Based on finding that the Debtor did not authorize the filing of a Chapter 13 petition, the Court vacates earlier order of dismissal and dismisses the case as a fraudulent and unauthorized filing for which the Debtor was not responsible. Court cannot direct credit reporting company to change records but authorizes the reporting of the petition as being fraudulent and without the debtor’s authority. Court directs copies of the Order to be sent to the U.S. Attorney,. U.S. Trustee, and State Bar of Georgia for further investigation as to whether conduct of lawyer and person who submitted the petition was fraudulent, criminal, or otherwise improper.
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Opinions
Effective January 1, 2017, Orders in the United States Bankruptcy Court for the Northern District of Georgia designated by the Court as "opinions" will be transmitted to the Government Publishing Office (GPO) and made available to the public at no cost. To view these opinions, click HERE to be transferred to GPO site.
Orders designated as Opinions and issued between January 1, 2004 and December 31, 2016 are maintained on this website. Many of these Opinions are not intended for publication and are so designated. Each entry includes the style of the matter, the case number, the date entered on the docket, and a short parenthetical expression of the issue(s) raised. The most recent opinions appear first.
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Honorable Paul W. Bonapfel
The Internal Revenue Service filed a proof of claim for unpaid taxes for the years 2001 through 2007. The proof of claim indicates that tax returns were filed for all years except 2007. The Debtors filed an objection to the claim, asserting that they have now filed tax their tax return for 2007 and that they received a tax refund of $950 that the IRS applied to the unpaid balance of other taxes. For some unexplained reason, they conclude that this set of circumstances entitles them to disallowance of the entire proof of claim. Although IRS did not respond to the objection or appear at the hearing, no basis for disallowance of the claim exists. The objection is denied, without prejudice to the rights of the debtors to renew the objection and to seek allowance of the IRS’s claims in the proper amount.
A Chapter 13 debtor must act in good faith in connection with the claims resolution process. IRS filed a proof of claim for taxes for 2005 through 2007, noting that the Debtors had not filed returns for those years. Debtors objected to the claim on the ground that they have now filed tax returns. Disallowance is not proper given that debtors known their tax liabilities. Objection denied, without prejudice to renew objection and to show seek allowance of claim only in amount that Debtors actually owe according to their tax returns.
Order allowing $1,500 of $3,500 chapter 13 fee request, without prejudice to the attorney’s right to seek further compensation if circumstances warrant or to file a renewed application for the currently disallowed portion. The Court concluded that the Debtor’s attorney failed to demonstrate that a fee of $3,500 for this case was reasonable, taking into account all of the factors that are relevant to determination of a reasonable fee under § 330, Rule 1.5(a) of the Georgia Rules of Professional Conduct, and the Johnson factors. The court reasoned that “Fair compensation is a function of objective factors and subjective factors unique to each case. It is the role and responsibility of the debtor’s attorney to consider such factors in calculating her fee, and articulate such factors if the fee is challenged.” (Order at 13).
When attorney declines to make certifications required in connection with reaffirmation, attorney’s responsibility is to assist client in presenting (but not advocating) the agreement to the court for review. The attorney does not have to withdraw as a condition to the court’s review of the agreement.
Honorable Mary Grace Diehl (Recall)
Order holding debts dischargeable when Plaintiff sought a declaration that the debts were non-dischargeable pursuant to 11 U.S.C. § 523(a)(4) and Plaintiff failed to carry its burden of proving that the debts at issue were the result of fraud or defalcation while acting in a fiduciary duty.
Order denying car creditor's motion to reconsider, which followed a motion to disburse unclaimed funds. Applying Georgia law, O.C.G.A. § 10-1-36, the Court found there was no evidence that the creditor had complied with the requirements of Georgia law to preserve its right to seek a deficiency claim on the vehicle.
Judge James E. Massey (Retired)
Debtor filed an application to employ the attorney who filed her bankruptcy case to represent her in truth in lending case. The Court denied the application because a debtor in a bankruptcy case (as opposed to a debtor in possession in a Chapter 11 case) is free to employ any professional that the debtor chooses to employ for any purpose, including prosecution of a cause of action that the debtor is entitled to pursue.
NOT INTENDED FOR PUBLICATION
In an involuntary case filed by a single creditor, the alleged debtor filed an answer to the involuntary petition denying that it was not paying its debts as they came due and a separate motion to dismiss on the ground that the debtor has more than 11 creditors. The Court denied the motion to dismiss, pointing out that the defense of too few petitioning creditors had to be raised in the answer and that Bankruptcy Rule 1003(b) requires a list of the names and addresses of all creditors so they may be afforded the chance to join the petition. The Court afforded the debtor an opportunity to amend its answer.
NOT INTENDED FOR PUBLICATION
Plaintiff obtained subpoenas from the Clerk and served one of them on a California resident with a demand for document production in California. When the witness failed to produce the documents, Plaintiff moved for an order to show cause why the individual should not be held in contempt. The Court denied the motion and quashed the subpoena. Civil Rule 45, made applicable by Bankruptcy Rule 9016, limits the geographic area where a subpoena may be served, and the subpoena in question was not served in accordance with that rule.
NOT INTENDED FOR PUBLICATION