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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.

Barber & Ross Co. v. SCP Building Prods., LLC (In re Barber & Ross Co.) (Case No. 07-50546; A.P. No. 09-05081) 06/24/2010

            The parties filed competing motions for summary judgment asserting entitlement to certain monies held in an escrow account which were disbursed to the defendant within days after the commencement of the bankruptcy case.  The Court determined that funds in an escrow account are not property of the estate when the escrow fund has served as “an assurance or guarantee fund.” The Court further noted that the filing of the petition against the debtor did not remove the escrowed money from the strictures of the escrow agreement, but it did subject the debtor’s as well as the defendant’s  rights in the account to applicable provisions of the Bankruptcy Code.  The Court concluded that the wiring of the escrow account balance to the defendant after the filing of the petition was an “act” which enabled the defendant to “recover a claim against the debtor which arose before the commencement” of the debtor’s bankruptcy case within the meaning of § 362(a)(6).  The Court denied both motions for summary judgment.

In re Mullins (Case No. 09-70595) 06/22/2010

On the debtor’s third amended disclosure statement, third amended plan of reorganization, motion to confirm the plan notwithstanding ballot cramdown, the Court denied confirmation of the amended plan.  The burden of proof to establish that a Chapter 11 plan satisfies the statutory requirements for confirmation falls on the plan’s proponent.  The absolute priority rule generally prohibits any junior class of interests from receiving or retaining any interest if any senior impaired class does not accept the plan.  See 11 U.S.C. § 1129(b).  Since the debtor in this case proposed to retain his home, a rental property, and non-exempt personal property while only paying unsecured creditors 12%, the Court found that his proposal was unreasonable and denied confirmation of his Chapter 11 plan.

In re Hampton (Case No. 07-62119) 06/21/2010

            The chapter 13 trustee filed a motion to alter or amend an order denying the chapter 13 trustee’s motion to modify the confirmed chapter 13 plan.  The Court concluded that once a chapter 13 plan has been confirmed, the rule in Murphy provides a shield to prevent a trustee or creditor from filing a motion to modify a debtor’s chapter 13 plan when the debtor has experienced no more than an unsubstantial or anticipated change in his or her financial condition. It does not provide a sword that permits a trustee or creditor to force a debtor to pay more to their unsecured creditors than is required by statute.  The Court denied the motion to alter or amend.

McDow v. Eye (In re Eye) (Case No. 08-50723; A.P. No. 08-05061) 06/11/2010

            The debtor did not disclose her interest as a result of her mother’s passing away in either the personal property or the residual estate on her bankruptcy petition nor at the § 341 meeting.  The debtor was entitled to a one-third interest in proceeds from the sale of her mother’s house, but at the real estate closing the debtor disclaimed her interest in the proceeds in favor of one of her brothers.  As a result, the United States trustee filed a motion to deny the debtor’s discharge pursuant to 11 U.S.C. § 727(a)(2) as well as § 727(a)(4)(A).

            The Court found that the trustee failed to prove, beyond a preponderance of the evidence, all elements required for a denial of the debtor’s discharge under either 11 U.S.C. §727(a)(2) or 11 U.S.C. §727(a)(4)(A).  Specifically, the trustee failed to demonstrate that the debtor acted with the intent to delay, hinder or defraud creditors when she failed to disclose her interest in property bequeathed to her by her mother or when she disavowed her interest in said property to her brother.

In re Raymond (Case No. 10-70693) 06/08/2010

The Court denied CitiFinancial’s motion to approve a reaffirmation agreement. Counsel for the debtors was unwilling to sign the certification form because of the significant difference between the value of the vehicle and the amount to be reaffirmed.  Even though no actual negotiation occurred with regard to the agreement, the Court found that the debtors were represented by counsel in connection with the signing of the agreement.  Therefore, the Court held that it was not authorized to step in when no presumption of undue hardship existed and the debtors were represented by counsel.

In re Village in Roanoke (Case No. 09-72431) 05/28/2010

On a creditor's motion for relief from the automatic stay pursuant to 11 U.S.C. §§ 362(d), where the debtor has not commenced payments and has filed a plan within 90 days of the commencement of the case that does not have a reasonable possibility of being confirmed, the Court granted the motion for relief with conditions. The Court held that conditioning the automatic stay was more appropriate in this case than to terminate it altogether. The Court conditioned the continuation of the automatic stay upon the debtor’s ability to obtain confirmation of its amended by July 15, 2010.

In re Neilsen (Case No. 10-50124) 05/03/2010

            At hearing on a motion for relief, the Court found that the motion for relief was actually a request for a determination of non-dischargeability of debt and a request for the return of funds garnished from the female debtor.  The Court found that an adversary proceeding was required for a determination of non-dischargeability and since the matter before the Court was a not an adversary proceeding, the Court could not hear the issue.  The Court then took under advisement the issue of whether the funds the movant received from garnishing the wages of the female debtor were properly remitted to either the trustee or the debtor.  The Court found that the debtors were not entitled to exempt the garnished wages but that the movant was not entitled to the return of those wages because they became property of the estate when the debtors’ petition was filed.

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