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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.

Leach v. Wells (In re Wells) (Case No. 06-60319; A.P. No. 06-06116) 06/20/2007

The matters before the Court are counter-motions for summary judgment.  A motion for summary judgment shall be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.  Fed. R. Civ. P. 56(c); Fed. R Bankr. P. 7056. 

The Court denied summary judgment as to the first cause of action, which was brought under 11 U.S.C. § 727 (denial of discharge) because there was a genuine issue of material fact as to whether the defendant owned the company, what the value of the company was at that time, and whether the defendant violated § 727(a)(2).

The Court granted the defendant's motion for summary judgment as to the second count, which was brought under 11 U.S.C. § 523 because § 523(a)(19) applies only to judgments entered pursuant to claims asserting violations of federal or state securities laws, which is not relevant to this case.

In re Barker (Case No. 06-60835) 06/12/2007

The United States Trustee filed a motion to dismiss this case as an abuse of the provisions of Chapter 7 of the Bankruptcy Code, pursuant to 11 U.S.C. § 707(b).  Section 707(b)(1) provides that a court may dismiss an individual case under Chapter 7 if (1) the debtor’s debts are primarily consumer debts and (2) it would be an abuse of the provisions of chapter 7 of the Bankruptcy Code to grant relief to the debtor.  Section 707(b)(2) provides that abuse is presumed if a debtor's net monthly income exceeds a certain threshold amount as determined by the means test.  Section 707(b)(3)(B) provides that if the presumption in Section 707(b)(2) does not arise or is rebutted, the court must consider the totality of the debtor's financial circumstances in determining whether proceeding in Chapter 7 would be an abuse.  The United States Trustee has the burden of proof to prove by a preponderance of the evidence that allowing the Debtor to continue in Chapter 7 would constitute abuse.

In considering Section 707(b)(3), the Court applied the factors enumerated by the Fourth Circuit in Green v. Staples (In re Green), 934 F.2d 568 (4th Cir. 1991).   The Court concluded that it would not be a substantial abuse to permit the Debtor to continue under Chapter 7.  The Debtor has disposable income that could fund a Chapter 13 plan; however, unsecured creditors would receive a dividend equal to less than 20%.  Accordingly, the Court denied the United States Trustee's motion to dismiss this case for abuse.

In re Hendricks (Case No. 06-50335) 5/31/2007

The matter before the Court is the trustee's objection to the debtor's claim of exemption in real property.  The debtor and his non-debtor spouse own two parcels of real property as tenants by the entireties, and the debtor claimed both properties as exempt in his schedules.  Prior to filing bankruptcy, the debtor and his spouse executed a Post-Nuptial Property Settlement Agreement, which provided the debtor with a 60-day option to refinance the couple's credit line deed of trust, removing his wife as an obligor.  In turn, his wife had to convey her interest in the property to the debtor.  The trustee objected to the debtor's claim of exemption in the property, seeking disallowance of any tenancy by the entireties exemption claimed by the debtor.   The trustee sought to sever the tenancy by the entities interest so that the debtor cannot properly claim the property as exempt.  The Court held that the trustee cannot assume the refinancing agreement pursuant to 11 U.S.C. § 365(a) in order to destroy the debtor's tenancy by the entireties interest because the agreement does not constitute an "executory contract."

In re Ramey (Case No. 06-71444) 05/25/2007

The Court granted the trustee's motion to turn over property (the debtor's pro rata portion of federal income tax refund) because, as held in In re Whitmer, 228 B.R. 841 (W.D. Va. 1998) and based on Beaman v. Shearin (In re Shearin), 224 F.3d 346 (4th Cir. 2000), the broad language of 11 U.S.C. § 541(a)(1) considers the earned income credit (“EIC”) to be property of the estate and thus, the EIC must be turned over to the trustee.  In reaching this decision, the Court found that even though the debtor could not receive the EIC until after the petition date when she filed her tax return, the EIC is rooted in the pre-petition past because the amount of the EIC was calculated based on the debtor's total income for the taxable year and the EIC is rooted in the post-petition time period because 26 U.S.C. § 32(e) prevents the EIC from being available for tax returns covering a period of less than 12 months.

In re Lucas (Case No. 07-70186) 05/18/2007

The Court dismissed the debtors' motion for declaratory judgment, holding that 11 U.S.C. § 362(c)(3) terminates the automatic stay with regard to the debtors but does not terminate the automatic stay with regard to property of the bankruptcy estate.  In so holding, the Court noted that no creditor was alleged to be taking or threatening any collection enforcement action against the debtors and no party in interest had appeared or otherwise asserted a position opposing such motion, and therefore, the Court found that there is no actual controversy as required by 28 U.S.C. § 2201(a) in order to issue a declaratory judgment.

In re Hurt (Case No. 06-71167) 5/11/2007

The Court granted the debtor's motion to impose the automatic stay pursuant to 11 U.S.C. § 362(c)(4).  The debtor filed two previous cases which were pending before the Court within one year prior to the present case, so the presumption that the debtor did not file the present case in good faith arose.  The debtor has the burden to rebut, by clear and convincing evidence, that he did not file this case in good faith.  The Court examined the totality of the circumstances and found that the evidence is sufficient to rebut the presumption of bad faith in Section 362(c)(4), and that grounds for imposition of the automatic stay exist.

In re Waters (Case No. 06-50309) 5/9/2007

The matter before the Court is a creditor's objection to confirmation of the debtors' Chapter 13 plan on the ground that it does not comply with the provisions of the “hanging paragraph” of 11 U.S.C. § 1325(a)(5).  The Court held that the plain language of the "hanging paragraph" of Section 1325(a)(5) prevents the bifurcation of a secured claim into secured and unsecured portions for the purpose of claims filed by 910 creditors.  As such, the 910 creditor holds only a secured claim, which is treated as fully secured.  The surrender of fully secured collateral satisfies an allowed secured claim in full.  Accordingly, the Court overruled the creditor's objection to confirmation.

In re Danville Emergency Physicians, P.C. (Case No. 06-61306) 04/13/2007

The Court held that for purposes of 11 U.S.C. § 303(b) and based on 11 U.S.C. § 549, a creditor is not a qualifying creditor if (1) it receives a transfer of property of the estate post-petition (2) which transfer is not duly authorized by the Bankruptcy Code or the Court, and (3) the creditor does not give value to the alleged debtor during the gap period that is greater than the value of the transfer.  Further, the Court held that there is no ordinary course of business exception to post-petition transfers made during the gap period following the filing of an involuntary Chapter 7 petition, and that former employees of an alleged debtor are not qualifying employees for purposes of 11 U.S.C. § 303(b)(2).  Overall, the Court denied the motion to dismiss an involuntary petition on the ground that there were not three petitioning creditors because the alleged debtor did not have twelve or more qualifying creditors on the date of petition.

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