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The summaries on this website are summaries of the opinions issued by the judges of the Bankruptcy Court for the Western District of Virginia from October 2004 to date. The opinions may be searched by year, judge, category and chapter. For a more detailed search, enter a keyword in the search box above. This opinion bank, however, is not an exhaustive list of opinions issued by the judges of the Western District. These summaries are not intended to replace other research methods, but may be used as a starting point for your research. These summaries do not contain information as to whether an opinion has been published, appealed or the disposition of any such appeal, or otherwise overruled or affected by subsequent case law or statute. These summaries have been prepared for the convenience of the researcher and in no way constitute an interpretation by the Court of the opinion summarized. Please rely on the opinion not the summary. Please contact Judge Connelly's chambers or Judge Black's chambers regarding any questions or errors.

In re Oakwood Country Club, Inc. (Case No. 10-60246) 11/22/2010

The United States Trustee objected to approval of the Disclosure Statement on the ground that the Chapter 11 plan is not confirmable on its face.  Four classes are impaired under the plan, but the plan does not provide that the creditors in those classes will be allowed to vote whether to accept or reject the plan; therefore, the plan itself is not confirmable.  The Court noted that approving a disclosure statement, when a facially non-confirmable plan is attached, would be akin to inadequate disclosure and misrepresentation. Therefore, the Court sustained the United States Trustee's objection.

Marsh v. Campbell (In re Campbell) (Case No. 10-60197; A.P. No. 10-06053) 11/17/2010

The Court analyzed the twelve factors set forth in Eastport Assocs. v. City of Los Angeles, 935 F.2d 1071, 1075 (9th Cir. 1991), and determined that abstention is warranted in this case because the parties litigated the matter in the state court for more than seven months before the petition was filed and because all of the causes of action, other than the dischargeability cause of action, are based exclusively on state law.  Accordingly, the Court granted the motion for relief from the automatic stay to allow the parties to continue to litigate this matter in state court.

In re Brown (Case No. 04-00291) 11/12/2010

In this pre-BAPCPA case, the Court denied the debtor's request to reopen his case for the purpose of adding a creditor not included in his original schedules. Because the effect of the discharge on the child support obligation was not certain under Section 523, the Court denied the motion without prejudice to the right of either the debtor or the creditor to file a motion to reopen the case for the purpose of filing a complaint to initiate an adversary proceeding to obtain a determination of the dischargeability of the obligation.  The Court's decision has no effect upon the non-bankruptcy issue of whether the support obligation remains enforceable as a matter of state law under Va. Code Section 8.01-251(A).

Tavenner v. LTA Mgmt., Inc. (In re Nationsline New Jersey, Inc.)(Case No. 08-71014; A.P. No. 10-07037) 10/29/2010

The debtor’s chapter 7 trustee filed an adversary proceeding to recover excessive compensation which she claims the debtor paid to an affiliate company, LTA Management, Inc., alleged to be owned by the debtor’s president, Norman D. Mason, his wife, and another insider. The defendants filed a motion to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6), which is made applicable to bankruptcy adversary proceedings by Bankruptcy Rule 7012.

Citing insufficient factual allegations to support the causes of action, the Court granted defendants' motion to dismiss the complaint as to Count 1 (turnover of estate property and accounting under Section 542), Count 3 (avoidance of voluntary conveyance under Va. Code Ann. § 55-81), Count 5 (avoidance of preferential transfers under Section 547), Count 8 (breach of fiduciary duty), Count 9 (aiding and abetting), Count 10 (breach of contract), and Count 12 (corporate waste) as the trustee failed to state a claim upon which relief could be granted. The Court partially granted the motion to dismiss as to Count 2 (avoidance of fraudulent transfers under Section 548) because insufficient facts were alleged beyond the mere recital of the elements of the cause of action -- the claims that the debtor was left with unreasonably small capital or that its principals intended to incur debts beyond the debtor's ability to pay. The Court also partially granted the motion as to Count 11 (conversion and money had and received). The court denied dismissal of Count 2 and Count 11 with regard to the rest of the claims.

Finding sufficient factual allegations to support the causes of action, the Court denied the motion to dismiss as to Count 4 (avoidance of fraudulent transfers under Va. Code § 55-80), Count 6 (avoidance of post-petition transfers), Count 7 (recovery under Section 550), Count 13 (objection to claims), and Count 14 (equitable subordination).

Specialty Fin. Grp., LLC, v. Minor Family Hotels, LLC (In re Minor Family Hotels) (Case No. 10-62543; A.P. No. 10-06112) 10/12/2010

Debtor filed a motion to stay the Court’s previous remand order in this case pending appeal.  A motion for a stay pending appeal under Rule 8005 is an extraordinary remedy and requires a substantial showing on the part of the movant, who is the Debtor in this case.  A party seeking a stay pending appeal pursuant to the bankruptcy rules bears the burden of establishing: (1) the likelihood of success on the merits of the appeal, (2) that the movant will suffer irreparable injury if the stay is denied, (3) that no substantial harm will be suffered by the other parties if the stay is granted, and (4) that no harm to the public interest, if it is implicated, will be caused by granting the stay.  See In re Section 20 Land Grp., Ltd., 252 B.R. 819 (Bankr. M.D. Fla. 2000)).  The Court found that the Debtor, as the movant, did not meet its burden, and therefore, denied the motion for stay pending appeal.

Specialty Fin. Grp., LLC, v. Minor Family Hotels, LLC (In re Minor Family Hotels) (Case No. 10-62543; A.P. No. 10-06112) 10/01/2010

The Court granted the motion to remand the adversary proceeding to the Georgia state court for further proceedings. The twelve factors that a court should weigh when considering discretionary abstention and remand are the same.  See Eastport Assoc. v. City of Los Angeles, 935 F.2d 1071, 1075 (9th Cir. 1991).  The overwhelming factor supporting remand in this case is the fact that the Georgia state court action has, after eighteen months of strongly contested litigation, come to the verge of resolution; therefore, it would be folly for this Court to begin the process anew. 

McDow v. Davis (In re Davis) (Case No. 09-60167; A.P. No. 09-06072) 09/21/2010

            The United States trustee filed a complaint under 11 U.S.C. § 727(a)(2), (4), and (5) seeking a judgment denying the debtor his discharge.  The United States trustee withdrew his objection to discharge based on section 727(a)(5).  The debtor had failed to disclose the sales and transfers of certain property and also failed to disclose that he conducted business through an LLC and not as a sole proprietorship.  The Court found that the United States trustee presented no evidence to support the element of intent and thus concluded that the debtor’s failure to disclose the sales was not the result of an intent to hinder, delay, or defraud a creditor or an officer of the estate.  While the Court concluded that the debtor made a false oath that was material in connection with the case, it also concluded that the debtor did so without any intent to deceive.

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