On chapter 13 debtors' motion, the court considered whether debtors could surrender collateral, more than two years post-plan confirmation, in full satisfaction of secured creditor's claim. Adopting the reasoning of Chrysler Fin. Corp. v. Nolan (In re Nolan), 232 F.3d 528 (6th Cir. 2000), the court determined that 11 U.S.C. § 1329(a) does not allow the modification sought by debtors. A confirmed plan is a binding contract between the parties, whether or not the creditor participated in plan confirmation or filed a proof of claim. Although § 1329(a) allows modification of plan payments, it does not allow debtors to change the status of a secured claim in the manner suggested. Debtors motion to modify was denied.
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Title: In re Blansett | Date: Feb-14-2003 | Status: UNPUBLISHED (Judge Thurman) | Case(s): 00-21397
Title: In re Blansett | Date: Feb-14-2003 | Status: UNPUBLISHED See 433a.pdf (Judge Thurman) | Case(s): 00-21397
This decision was inadvertantly filed out of order. See 433a.pdf for summary.
Title: In re Medical Software Solutions, 286 B.R. 431 (Bankr.D.Utah) | Date: Nov-14-2002 | Status: PUBLISHED (Judge Thurman) | Case(s): 02-32330
The issue before the Court was whether the Debtor's proposed sale of substantially all of its assets outside the ordinary course of business, and before a Chapter 11 Plan of Reorganization and Disclosure Statement had been proposed, should be approved by the Court. Complicating matters further, the proposed buyers were insiders as that term is defined within the Bankruptcy Code. The Court concluded that in order to approve a sale of substantially all the Debtor's assets outside the ordinary course of business, the following elements must be met. The Debtor must show (1) that a sound business reason exists for the sale; (2) there has been adequate and reasonable notice to interested parties, including full disclosure of the sale terms and the Debtor's relationship with the buyer; (3) that the sale price is fair and reasonable; and (4) that the proposed buyer is proceeding in good faith. See e.g. , In re Delaware & Hudson Ry. Co., 124 B.R. 169, 176 (D. Del. 1991); WBQ Partnership v. Virginia Dep't of Med. Assistance Serv. (In re WBQ Partnership) , 189 B.R. 97, 102 (Bankr. E.D. Va. 1995). The Court specifically found that because of the proposed purchaser's insider status that the purchaser has a heightened responsibility to show that the sale is proposed in good faith and for fair value. Relying upon the court-appointed examiner's reports in this case, the Court found no evidence of fraud or collusion or other actions indicative of bad faith and approved the sale free and clear of all liabilities including possible successor liability claims by the former president of the company.
Title: In re Sorrell, 286 B.R. 798 (Bankr.D.Utah) | Date: Nov-6-2002 | Status: PUBLISHED (Judge Thurman) | Case(s): 02-28611
The Debtors filed a bankruptcy petition under Chapter 12 of the Bankruptcy Code and moved for confirmation of their plan of reorganization. The Debtors proposed a plan wherein they surrendered one piece of real property to the secured creditor but kept another piece, providing for a twenty-year amortization of the remaining amount due under the secured claim. In addition, certain additional obligations were secured by personal property and were treated in the plan. The secured creditor objected on several grounds including that the Debtors did not meet the definition of family farmer as contemplated by Congress when drafting Chapter 12 and that the Debtors' plan was not proposed in good faith. The Court concluded the Flygare Chapter 13 factors of good faith are equally applicable in Chapter 12 cases and determined that if certain conditions were met, the plan met the good faith test as required under 11 U.S.C. § 1225(a)(3). See Flygare v. Boulden 709 F.2d 1344, 1347-48 (10th Cir.1983). In addition, the Court held that because the Debtors satisfied the criteria of the family farmer definition in the previous year that they could go forward under Chapter 12 despite evidence that the Debtors' current farming operations were minimal.
Title: In re Mountaineer Development Corp. | Date: Oct-21-2002 | Status: UNPUBLISHED (Judge Boulden) | Case(s): 00-28590
The high bidder at a trustee's auction moved to set aside the sale of the estate's interest in a note, alleging that false or misleading information induced his bid. Following the failed sale, the chapter 7 trustee moved for authority to sell the asset to a third party. The original high bidder also objected to sale of the estate's interest in the note to a third party. The original sale was authorized by the court, made regularly and with notice. The terms of the sale were as is, where is, if is, with no warranties or representations. To set aside such a sale, a party must show fraud, accident, mistake, or some other equitable cause for avoiding a like sale between private parties. See Golfland Entertainment Centers, Inc. v. Peak Investment, Inc. ( Ir re BCD Corp. ), 119 F.3d 852, 859-60 (10th Cir. 1997) (citations omitted). The trustee had passed along some, but not all, information in her possession regarding the status of the asset to the bidder. The trustee lacked independent knowledge of the accuracy of the information in issue, and the bidder made no specific request for this information. The court denied bidder's motion, finding the evidence insufficient to show any of the required elements. The court further held that the trustee owed no heightened fiduciary duty to disclose information to a bidder at auction where the bidder is also a creditor of the estate. The trustee's duty to a bidder-creditor is the duty of due care, diligence, and skill as measured by a reasonable person standard. See United States of America v. Aldrich ( In re Rigden ), 795 F.2d 727, 731 (9th Cir. 1986). There was no evidence in this case that the trustee had failed to fulfill her duty. Relying on the factors set forth in In re Anchor Exploration Co. , 30 B.R. 802 (N.D. Okla. 1983), the court found the trustee's proposed second sale to a non-bidding third party appropriate under the terms of the original Sale Order. See In re Anchor , 30 B.R. at 808
Title: In re Mount | Date: Sep-26-2002 | Status: UNPUBLISHED (Judge Clark) | Case(s): 02-29694
The debtor filed a Chapter 7 petition in bankruptcy less than one year after she transferred her 401(K) plan into an IRA. The trustee objected to the debtor's claimed exemption. It is the opinion of this Court that Tae Sun Hong (see opinion #427) correctly interprets the effect of U.C.A. § 78-23-5(1)(b)(ii) on debtor's claimed exemption. The trustee's objection to the claimed exemption is sustained.
Title: General Motors Acceptance Corporation v. Staples (In re Staples) | Date: Sep-3-2002 | Status: UNPUBLISHED (Judge Boulden) | Case(s): 01P-2084
GMAC brought a nondischargeability action against the debtor seeking to have a deficiency debt resulting from the sale of a repossessed vehicle declared nondischargeable under 11 U.S.C. § 523(a)(2)(C). The Court found, under all the facts of the case, that the 2000 GMC Jimmy SLC 4x4 4-door sport utility vehicle was not a "luxury good" as used in the statute, and the debt was discharged.
Title: In re JD Services, 284 B.R. 292 (Bankr.D.Utah) | Date: Jul-30-2002 | Status: PUBLISHED (Judge Clark) | Case(s): 00-29460
This dispute involves a transfer that resulted in $725,000.00 being credited to debtor's bank account instead of $7,250.00 because of a bank encoding error. The encoding error and transfer of disputed funds took place postpetition. The Court finds that the debtor was unjustly enriched in the amount of $717,750.00. Unjust enrichment will support a constructive trust. The funds were commingled with other funds to which general creditors have a claim. Therefore, the bank must trace its funds held in constructive trust utilizing the lowest intermediate balance rule. Because the funds held in constructive trust have always belonged to the bank, it is entitled to the interest actually earned by the $394,460.53 in constructive trust funds held. The bank is entitled to a postpetition administrative priority claim in the amount of $323,289.53 which represents the difference between the $717,750.00 originally transferred by mistake and the amount successfully traced using the lowest intermediate balance method. Because the $323,289.53 is unsecured, it is not entitled to the accrual of interest.
Title: In re Hong | Date: Jun-4-2002 | Status: UNPUBLISHED (Judge Boulden) | Case(s): 01-35072
Upon the chapter 7 trustee's objection to exemption, the debtors sought a determination that funds rolled over prepetition from an ERISA qualified plan into an IRA annuity were either not property of the chapter 7 estate under 11 U.S.C. §541(c)(2), or were exempt under Utah Code Ann.§78-23-5(1)(a)(x) or 79-23-6. The Court determined that the funds in the IRA annuity lost their ERISA anti-alienation characteristics prepetition and were therefore property of the estate. Once property of the estate, the funds were exempt pursuant to Utah Code Ann. §78-23-5(1)(a)(x) because they were held in an arrangement described in Section 408 of the Internal Revenue Code, unless the funds constituted a "contribution" made to the IRA annuity within one year of filing for bankruptcy. The Court found that the statute did not restrict "contribution" to exclude rollover funds, and therefore Utah Code Ann. §78-23-5(1)(b) applied, and the funds were not exempt. Further, Utah Code Ann. § 78-23-6 was inapplicable to exempt the funds as a matter of fact.
Title: Skull Valley Band of Goshute Indians v. Chivers (In re Chivers), 275 B.R. 606 (Bankr.D.Utah) | Date: Apr-9-2002 | Status: PUBLISHED (Judge Boulden) | Case(s): 99P-2573
Creditor sought nondischargeability of certain debts under 11 U.S.C. §523(a)(2)(A) and (B) and sought a determination thereof pursuant to its motion for summary judgment. Debtor filed a cross motion for summary judgment seeking dismissal of claims. The decision required a determination of the meaning of the term "financial condition" under § 523(a)(2)(B) and the interplay of Field v. Mans, 516 U.S. 59 (1995) and the tort of fraudulent misrepresentation with § 523(a)(2)(A). The Court adopted a narrow reading of "financial condition"which requires that a false written statement describe the debtor's net worth, overall financial health, or ability to generate income. The Court also recognized the Supreme Court's reference in Field to the Restatement (Second) of Torts and adopted the analysis set forth in the Restatement in analyzing fraudulent misrepresentations under § 523(a)(2)(A). Judgment in favor of creditor.