Justia Bankruptcy Opinion Summaries

Ramey filed a pro se Chapter 7 petition and sought permanent waiver of the pre-petition credit counseling requirement of 11 U.S.C. 109(h), arguing incapacity and exigent circumstances. The bankruptcy court found that the motion failed to comply with local notice rules. The case was then dismissed because Ramey failed to file schedules and other initial documents. Weeks later, Ramey filed a credit counseling certificate that was completed post-petition and other documents. Ramey sought to vacate the dismissal, but her filing did not address credit counseling. The court denied Ramey’s motion, citing the lack of pre-petition counseling. Weeks later, Ramey again moved to waive the requirement and vacate the dismissal, citing medical issues. The court denied the motion, stating that Ramey did not meet the definition of incapacity or disability, having successfully completed counseling, post-petition. The Sixth Circuit Bankruptcy Appellate Panel affirmed, stating that the court must apply the statute as written. Exceptions to the pre-petition counseling requirement apply only if the court determines, after a hearing, that debtor is unable to complete those requirements because of incapacity, disability, or active duty in a military combat zone. Incapacity “means that the debtor is . . . incapable of realizing and making rational decisions.” Disability means that “the debtor is so physically impaired as to be unable, after reasonable effort, to participate in an in person, telephone, or Internet briefing.” View "In re: Ramey" on Justia Law

Debtors argue that the bankruptcy court erred in not awarding them all the attorney fees they incurred in their adversary proceeding against Champion for its violation of the discharge injunction. Debtors also argue that the bankruptcy court erred in not awarding them punitive damages for Champion's violation of the discharge injunction. The BAP concluded that both arguments failed for the same reason. In this case, the record on appeal affords the panel no basis for evaluating their merits. Therefore, the BAP is unable to review the bankruptcy court's findings of fact or its conclusions of law, and cannot say, without the transcript, that the bankruptcy court abused its discretion in reaching the decision it did. Accordingly, the BAP affirmed the judgment. View "Huonder v. Champion Milking Systems" on Justia Law

Debtor appeals the bankruptcy court's order converting his chapter 13 case to chapter 7. The BAP concluded that the bankruptcy court did not err by refusing to hold an evidentiary hearing on the United States Trustee's motion. The BAP also concluded that even if debtor had not waived his challenges, the bankruptcy court's findings are not clearly erroneous. In this case, the bankruptcy court's findings are amply supported by the facts set forth in the United States Trustee's verified motion. The BAP agreed with the bankruptcy court's findings that there was sufficient cause to convert the chapter 13 case to chapter 7. The bankruptcy court found that, inter alia, debtor had exhibited a serious and studied disregard for the orderly process of justice and a relentless willingness to lie; he had intentionally given inconsistent testimony and failed to provide responsive information; he had filed his bankruptcy petition in an attempt to avoid having to disclose financial information; and he failed to disclose assets on bankruptcy schedules. Accordingly, the BAP affirmed the judgment. View "Hansmeier v. McDermott" on Justia Law

The County appealed the bankruptcy court's order and judgment discharging the debt owed to it by Jacob Milan for costs incurred related to his incarceration. The bankruptcy code precludes discharge of a debt for a fine, penalty or forfeiture owing to a governmental unit unless it is pecuniary in nature. The court concluded that the bankruptcy court committed no error in its determination that the Incarceration Costs are subject to discharge under 11 U.S.C. 523(a)(7). In this case, the clear intent for the Incarceration Costs is pecuniary in nature. View "County of Dakota v. Milan" on Justia Law

Barbara Wigley appeals the bankruptcy court's order denying confirmation of Robert Wigley's (debtor) second modified Chapter 11 plan. The court held that Barbara does not have standing because her interests are not central to the bankruptcy process and she is not a person aggrieved. Therefore, the court dismissed the appeal. To the extent that Barbara has standing to bring this appeal, the court concluded that the bankruptcy court did not err in denying approval of a settlement in debtor's Chapter 11 plan, and the district court did not err in entering the stay relief order. View "Wigley v. Wigley" on Justia Law

Lariat appealed the bankruptcy court's order denying Lariat's request to dismiss the Chapter 11 case of debtor, or to convert the case to Chapter 7, denying confirmation of debtor’s second modified Chapter 11 plan, and establishing deadlines for debtor to file a modified plan and obtain confirmation of it. Lariat also appealed the bankruptcy court's order confirming debtor's fourth modified Chapter 11 plan. Lariat’s main argument is that the bankruptcy court erred in finding that debtor’s Chapter 11 case was filed in good faith. The court found no error with the bankruptcy court’s findings that debtor was in financial distress, and that he filed his Chapter 11 petition to maximize the value of his assets and to obtain the benefits of the Bankruptcy Code. The court rejected Lariat's contentions and affirmed the judgment. View "Lariat Companies, Inc. v. Wigley" on Justia Law

In 2010, Trentadue’s ex‐wife sought to modify placement and child support, related to one of their six children. A three-year legal dispute over custody, placement, health insurance, and child support followed, involving substantial motion practice, requests for contempt findings, engagement of experts, and evidentiary hearings. The Wisconsin state court overseeing the litigation determined that Trentadue’s conduct resulted in excessive trial time to resolve the case and awarded Trentadue’s ex‐wife $25,000 in attorney’s fees for “overtrial,” to be paid to attorney Gay. Trentadue never paid Gay. Instead, he filed a chapter 13 bankruptcy petition. Gay countered by filing a $25,000 claim for the unpaid overtrial award and classified it as a nondischargeable, domestic support obligation entitled to priority. Trentadue objected that the obligation was imposed as a punishment, not a domestic support obligation. The bankruptcy court overruled his objection. The district court and Seventh Circuit affirmed, noting the restorative nature of the award. which “furthers two objectives, providing compensation to the overtrial victim for fees unnecessarily incurred and deterring unnecessary use of judicial resources.” The court also noted that Trentadue’s finances are “not so bleak,” including monthly income of six to seven thousand dollars. View "Trentadue v. Gay" on Justia Law

The City of Vallejo petitioned for Chapter 9 bankruptcy in 2008. Two years after the bankruptcy court confirmed Vallejo's debt-adjustment plan, a federal jury found that two police officers employed by Vallejo used constitutionally excessive force when they arrested Jason Eugene Deocampo. The district court entered a judgment for money damages against the officers in their personal capacities, and awarded Deocampo his attorney’s fees. The court noted that, under California law, Vallejo is generally obligated to indemnify its employees for claims against them arising from their employment. The court held that where, as here, the plan confirmed by the bankruptcy court did not expressly encompass claims or judgments against the city’s employees, the indemnification statutes do not subject such claims or judgments to adjustment by operation of law nor by the fact of the public employment itself. The court affirmed the district court’s denial of the officers’ Rule 60 motion for relief from judgment, and agreed with the district court that neither the judgment nor attorney’s fee award was discharged by Vallejo’s bankruptcy proceedings. View "Deocampo v. Potts" on Justia Law

After the County Treasurer and Tax Collector conducted tax sales of the properties debtor owned, debtor filed for Chapter 11 bankruptcy relief. Debtor filed an adversary complaint against the County Treasurer and the purchasers of the two properties, alleging that because the County sold the properties for a price that was too low, the tax sales were fraudulent transfers voidable under 11 U.S.C. 548(a). The bankruptcy court dismissed the complaint with prejudice, and the Ninth Circuit Bankruptcy Appellate Panel affirmed. In BFP v. Resolution Trust Corp., the Supreme Court held that the price received at a mortgage foreclosure sale “conclusively satisfies” the Bankruptcy Code’s requirement that transfers of an insolvent debtor’s property be in exchange for a “reasonably equivalent value,” so long as the mortgagee complied with the relevant foreclosure laws of the state in question, which in that case was also California. Because California tax sales have the same procedural safeguards as the California mortgage foreclosure sale at issue in BFP, the court agreed with the BAP and held that the price received at a California tax sale conducted in accordance with state law conclusively establishes “reasonably equivalent value” for purposes of 11 U.S.C. 548(a). Accordingly, the court affirmed the judgment. View "In re Tracht Gut, LLC" on Justia Law

Castellino hired Picerne, a general contractor, to construct an apartment complex on Castellino's property. After Castellino defaulted on its obligations and failed to pay Picerne and its subcontractors, Picerne filed a demand for arbitration and a mechanic’s lien against the apartment complex. The parties eventually entered into arbitration and, on the same day the superior court confirmed the arbitration award, Castellino filed a Chapter 11 petition for bankruptcy. On appeal, Picerne contends that the bankruptcy court erred in denying its motion for post-discharge attorneys’ fees. The court concluded that, under the circumstances of this case, Picerne could “fairly or reasonably contemplate” that it would have a claim for attorneys’ fees if it prevailed in the state litigation before Castellino filed its petition for bankruptcy. Therefore, the district court correctly determined that the claim was discharged when the bankruptcy court confirmed Castellino’s plan. Accordingly, the court affirmed the judgment. View "Picerne Constr. v. Castellino Villas" on Justia Law