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.
The defendant, in an adversary proceeding challenging dischargeability of a particular debt, moved to dismiss a complaint asserting that it lacked legal sufficiency. The Court denied the motion to dismiss finding that the amended complaint did allege sufficient facts.
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.
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).
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.
The Court granted a motion to stay an adversary proceeding pending appeal, holding that it did not appear that the appellees would suffer any harm, particularly since the appellees have not filed any opposition to the motion.
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.
The Court analyzed the twelve factors set forth in Eastport Assocs. v. City of Los Angeles, 935 F.2d 1071, 1075 (9th Cir. 1991), and determined that abstention is warranted in this case because the parties litigated the matter in the state court for more than seven months before the petition was filed and because all of the causes of action, other than the dischargeability cause of action, are based exclusively on state law. Accordingly, the Court granted the motion for relief from the automatic stay to allow the parties to continue to litigate this matter in state court.
In this pre-BAPCPA case, the Court denied the debtor's request to reopen his case for the purpose of adding a creditor not included in his original schedules. Because the effect of the discharge on the child support obligation was not certain under Section 523, the Court denied the motion without prejudice to the right of either the debtor or the creditor to file a motion to reopen the case for the purpose of filing a complaint to initiate an adversary proceeding to obtain a determination of the dischargeability of the obligation. The Court's decision has no effect upon the non-bankruptcy issue of whether the support obligation remains enforceable as a matter of state law under Va. Code Section 8.01-251(A).
Before the Court was an objection to the secured status of a claim. The Court overruled the objection, finding that the lien created by the deed of trust in question was not avoidable and did not need to have been recorded to create the lien pursuant to an order approving a post-petition financing agreement.
Before the Court was an objection to the secured status of a claim. The Court overruled the objection, finding that the lien created by the deed of trust in question was not avoidable and did not need to have been recorded to create the lien pursuant to an order approving a post-petition financing agreement.