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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 Reynolds (Case No. 09-71964) 02/10/2011

            After the debtor had received a discharge, Wells Fargo filed a motion for relief from stay as to certain property of the estate, alleging $14,000 of default on the loan secured by the property.  At the time debtor filed his petition, the property was held by the debtor as the trustee of a trust established by his father.  The debtor’s father died and, pursuant to the trust instrument, a 50% share of the trust was distributed to the debtor.  The debtor opposed the motion for relief, but the trustee did not file a response.  The Court ruled that the debtor lacked standing since the property was property of the chapter 7 estate and the trustee had not yet abandoned the property.  The Court found cause to grant relief from stay.

Hines v. Wolfe (In re Stillwater, Inc.) (Case No. 04-01023) 1/25/2011

The Treasurer of Rockbridge County, Virginia filed an Application for Administrative Expenses, seeking that the value of the real estate taxes that have accrued for 2004-2010 be paid as an administrative expense under 11 U.S.C. § 503(b)(1)(B).  The Court held that only a portion of the accrued real property taxes were allowed as an administrative expense under Section 503(b)(1)(B) because only taxes attaching to the property after the creation of the estate can be assessed against the estate as an administrative expense.  Therefore, the real property taxes on the real property held by the estate for the years 2005-2010 constitute administrative expenses under Section 503(b)(1)(B), but the real property taxes assessed for 2004 does not because the real property was owned by the pre-petition debtor and not the estate as of January 1, 2004, the time the taxes for that year were incurred.

In re Travis (Case No. 08-71735) 01/19/2011

            The debtor’s counsel filed a fee application for services rendered by him to his client in connection with a motion for relief filed by his client’s mortgagee within two weeks after the confirmation of a modified plan.  The chapter 7 trustee objected.  The Court concluded that counsel failed to carry his burden of proving that the legal services performed by him were actually necessary and that the case reflected a pattern of representation that was reactive rather than proactive.  The Court thus denied the fee application.

In re Clinch Mountain Finishing & Logistics Corp. (Case No. 10-72574) 01/13/2011

            The debtor filed a motion for entry of a sale procedures order (a) approving sale of assets free and clear of all liens, encumbrances, and other interests, (b) scheduling a final hearing date, and (c) approving notice and entry of an order approving the sale free and clear of liens, interest, and other encumbrances of certain assets of the corporation.  The United States trustee filed a motion to convert the case to chapter 7 or to dismiss the case.  The Court granted the debtor’s motion upon certain conditions and denied preliminarily the United States trustee’s motion; the Court however continued the motions for a final hearing to take place promptly following either a completed sale of those assets to be sold pursuant to the debtor’s motion or the Court’s determination that the efforts to effect a sale pursuant to that Motion have failed.

In re Barber & Ross Co. (Case No. 07-50546) 12/22/2010

Debtor's motion to enforce the automatic stay pursuant to section 362 against creditor was denied where debtor sought to compel creditor to return funds transferred to it by its borrowing customer who acquired those funds post-petition from escrow account in connection with pre-petition indemnification claim which that customer had against the debtor.  Court held that while debtor's rights under the escrow agreement were property of the estate, the actual money that was in the escrow account was not and creditor's receipt of those funds was not an act to obtain possession of property of the estate and did not violate section 362(a)(3). The fact that the customer subsequently transferred funds to a third party did not transform them into property of the estate. The creditor only accepted the transfer of the funds and did not take some action against the debtor or property of the estate.  Court held that no violation of the stay occurred and the attempt to recover the funds from the bank pursuant to section 362 was inappropriate.  Court also held that debtor should have proceeded by adversary proceeding and not motion in this situation.

In re Clinch Mountain Finishing (Case No. 10-72574) 12/09/2010

Court denied the debtor's motion to sell substantially all of its assets pursuant to Section 363 through an expedited court-supervised process prior to the filing of a plan of reorganization or liquidation for the following reasons:  proposed bidding procedures were not adequate regarding terms of credit bid; no indication that debtor exercised an independent business judgment with respect to appropriateness of proposed bidding procedures; no consideration of selling assets individually; proposed sale date did not provide sufficient time for well thought out, properly advertised and expertly conducted sale to take place nor did it allow adequate time for any disputes as to ownership of assets to be resolved; proposed sale was to take place prior to first meeting of creditors and before unsecured creditors' committee had reasonable opportunity to begin to function; and lack of  adequate notice to creditors (failure to address conflicting interests of principals, description of assets to be sold and effect of such sale upon subsequent conduct of the case).

In re Meade (Case No. 09-73084) 12/06/2010

The Court denied the motion of EverHome Mortgage, a secured creditor of the debtors, to allow the late filing of a proof of claim. The Court found that there is no provision in the Bankruptcy Code allowing for the extension except as provided in Rule 3002(c)(1) - (6). None of the special exceptions in Rule 3002(c)(1) - (6) were applicable to the circumstances in the present case. Therefore, the Court denied the motion.  The Court also held that although the motion to extend was denied, no one objected to the claim, and under 11 U.S.C. § 502(a) the claim was deemed allowed unless and until an objection is filed.

In re Oakwood Country Club, Inc. (Case No. 10-60246) 11/22/2010

The United States Trustee objected to approval of the Disclosure Statement on the ground that the Chapter 11 plan is not confirmable on its face.  Four classes are impaired under the plan, but the plan does not provide that the creditors in those classes will be allowed to vote whether to accept or reject the plan; therefore, the plan itself is not confirmable.  The Court noted that approving a disclosure statement, when a facially non-confirmable plan is attached, would be akin to inadequate disclosure and misrepresentation. Therefore, the Court sustained the United States Trustee's objection.

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