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) -- 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, 576 B.R. 845 (November 2017) -- 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) -- Chief 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) -- Chief 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.
In re Sier, Case No. 17-20837 (August 2017) -- Judge B.E. Hanan
The chapter 7 debtor moved to reopen her case in order to vacate her discharge order and file reaffirmation agreements made after the discharge order was entered. The court denied the motion, questioning first whether the court could vacate the discharge order for such a purpose, and concluding that, in any event, the debtor had failed to demonstrate that she was entitled to relief under Rule 60(b).
In re Carr (July 2017) -- Judge S.V. Kelley
On post-confirmation dismissal of a Chapter 13 case, funds the trustee is holding are disbursed to the debtor, not the creditors.
In re Schmidt, Case No. 08-25973 (July 2017) -- Judge B.E. Hanan
The court granted the motion of the debtor's personal representative to reopen the case, file a certificate of financial management, and obtain a discharge, despite the passage of several years, outlining the factors courts consider in determining whether to grant such a motion.