Justia Bankruptcy Opinion Summaries

Debtor Fred Fausett Cranmer filed a Chapter 13 repayment plan, which excluded Social Security income (SSI) from the projected disposable income calculation. The bankruptcy trustee objected to the plan on that basis. The bankruptcy court denied confirmation of the plan, concluding, inter alia, SSI must be included in the projected disposable income calculation and Cranmer's failure to do so meant he did not propose his plan in good faith. Cranmer appealed and the district court reversed. Upon review, the Tenth Circuit Court of Appeals concluded that SSI need not be included in the calculation of projected disposable income and Cranmer's failure to include it was not grounds for finding he did not propose his plan in good faith. View "Anderson v. Cranmer" on Justia Law

The issue before the Tenth Circuit Court of Appeals in this case concerned whether the amount of a federal tax refund equivalent to the "nonrefundable" portion of the child tax credit was exempt from a bankruptcy debtor's estate under Colorado law. The Bankruptcy Panel for the Tenth Circuit held that the disputed funds were exempt; upon review, the Tenth Circuit Court of Appeals disagreed and reversed, finding that the nonrefundable portion was "property" of the bankruptcy estate within the meaning of 11 U.S.C. 541(a). View "In re: Borgman, et al" on Justia Law

Tracy Broadcasting is a Nebraska corporation that operated an FM radio station in Wyoming. In 2008, Tracy Broadcasting executed a promissory note for a $1,596,100 loan from Valley Bank & Trust Company (Valley Bank). The note was secured by an agreement dated December 13, 2007, which granted Valley Bank a security interest in various assets, including Tracy Broadcasting's general intangibles and their proceeds. In 2009, Spectrum Scan, LLC obtained a judgment in Nebraska federal court against Tracy Broadcasting in the amount of $1,400,000. Seven months later, Tracy Broadcasting filed a petition under Chapter 11 in Colorado bankruptcy court. The two primary creditors of Tracy Broadcasting were Valley Bank and Spectrum Scan, which was unsecured. The most valuable asset listed was the broadcasting license. The schedules stated that the “proceeds” of the license were “secured to Valley Bank.” Spectrum Scan brought an adversary action to determine the extent of Valley Bank’s security interest. The bankruptcy court ruled that Valley Bank had no priority in the proceeds of the sale of Tracy Broadcasting’s license. The United States District Court for the District of Colorado affirmed. The issue before the Tenth Circuit centered on whether a creditor with a security interest in the general intangibles (and their proceeds) had priority over unsecured creditors in the proceeds of the sale of the license. The bankruptcy court and the district court held that it did not. Upon review, the Tenth Circuit disagreed: "Federal law permits a licensee to grant a security interest in the economic value of its license, and Nebraska law recognizes that a security interest in the proceeds of a license sale attaches when the licensee enters into the security agreement, regardless of whether a sale is contemplated at that time." View "Tracy Broadcasting Corp. v. Spectrum Scan, LLC" on Justia Law

Defendant, convicted of substantive and conspiratorial bank fraud and tax crimes, appealed from an amended judgment resentencing him to four months' imprisonment after he was found to have willfully violated probation by failing to pay ordered restitution. Defendant, who declared bankruptcy after his initial sentencing, submitted that the automatic stay provision of the United States Bankruptcy Code, 11 U.S.C. 362(a), temporarily halted his obligation to pay restitution and barred the district court from revoking his probation of nonpayment. At issue was what effect, if any, the Bankruptcy Code's automatic stay provision had on court-ordered conditions of a criminal sentence or proceedings to address violations of those conditions. The court concluded that such orders and proceedings fell within an express exception to the automatic stay because they constituted a "continuation of the criminal action or proceeding." Defendant's alternative argument was meritless. The court dismissed the part of defendant's appeal that asked the court to modify the amended judgment to clarify that he was under no obligation to pay restitution while incarcerated, because it was unripe for adjudication. View "United States v. Colasuonno" on Justia Law

U.S. Bank appealed from an order granting the motion of debtor to value U.S. Bank's allowed secured claim pursuant to section 506(a) of the Bankruptcy Code, and valuing the claim at $3,500,000. The Bankruptcy Appellate Panel held that the order was not final but that U.S. Bank's alternative request to grant leave to appeal it as an interlocutory order should be granted. The Bankruptcy Appellate Panel also concluded that low income tax credits that the owner of the property was eligible to claim, as well as the obligations they imposed, did affect the value of the property and should have been considered as part of the property's value. Accordingly, the court reversed and remanded. View "U.S. Bank Nat'l Assoc. v. Lewis & Clark Apartments, et al" on Justia Law

Frank Williams and Stephen Sherman Wyse appealed from a bankruptcy court order granting in part and denying in part Wyse's Motion to Reconsider Order of the Court Granting in part the Motion for Sanctions. The bankruptcy court ruled that Williams had to dismiss count I of a state court complaint within 15 days of the order but could continue to pursue counts II and III. The order reaffirmed an award of attorney fees to be paid by Wyse to debtor. The court affirmed the judgment, holding that King's pre-conversion debt was discharged. View "Williams, et al v. King" on Justia Law

Debtor executed a Balloon Note and Deed of Trust in favor of Wells Fargo for the purchase of a home and subsequently filed for bankruptcy. On appeal, Wells Fargo challenged the district court's amended order granting debtor's motion for summary judgment, finding that Wells Fargo was judicially estopped from filing a claim in the Second Bankruptcy for any amounts that could have been, but were not, claimed in the First Bankruptcy. Because the district court abused its discretion in finding that Wells Fargo adopted inconsistent positions in debtor's bankruptcy proceedings and that the bankruptcy court's acceptance of Wells Fargo's claims in the First Bankruptcy was not negated by debtor's dismissal without discharge, the application of judicial estoppel was not warranted. Accordingly, the court reversed and remanded. View "Wells Fargo Bank, N.A. v. Oparaji" on Justia Law

Debtors appealed from the ruling of the bankruptcy court granting summary judgment to SunTrust and denying summary judgment to debtors, on debtors' adversary complaint that challenged SunTrust's standing to enforce a promissory note and deed of trust on debtors' property, and sought to remove the deed of trust from the chain of title to such property. The court affirmed the bankruptcy court's judgment and held that the promissory note was a negotiable instrument and that SunTrust was entitled to enforce it and the deed of trust. The bankruptcy court properly used evidence from the affidavit of SunTrust's representative and properly applied judicial estoppel. View "Knigge, et al v. SunTrust Mortgage, Inc." on Justia Law

Debtor paid off a line of credit and a $28,000 loan from her parents and transferred her interest in the marital residence to her husband, Bruno. In a separation agreement, Debtor waived any claim to equity in the residence, about $27,500. Bruno agreed to pay the mortgage and retained four vehicles (marital property) plus three other vehicles and tracts totaling 60 acres, non-marital property. Debtor retained a 1999 Pontiac. Both waived claims to support and retirement accounts. Debtor later filed her chapter 7 no-asset petition, listing an $11,000.00 lien on the Pontiac and $60,763.48 credit card debt (both incurred during marriage). The Trustee filed an adversary complaint to recover the value of alleged fraudulent transfers, 11 U.S.C. 548(a)(1)(B), 544, 550. Bruno argued that in a contested divorce, he would have likely received support, insurance and part of Debtor’s pension. The bankruptcy court concluded that Debtor did not receive reasonably equivalent value and entered a judgment of $47,635.27. The Sixth Circuit affirmed that Debtor did not receive reasonably equivalent value, but remanded to amend the judgment to $4,532.98. It was unnecessary to consider the likely outcome of a contested divorce; the issue was comparison of the value Debtor received with the value Debtor transferred. View "In re: Neal" on Justia Law

Debtors appealed the bankruptcy court's order granting CitiMortgage's motion to dismiss debtors' adversary proceeding seeking the avoidance of CitiMortgage's lien on debtors' residence. The court concluded that a secured creditor's lien could not be avoided under 11 U.S.C. 506(d) based solely on the fact that the creditor's claim had been disallowed for untimeliness. Accordingly, the court affirmed the judgment. View "Shelton, et al v. CitiMortgage, Inc." on Justia Law