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Opinions

 

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 Burnett (Case No. 11-71622) 11/18/2011

Debtor filed an objection to a creditor's proof of claim that was filed as unsecured claim even though it was filed with proof of perfection of a deed of trust securing the obligation. As treatment of creditor's claim as unsecured would frustrate the debtor's ability to confirm a plan which proposes to pay his unsecured creditors in full, the Court disallowed the proof of claim and ordered the creditor to file an amended claim as a secured creditor or be bound by amount of arrearage set forth in debtor's plan.

In re M & M Enterprises, Inc. (Case No. 10-70468) 11/18/2011

            The debtor filed an objection to a claim filed by the Internal Revenue Service.  The debtor conceded that under 26 U.S.C. § 6321 the IRS’s tax lien did create a lien on two of its bank accounts but argued that the lien was junior and inferior to the holders of checks which had been issued by the debtor pre-petition and were outstanding at the time the debtor filed its bankruptcy petition.  The Court concluded that the law is clear that the bankruptcy estate includes the full balance of any non-payroll or other non-trust bank account owned by the bankruptcy debtor as of the commencement of the bankruptcy case.  Even if the payees of these checks honored after filing would have a defense by virtue of § 6323(b)(1)(A) to the IRS’s enforcement of its lien against them outside of bankruptcy, the Court concluded that such fact would not affect the amount of the government’s secured claim against the bankruptcy estate “as of the date of filing” under § 502(b) of the Bankruptcy Code.

In re Kell (Case No. 11-71388) 11/17/2011

            The debtors moved to redeem a 2006 Chrysler PT Cruiser which they acquired by means of financing provided to them by C & F Finance Company.  The issue presented was what the proper redemption value of the vehicle was.  Noting that although the evidence would justify a conclusion that the present liquidation value of the PT Cruiser was something less than the scheduled value of that vehicle, the Court concluded that the debtors have admitted that the car’s value as of the petition filing date was $4,575 and that they were bound by such figure for the purpose of the redemption motion.

In re Glover (Case No. 11-62175) 11/08/2011

            The debtor proposed a chapter 13 plan which included compensation for counsel of $3,124, consisting of $2,750 for services rendered, $274 for statutory filing fees advanced, and $100 for “credit counseling” fees advanced.  The chapter 13 trustee brought the matter before the Court.  The issue was whether the fees advanced were actual, necessary costs of preserving the estate under 11 U.S.C. § 503(a).

            The Court did not approve the advance of the fee for credit counseling because it created a conflict of interest and the debtor should have the funds to pay that fee before the chapter 13 petition is filed.  The Court did approve the advance of the filing fee because it is a post-petition expense and otherwise the case would be dismissed, thus making it necessary for the preservation of the estate.  The Court also concluded that the advancement of the fee for the Financial Management Course is not necessary.  The Court thus denied confirmation of the plan and allowed for the filing of an amended plan that provides for the reimbursement of the filing fee.

In re Beach (Case No. 11-62222) 11/08/2011

            The debtor proposed a chapter 13 plan which included compensation for counsel of $3,124, consisting of $2,750 for services rendered, $274 for statutory filing fees advanced, and $100 for “credit counseling” fees advanced.  The chapter 13 trustee brought the matter before the Court.  The issue was whether the fees advanced were actual, necessary costs of preserving the estate under 11 U.S.C. § 503(a).

            The Court did not approve the advance of the fee for credit counseling because it created a conflict of interest and the debtor should have the funds to pay that fee before the chapter 13 petition is filed.  The Court did approve the advance of the filing fee because it is a post-petition expense and otherwise the case would be dismissed, thus making it necessary for the preservation of the estate.  The Court also concluded that the advancement of the fee for the Financial Management Course is not necessary.  The Court thus denied confirmation of the plan and allowed for the filing of an amended plan that provides for the reimbursement of the filing fee.

In re Stanley (Case No. 11-62125) 11/08/2011

            The debtors proposed a chapter 13 plan which included compensation for counsel of $3,124, consisting of $2,750 for services rendered, $274 for statutory filing fees advanced, and $100 for “credit counseling” fees advanced.  The chapter 13 trustee brought the matter before the Court.  The issue was whether the fees advanced were actual, necessary costs of preserving the estate under 11 U.S.C. § 503(a).

            The Court did not approve the advance of the fee for credit counseling because it created a conflict of interest and the debtor should have the funds to pay that fee before the chapter 13 petition is filed.  The Court did approve the advance of the filing fee because it is a post-petition expense and otherwise the case would be dismissed, thus making it necessary for the preservation of the estate.  The Court also concluded that the advancement of the fee for the Financial Management Course is not necessary.  The Court thus denied confirmation of the plan and allowed for the filing of an amended plan that provides for the reimbursement of the filing fee.

In re Robinson (Case No. 11-62155) 11/08/2011

            The debtor proposed a chapter 13 plan which included compensation for counsel of $3,124, consisting of $2,750 for services rendered, $274 for statutory filing fees advanced, and $100 for “credit counseling” fees advanced.  The chapter 13 trustee brought the matter before the Court.  The issue was whether the fees advanced were actual, necessary costs of preserving the estate under 11 U.S.C. § 503(a).

            The Court did not approve the advance of the fee for credit counseling because it created a conflict of interest and the debtor should have the funds to pay that fee before the chapter 13 petition is filed.  The Court did approve the advance of the filing fee because it is a post-petition expense and otherwise the case would be dismissed, thus making it necessary for the preservation of the estate.  The Court also concluded that the advancement of the fee for the Financial Management Course is not necessary.  The Court thus denied confirmation of the plan and allowed for the filing of an amended plan that provides for the reimbursement of the filing fee.

Arvilla Pipeline Construction Co. v. Anders (In re Anders) (Case No. 11-70995; A.P. No. 11-07039) 11/04/2011

            The debtor moved to dismiss an adversary proceeding seeking a determination of non-dischargeability pursuant to11 U.S.C. § 523(a)(2), (4) and (6) of his asserted liability to the plaintiff for certain alleged pre-petition wrongful actions on his part which are claimed to have damaged the plaintiff’s property and business.  The ground for dismissal was that the complaint initiating this adversary proceeding was untimely in that it was filed after the deadline set by Bankruptcy Rule 4007(c).  The plaintiff conceded that the complaint was filed after the date provided for in the Rule, but sought an equitable exception to the enforcement of that provision on the ground that the Court’s notice to creditors of the bankruptcy filing failed to set forth the date by which such a complaint was required to be filed and that the Court has not provided to it any other notice of such bar date.  Federal Rule of Bankruptcy Procedure 4007(c) expressly provides that “[t]he court shall give all creditors no less than 30 days’ notice of the time so fixed [to file a non-dischargeability complaint] in the manner provided in Rule 2002.”

            The Court found that there was no evidence demonstrating that the plaintiff’s failure to make a timely filing of its adversary proceeding was directly attributable to any deficiency in the content of the notice.  The Court concluded that the facts of this case did not present the type of “extraordinary” circumstance justifying the Court in disregarding the explicit deadline imposed by Bankruptcy Rule 4007(c), and thus the Court granted the debtor’s motion to dismiss.

In re Vencill (Case No. 10-72956) 10/31/2011

            The United States trustee moved to disqualify the debtor’s counsel for two main reasons: (1) counsel did not provide adequate counsel nor comport with his fiduciary duties both before the filing of the case or since the filing of the case and (2) the pattern of inaccurate or incomplete disclosures on behalf of the estate also appear in the disclosure made to the Court by counsel in support of their employment application.  The Court concluded that the evidence before it, particularly pre-petition advice and services that were not disclosed, established cause for the disqualification of counsel from further representation of the debtor-in-possession.

In re Lee County Child Care Council, Inc. (Case No. 11-70168) 10/11/2011

            The United States Trustee filed a motion to dismiss the case, moving for dismissal under 11 U.S.C. § 1112(b)(1) for six defined causes provided in 11 U.S.C. § 1112(b)(4).  These grounds included the debtor’s alleged failures to: append either its Federal income tax return or a statement of noncompliance to the voluntary petition; file an operating report; comply with the Court’s order requiring certain reports; respond to the United States Trustee’s requests for tax returns; maintain the debtor’s corporate status; and operate the business so as to prevent substantial or continuing loss to the estate.  The Court granted the motion to dismiss without prejudice to refiling.

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