Trustee sued Home Depot to recover balance due for postpetition sales of ladders. Home Depot moved for summary judgment, contending it could recoup or set off what it owed Debtor (Krause) against Krause’s debt to Home Depot arising out of failure to provide insurance and indemnity with respect to sales of defective ladders. Motion denied. Home Depot failed to show that Krause’s obligations to Home Depot arose from the same transaction as Home Depot’s obligation to Krause (thereby precluding recoupment) or that its claims and Krause’s claims were both prepetition obligations or both postpetition obligations (thereby precluding setoff).
NOT INTENDED FOR PUBLICATION
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Judge James E. Massey (Retired)
In action to deny the Debtor’s discharge or, alternatively to determine dischargeability of debt, secured creditor contended that Debtor sold collateral within one year of bankruptcy in violation of security agreement with intend to defraud creditor and that Debtor fraudulently and falsely stated that he had transferred assets. Held: judgment for Debtor. Security Agreement did not unambiguously prohibit transfers of collateral. Plaintiff failed to prove Debtor deliberately lied, as opposed to being mistaken or negligent, in stating he had not transferred an asset within one year. [§§ 727(a)(2), (a)(4), 523(a)(6)]
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Landlord moved for payment as an expense of administration its legal fees incurred in opposing Debtor’s motion to extend time to assume or reject a sublease. Motion was denied because Landlord failed to show any benefit requested by or conferred on estate.
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Petition filed in name of Debtor was signed by her husband, who was ineligible to file bankruptcy. Court modified stay to permit creditors to continue foreclosure efforts short of transferring title and required Debtor to appear at Clerk’s office with identification to execute petition.
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Landlord sought payment of postpetition rent on premises leased by Debtor, which it subleased to third party. Third party, also in bankruptcy, paid Landlord directly after the petition date. Landlord applied such payments to prepetition rent due from Rhodes. Held: Landlord’s application of payments violated automatic stay as a an act to collect a debt. There was no evidence to show that subtenant was paying or could legally pay a prepetition debt owed by Rhodes.
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Creditors of Debtor brought claims against Wilmann in state court contending it was a de facto general partner of Debtor. Wilmann sued creditors, seeking benefit of automatic stay so as to enjoin the state court cases. Motion for preliminary injunction denied because Wilmann could not show any of the 4 prerequisites, and in particular any likelihood of success on merits.
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Debtor sued its secured lender in an attempt to stop a foreclosure on property owned by Debtor’s principal in which Debtor conducts its business and with complaint filed a motion for “Expedited Hearing on Complaint.” Motion denied because motion sought immediate trial; proper procedure was to have filed motion for TRO or preliminary injunction. Motion alleged no facts to support injunctive relief.
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Pro se Chapter 13 Debtor’s post-confirmation objection to proof of claim of secured creditor on ground that interest rate higher than 7% would make it impossible for debtor to perform plan denied.
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Wife of president of Debtor was insider of the debtor within meaning of 11 U.S.C. § 101(31), whether or not she was related to her husband by affinity and even though she had no control over debtor, because she had a close relationship to her insider husband and loans she made to debtor and their repayment were not arms’ length transactions. Judgment on preference claim for trustee.
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Court denied defendant’s motion for summary judgment in section 523(a)(2) case, rejecting contentions that note given to evidence the debt effected a novation thereby barring a claim that plaintiff had been defrauded and that note was an accord and satisfaction of fraud claim.
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