Chapter 7 trustee sought to avoid a transfer debtor had made to a related entity, alleging it was a preference under 11 U.S.C. § 547(b), and defendant moved for partial summary judgment. The transaction at issue was part of a three-way debt forgiveness between debtor, defendant, and another related entity. Defendant argued that the transaction constituted a setoff rather than a transfer, and thus § 547(b) was inapplicable. The court agreed that § 547(b) does not apply to setoffs, and considered whether the "triangular setoff" at issue fell within the protection of 11 U.S.C. § 553(a). The court held that creditors only have the right to setoff "mutual debt," which generally requires that debtor and creditor owe debts to each other, and as such, triangular offsets are not typically considered "mutual." The court recognized narrow exceptions to that outcome, however, where the debtor "formally agreed" that two related entities could aggregate debts owed to and from debtor as a setoff, or where the other entities were alter egos of one another. Concluding that these scenarios were fact-dependent, the court denied defendant's summary judgment motion.

Relying on 11 U.S.C. § 547(b), chapter 11 trustee sought to avoid payments made by debtor to three partnerships, in which debtor was a partner, that were then used by the partnerships to make loan payments to defendant bank. The bankruptcy court held that trustee could recover the payments from bank, as the "initial transferee" under 11 U.S.C. § 550, finding that the partnerships were mere "conduits" between debtor and bank. This decision was reversed by the district court in 316.pdf.

Creditor repossessed business equipment from chapter 13 debtor without seeking relief from stay, and asserted as a defense to a stay violation claim that it believed its contract to be with a corporate entity rather than with debtor individually. The court found that debtor had informed creditor that her business had not filed its articles of incorporation, and had signed the agreement without listing any corporate capacity. The court further found that creditor had failed to either confirm the existence of a corporate entity or take any other action in response to debtor's disclosure that she was under the court's protection. The court concluded that creditor had willfully violated the stay, and awarded debtor actual damages, attorney's fees, and punitive damages pursuant to 11 U.S.C. §105(a) and 362(h).

Creditor filed a non-dischargeability complaint against chapter 7 debtor under 11 U.S.C. § 523(a)(2)(B), then later stipulated to dismissal of the complaint with prejudice. Debtor requested attorney's fees from plaintiff under § 523(d). Noting that the purpose of the § 523(d) fee-shifting provision was to protect an honest debtor from claims that have no basis in fact or law, the court found that plaintiff could have discovered facts, with little cost or inconvenience, that would have led it to conclude that its legal claim was not supported. Therefore, the claim against debtor was not substantially justified. However, because creditor had relied on debtor's schedules and her sworn testimony at the creditors' meeting, the court concluded that special circumstances made an award of fees unjust, and debtor's request was denied.