After a careful consideration of the debtor’s prior filing history, the court granted a secured creditor’s motion for in rem stay relief as to the debtor’s rental property. The fact that the debtor had filed five chapter 13 cases in six-and-a-half years was not dispositive. In deciding whether in rem relief was warranted, the court reviewed the circumstances surrounding each of the debtor’s prior filings, as well as her performance in those cases, including the reasons for their failures and the debtor’s treatment of the creditor.
In re Gorokhovsky, Case No. 17-28901-beh (March 2018) -- Judge B.E. Hanan
The United States moved for relief from stay to perfect its secured interest (tax liens) in three of the chapter 7 debtor’s real properties, against certain third parties. Because the debtor lacked equity in any of the properties, they were not necessary for a reorganization, and the United States’ interests would not otherwise be adequately protected in the event of a sale or further encumbrance of any of the properties, the court granted the motion.
Dubis v. Stebnitz (In re Stebnitz), Case No. 13-32097-beh, Adversary No. 17-02110, 586 B.R. 289 (February 2018) -- Judge B.E. Hanan
Trustee sought a declaratory judgment that an LLC operating agreement required remaining members to purchase the departing member's/Trustee's interest based on an appraisal of property held by the LLC. The remaining members read the agreement to require a valuation of the LLC itself, and not just the property held by it. The court applied principles of contract interpretation to conclude that the agreement text was plain, and because the only purpose of the LLC was to hold property for enjoyment of family members, an appraisal of the property held was all that was required. To read the agreement to require a valuation that included deductions for "lack of control "or "lack of marketability" would give the remaining members a windfall, and be inconsistent with the stated purposes of the LLC.
Brandt v. Hurley (In re Hurley), Case No. 16-32442-beh, Adversary No. 17-2048, 2018 WL 770364 (February 2018) -- Judge B.E. Hanan
The chapter 7 debtor’s ex-wife sought a determination that certain obligations assigned to the debtor in the parties’ pre-petition Martial Settlement Agreement (“MSA”) were non-dischargeable under 11 U.S.C. section 523(a)(15)—specifically, the debtor’s obligation to make certain payments toward the parties’ marital debt (the “marital debt payments”), and his obligation to hold his ex-wife harmless for payment of the second mortgage on the parties’ residence. In reviewing the language of the MSA and considering the agreement as a whole, the court concluded that the MSA required the debtor to make the marital debt payments directly to his ex-wife (not to the underlying creditors, as the debtor suggested), and that those debts were nondischargeable under section 523(a)(15). The court also concluded that the debtor’s hold harmless obligation on the second mortgage created a new, nondischargeable debt, and granted the plaintiff’s motion for summary judgment.
In re Poivey, Case No. 17-26408 (January 2018) -- Judge B.H. Ludwig
The court concluded that the debtors' interest in certain mineral rights is property of the estate not subject to exclusion under 11 U.S.C. §541(b)(4).
In re Patrick and Angela Sabec, Case No. 17-23264 (January 2018) -- Judge G.M. Halfenger
The chapter 13 debtors filed a motion to limit notice of their request to amend their unconfirmed chapter 13 plan contending that the amended plan did not adversely affect any other parties in interest. The court denied the motion. The court's order explains that Interim Local Rule 3015(c)(3) requires debtors to serve all plan amendments on all creditors in order to reduce substantially the administrative cost in determining whether the debtor properly served the plan. The order states that the court "will reserve orders limiting notice to those rare instances in which some final amendment that likely has no detrimental effect on creditors is needed to achieve confirmation."
In re Dixon, Case No. 17-31675-beh, 2018 WL 400722 (January 2018) -- Judge B.E. Hanan
The lessor of the debtor’s vehicle repossessed the debtor’s car prepetition. When the lessor refused to return the vehicle after she filed her petition, the debtor moved to hold the lessor in contempt, for return of the vehicle, and to impose sanctions for willful violation of the automatic stay. After reviewing the language of the parties’ lease, the court concluded that the lessor had terminated the lease prepetition, and therefore the debtor did not possess any interest in the vehicle at the time of filing. The court therefore denied the debtor’s motion.
In re Green Box NA Green Bay, LLC, Case No. 16-24179, 579 B.R. 504 (December 2017) -- Judge B.E. Hanan
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) -- Chief 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) -- Chief 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.