Chapter 11 individual debtor filed counterclaims against the plaintiff bank for damages to the debtor's apartment complex while under the management and control of the bank. Bank's motion to dismiss counterclaims was granted because debtor, as guarantor, did not have standing under the guaranty; the claims against the bank belonged to the borrower, the debtor's LLC.
In re Noll, 491 B.R. 550 (May 2013) -- Judge S.V. Kelley
When Clerk issues notice of second claims bar date in reconverted case, creditor could file claim in reliance on that notice.
In re Groce (13-21951) (April 2013) -- Chief Judge G.M. Halfenger
The debtor, after paying the prescribed filing fee installment, sought reconsideration of an order denying her fee waiver application. The court denied the reconsideration motion because the debtor, who supplied no additional evidence and made no showing of legal error, failed to meet the applicable standard. The order further discusses the showing needed to justify a discretionary waiver of the filing fee, see In re Williams, and cautions that filing facially incredible schedules weighs against the grant of a fee waiver.
In re Williams (13-22403) (April 2013) -- Chief Judge G.M. Halfenger
This decision explains Judge Halfenger's fee-waiver methodology and why he denied this debtor's application to waive the chapter 7 filing fee. When considering applications to waive the filing fee, Judge Halfenger begins with the statutory fee-waiver requirements: (1) whether the debtor's income falls below 150% of the applicable official income poverty line, and (2) whether the debtor is unable to pay the filing fee in installments. If the debtor's submission establishes that she meets these criteria, the grant of a fee waiver becomes a matter of judicial discretion. In exercising this discretion, Judge Halfenger considers whether there is reason to believe that the debtor faces special circumstances such that a bankruptcy discharge will afford her benefits beyond relief from typical collection efforts. In this case, although the debtor's income was below 150% of the income official poverty line, she did not show that she was unable to pay the filing fee in installments or that a discharge would provide unusual benefits.
In re Johnson (13-22870) (April 2013) -- Chief Judge G.M. Halfenger
The Court dismissed the debtor's case after he failed to pay the first filing fee installment. One day later, the debtor filed a motion to vacate the order of dismissal, reinstate the case, and extend the time to pay the filing fee. The motion, which was supported only by a hand-written letter of the debtor, asserted that the debtor could not timely pay the filing fee because he could not recover previously garnished funds and other bills were due. The Court denied the motion on two independently sufficient grounds: (1) the debtor failed to pay the $306 filing fee with the motion, a condition of vacatur imposed by the dismissal order, and (2) the reasons provided did not explain how the missed payment was the result of excusable neglect, as required by Rules 9024 and 9006(b)(1).
In re Duckett (13-22312) (April 2013) -- Chief Judge G.M. Halfenger
The court dismissed the debtor's case after she failed to pay the first installment of the filing fee. Three days later, the debtor filed a motion to vacate the order of dismissal. The motion, which was unsupported by an affidavit, asserted without elaboration that debtor's counsel did not believe she had received the order granting the debtor's request to pay the fee in installments. The court denied the motion. The court reasoned that the lack of detail made it impossible to determine whether the default was the result of mistake, inadvertence, or excusable neglect, as required by Rule 9024. The court further ruled that the debtor's failure to pay the filing fee in full with the motion, a prerequisite to seeking relief from the order of dismissal, constituted an independently sufficient ground to deny the motion.
In re Panos (13-21338) (April 2013) -- Chief Judge G.M. Halfenger
Commerce State Bank initiated a state-court, pre-petition garnishment action against the debtor's lawyers to collect on its judgment against the debtor. Before the debtor commenced this bankruptcy case, Commerce filed a motion for default judgment against the lawyers, alleging that they had failed to timely answer the garnishment complaint. Before the state court could conduct a scheduled hearing on Commerce's default judgment motion, the debtor commenced this case and requested that Commerce cancel the motion hearing. After Commerce refused that request, the debtor moved for sanctions claiming that Commerce's refusal violated the automatic stay. This Court denied the debtor's motion. It held that §362(a) did not stay the state-court motion hearing (a fortiori imposing no duty to cancel that hearing) because, under Wisconsin law, the default judgment motion only sought relief personal to the debtor's lawyers, rather than from the debtor, the debtor's property, or the debtor's bankruptcy estate.
In re Lowell E. Davis, Case No. 12-21160, Debtor v. City of Milwaukee, Adv. No. 12-2321 (April 2013) -- Judge M.D. McGarity
Material facts in dispute precluded summary judgment in debtor's adversary proceeding to recover transfer of non-homestead property in real estate tax foreclosure allegedly done in violation of the automatic stay and for less than reasonably equivalent value.
In re Amanda Jaeger-Jacobs, Case No. 12-20021, Ryan Jacobs v. Debtor, Adv. No. 12-2227 (April 2013) -- Judge M.D. McGarity
Although the chapter 7 debtor was assigned payment of joint credit card obligations under the parties' Marital Settlement Agreement, after the debtor stopped making payments and the default was reported negatively on her former spouse's credit report, the former spouse made the credit card payments. The court rejected the debtor's argument that, because the creditor had not sued or threated legal action against her former spouse, she was not liable to reimburse her former spouse for his "voluntary" payments. The debtor's responsibility to hold her former spouse harmless became a nondischargeable obligation under sec. 523(a)(15) when the judgment incorporating the MSA was granted.
In re 4848, LLC, Case No. 12-36114 (April 2013) -- Judge M.D. McGarity
Court granted relief from automatic stay under sec. 362(d)(3)(A) because single asset real estate debtor's proposed chapter 11 plan did not have reasonable possibility of being confirmed within reasonable time. Additional factor establishing "cause" for relief under sec. 362(d)(1) was prepetition stay waiver within forbearance agreement between debtor and secured lender.