The Court partially granted the Chapter 7 Trustee's Application for Compensation, which was filed after the Debtor converted her case from Chapter 7 to Chapter 13 and before the Chapter 7 Trustee distributed any funds to parties in interest. The Court found that the Chapter 7 Trustee performed substantial services on behalf of the estate (including liquidating $91,062.50 in assets) and concluded that he was entitled to reasonable compensation but that any compensation to the Chapter 7 Trustee could not exceed $7,803.13, which is the amount of the cap on trustee fees under 11 U.S.C. Section 326(a) applied to the total amount of funds the Court authorized him to distribute to parties in interest, including administrative claimants and the successive Chapter 13 Trustee. The Court further looked to Section 326(c)--which caps the total amount payable when multiple trustees serve in the same case--and, despite concluding that Section 326(c) does not necessarily apply when a case is converted from Chapter 7 to 13, nevertheless limited the Chapter 7 Trustee's fee to the amount capped by Section 326(a) minus any commissions the Chapter 13 Trustee earns under Section 326(b).
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Honorable James R. Sacca
The Court denied Debtor-defendant's motion to dismiss adversary proceeding, in which creditor-plaintiff alleged the Debtor is not entitled to a discharge pursuant to 11 U.S.C. Sections 727(a)(2)(A), 727(a)(2)(B), 727(a)(3), and 727(a)(5), because the plaintiff alleged sufficient facts--namely that the Debtor allegedly transferred certain cars and granted his friend a security interest in his home without satisfactorily explaining what happened to the proceeds of those transactions or producing records in support--to state a claim for transferring or concealing assets with intent to hinder, delay, or defraud a creditor; for concealing, destroying, mutilating, falsifying, or failing to keep or preserve records relating to his financial condition; and for failing to satisfactorily explaining any loss of assets.
Following trial, the Court dismissed an ex-husband's complaint against his ex-wife seeking damages and a determination of nondischargeability regarding purported debts relating to a business they operated; the Court concluded that the exception to dischargeability contained in 11 U.S.C. Section 523(a)(15) did not apply because the ex-husband and ex-wife each were responsible for 50% of business debts both before and after their divorce--thus their divorce settlement did not create any new obligations, and thus the relevant debts were not incurred in the course of their divorce. Also, the Court held that the ex-husband violated the automatic stay by withholding a portion of his child support payments and claiming a setoff against the ex-wife's alleged debt to him because Georgia law rarely permits setoffs against child support and because any claims he may have had against her were discharged in her Chapter 7 bankruptcy.
The Court denied the Chapter 13 Trustee's objection to the Internal Revenue Service's claim that was filed after the claims bar date because the Internal Revenue Service was not listed as a creditor on the Debtor's bankruptcy petition and thus received no notice of the bankruptcy case or the claims bar date, and fundamental fairness requires that the Service not be deprived of the opportunity to participate in the Debtor's Chapter 13 plan when it had no notice of the bankruptcy filing.
The Court granted the Chapter 13 Trustee's motion for summary judgment and denied the Defendant credit union's cross-motion, holding that the Trustee was entitled to avoid a transfer of $3,400 from the Debtor to the Defendant as a preferential transfer pursuant to 11 U.S.C. Section 547 and that the ordinary course of business exception contained in 11 U.S.C. Section 547(c) did not apply because the transfers were in payment of a debt on which the Defendant obtained a nondischargeability judgment in a prior bankruptcy case; the Court concluded that the Debtor did not incur the debt in the ordinary course of her financial affairs because--accordingly to the nondischargeability judgment in the prior case--she did so fraudulently, that the transfers were not made in the ordinary course of her financial affairs, and that the transfers were not made according to ordinary business terms.
The Court scheduled the continuation of a trial after concluding that recusal was unwarranted where one defendant's testimony conflicted with information the Court discovered while performing research for another case; the Court concluded that recusal was not appropriate because the information it discovered was obtained in its judicial capacity and thus did not stem from an extrajudicial source.
The Court found after trial that Debtor purchased a car from her live-in-lover's car dealership and paid for it in full, despite his contention that she still owed him money for the car and that his dealership still owned it. The Court concluded that the Debtor's surety owed no liability on the bond she was required to post in order to obtain a Georgia title for the car and that all parties would be enjoined from asserting any further claim to this bond.
The Court found after trial that Debtor fraudulently embezzled money from her live-in-lover's company while working as its bookkeeper and paying her personal expenses with company funds, but the Court found that other funds she obtained from her lover were not the result of fraud, larceny, or embezzlement. The Court concluded that the amounts fraudulently embezzled from the company were nondischargeable pursuant to 11 U.S.C. Sections 523(a)(2)(A) and 523(a)(4), but the Court declined to award punitive damages.
The Court denied Plaintiff's request that Defendants' failure to respond to requests for admissions be deemed conclusive admissions of the matters set forth therein because--pursuant to Fed. R. Bankr. P. 7036, Fed. R. Civ. P. 36(b), and Perez v. Miami-Dade Cnty., 297 F.3d 1255 (11th Cir. 2002)--Defendants submitted and amended their responses to the requests for admissions, and the Court determined that allowing these amended responses would promote a presentation of the merits of the case and would not prejudice the Plaintiff.
The Court denied Defendants' motion to voluntarily dismiss its counterclaims pursuant to Fed. R. Bankr. P. 7041 and Fed. R. Civ. P. 41 because Plaintiffs had a motion for judgment on the pleadings pending--which was filed several months prior and which had been extensively briefed by both sides--and because allowing Defendants to dismiss their counterclaims at such a late stage of the proceedings would prejudice Plaintiff and likely cause it to suffer unnecessary delays and incur substantial additional costs.