Trustee objected to chapter 7 debtor's exemption of funds accrued while participating in a 401(k) ERISA qualified pension plan where funds were available to debtor as a result of debtor's employment terminating prepetition. Because the terms of the plan provided that after termination of employment debtor had the absolute right to the funds, trustee argued the funds lost their anti-alienation characteristics as part of an ERISA qualified plan and were not exempt under Utah Code Ann. § 78-23-5(1)(a)(x). Debtor responded by arguing that because the funds remained in the plan until they were deposited into an IRA, postpetition, they remained exempt under either ERISA or state exemption statutes. The court cited Guidry v. Sheet Metal Workers Nat'l Pension Fund , 39 F.3d 1078, 1082-83 (10th Cir. 1994)(en banc), cert. denied , 514 U.S. 1063 (1995), for the proposition that such funds are protected by anti-alienation provisions of ERISA § 206(d)(1), so long as they are within the fiduciary responsibility of private plan managers and not paid to or received by plan participants or beneficiaries. Therefore, the court concluded that the trustee's objection to exemption was overruled because the debtor's plan funds were not property of the estate.
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Title: In re Parks, 255 B.R. 768 (Bankr.D.Utah) | Date: Nov-9-2000 | Status: PUBLISHED (Judge Boulden) | Case(s): 00-27517
Title: In re Dabbas | Date: Aug-24-2000 | Status: UNPUBLISHED (Judge Clark) | Case(s): 00-21217
The matter before the court is a motion to dismiss a chapter 7 bankruptcy case for substantial abuse under §707(b). The bankruptcy court relied upon In re Stewart , 175 F.3d 796 (10th Cir. 1999) and its "totality of the circumstances" test to determine if substantial abuse exists. Under the totality of the circumstances test, the debtors can reduce expenses without being deprived of adequate food, clothing, shelter, or other necessities; therefore, unless the case is converted to another chapter within ten days, the case is dismissed for substantial abuse of the bankruptcy laws.
Title: In re Jackson, 251 B.R. 597 (Bankr.D.Utah) | Date: Jul-21-2000 | Status: PUBLISHED (Judge Clark) | Case(s): 99-33070
The issue before the court is the willful violation of the automatic stay and the failure of the creditor to turn over property of the estate. The court awarded debtor compensation but declined to award punitive damages because it believed that punitive damages were not necessary to deter similar conduct in the future.
Title: Armstrong v. Bailey (In re Willow Brook Cottages) | Date: May-18-2000 | Status: APPEAL (Judge Kimball, U.S. District Court) | Case(s): 99PC-2187
After holding a hearing to show cause, the bankruptcy court held that Armstrong had violated the bankruptcy automatic stay provision, § 362, by filing his adversary proceeding without the court's permission. The bankruptcy court held him in contempt, awarded the trustee attorney's fees and punitive damages, and dismissed the adversary proceeding with prejudice. The review of the dismissal with prejudice for the alleged violation of the automatic stay was reviewed de novo . The factual determinations of the bankruptcy court as to the awarding of fees and damages were reviewed under an abuse of discretion standard. The district court ruled that the bankruptcy court properly dismissed Armstrong's action with prejudice for violating the stay and that it was acting within its discretion in awarding compensatory damages to a corporation. The district court determined that the punitive damage award is an abuse of discretion and that Armstrong's procedural defect does not merit the awarding of punitive damages based upon criminal contempt. The punitive damages award is reversed and the contempt charges are set aside.
Title: George v. Cevering (In re Cevering) | Date: Apr-14-2000 | Status: UNPUBLISHED (Judge Boulden) | Case(s): 99PB-2022
Debtor's ex-spouse filed a nondischargeability action under 11 U.S.C. §523(a)(4), (a)(5), and (a)(15) seeking $50,000, an award of punitive damages and attorney fees. On the day of trial, the debtor stipulated that the $50,000 debt was nondischargeable under 11 U.S.C. § 523(a)(15). The court found that the debt was also nondischargeable under 11 U.S.C. § 523(a)(4) but declined to award punitive damages because the statute of limitations ran on any state law conversion claim prepetition and no provision of the Bankruptcy Code allowed punitive damages under the circumstances of the case. The court declined to award attorney fees finding there was no case law, contractual, or statutory basis. The plaintiff also sought a general denial of the debtor's discharge under 11 U.S.C. §727(a)(2) and (a)(4)(A). The court denied the debtor's discharge under § 727(a)(4)(A) finding that the debtor knowingly and fraudulently made a material false oath.
Title: Nickerson v. Bailey (In re Ogden) | Date: Apr-13-2000 | Status: APPEAL Unpublished 2000 WL 33710895 (U.S. District Court, Utah) | Case(s): 98PA-2299
The bankruptcy court awarded summary judgment in favor of the chapter 7 trustee and against the Nickersons for $2ll,237.50, plus interest, as initial transferees under 11 U.S.C. § 550. The bankruptcy court ruled that the Nickersons must return to debtor's estate the amounts they received from debtor as profits from a Ponzi scheme that debtor operated. The district court affirmed the bankruptcy court's decision in its entirety.
Title: In re Amos | Date: Feb-16-2000 | Status: UNPUBLISHED (Judge Boulden) | Case(s): 98B-32761
"Gap period" attorneys fees incurred after the filing of a chapter 13 petition but before conversion to chapter 7 which are not allowed under §330(a)(4)(B) will not be allowed under §503(b)(1)(A). Applications for allowance of administrative expenses filed prior to conversion to chapter 7 are timely pursuant to Fed R. Bankr. P. 1019(c), and, to the extent allowed by the court, should be paid by the chapter 13 trustee from available §1306(a)(2) funds. If there are more allowed chapter 13 administrative claims than available §1306(a)(2) funds, the allowed §503(b)(2) administrative claims should be prorated and paid from §541 property after chapter 7 administrative expenses pursuant to §726.Procedure change : Parties seeking allowance of any chapter 13 administrative expense must timely file a request for payment of the administrative expense prior to conversion to chapter 7 and have that request resolved by a final order, or other order extending the period, within sixty days of the conversion, or the administrative expense claim will be deemed waived by the applicant.
Title: Big Sky Motors, Ltd. v. Bailey (In re Ogden) | Date: Feb-4-2000 | Status: APPEAL Unpublished 2000 WL 33672946 (U.S. District Court, Utah) | Case(s): 98PA-2198
The bankruptcy court held that Big Sky received a $300,000 preferential transfer from debtor, which the trustee was entitled to avoid and recover from Big Sky, which was the initial transferee. The district court held that the bankruptcy court correctly determined that the trustee could avoid the $300,000 transfer to Big Sky under 11 U.S.C. § 547(b) and recover the money from Big Sky under 11 U.S.C. § 550(a)(1).
Title: In re WIN Trucking, 236 B.R. 774 (Bankr.D.Utah) | Date: Jul-27-1999 | Status: PUBLISHED (Judge Boulden) | Case(s): 98B-25814
Chapter 11 debtor elected to be treated as a small business but no party filed a plan within the 160-day time limit imposed by 11 U.S.C. §1121(e). After filing an untimely plan, the debtor filed a withdrawal of its small business election. The court concludes that the debtor's failure to timely file its plan and its belated attempt to withdraw its small business election preclude confirmation of the plan under 11 U.S.C. §1129(a)(1) and (2).
Title: In re Geneva Steel, 236 B.R. 770 (Bankr.D.Utah) | Date: Jul-20-1999 | Status: PUBLISHED (Judge Clark) | Case(s): 99C-21130
Debtor's motion for authorization to implement a employee retention program is before the court. In view of the objection by the United Steelworkers of America, the court finds that to propose this retention program without first having discussed its provisions with the Steelworkers is not an example of good business judgment, especially when the continued existence of the business is in question. Granting the motion may jeopardize the continuing support of the Steelworkers in the reorganization process. To be acceptable to this court, the severance plan must contain a mitigation provision that reduces the amount payable in the event the executive obtains other employment during the six or nine month reimbursement period. The severance plan is unacceptable because of the adverse impact the provision could have on the administration of the case in chapter 7. Further, the court will construe the payment of the emergence bonus only in the event that a plan of reorganization is confirmed and not an chapter 11 liquidating plan. The motion is denied without prejudice. The debtor is granted leave to set a hearing on ten days notice for approval of a retention program consistent with this order.