The Chapter 7 Trustee sought order avoiding voluntary transfer of land from one debtor to his daughter in which a life estate was reserved for the debtors (one of whom was a stranger to the title) under 11 U.S.C. § 544(b) and Virginia Code § 55-81. As the female debtor did not own an interest in the property prior to the reservation, the reservation of the life estate only survived as to the male debtor.  The Court then valued his single life estate in the property and added that to the value of his other personal property and found that the total asset value after the transfer was greater than his total liabilities. Thus, the male debtor was not insolvent at the time of, or made insolvent by, the transfer and the conveyance may not be avoided.

The Chapter 7 Trustee, the Bank creditor and the foreclosure trustee under certain deeds of trust filed a motion to approve a compromise and settlement whereby the Bank would pay a certain sum to the Trustee, after which the Trustee would convey certain real property  to the Bank and execute a general release of the Bank and foreclosure trustee releasing all claims against them, known and unknown, and accruing from the beginning of time through the date of the entry of the order approving the settlement. The Debtors objected to the motion asserting that certain causes of action were not property of the estates and that the Debtors were entitled to bring litigation against these parties without the Trustee's involvement.   As the scope of the definition of estate property under 11 U.S.C. § 541 is both comprehensive and far-reaching, the Court found that the causes of action alleged by the Debtors in these pending separate lawsuits were "sufficiently rooted" in the Debtors' pre-bankruptcy pasts with the Bank to fall within the  Segal v. Rochelle test, and that the alleged causes of action sufficiently flowed from the Debtors' prepetition assets such as to fall within the scope of Section 541.  The Court did not decide whether the settlement should be approved, reserving the issue until after the Trustee fulfills his statutory duties.

The United States Trustee filed adversary proceedings against certain parties involved in a multi-jurisdictional law practice seeking disgorgement of attorney's fees, cancellation of fee agreements between the debtors and their attorneys, an injunction against the parties enjoining them from violating 11 U.S.C. §  526, and the imposition of civil penalties and sanctions against the parties.  While the Court expressed concern about the way the multi-jurisdictional law firm conducted its business and the lack of proper oversight of its employees, the Court found the Rule 2016(b) statements were not actionable on the grounds the local partners were not sharing compensation with members of the same law firm.   However, the Court found the law firm was an active participant in promoting and participating in an improper scheme called a "New Car Custody Program" to have consumers' vehicles towed out of state to facilitate the payment of the law firm's attorney's fees and filing fees by the towing company.  The Court ordered disgorgement of attorney's fees received under 11 U.S.C. § 329, with the funds to be paid to the debtor's estates.   Further, under its inherent authority pursuant to 11 U.S.C. § 105(a), the Court sanctioned the "local partner" attorneys by revoking their privileges to conduct and file cases in the Western District of Virginia for one year and eighteen months, respectively, and also monetarily sanctioned them $5,000.00 each. The Court also separately fined the law firm and certain of its members and affiliated persons the sum of $250,000 and revoked the law firm's privilege to conduct and file cases in this District for five years. The managing partner was fined $50,000 personally.  The Court further ordered the towing defendant in default to, among other things, disgorge all funds received from residents of this district in connection with the vehicle recovery program.

The Debtor filed an adversary proceeding against the U.S. Department of Defense and the U.S. Department of the Treasury seeking a declaration that her debt to the Department of Defense under the ROTC/SOAR program is dischargeable under 11 U.S.C. § 727 or alternatively that any such debt excepted from discharge under 11 U.S.C. § 523(a)(8) constitutes an undue hardship on the Debtor and should be discharged.  The Debtor also asserted that the Defendants’ actions were arbitrary and capricious and that no reason exists for disparate treatment of the Debtor and sought declaratory judgment that the Defendants’ decision to recoup certain expenses because of her disenrollment from the Air Force based solely on her sexual preference is in violation of 5 U.S.C. §706(2) and her right to due process and equal protection under the Fifth Amendment of the Constitution.  In response, the Defendants filed a motion to dismiss pursuant to Rule 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. The Court granted the Defendants’ Motion to Dismiss in part and denied it in part, denied the Debtor’s Motion to Amend the Complaint as futile, but allowed the Debtor to amend her complaint as to whether the debt can be discharged as an undue hardship under the Brunner v. N.Y. State Higher Educ. Servcs. Corp. test.