S.C. § 523(a)(7), which excepts from discharge debts for governmental fines, penalties, and forfeitures that are not compensation for actual pecuniary loss. The parties filed cross motions for summary judgment. The Court determined that the reimbursement debt is not an "excise tax on a transaction" under 11 U.S.C. § 507(a)(8)(E) so is not excepted from discharge under § 523(a)(1)(A). The Court acknowledged the difficulty of determining whether a reimbursement claim is a "tax," but such a determination was not necessary because the reimbursement claim is not an "excise tax" nor "on a transaction." The Court further concluded 11 U.S.C. § 523(a)(7) does not except the reimbursement debt from discharge because the debt is compensation for an actual pecuniary loss to the Uninsured Employers Fund. The Court granted summary judgment to the debtor-defendant on both counts. In re Fowler, No. 25-23180-kmp, 2026 WL 2927917 (Bankr. E.D. Wis. Sep. 29, 2026) (September 2026) -- Chief Judge K.M. Perhach Individual Chapter 11 debtors filed a motion to terminate the appointment of a Chapter 11 trustee and return them to possession and management of their bankruptcy estate under 11 U.S.C. § 1105. After an evidentiary hearing, the Court concluded that the circumstances that existed when the debtors consented to the appointment of a trustee had materially changed. The debtors had obtained competent bankruptcy counsel, understood their obligations as debtors-in-possession, and had demonstrated a willingness to comply with the Bankruptcy Code, the Bankruptcy Rules, and the requirements of the United States Trustee. Under the highly unusual circumstances of the case, § 1105 permitted the termination of the trustee’s appointment and the restoration of the debtors as debtors-in-possession. In re Hair, Case No. 20-27743 (August 2026) -- Judge B.E. Hanan Joint debtors obtained a divorce decree in state court during the pendency of their chapter 13 bankruptcy plan. Upon the Chapter 13 trustee’s notice of completion of the plan, both debtors separately filed Local Form 2831, certifying that they did not owe any domestic support obligations at the time that they filed the bankruptcy petition, and they had not been required to pay any such obligation since that time. One of the debtors then filed documentation with the Court alleging that there was a child support order in place and his joint debtor ex-wife owed substantial arrears to him. Because of the discrepancy between debtor ex-wife’s certifications and debtor ex-husband’s filings, the Chapter 13 trustee filed a motion to deny debtor ex-wife’s discharge under § 1328(a). The Court concluded that § 1328(a) does not provide a procedural vehicle for denying a Chapter 13 debtor’s discharge, but that when a debtor is not current on her domestic support obligations upon completion of her Chapter 13 plan, the proper course of action is to close the case without granting her discharge. In re Ba-Ha Dairy, LLC, No. 25-25882-kmp (Bankr. E.D. Wis. Aug. 17, 2026) (August 2026) -- Chief Judge K.M. Perhach The Court overruled the Chapter 12 trustee’s objections to confirmation in three separate but related cases. The trustee argued that the Court’s prior finding of an equity cushion in collateral cross-collateralized to secure a creditor’s claim precluded the debtors from establishing that their estates had no equity available for unsecured creditors under the best interests test of 11 U.S.C. § 1225(a)(4). The Court held that issue preclusion did not apply because the prior relief-from-stay proceedings addressed whether the creditor’s interest in the combined collateral pool was adequately protected, while confirmation required a separate liquidation analysis in each case. Although the cases were related, they were not substantively consolidated or jointly administered. Because each plan satisfied the best interests test when the cases were considered individually, the Court overruled the objections to confirmation. Lee v. Herr (In re Herr), Case No. 25-22893, Adv. No. 25-2101 (August 2026) -- Judge R.M. Blise The plaintiffs filed an amended adversary complaint against the debtor-defendants alleging various theories of liability under Wisconsin law and seeking to have the debt declared nondischargeable under 11 U.S.C. §§ 523(a)(2)(A), (a)(4), and (a)(6). The amended complaint included references to a range of statutes and legal theories, including a claim under property-related statutes, a claim for theft by fraud, claims asserted by reference to the plaintiffs' cross claims against the defendants in a state court case, and conspiracy claims under state and common law. The defendants moved to dismiss the complaint. The Court determined that only one of the causes of action identified by the plaintiffs was legally cognizable based on the facts pleaded in the complaint. The Court dismissed the insufficiently plead claims and granted the plaintiffs leave to amend their complaint. In re Kimble, Case No. 25-25616 (July 2026) -- Judge R.M. Blise After the chapter 13 debtor failed to make post-petition rent payments to her residential landlord, the landlord obtained relief from the automatic stay, and the debtor vacated the apartment. The landlord then filed an application requesting approval of an administrative expense under 11 U.S.C. § 503(b) for the unpaid rent between the petition date and when the debtor vacated the apartment. The debtor opposed the request. The Court rejected the landlord's argument that the unpaid rent qualified as an actual and necessary cost of preserving the estate because maintaining stable housing was integral to the debtor's ability to earn income and perform under the plan. The Court determined that the “actual, necessary costs and expenses of preserving the estate” described in § 503(b)(1) must necessarily be of a different scope than the post-petition costs necessary for a debtor to perform under the plan described in 11 U.S.C. § 1305(a)(2), otherwise § 1305 would be superfluous and all such post-petition expenses could be allowed as administrative expenses. The Court concluded that the landlord's claim was not entitled to administrative expense priority because the debtor’s post-petition occupation of a residence was not an actual, necessary cost of preserving the estate under § 503(b)(1)(A). In re Cho, Case No. 24-25518, and Lee v. Cho, Adv. Proc. No. 25-02050 (July 2026) -- Judge G.M. Halfenger Before filing his chapter 7 case in this court, the debtor was the defendant in a civil lawsuit in California state court. The plaintiff in that case moved to modify the discharge injunction in the chapter 7 case to allow her to continue her state-court litigation against the debtor and to stay her pending adversary proceeding in this court for a determination that the debt she seeks to reduce to judgment in California is excepted from the debtor's discharge because it is for willful and malicious injury within the scope of 11 U.S.C. §523(a)(6). The court held an evidentiary hearing, primarily about the nature of the claims in the state-court case and the facts underlying that case, to assess the state-court plaintiff's likelihood of success on the merits of her claims and her likelihood of success in obtaining a determination from this court that the resulting debt is excepted from the debtor's chapter 7 discharge, but also to weigh the other equitable factors relevant in considering whether to modify the discharge injunction. Based on the evidence presented and the record in the chapter 7 case, the court found that the state-court plaintiff has at least a reasonable likelihood of success on both the merits of her state-law claims and in establishing that the resulting debt is excepted from the debtor's discharge. The court also found that, on balance, the relevant equitable factors, including but not limited to the availability of witnesses to testify and the general inability (under the circumstances) of this court to try her state-law claims to judgment, weigh in favor of modifying the discharge injunction to allow for the continuation of the state-court litigation. The court so ordered and stayed the pending adversary proceeding until the conclusion of the state-court litigation. In re Wisconsin & Milwaukee Hotel LLC, Case No. 24-21743 (July 2026) -- Judge G.M. Halfenger The debtor requested that the court confirm its fourth amended chapter 11 plan, which proposed to pay Computershare Trust Company, N.A.'s secured claim at a rate equal to the five-year Treasury note rate plus 320 basis points, adjusted every five years to account for changes in the base rate. Computershare objected to plan confirmation on several grounds, including that the plan failed to meet §1129(b)(2)(A)(i)(II)'s confirmation requirement that future periodic payments equal the present value of its secured claim on the plan's effective date. Computershare argued that the interest rate paid on its secured claim must be a fixed rate and cannot be based on a variable rate, and it sought to present the testimony of its expert to opine that, if the court determined that a fixed rate were required, then the appropriate base rate to choose was not the five-year Treasury note rate but, instead, the yield for a U.S. Treasury maturing in 18 years. The debtor moved to exclude the expert's testimony as irrelevant because the court previously ruled that the plan's future payments on Computershare's allowed secured claim must be discounted at a rate equal to the prevailing rate for five-year Treasury notes, as referenced in the plan, which included adjustments every five years to account for changes in the prevailing rate, plus 320 basis points. The court granted the debtor's motion, ruling that the cramdown rate was the law of the case and that Computershare had presented no good justification for departing from the previous determination. |