OpinionsOn remand, the chapter 7 trustee was required to prove the debtor received less than reasonably equivalent value in exchange for relevant transfers and the debtor was insolvent on the date the transfers were made or became insolvent as a result of the transfers. The evidence supported the court's previous findings in favor of the trustee and the court denied the defendant's motion for return of the proceeds. In re Mikulsky, 301 B.R. 726 (December 2003) -- Judge S.V. Kelley Collateral estoppel applies to a nondischargeability proceeding where the state court awarded punitive damages based on the debtor's malicious conduct. In re Young, 310 B.R. 127 (November 2003) -- Judge S.V. Kelley When a mortgage arrearage is cured under Bankruptcy Code § 1322(e), a mortgage creditor is entitled to no more than it would have received under its written agreement with the mortgagor. In re Merriwether, No. 02-02424-svk (unpublished) (November 2003) -- Judge S.V. Kelley Undue hardship is a difficult burden for a debtor to overcome, and to discharge student loan debts requires much more than a garden variety hardship. In re Trevisan, 300 B.R. 708 (October 2003) -- Judge S.V. Kelley A prima facie case for fraud is required for an entry of a default judgment in a Bankruptcy Code § 523(a)(2)(A) nondischargeability action for passing NSF checks. In re Delta Group, 300 B.R. 918 (October 2003) -- Judge S.V. Kelley Bankruptcy Code § 544(b) does not allow a trustee in bankruptcy to avail himself of avoidance powers found under Wis. Stats. § 128.07. In re Richard & Barbara Fisher, Case No. 02-22055, Monroe Equipment, Inc. v. Debtors v. Milwaukee Western Bank, Adv. No. 02-2196 (May 2003) -- Judge M.D. McGarity Debtors claimed any recovery they received from third party complaint was not part of the bankruptcy estate, but rather for the beneficiaries of a trust. The bank argued, and the court agreed, that based on the debtors' claim, the court did not have subject matter jurisdiction; therefore, the third party complaint was dismissed. In re Arrowhead Systems, LLC, Case No. 02-20147 (April 2003) -- Judge M.D. McGarity The State of Minnesota Department of Revenue amended its claim requesting unpaid state sales tax, accrued interest and penalties. The debtor objected to the penalty portion of the claim, stating the punitive aspect of the claim should not take priority over the allowed claims of unsecured creditors. The court overruled the debtor's objection, finding the doctrine of equitable subordination was inapplicable. In re Julie A. Kahl, Case No. 01-32245, Paul G. Swanson, Trustee v. GMAC, Adv. No. 02-2207 Published: In re Kahl, 316 B.R. 919 (February 2003) -- Judge M.D. McGarity Debtor purchased a motor vehicle prepetition and GMAC was granted a security interest. The title application listed GMAC as the secured party. Baird, Inc., a third party agent under contract with the Wisconsin Department of Transportation, entered the title information into the state's database, omitting GMAC as the secured party. The chapter 7 trustee sought to avoid the unperfected security interest, recover payments made to GMAC postpetition, and preserve the remaining amount due for the benefit of the estate. The court granted GMAC's motion for summary judgment, finding because an agent of the state made the mistake, the savings clause was implicated and GMAC's lien was perfected under state law. In re Steven & Mary Anderson, Case No. 01-33143, Andrew Herbach, Trustee v. Phyllis Anderson, Adv. No. 02-2163 (December 2002) -- Judge M.D. McGarity In May 2000, the defendant loaned $25,000 to an LLC, of which the debtors were the sole members. A key loan provision stated that if the loan was not paid in full, on demand, the defendant had to option to acquire a 99% equity interest in the LLC. In June 2000, the defendant demanded payment in full. Because the debtors were unable to pay in full, the defendant acquired a 99% equity interest in the LLC. Over a year later, the debtors filed chapter 7 and the trustee sought to recover the interest as a preferential or fraudulent transfer. The defendant moved for summary judgment, arguing the loans were made to the LLC, not the debtors. The court denied the motion, finding genuine issues of material fact existed; namely, when the transfer was made, whether the debtors were insolvent at the time of transfer, whether the transfer could be avoided as a preference, the intent of the debtors, and the fair market value of the interest. |