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Opinions

Case Title Date & Status Case Number(s) Judge & PDF Summary

Miller v. Stone (In re Waterford Funding, LLC)


(Internal Ref: Opinion 598)

Feb-1-2017

UNPUBLISHED

11-2093

Judge Mosier

PDF icon 11-02093_dkt_58.pdf

Chapter 11 trustee obtained a default judgment on an avoidance action and assigned the judgment to a third party. Subsequent to the assignment, the defendant successfully set aside the default judgment. The assignee then filed an amended complaint and a motion to substitute as the plaintiff, while the defendant filed a motion to dismiss the amended complaint, and the trustee filed a motion to approve settlement of the adversary proceeding with the defendant. The assignee took the position that it had the ability to substitute as plaintiff because the trustee had assigned the underlying claims to it. The Court concluded that the assignee could not substitute as plaintiff and pursue the claims because even if the trustee had intended to assign those claims, he was legally precluded from doing so. While noting certain limited circumstances in which parties can exercise a trustee’s avoidance powers, the Court held that such circumstances were not present in this case and distinguished them from an outright sale of avoidance claims. The Court then approved the trustee’s settlement of the adversary proceeding.

In re Christensen


(Internal Ref: Opinion 597)

Dec-14-2016

PUBLISHED

15-29773, 15-29783

Judge Mosier

PDF icon 15-29773_dkt_167.pdf

Former chapter 7 trustee and his firm filed applications for compensation in two cases after they were converted to chapter 13. The applications sought fees and costs incurred in furtherance of sales of the debtors’ homes, which were encumbered by substantial federal tax liens. The trustee had reached stipulations with the IRS whereby a $10,000 carve-out would go to each estate from proceeds that otherwise would have gone to the IRS. The Court disallowed the fee applications in their entirety, concluding that the services therein were not necessary to the administration of the case and were not reasonably likely to benefit the estate. The Court held that the sales could not go forward unless the debtors’ homestead exemptions were paid in full. The trustee had objected to the exemptions because there was no equity in the property, but the Court concluded that was not a valid basis to disallow a homestead exemption. The Court also held that the asserted basis for the sales—that the carve-outs would be distributed to unsecured creditors—could not occur because the debtors were entitled to exempt the carve-outs as proceeds from the sales of their homes. Because the sales would not have provided a benefit to unsecured creditors, the Court held that the services performed in furtherance of those sales were not compensable under § 330(a).

Ray Klein, Inc. v. Daniel Jeff Webb (In re Call and Webb)


(Internal Ref: Opinion 603)

Nov-14-2016

PUBLISHED

15-02119

Judge Anderson

PDF icon 15-02119_dkt_49.pdf

Debtor made false representations to lender regarding his financial condition in connection with the purchase of a commercial boat (debtor stated he had the backing of Kraft Foods and the LDS church). The Court excepted the debt from discharge for false pretenses, false representation, or actual fraud, but denied cause of action for willful and malicious injury.

In re Castle Service, LLC


(Internal Ref: Opinion 602)

Nov-9-2016

PUBLISHED

16-26302

Judge Anderson

PDF icon 16-26302_dkt_44.pdf

The Court denied creditor's motion for relief from stay holding that the real property at issue was an asset of the estate, and the creditor did not establish sufficient cause to grant relief from the automatic stay.

In re Petersen


(Internal Ref: Opinion 591)

Nov-8-2016

PUBLISHED

16-20042

Judge Thurman

PDF icon 591.pdf

Chapter 13 debtors filed a motion to avoid a judicial lien impairing their homestead exemption per 11 U.S.C. § 522(f). The Debtors sought to avoid the lien immediately and argued that the Code allowed for the same. The Chapter 13 Trustee objected to the motion and argued that the lien should only be avoided after debtors' completion of their chapter 13 plan and a discharge relying on §105(a) and 349(b)(1)(B). The Trustee urged the Court to follow its line of reasoning in In re Woolsey, 438 B.R. 432 (Bankr. D. Utah 2010), aff'd, 696 F.3d 1266 (10th Cir. 2012), which analyzed lien avoidance under § 506(d), because of the potential harm to creditors if the property is sold without the lien attached and the case is thereafter dismissed without a discharge.  The Court granted the motion and created a two-step process for avoiding a judicial lien. In ruling, the Court explained that the lien may be avoided immediately for plan consummation purposes and once the debtors complete their plan, the lien could be completely avoided by the recordation of an order and discharge with the county recorder's office.

In re Bench


(Internal Ref: Opinion 601)

Aug-26-2016

PUBLISHED

12-26827

Judge Anderson

PDF icon 12-26827_dkt_58.pdf

Debtor failed to comply with the trustee's requests that ultimately resulted in the entry of a default judgment denying his discharge. Some 2.5 years later, the Debtor moved to set aside the judgment because he was now willing to cooperate with the trustee and to pay in $2,793 for creditors. Based on the circumstances and the passage of time, the Court denied the Debtor's request to set aside the default judgment under Rule 60.

Lee v. McCardle (In re Peeples)


(Internal Ref: Opinion 596)

Jul-14-2016

PUBLISHED

14-2159

Judge Mosier

PDF icon 14-02159_dkt_80.pdf

Creditor filed a pre-petition state court lawsuit against the trustee of a trust of which the debtor at one time had been a beneficiary. The creditor lost the suit and, after the debtor filed bankruptcy, the trustee obtained a judgment against the creditor. The creditor then filed a declaratory judgment action in bankruptcy court against the trustee, arguing that the automatic stay of § 362(a) had stayed the state court lawsuit because the creditor sued the trustee with the subjective intent to recover against the debtor. On cross-motions for summary judgment, the Court denied the creditor’s motion because the state court lawsuit had not been an action to recover a claim against the debtor. The Court held that the automatic stay does not stay an action whose basis is independent of a claim against the debtor. The Court also held that whether the automatic stay applies to an action is not determined by a party’s subjective intent in undertaking that action. Accordingly, the Court denied the creditor’s request for stay violation damages under § 362(k).

In re Wareham


(Internal Ref: Opinion 590)

Jul-6-2016

PUBLISHED

15-30297

Judge Thurman

PDF icon 590.pdf

In this business chapter 13 case, the trustee and creditor objected to confirmation of debtors' plan and the creditor also moved to dismiss or convert the case to chapter 7. The creditor argued that the debtors lacked good faith in filing their petition and plan because the debtors took inappropriate deductions in calculating their net disposable income, which left Debtors' business budget inaccurate. The Court looked at the Flygare and Gier cases from the 10th Circuit as compared to the Debtors' case and concluded the petition and plan were filed in good faith. Debtors' miscalculation of net disposable income was not indicia of lack of good faith. However, since the debtors' calculation of their net disposable income was incorrect, confirmation of the plan was denied with leave to amend.

Miller v. Stone (In re Waterford Funding, LLC)


(Internal Ref: Opinion 595)

Jun-30-2016

UNPUBLISHED

11-2093

Judge Mosier

PDF icon 11-02093_dkt_33.pdf

Defendant moved to set aside a default judgment because he was not properly served with the summons and complaint. The plaintiff had mailed the summons and complaint to the address the defendant had vacated about eight months before. Even though the U.S. Postal Service was forwarding the defendant’s mail to his new address and his wife signed a certified mail receipt for the summons and complaint, the Court held that service did not comply with Rule 7004(b). That rule requires that notice be sent to “the individual’s dwelling house or usual place of abode or to the place where the individual regularly conducts a business or profession,” which was not accomplished in this case. The Court also held that Rule 7004(b) requires that a plaintiff make a reasonable inquiry to determine the defendant’s dwelling house or usual place of abode, which the plaintiff did not do. Because proper service of process is necessary to obtain personal jurisdiction over a defendant, and a default judgment obtained without personal jurisdiction is void, the Court granted the defendant’s motion and set aside the default judgment under Rule 60(b)(4).

In re Robertson


(Internal Ref: Opinion 594)

Mar-24-2016

UNPUBLISHED

14-20984

Judge Mosier

PDF icon 14-20984_dkt_50.pdf

Chapter 7 debtor sought a determination that a claim against a creditor had been abandoned to him. The debtor had scheduled the claim, which arose as a result of pre-petition state court litigation between the debtor and the creditor. The chapter 7 trustee communicated with debtor’s and creditor’s counsel regarding the claim, but the creditor declined to purchase or settle the claim. Thereafter, the trustee filed a report of no distribution, the case was closed, and the parties resumed the state court litigation. The state court of appeals then stayed the litigation pending a determination that the debtor’s claim was abandoned to him. The Court determined that because the claim was scheduled and not administered at the time the case was closed, it was abandoned to the debtor under § 554(c). The Court further held that a trustee is not required to give notice of a final report in cases where there is no distribution in order for abandonment to be effected under § 544(c).

Bird v. SKR Credit, Ltd. (In re Digital Bridge Holdings, Inc.)


(Internal Ref: Opinion 593)

Sep-30-2015

UNPUBLISHED

12-02373

Judge Mosier

PDF icon 12-02373_dkt_150.pdf

Corporate debtor borrowed money from three lenders pre-petition. The promissory notes provided that the debtor would file UCC financing statements to perfect the lenders’ security interests. The debtor filed the statements incorrectly, leaving the lenders’ interests unperfected. Subsequently the debtor borrowed money from a fourth lender, which properly perfected its security interest. After an involuntary chapter 11 petition was filed against the debtor, the case was later converted to chapter 7, where the trustee sought equitable subordination of the fourth lender’s lien under § 510(c). The trustee argued that equitable subordination was proper because the fourth lender had injured the three other lenders. The Court held that § 510(c) only subordinates claims, not liens. In addition, the Court held that the trustee lacked standing to assert equitable subordination claims on behalf of individual creditors. Ordinarily, a trustee can bring a general equitable subordination claim on behalf of the estate as a whole. Lastly, the Court held that § 510(c) was inapplicable by its own terms because the trustee was not proposing to make a distribution to general unsecured creditors.

Hunt v. Steffensen (In re Steffensen)


(Internal Ref: Opinion 589)

Jul-23-2015

PUBLISHED

13-2192

Judge Thurman

PDF icon 589.pdf

Chapter 7 trustee brought an adversary proceeding to deny debtor a discharge and moved for partial summary judgment under 11 U.S.C. § 727(a)(3) and 727(a)(5). The Court denied the Debtor his discharge and found: (1) the term "keep," as used in discharge exception for debtors who fail to "keep or preserve" adequate financial records, is not synonymous with preserve; (2) debtor-attorney was a sophisticated individual with experience in bankruptcy law and so had no excuse for failing to create and preserve records sufficient to allow trustee and creditors to ascertain his business transactions; and (3) debtor's explanation that he could not keep records because he could not afford a bookkeeper, did not have time to keep records himself, and his computer hard drive crashed was inadequate.

In re Naartjie Custom Kids, Inc.


(Internal Ref: Opinion 588)

Jul-13-2015

PUBLISHED

14-29666

Judge Thurman

PDF icon 588.pdf

The Debtor, joined by the Official Committee of Unsecured Creditors, moved to dismiss its Chapter 11 case and requested that the Court's orders remain in full force and effect.  The United States Trustee objected, arguing that the Court lacked statutory authority to grant a structured dismissal.  The Court found that where cause is shown under § 305(a) or § 1112(b), the Bankruptcy Code authorizes structured dismissal pursuant to the plain language of § 349(b).  Finding that the Debtor had met its burden under § 305(a), the Court accordingly granted the structured dismissal.

Jubber v. Defendants re C.W. Mining Company Coal Proceeds (In re C.W. Mining Company)


(Internal Ref: Opinion 587)

Mar-31-2015

PUBLISHED

11-8002

Judge Mosier

PDF icon 587.pdf

The Court consolidated various adversary proceedings to resolve the question of who was entitled to the coal mined by the Debtor and the accounts created by the Debtor's contracts with coal purchasers, which were subsequently assigned or sold to the Debtor's agent. On summary judgment, the Court held that the Uniform Commercial Code governs the assignment or sale of the accounts. But the Court also held that the accounts were, for purposes of the trustee's motion, not property of the Debtor or the bankruptcy estate. The trustee's motion assumed that the Debtor sold the accounts to its agent, and a seller of accounts does not retain a legal or equitable interest in them pursuant to Utah Code Ann. § 70A-9a-318(1). The Court further held that, because the Debtor's agent had not perfected its security interests in the accounts, the trustee could avoid those interests using his power as a hypothetical lien creditor under § 544(a)(1). But because § 544(a)(1) does not provide a basis to avoid a prepetition transfer of property, the trustee did not have the ability to recover the payments made to the Debtor's agent before the petition date.

Withers v Trust Funds (In re Withers)


(Internal Ref: Opinion 586)

Mar-31-2015

UNPUBLISHED

13-2096

Judge Mosier

PDF icon 586.pdf

Debtors brought adversary proceeding seeking declaratory judgment that Creditor had notice or actual knowledge of Debtors' bankruptcy under § 523(a)(3)(A). Although Creditor did not receive formal notice, Debtors argued that Creditor was given notice of the bankruptcy in two ways: 1) by a telephone call to the Creditor's accountant who in turn advised Creditor's attorney, and 2) by a telephone call between the Debtor and the Creditor's attorney. Because the bankruptcy information provided by the Debtors during the telephone calls was within the scope of the agency of the Creditor's attorney, Creditor was put on notice or inquiry notice of the Debtors' bankruptcy. The Creditor was found to have sufficient notice or actual knowledge of the case in time to file a timely proof of claim.

Jubber v. Defendants re C.W. Mining Co. Coal Proceeds (In re C.W. Mining Co.)


(Internal Ref: Opinion 592)

Mar-31-2015

PUBLISHED

11-8002

Judge Mosier

PDF icon 11-08002_dkt_376.pdf

Pre-petition, the debtor entered into two contracts to supply coal to two coal purchasers. Subsequently, the debtor assigned the right to receive payment under these contracts to a related party, but it did not assign the underlying contracts themselves. Post-petition, the trustee sought a determination that the accounts created by these assignments were property of the debtor or the estate, that the trustee could avoid any security interest in the accounts, and that the trustee could recover pre-petition payments made on the accounts under § 544(a)(1). On summary judgment, the Court held that the assignment of the accounts was subject to the perfection rules of Article 9 of the UCC, and that because the related party’s security interest in the accounts was unperfected, the trustee could avoid that interest. On the issue of ownership, the trustee conceded the debtor had sold the accounts to the related party. Accordingly, under § 318 of Article 9, the Court concluded that the debtor held no legal or equitable interest in the accounts, which were therefore not property of the debtor or the estate. Lastly, the Court held that § 544(a)(1) did not give the trustee the power to avoid pre-petition payments that had been made on the accounts to the related party.

Zions v Taylor (In re Taylor)


(Internal Ref: Opinion 585)

Mar-26-2015

UNPUBLISHED

13-2186

Judge Mosier

PDF icon 585.pdf

Debtor financed the purchase of six luxury automobiles at the urging of an auto rental company who told the Debtor that the various banks used to finance the automobiles were aware of Debtor's intent to lease the vehicles to the rental company notwithstanding Debtor's representations contained in the loan documents that the vehicles were for the Debtor's personal use only. Debtor defended the § 523(a)(2)(A) complaint arguing that because he believed the auto rental company's representations, he therefore lacked the necessary intent to defraud.  The Court held that the auto rental company's fraud upon the Debtor does not absolve the Debtor of his fraud upon the bank. The Debtor's failure to verify that the Bank was aware of the Debtor's true intention to lease the vehicle amounted to willful blindness. The Court did not countenance a "pure heart, empty head" defense, and the Debtor's intent to deceive can be inferred from the totality of the circumstances.

In re Monson


(Internal Ref: Opinion 583)

Nov-24-2014

PUBLISHED

12-31811, 12-02354

Judge Thurman

PDF icon 583.pdf

The U.S. Trustee filed motions in two cases to assess fines against a bankruptcy petition preparer as well as require him to disgorge his fees and pay damages to the Debtors. The U.S. Trustee alleged that the bankruptcy petition preparer had violated 11 U.S.C. § 110 by failing to disclose his identity on certain documents and by providing legal advice to the Debtors. After an evidentiary hearing, the Court concluded that the bankruptcy petition preparer had violated § 110 24 separate times, warranting $8,080 in fines, disgorgement of fees, payment of $6,681 in damages to the Debtors in each case, and submission of biannual disclosures to the U.S. Trustee.

In re Zisumbo, In re Brumfield


(Internal Ref: Opinion 584)

Oct-6-2014

PUBLISHED

10-35907, 11-25031

Judge Thurman

PDF icon 584.pdf

Chapter 13 Debtors received inheritances 180 days after the date of petition. Addressing the interaction between 11 U.S.C. §1306(a) and 1327(b), the Court held that upon confirmation of a Chapter 13 plan, the property of the Chapter 13 estate vests in the debtor pursuant to 11 U.S.C. § 1327(b) and (c), but the Chapter 13 estate is not extinguished and is augmented by any property acquired after confirmation until closure, dismissal, or conversion of the case pursuant to 11 U.S.C. § 1306(a). Zisumbo's plan was modified and she was ordered to turn over the inheritance to the Chapter 13 Trustee. However, because the motion to modify the Brumfield plan was filed after the completion of plan payments, the motion was denied pursuant to 11 U.S.C. § 1329(a).

Gillman v. Geis (In re Twin Peaks Financial Services)


(Internal Ref: Opinion 579)

Aug-13-2014

UNPUBLISHED

09-02574

Judge Mosier

PDF icon 579.pdf

The Trustee brought an avoidance action against the defendants under § 548 to recover payments they received in excess of their investment in the debtor's ponzi scheme. The defendants argued that they were entitled to offset their potential claim for securities fraud under Utah state law or retain the payments under § 548(c). Held: Defendant's may not offset a pre-petition claim against the Trustee's avoidance claim. The defendant's potential statutory claim does not constitute value for purposes of § 548(c) and the payments the defendants received were not in satisfaction of the potential statutory claim.

Hofmann v. Drabner (In re Baldwin)


(Internal Ref: Opinion 578)

Aug-11-2014

PUBLISHED

13-2515

Judge Thurman

PDF icon 578.pdf

Less than a month before the Debtor filed bankruptcy, her mother transferred funds to the trust account of the Debtor's criminal defense attorney, who in turn transferred the money to the Defendants to settle criminal charges against the Debtor. The Trustee sought to avoid the transfer to the Defendants as a preferential or fraudulent transfer, and both parties moved for summary judgment. Applying the dominion or control and diminution of the estate tests found in Parks v. FIA Card Services, N.A. (In re Marshall), 550 F.3d 1251 (10th Cir. 2008), the Court granted summary judgment to the Defendants, concluding that the transfer was not of "an interest of the debtor in property" under 11 U.S.C. § 547 or § 548.

Jubber v. Hiawatha Coal Proceeds (In re C.W. Mining Company)


(Internal Ref: Opinion 577)

Jun-20-2014

PUBLISHED

11-08001

Judge Mosier

PDF icon 577.pdf

The Debtor was party to a contract that gave the Debtor the exclusive right to mine coal. An involuntary chapter 11 petition was filed against the Debtor. During the GAP period, the Debtor transferred its rights in the mine to a third party, which mined coal until an order for relief was entered and the case was converted to chapter 7. The Chapter 7 Trustee brought an adversary proceeding against the third party and others seeking avoidance of the mine's transfer and recovery of the mined coal under §542, 549 and 550, arguing, inter alia, that the coal mined post-petition, as well as any proceeds of the coal, was property of the estate. The Court denied the Trustee's claims to the mined coal and the Trustee appealed to the District Court. The District Court affirmed that the mined coal, while it was in situ, was not property of the estate but remanded the case to address the Trustee's additional arguments. On remand, the Court found that, under the terms of the contract and Utah law, the Debtor's property interest was an incorporeal hereditament, a future right to possession of the coal, which was contingent on the Debtor mining the coal. While the Trustee may have a claim for damages, the Debtor had no possessory interest in the mined coal because the third party, not the Debtor, mined the coal. The Court also held that none of the Trustee's alternative arguments - (1) the third party was not authorized to mine the coal; (2) the Debtor had expenditure significant sums preparing the coal for extraction; (3) the estate was liable for royalties on the coal it did not mine; (4) the transfer of the mine was a violation of the automatic stay; and (5) equity supported finding the coal to be property of the estate - were sufficient to create a possessory interest in the mined coal. The Court therefore denied the Trustee's §542, 549 and 550 causes of action with respect to the mined coal.

In re Cotant, In re Davidson


(Internal Ref: Opinion 582)

May-25-2014

UNPUBLISHED

13-34235, 13-34268

Judge Thurman

PDF icon 582.pdf

Debtors filed a request for "special notice," through which all pleadings would be served personally on the Debtors in addition to their counsel. The Chapter 13 Trustee objected, which did not serve as a bar to confirmation. The Court held that Debtors did not have standing because there was no injury in fact nor certainly impending injury. Alternatively, the Court held that denying the special notice request would not violate the Debtors' rights to due process or equal protection.

Hunt v. Steffensen (In re Steffensen)


(Internal Ref: Opinion 576)

May-23-2014

PUBLISHED

13-2192

Judge Thurman

PDF icon 576.pdf

The Defendant filed a motion to dismiss the Plaintiff's complaint, which the Court treated as a motion for summary judgment pursuant to Fed. R. Civ. P. 12(d), yet permitting the Defendant to argue his motion merged with a motion for summary judgment. After the parties submitted additional briefing, the Court examined the Defendant's revised motion separately under Fed. R. Civ. P. 12(b)(6) and 56. The Defendant provided sworn statements of fact with his revised motion, which he argued contradicted the factual allegations in the complaint, requiring it to be dismissed. The Court held to the contrary, reasoning that all well-pleaded factual allegations in a complaint are assumed true on a motion to dismiss, which is not a proper means to contest the truthfulness of the allegations.

West v. Christensen (In re Christensen)


(Internal Ref: Opinion 575)

May-8-2014

UNPUBLISHED

13-2248

Judge Thurman

PDF icon 575.pdf

In this adversary proceeding, the Court addressed the parties' compliance with new Local Rule 7056-1. It ruled that the Plaintiff's opposition to the Defendant's motion for summary judgment was not untimely because the Defendant had not filed a Notice of Summary Judgment Motion and Notice of Hearing. Nor did the Defendant set an opposition deadline as required by Local Rule 7056-1(c). The Court also ruled that the Defendant's motion for summary judgment was not in compliance with Local Rule 7056-1(b) as it was not contained in one document and was not organized as required by that rule. The Court cautioned the parties to hew to the rule in the future. As to the merits, the Court held that a debtor's spouse is related to the debtor by affinity and therefore an insider of the debtor under § 101(31) for this avoidance action.

Rushton v. Tennessee Valley Authority (In re C.W. Mining Company)


(Internal Ref: Opinion 573)

Mar-31-2014

PUBLISHED

10-2816

Judge Mosier

PDF icon 573.pdf

Postpetition, a garnishee and customer of the Debtor paid to the Debtor's agent funds that were garnished prepetition. After conversion from chapter 11 to chapter 7, the trustee commenced an adversary proceeding to recover the garnished funds from the garnishee and alleged custodian of those funds. Relying on its prior determination that the Debtor's agent had authority to receive payments from purchasers during the time between the filing of the bankruptcy petition and the order for relief, the Court held that the bankruptcy estate was not injured by the payment to the Debtor's agent because payment to the agent was equivalent to payment to the then Debtor in possession. The Court also held that the garnishee was not a custodian under § 101(11) and therefore did not have the duties of a custodian under § 543. Even if the garnishee did have those duties, however, the Court held that it fulfilled them by delivering the garnished funds to the Debtor's agent. Because the Debtor received, through its agent, what it was entitled to receive, and the estate was not entitled to receive more from the garnishee, the Court granted the garnishee's motion for summary judgment.

Rushton v. Standard Industries (In re C.W. Mining Company)


(Internal Ref: Opinion 574)

Mar-31-2014

PUBLISHED

09-2047

Judge Mosier

PDF icon 574.pdf

One of the Debtor's customers interpleaded funds resulting from payments withheld on certain invoices into the Court. After conversion from chapter 11 to chapter 7, the trustee commenced an adversary proceeding to recover the interpleaded funds for the benefit of the estate. The Court initially granted the trustee's motion for summary judgment in part and ordered that the interpleaded funds be paid to the trustee. After the Court's decision was appealed and the case was remanded from the District Court, a creditor moved for summary judgment on the issue of whether the estate was entitled to the interpleaded funds. The Court granted the creditor's motion, holding that because the Debtor only assigned its interest in contract proceeds to its agent, but not the contract itself, and because the agent did not perfect its interest in the proceeds under the UCC, the trustee's interest in the interpleaded funds was superior to that of the agent. The Court also held that the invoices, though generated in the agent's name, did not create a genuine dispute regarding the ownership of the account with the customer or the interpleaded funds.

In re Akbarian


(Internal Ref: Opinion 572)

Feb-5-2014

PUBLISHED

12-21670

Judge Thurman

PDF icon 572.pdf

The Court approved the Debtor's waiver of her chapter 7 discharge, concluding that it met the statutory requirements of § 727(a)(10) and was voluntary, knowing, informed, and made with awareness of the consequences of foregoing a discharge in bankruptcy. As a consequence, the Court granted the Debtor's request to dismiss two consolidated denial of discharge adversary proceedings, which were rendered moot by the waiver. In approving the waiver and dismissing the adversary proceedings, the Court overruled the objections of the Chapter 7 Trustee and two creditors, who had filed the adversary proceedings. The Court concluded that the objecting parties had not raised concerns sufficient to deny approval of the Debtor's waiver.

In re Stain


(Internal Ref: Opinion 581)

Jan-13-2014

UNPUBLISHED

10-30043

Judge Thurman

PDF icon 581.pdf

The Chapter 13 Trustee filed a motion to dismiss after Debtors failed to make three plan payments. Debtors objected and filed a motion to abate, requesting, inter alia, that the Court "permanently" abate the three payments that had already come due under the plan as Debtor was injured and unable to work full time. The Court explained, citing to In re Tonioli, 359 B.R. 814 (Bankr. D. Utah 2007) and In re Hughes, No. 08-24736, 2009 WL 2252181 (Bankr. D. Utah, July 17, 2009), that abatement in this District is a term of art and that it may only be applied prospectively. The Court held that the Debtors showed cause and granted the abatement, prorating the future payments to account for the delinquent payments in full and ongoing plan payments under the modified plan.

In re Akbarian


(Internal Ref: Opinion 571)

Dec-19-2013

UNPUBLISHED

12-21670

Judge Thurman

PDF icon 571.pdf

The Court denied the Debtor's motion to dismiss her chapter 7 case under § 707(a). The Court applied the factors enumerated by the Tenth Circuit BAP in Isho v. Loveridge, 2013 WL 1386208 (B.A.P. 10th Cir. Apr. 5, 2013), and concluded that the Debtor had not demonstrated cause to dismiss. In addition, the Court found that the objecting creditors would be prejudiced by dismissal because, after twenty months in bankruptcy court, they would be required to return to state court to litigate their claims, which would deny them the possibility of a return through the Trustee's pending avoidance actions. The Court also held that the presence of denial of discharge proceedings and the potential that dismissal would reorder the payment priority established by bankruptcy law were factors favoring denial of the motion. While not present here, the Court opined that there could be circumstances that would permit dismissal, such as where all parties consented, or where the debtor demonstrated a precise mechanism to satisfy all creditors.

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