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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 Patterson (Case No. 13-70227) 05/23/2013

The debtor filed a motion to extend the stay pursuant to 11 U.S.C. § 362(c)(3), and two creditors objected.  The debtor entered into an agreement with one creditor to extend the stay based on certain conditions.  The debtor did not meet those conditions.  The court concluded, “with considerable disquiet,” that it had to deny the debtor’s oral motion to reimpose the automatic stay and leave him with the consequences of the agreement which he made in order to avoid a contested hearing before the court on his motion to extend the automatic stay.

In re Bays (Case No. 11-72355) 05/17/2013

The debtor filed an application to approve employment of counsel following the appointment of a chapter 11 trustee, that is after the debtor was no longer a debtor in possession.  The application provided that he would seek payment, at least in part, from assets of the estate.  The court noted that if counsel for the debtor in either a chapter 7 or chapter 11 case is not employed pursuant to § 327, then the court may not award compensation to such counsel from the assets of the bankruptcy estate.  The court thus denied the application for employment.

Hall v. Harding (In re Harding) (Case No. 11-61062; A.P. No. 11-06131) 05/10/2013

The plaintiff filed a complaint seeking a monetary judgment against the debtor and also a declaration that any such judgment would be non-dischargeable under 11 U.S.C. § 523(a)(2), (4) and (6).  The debtor did not contest the debt owed, and thus the court entered judgment in the amount of $413,324.75.  A judgment had already been entered in the debtor’s case denying him a discharge; therefore, the court held that the dischargeability action was moot.

In re St. Clair (Case No. 06-70125) 05/02/2013

The debtor filed a complaint requesting the court determine who held a note, the validity and extent of any secured deed of trust, the current balance of the lien, and to disallow any unauthorized fees and unlawful interest charges, to award attorneys’ fees and costs.  One defendant filed an answer with affirmative defenses and a motion to dismiss for failure to state a claim upon which relief could be granted.  The court found that the complaint simply stated certain legal conclusions unsupported by any allegation of facts constituting the basis for such conclusions.  Accordingly, the court sustained the motion to dismiss but granted leave for the debtor to amend the complaint.

Lee Bank and Trust Co. v. Defore (In re Defore) (Case No. 12-71915; A.P. No. 13-07009) 04/26/2013

Lee Bank and Trust filed an adversary proceeding seeking a determination of non-dischargeability of certain debts owed to it by the debtor pursuant to 11 U.S.C. § 523.  The debtor filed a motion to dismiss which raised three defenses: first, a plea of the Virginia statute of limitations applicable to causes of action for fraud; second, that any claim based on allegedly false financial statements was on its face without merit because the financial statements in question were joint statements of the debtor and his wife although only the debtor was an obligor on the loans made; and third, that the count asserting that the debtor maliciously and intentionally converted some of the collateral is defective because it fails to allege any value for such converted collateral and therefore any cognizable damages resulting from the claimed conversion.  The court overruled the first two and sustained the third but allowed the bank to file an amended complaint to cure the deficiency.

In re Bays (Case No. 11-72355) 04/15/2013

The trustee filed a motion to sell pursuant to section 363.  The court concluded that the circumstances presented, particularly the extremely precarious business and financial situation faced by the involved corporations and the likelihood of an early foreclosure sale of a majority of the substantial assets of several of the corporations, did constitute a sound business reason for their sale before a foreclosure sale took place.  The court approved the motion to sell but with detailed modifications.  The debtor had also filed a motion to abandon, but the court continued that to a further hearing date.

Johnston v. SunTrust Bank (In re Johnston) (Case No. 12-51263; A.P. No. 12-05066) 04/12/2013

The debtors filed a complaint to determine the validity and extent of SunTrust Bank’s lien on the debtors’ residence and to strip said lien from the property.  SunTrust disputed the debtors’ valuation of their residence.  By considering the underlying economic motivations of the parties, the court concluded that in an action to strip a lien from a debtor’s primary residence, a chapter 13 debtor bears the burden to prove he is entitled to prevail.  After reviewing the pleadings and exhibits and considering the testimony given at trial, the court concluded that debtors failed to carry their burden of persuading the court that their residence was worth less than the first lien on the property as of the petition date and thus that the SunTrust debt was not wholly unsecured.  The court thus denied the debtors’ request to strip the second lien deed of trust of SunTrust.

In re Robinette (Case No 11-70557) 04/01/2013

The chapter 13 trustee objected to confirmation of modified plans in two separate cases.  The court thus considered how payments received, pursuant to an existing wage deduction order, in the interval between the time a modified plan is prepared and the date it is actually filed, should be applied – to an existing delinquency under the confirmed plan or the obligations to accrue under the terms of the modified plan.  The court concluded that, although it may be observed that the practical effect of confirmation would be to forgive by implication payments which accrued under the confirmed plans, such a result can be expressly included in a modified plan and where otherwise appropriate confirmed.  The court overruled the trustee’s objections and confirmed the plans.

In re Stamback (Case No. 11-71617) 04/01/2013

The chapter 13 trustee objected to confirmation of modified plans in two separate cases.  The court thus considered how payments received, pursuant to an existing wage deduction order, in the interval between the time a modified plan is prepared and the date it is actually filed, should be applied – to an existing delinquency under the confirmed plan or the obligations to accrue under the terms of the modified plan.  The court concluded that, although it may be observed that the practical effect of confirmation would be to forgive by implication payments which accrued under the confirmed plans, such a result can be expressly included in a modified plan and where otherwise appropriate confirmed.  The court overruled the trustee’s objections and confirmed the plans.

In re S&R Construction Co., Inc. (Case No. 09-70710) 03/13/2013

The court was asked to clarify or amend its previous order concerning a derivative proceeding.  The court noted that a Virginia corporation owns the rights to assert causes of action, a trustee succeeds to those rights when a corporation files bankruptcy, the rights become assets of the estate, and the trustee can then sell (or abandon pursuant to 11 U.S.C. § 554) those assets when administering the estate.  The court concluded that it had the authority to order abandonment and that the order that was entered specifically abandoned the right to prosecute the derivative suit to one of the shareholders, reserving only a portion of the potential proceeds for the estate.

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