Creditor, the lessor of commercial mall space to chapter 11 debtor, filed a prepetition state court action against debtor seeking unpaid rent and recovery of the leased property. Over a period of more than a year, debtor made a number of payments to the clerk of the state court, in order to retain possession of the property during the lawsuit. When debtor filed its petition in bankruptcy, the amount being held by the state court was approximately $33,000, which was significantly less than the amount creditor was entitled to under the lease. The court considered the parties' conflicting claims to those funds, which it determined to be "cash collateral" under 11 U.S.C. § 363(a), and ruled both that creditor had established its interest in the funds, in satisfaction of § 363(o)(1), and that debtor had not satisfied its burden to provide creditor with adequate protection under § 363(o)(2). Therefore, the court vacated its previous order granting turnover of the funds to debtor, and granted creditor's motion to prohibit debtor's use of the funds.

On applications for interim compensation filed by co-attorneys for an unofficial creditors committee, an accountant for the chapter 11 debtor, and an accountant for the creditors committee, the court considered the following issues: (1) whether compensation for prepetition services by creditors committee counsel and debtor's accountant is allowable as an administrative expense; (2) whether professional fee payments are limited to local hourly rates; (3) whether the committee's accountant represented an interest adverse to the debtor's estate, and is therefore not entitled to compensation; and (4) whether the fees and costs applied for may be otherwise allowed. The court concluded that (1) prepetition legal services to the creditors committee did not substantially benefit the bankruptcy estate and were not compensable by the estate; (2) prepetition accounting services may not be allowed as administrative claims; (3) when out-of-state attorneys practice before the court, they are entitled to charge their customary billing rates; and (4) attorneys' postpetition fees were reasonable, proper, and allowable as administrative expenses, but the accountants' applications required an additional hearing to determine whether they had conflicts of interest.

Bank filed an adversary complaint against various defendants who owed money to debtor, seeking recovery of debts based on bank's superior security interest. Bank filed motions for summary judgment, to which the only defense was that the court was without subject matter jurisdiction. No evidence was presented at the hearing on the motions by defendants. The court granted summary judgment, indicating that it was unopposed and appeared to be meritorious. Shortly thereafter, defendants filed an objection to entry of summary judgment, raising factual issues regarding service of the motions, counsel's entry of appearance for defendants at the summary judgment hearing, and service of the complaint on one of the defendants. Bank's counsel filed an affidavit controverting defendants' claims, but defendants again failed to offer any evidentiary support. Based on defendants' failure to controvert the facts sworn to by plaintiff's counsel, and the fact that defendants were attempting to raise new defenses to summary judgment that they had not made at the hearing, the court found that their objection was not properly a motion under either Bankr. Rule 9023(c) or Rule 9024(a), nor could it be granted under 11 U.S.C. § 105, as there were no facts before the court to support their allegations. Defendants' objection was denied.

Limited partners filed a class action adversary complaint against debtor, the partnership's general partner, alleging that debtor had engaged in fraud while acting as a fiduciary, and that limited partners' claims were therefore non-dischargeable. Debtor moved to dismiss the complaint, asserting that plaintiffs had failed both to certify their class action and to plead fraud with particularity. The court refused to dismiss plaintiffs' claims based on failure to certify the class, concluding that dismissal was not appropriate because plaintiffs' claims could be maintained as non-class claims. However, the court granted dismissal pursuant to Fed. R. Civ. P. 9(b) [Bankr. R. 7009], based on plaintiffs' failure to plead fraud with particularity. The court refused to adopt a liberal reading of the claims in the case, because plaintiffs were all parties to the alleged fraudulent transactions, and should therefore be able to describe the facts of the fraud with particularity. The complaint was dismissed without prejudice.