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Opinions
| Case Title | Date & Status | Case Number(s) | Judge & PDF | Summary | |
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In re Skinner (Internal Ref: Opinion 258) |
Aug-10-1988 APPEAL Unpublished |
87A-3646 |
U.S. District Court, Utah |
The bankruptcy court determined that creditor had willfully violated the automatic stay by selling debtors' previously repossessed vehicle after receiving notice of debtors' bankruptcy filing, and awarded sanctions to debtors under 11 U.S.C. § 362(h). Creditor appealed. The district court concluded that the bankruptcy court's findings, that the notice of bankruptcy was received at creditor's post office box prior to the sale and that creditor's employees did not intend to violate the stay, were not clearly erroneous. Noting that creditor could only act through its employees, and that § 362(h) requires willful and intentional violation of the stay, the district court determined that the bankruptcy court had improperly imposed sanctions under § 362(h). However, concluding that bankruptcy courts have authority, under 11 U.S.C. § 105, to impose civil contempt sanctions, the district court remanded the matter to the bankruptcy court for imposition of such sanctions, within its discretion. | |
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Clendenen v. Van Dyk Oil Co., Inc. (In re By-Rite Distrib., Inc.) (Internal Ref: Opinion 257) |
Jul-27-1988 APPEAL Unpublished |
86PA-0946 |
U.S. District Court, Utah |
The court considered whether payments by check that were delivered to payee shortly before debtor filed its bankruptcy petition were "transferred" when delivered, or when paid by debtor's bank postpetition, for purposes of both avoidance under 11 U.S.C. § 549(a)(1) and the limitations period applicable to such claims in § 549(d). Payee appealed the bankruptcy court's ruling that the transfer occurred on the date debtor's bank actually disbursed funds belonging to debtor, which meant the funds were avoidable as postpetition transfers. The district court affirmed. | |
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Eggett v. Shaffer (In re Shaffer) (Internal Ref: Opinion 256) |
Jul-27-1988 UNPUBLISHED |
86PC-0021 |
Judge Clark |
Plaintiffs filed an adversary complaint alleging that a judgment they had obtained in state court was not dischargeable in debtor's bankruptcy pursuant to 11 U.S.C. § 523(a)(2). On the parties' cross-motions for summary judgment, the court ruled that § 523(a)(2) requires a showing of intentional misrepresentation. Plaintiffs' state judgment was based on negligent misrepresentation, which is not sufficient. The court indicated that debtor's motion would be granted unless plaintiffs amended their complaint to state an intentional misrepresentation claim pursuant to § 523(a)(2). | |
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Megabar Corp. v. First Sec. Bank of Utah (In re Megabar Corp.) (Internal Ref: Opinion 255) |
Jul-21-1988 UNPUBLISHED |
87PB-0772 |
Judge Clark |
Debtor-in-possession filed an adversary complaint against defendant bank, alleging that payment on a loan from bank to debtor that was made by debtor's licensee constituted a preference under 11 U.S.C. § 547. Debtor argued that the payment was an indirect transfer of its property to bank, as licensee simply paid to bank what licensee owed to debtor. Bank argued that the payment was made pursuant to licensee's independent obligation as guarantor of debtor's loan. The court defined the issue as whether the payment depleted estate assets in favor of one creditor over others. The court determined that licensee had made the payment to bank in order to protect its own interests as a guarantor on the loan, and that the result did not diminish debtor's estate because bank essentially gave its claim for the payment amount to licensee. Therefore, the payment was not a preference subject to § 547. | |
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ANR Ltd. Inc. v. Chattin [Utex Oil Co., debtor] (Internal Ref: Opinion 254a) |
Jul-20-1988 RELATED CASE 89 B.R. 898 (D.Utah) |
(Utex Oil Co., debtor) |
U.S. District Court, Utah |
After settling its adversary proceeding against a chapter 11 debtor in bankruptcy court, plaintiff filed an action in district court against debtor's former officers and directors. Plaintiff alleged that defendants assisted debtor's mismanagement of funds for which debtor owed plaintiff a fiduciary duty. The district court defined the issue before it as whether plaintiff had standing to bring the causes of action in the complaint, which would depend on whether the claims were personal to plaintiff or belonged to the debtor's bankruptcy estate. The court determined that, under Utah law, the corporation is the proper party to assert claims against its insiders for corporate management and, therefore, such claims belonged to the debtor corporation's estate. However, claims by creditors that they were specifically harmed by insider conduct are personal to the creditor, and are not part of the corporation's bankruptcy estate. A personal claim is one in which no one else has an interest. Plaintiff's claim sought an alter ego remedy against defendants, seeking to have them held personally liable for the corporation's debts, which the district court determined could be either a corporate claim or a personal claim of a creditor under Utah law. The court then held that a determination of that issue depended on whether placing the claim within the bankruptcy estate would further federal bankruptcy policies. Since a successful alter ego claim concludes that insiders are personally liable for all of the corporation's debts, fundamental principles of bankruptcy compel a conclusion that the bankruptcy trustee should be the one to assert such a claim, on behalf of all creditors. Plaintiff did have standing to bring its tort claims against the defendants because those claims alleged direct injury to plaintiff and not to others. | |
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In re Smith Son Septic Sanitation Serv., 88 B.R. 375 (Bankr.D.Utah) (Internal Ref: Opinion 254) |
Jul-1-1988 PUBLISHED |
86B-5435 |
Judge Boulden |
Debtor partnership moved to dismiss its chapter 11 case due to changes in financial circumstances that made confirmation of a plan impossible. The US Trustee objected to dismissal on the ground that debtor had failed to pay quarterly fees imposed by 28 U.S.C. § 1930(a)(6). Both parties agreed that conversion of the case to chapter 7 would serve no purpose. No other party objected to dismissal. Noting that Congress had failed to provide a means of enforcing payment of the § 1930(a)(6) fees, the court considered and rejected trustee's suggested alternatives to dismissal, including imposition of a contempt order against debtor, or awarding trustee a money judgment for the fees. The court concluded that trustee's interpretation of the fees statute, to the effect that debtors must pay the minimum fee for each quarter even if no disbursements were made, was not supported by the statute's legislative history. The court dismissed debtor's case, but allowed time for the trustee to determine whether it wanted to file an adversary proceeding to recover unpaid fees in accordance with the court's interpretation of § 1930(a)(6). | |
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DLB Collection Trust v. Harline (In re Harline) (Internal Ref: Opinion 253a) |
Jun-30-1988 APPEAL Unpublished |
87-0184 and -0185 |
U.S. District Court, Utah |
When debtor's chapter 11 case was converted to chapter 7, the bankruptcy court issued a notice that listed February 11 of the previous year as the last day to file non-dischargeability complaints. The correct date should have been February 9, 1987. Plaintiffs' complaints, filed on February 11, 1987, were dismissed by the bankruptcy court as untimely, finding that plaintiffs could not reasonably rely on a date that had already passed, and had a duty to compute the date themselves from the date of the creditors meeting. On appeal, the district court reversed, concluding that the bankruptcy court should have, sua sponte, used its power under Bankruptcy Rule 4004(b) to correct its own mistake by extending the time for filing plaintiffs' complaints, even though plaintiffs had not requested an extension. | |
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In re Granada, Inc., 88 B.R. 369 (Bankr.D.Utah) (Internal Ref: Opinion 253) |
Jun-24-1988 PUBLISHED |
87C-0693 |
Judge Clark |
The court considered a claim for non-residential rent that was incurred by debtor postpetition. Lessor asserted that, under 11 U.S.C. § 365(d)(3), its claim for rent must be paid immediately. However, trustee claimed that, as the estate did not have sufficient liquid assets at that time to pay all administrative claims, paying lessor's claim would give that claim improper superpriority over other administrative claims. The court determined that such priority was not supported by the statute, its legislative history, or case authority, and held that § 365(d)(3) claims do not have superpriority status over other 11 U.S.C. § 507(a)(1) administrative claims. However, the court held that, when immediate payment of a § 365(d)(3) claim has been properly sought, full payment must be made unless the trustee establishes a "substantial doubt" that there will ultimately be sufficient funds available to pay all administrative expenses. The court concluded that trustee had not made such a showing in the case before the court. | |
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Dewsnup v. Timm (In re Dewsnup), 87 B.R. 676 (Bankr.D.Utah) (Internal Ref: Opinion 252) |
Jun-15-1988 PUBLISHED See 908 F.2d 588 |
87PC-0116 |
Judge Clark |
Debtors filed an adversary action against a secured creditor, asserting that they could redeem abandoned secured property, pursuant to 11 U.S.C. § 506(d), by paying creditor the property's fair market value. Debtors argued that, since an allowed secured claim is limited to the value of the collateral by § 506(a), they should be able to pay creditor that value and take the property free and clear of creditor's security interest. The court extensively discussed the role of § 506 in bankruptcy, concluding that it only applies to property in which the estate has an interest. Since the estate has no interest in property that has been abandoned, that provision is not applicable to abandoned property. In addition, rights in abandoned property are considered the same as if no bankruptcy had been filed. Therefore, § 506(d) does not grant debtors any greater rights in abandoned property than they had under prepetition non-bankruptcy law. This decision was affirmed by the district court, and later by the Tenth Circuit. | |
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In re Dunyon (Internal Ref: Opinion 251) |
May-27-1988 UNPUBLISHED See 274.pdf |
87B-4887 |
Judge Boulden |
Creditor obtained a prepetition judgment against debtor, and continued its efforts to collect that judgment after debtor filed a chapter 7 petition. The court found that creditor's conduct constituted a willful violation of the automatic stay, without justification, and awarded sanctions pursuant to 11 U.S.C. § 362(h). This decision was upheld, but remanded for recalculation of the amount of fees that were a direct, foreseeable consequence of creditor's conduct in 274.pdf. | |
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Cmty. First Bank v. Quinlan (In re Quinlan) (Internal Ref: Opinion 250) |
May-26-1988 UNPUBLISHED |
87PB-0893 |
Judge Boulden |
Plaintiff's non-dischargeability action was dismissed for failure to file the pretrial order, and plaintiff moved for reconsideration of the dismissal, arguing excusable neglect under Bankruptcy Rule 9024. In finding no excusable neglect, the court noted that cumulative procedural and substantive deficiencies in the case were evidence of, at best, failure to attend to detail and, at worst, a cavalier attitude toward the court. Therefore, plaintiff's motion was denied with respect to its 11 U.S.C. § 523 cause of action. The court considered the problems with plaintiff's 11 U.S.C. § 727 action to be much more serious, noting that plaintiff's counsel had obtained the information in support of the claims against debtor by virtue of his previous role as trustee of debtor's estate. Counsel resigned as the trustee and filed plaintiff's complaint against debtor on the same day, which was also the last day for filing objections to discharge. The court found that acting as the trustee and representing a creditor of the estate was clearly a conflict of interest, and that the conflict was not cured by counsel's withdrawal as trustee. The court granted the motion to reinstate the § 727 cause of action, directed the US Trustee to take steps to ensure proper administration of the estate, and directed the chapter 7 trustee that had been appointed after plaintiff's counsel resigned to either schedule a pre-trial conference on the § 727 claim, or move to dismiss the adversary proceeding, within twenty days. | |
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In re The Weber Clinic (Internal Ref: Opinion 249) |
May-12-1988 UNPUBLISHED |
86A-0633 |
Judge Allen |
A lender to non-debtors filed a claim in debtor's bankruptcy based on a trust deed to debtor's property that was executed by debtor's president as security for the loan. The court chose not to determine whether the trust deed was enforceable and, instead, considered whether it had been released by lender's settlement with, and release of, one of the loan obligors. The court held that, under Utah law, a lender's release of one of several obligors, made without express written reservation of lender's rights against the other obligors, acts as a release of all obligors from the agreement. Therefore, lender's claim against debtor's estate was denied. | |
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Am. Cmty. Serv., Inc. v. Wright Mktg., Inc. (In re Am. Cmty. Serv., Inc.) (Internal Ref: Opinion 248) |
Apr-29-1988 WITHDRAWAL OF REFERENCE Unpublished |
86PC-0996 |
U.S. District Court, Utah |
The district court found "cause" under 28 U.S.C. § 157(d) to permissively withdraw the reference of a non-core adversary proceeding from the bankruptcy court. In so doing, the district court held that cause for permissive withdrawal of the reference is limited to a narrow set of circumstances, the existence of which is determined on the facts presented by each particular case, and withdrawal is generally appropriate when either judicial economy would be served or a party has a right to a jury trial. In the case before it, the non-debtor defendant had a seventh amendment right to a jury trial, which it had timely demanded, and it had not consented to the bankruptcy court's jurisdiction. Reference was therefore withdrawn. | |
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Bowen v. Internal Revenue Serv. (In re Bowen), 84 B.R. 214 (Bankr.D.Utah) (Internal Ref: Opinion 247) |
Mar-28-1988 PUBLISHED |
87PB-0236 |
Judge Boulden |
The court considered the proper method of calculating penalties under Internal Revenue Code § 6700, which was enacted as part of an effort to eliminate abusive tax shelters. Having considered the arguments of both the IRS and the chapter 11 debtor subject to such penalties, the court determined that a transactional assessment of the penalty was not supportable, and that the penalty should be assessed on a one-time basis, rather than annually. | |
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In re Terracor, 86 B.R. 671 (Bankr.D.Utah) (Internal Ref: Opinion 246) |
Mar-10-1988 PUBLISHED |
81B-0599 through -0602, and 81B-0689 through -0696 |
Judge Boulden |
The court determined that it had subject matter jurisdiction to consider a dispute between non-debtors that related to a chapter 11 plan confirmed more than five years prior to the dispute. However, the court concluded, based on the facts before it, that permissive abstention pursuant to 28 U.S.C. § 1334(c)(1) was appropriate. The court recommended to the district court that, in cases involving confirmed chapter 11 plans that are largely completed and resolution of the dispute will have little or no effect on the bankruptcy case, disputes between third parties should not be determined in the bankruptcy court and permissive abstention should be used to transfer such cases back to jurisdictions statutorily designated to handle them. | |
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Orem Postal Credit Union v. Twitchell (In re Twitchell) (Internal Ref: Opinion 245) |
Feb-22-1988 APPEAL 91 B.R. 961 (D.Utah) See 224.pdf |
85PA-0922 |
U.S. District Court, Utah |
Chapter 7 debtor, the president and treasurer of plaintiff credit union, appealed a bankruptcy court decision that concluded plaintiff's claim against him was non-dischargeable under 11 U.S.C. § 523(a)(4). The sole issue on appeal was whether debtor was acting in a fiduciary capacity when the proven defalcations took place. The district court noted that the general meaning of "fiduciary" is far too broad for the purposes of § 523(a)(4), which is narrowly construed, and that fiduciary capacity under the statute has been defined as arising only from an express or technical trust. The court rejected the position taken by some courts that debts due to breach of fiduciary duties by corporate or bank officers is sufficient to satisfy § 523(a)(4), finding that interpretation to be overly broad. The court concluded that plaintiff was required to show that all of debtor's defalcations occurred while he was acting as a trustee under a pre-existing express agreement or statute. Finding that no express agreement or statute made debtor a trustee over plaintiff's funds, the court reversed the bankruptcy court's decision. | |
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In re Ret. Inn at Forest Lane, Ltd. (Internal Ref: Opinion 244) |
Feb-16-1988 APPEAL 83 B.R. 795 (D.Utah) |
84A-4462 |
U.S. District Court, Utah (en banc) |
The district court considered a creditor's motion for change of venue of a bankruptcy case, en banc. The court concluded that the bankruptcy court's practice of automatically transmitting change of venue cases to the district court for disposition was not in keeping with the spirit and interpretation of various statutes, bankruptcy rules, and Local Rule B-106. The court resolved to amend Rule B-106 to provide that motions for change of venue in bankruptcy cases would thereafter be heard initially by the bankruptcy court, which would then provide a report and recommendation on the motion to the district court. In the case before it, the district court granted the motion to change venue in order to avoid further delay. | |
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The Lockhart Co. v. Multi-Resort Ownership P'ship (In re Sweetwater) (Internal Ref: Opinion 243a) |
Jan-11-1988 APPEAL Unpublished |
86PA-0766 |
U.S. District Court, Utah |
Prior to debtor's bankruptcy filing, plaintiff perfected a security interest in several contracts whereby debtor sold interests in recreational property. Under Utah Code Ann. § 70A-9-403(2), a filed financing statement is effective perfection for a period of five years from its filing, but must be re-perfected by filing a continuation statement prior to the end of the perfection period. However, if a security interest is perfected when insolvency proceedings are initiated, the perfection continues until either the perfection period runs, or sixty days after the insolvency proceedings terminate. Debtor's chapter 11 plan was confirmed in June 1984. Approximately five months later, debtor contested plaintiff's secured claim on the ground that plaintiff had not filed a continuation statement in accordance with § 70A-9-403(2). The bankruptcy court ruled in favor of debtor, determining that plaintiff's perfected security interest lapsed sixty days after the effective date of debtor's plan, and plaintiff appealed. The district court affirmed, ruling that a chapter 11 bankruptcy proceeding terminates on the effective date of the confirmed plan, and neither the bankruptcy court's retention of jurisdiction to further litigate the validity or extent of claims, nor a pending objection to the claim in the bankruptcy case, relieved plaintiff of its obligation to file a continuation statement. | |
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Merrill v. Turner (In re Indep. Clearing House Co.) (Internal Ref: Opinion 243) |
Dec-30-1987 APPEAL Unpublished See 237.pdf and 185.pdf |
83PA-3081 |
U.S. District Court, Utah |
Trustee for Ponzi scheme debtors asserted fraudulent transfer claims, pursuant to 11 U.S.C. § 548 and 544(b), against defendant, an attorney who acted as debtors' coordinating counsel with respect to numerous lawsuits filed against debtors across the country. Defendant argued that he was essentially a conduit from debtors to local counsel, and that he should not be accountable for money he did not retain. After a trial, the bankruptcy court concluded that defendant had failed to account properly for more than $350,000 of funds that had been transferred to him by debtors, and granted trustee a judgment for that amount. The district court agreed with the bankruptcy court's conclusion that trustee had established that debtors had transferred funds to defendant during the one-year period prior to debtors' bankruptcy filing, and that debtors were insolvent at the time of those transfers. The district court rejected defendant's argument that trustee had failed to meet his burden of proving that debtors received less than reasonably equivalent value for those transfers, on the ground that trustee testified that his investigation found no evidence at all of consideration received by debtors, which placed the duty on defendant to produce evidence of value returned to debtors. As defendant's accounting practices were grossly inadequate, he failed to establish that debtors had received value in return for the transfers made to him. However, the district court ruled that the bankruptcy court had failed to credit defendant with a few transfers that were adequately tied to legal services provided to debtors, totaling approximately $37,000, and affirmed the judgment less that amount. | |
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Prudential Fed. Sav. v. Dana (In re Dana) (Internal Ref: Opinion 242a) |
Dec-4-1987 APPEAL Unpublished |
87C-0810 |
U.S. District Court, Utah |
The district court tentatively ruled that appellants' attempt to file a chapter 13 bankruptcy petition while another chapter 13 petition was still pending was void from its inception. Given the opportunity to argue otherwise, appellants agreed with the court and requested dismissal. Their bankruptcy case was dismissed. | |
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In re CFS Fox River, Ltd. (Internal Ref: Opinion 242) |
Dec-1-1987 UNPUBLISHED |
86C-2732 |
Judge Clark |
Debtor filed its chapter 11 petition on the eve of a scheduled foreclosure sale of an apartment complex it operated. Secured creditor sought relief from stay or dismissal, but postponed the hearing on its motions and entered into a stipulation with debtor that essentially granted it superpriority administrative expense status over funds debtor would deposit into a segregated account. The court executed an order approving the stipulation, which included a provision regarding how a dismissal of debtor's petition would affect the agreement. Five days later, pursuant to a previous order, the court dismissed the case due to debtor's failure to file its schedules and statement of affairs. Thereafter, creditor sought post-dismissal relief from the court, alleging that debtor had violated the parties' stipulation. The court ruled, first, that superpriority status and collateral management are inherently bankruptcy functions, and are not "ancillary matters" over which the court would have continuing jurisdiction. Creditor's argument that the court retained inherent power to enforce its own orders was also rejected by the court, noting that a motion to dismiss supersedes prior orders and returns the parties to the remedies available to them under non-bankruptcy law. Concluding that it may have jurisdiction to consider creditor's motion, the court ruled that it would be inappropriate to do so. | |
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Rushton v. Nell Inv. Co. (In re Nell) (Internal Ref: Opinion 241) |
Nov-16-1987 UNPUBLISHED |
86PA-0026 |
Judge Clark |
Trustee filed fraudulent conveyance claims against a limited partnership that debtor created and controlled, and its limited partners, who were all family members of debtor. The court determined that all of the transfers made by debtor to the partnership were fraudulent under 11 U.S.C. §548 and 544, and that none of the defenses to those claims were available. Trustee was entitled to judgments against the transferees, either for the value of the transferred property or declaring the transfers null and void. | |
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In re Larson (Internal Ref: Opinion 240) |
Sep-25-1987 APPEAL Unpublished |
87C-0042 |
U.S. District Court, Utah |
Debtor, an individual guarantor of the debts of his failed corporation, filed a chapter 11 petition on the day of a scheduled foreclosure sale of his home, which creditor moved to dismiss. Debtor moved to disqualify the assigned bankruptcy judge and, at the hearing on that motion, moved to disqualify the bankruptcy judge hearing the motion as well. Debtor's disqualification motions were denied and, at a later hearing, creditor's motion to dismiss was granted. On appeal, the district court held that the bankruptcy court had not abused its discretion, either in the handling of debtor's motions to recuse, or by granting the motion to dismiss. | |
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Merrill v. Allen (In re Universal Clearing House Co.) (Internal Ref: Opinion 239) |
Sep-11-1987 APPEAL Unpublished See 157.pdf and 185.pdf |
82PA-0253 |
U.S. District Court, Utah |
The bankruptcy court granted summary judgment to trustee on his claims that commission payments made by Ponzi scheme debtor to its salespeople were fraudulent conveyances. Nine salespeople appealed that ruling, and the district court reversed the judgment against them and remanded for factual determination of whether they had given value for their commission payments. One defendant, who had not appealed, filed a motion to set aside the judgment against him in the bankruptcy court, pursuant to Fed. R. Civ. P. 60(b) and Bankruptcy Rule 9024, after the district court's ruling. The bankruptcy court denied that motion, and defendant appealed. On appeal, the district court ruled that the bankruptcy court had not abused its discretion by denying defendant's Rule 60(b) motion, notwithstanding defendant's claim that he did not appeal the final order because he could not afford to hire a lawyer, since such a motion is not intended to provide a substitute for appeal. | |
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In re Clark Tanklines Co. (Internal Ref: Opinion 238) |
Aug-6-1987 APPEAL Unpublished |
86C-0545 |
U.S. District Court, Utah |
The bankruptcy court denied lenders' motion for relief from stay, but granted them adequate protection payments under 11 U.S.C. § 361, to begin 30 days after the hearing. On appeal, the district court held that: (1) in the absence of statutory time mandates, the bankruptcy court had some discretion regarding when protection payments would begin; (2) allowing debtor to purchase certain collateral for fair market value was appropriate protection under § 361, as the "indubitable equivalent" of lenders' interest in that collateral; (3) the bankruptcy court properly concluded that lenders failed to perfect a security interest in vehicles debtor leased from third parties by filing a financing statement that did not appear on the vehicles' titles; and (4) adequate protection does not include compensation for delay in enforcing lenders' right against the collateral. Bankruptcy court's order was affirmed. | |
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Merrill v. Abbott (In re Indep. Clearing House Co.) (Internal Ref: Opinion 237) |
Jul-23-1987 APPEAL 77 B.R. 843 (D.Utah) |
83PA-0986 |
U.S. District Court, Utah (en banc) |
Trustee brought adversary proceeding to recover payments made to investors by debtor clearinghouses in connection with debtors' Ponzi scheme, and investors counterclaimed. The bankruptcy court entered default judgment on trustee's claims against some investors and denied those investors' motion to set aside the default. The defaulted investors appealed. The bankruptcy court subsequently granted trustee's motion for summary judgment on his 11 U.S.C. § 547 preference claim, and his 11 U.S.C. § 548 fraudulent transfer claim, but granted investors' motion for summary judgment on his third claim, and both sides appealed. The district court consolidated the appeals and held that: (1) trust that held investors' money in furtherance of a Ponzi scheme was a "business trust" eligible for chapter 11 relief; (2) debtors did not receive "reasonably equivalent value" for payments made to investors that exceeded their investments; (3) whether investors acted in good faith in accepting payments that did not exceed their investments was an issue of fact that precluded summary judgment for either party on trustee's third claim; (4) mere fact that debtors did not have legitimate or "ordinary" business did not mean that debtors' payments to investors were other than in "ordinary course of business" for purposes of a preference claim; and (5) denial of investors' motion to set aside default judgment and granting trustee's claims against them was an abuse of discretion. | |
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John Deere Co. v. Iverson (In re Iverson) (Internal Ref: Opinion 234) |
Jul-20-1987 UNPUBLISHED |
83PC-0666 |
Judge Clark |
In an adversary proceeding involving a farm equipment seller and two banks, the court sifted through the parties' arguments based on stipulated facts in order to resolve the priority of their conflicting security interests in various farm equipment. | |
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Wilkins v. Union Bank (In re Irving Fin. Corp.) (Internal Ref: Opinion 236) |
Jul-20-1987 UNPUBLISHED |
85PC-0181 |
Judge Clark |
Chapter 11 debtor pledged collateral to defendant bank based on bank's loan to debtor's subsidiary. Later, debtor sold the collateral and used the proceeds to pay off the loan. Chapter 11 trustee filed adversary complaint against bank, claiming the fund transfer from debtor was either a preference under 11 U.S.C. § 547 or a fraudulent conveyance under 11 U.S.C. § 548(a)(2). The court held that the payment was not a preference because bank had a perfected security interest in the collateral that was sold, and granted bank's motion for summary judgment on that issue. With respect to the fraudulent transfer claim, the court noted that transfers that solely benefit third parties generally are not considered supported by reasonably equivalent value, but that the indirect benefit exception precludes avoidance when debtor received the benefit of the transaction, despite third party participation. The court concluded that debtor's 80% ownership of the borrower raised issues of fact with respect to the quantity and nature of any indirect benefit debtor received from the transactions with bank. Accordingly, bank's motion for summary judgment was denied with respect to trustee's § 548 claim. | |
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In re Lawn Care Corp. (Internal Ref: Opinion 235) |
Jul-20-1987 UNPUBLISHED |
86C-3606 |
Judge Clark |
Trustee proposed to sell certain property in debtor's possession, free and clear of liens, pursuant to 11 U.S.C. § 363(f). Several objections to the proposed sale were made, alleging that certain assets did not belong to the estate. Relying on Mosier v. Schwenke (In re Dennis L. Carlson, Inc.), (D. Utah November 12, 1986) [213.pdf], the court ruled that trustee could not sell the assets under § 363(f) unless they were property of the estate under 11 U.S.C. § 541. Therefore, trustee could not sell assets subject to an objection until all ownership disputes were resolved. | |
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Moxley v. Bingham (In re Moxley) (Internal Ref: Opinion 233) |
Jul-16-1987 APPEAL Unpublished |
83C-2914 |
U.S. District Court, Utah |
Debtor filed a motion to reopen his no asset chapter 7 bankruptcy to add omitted creditors. The bankruptcy court denied the motion without prejudice, indicating that it would reconsider the motion after liability had been determined in creditors' state court action. Creditors had sued debtor based on his prepetition sale of insurance to them, and their claim appeared to fall within the coverage of debtor's professional malpractice insurance. The district court ruled that the bankruptcy court had not abused its discretion by denying debtor's motion, since the available facts indicated that debtor's malpractice carrier would likely cover any damages award. Denial of the motion to reopen was affirmed. |
