(overruling creditor's good faith objection to confirmation of Debtor's chapter 13 plan).
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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.
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(Corporate name included as "DBA" on petition of individual stricken; an individual cannot "do business as" a corporation)
(granting motion for default judgment on defendant' counterclaim).
(Chapter 11 case dismissed with 270-day bar to refiling)
Judge James E. Massey (Retired)
Chapter 7 Trustee moved for order authorizing the Rule 2004 examination of a law firm that closed on behalf of the lender a real estate transaction to which Debtors were parties. The Trustee did not serve the Debtors with the motion and was not required to by the Bankruptcy Rules. The law firm objected, citing Ga. Code Ann. § 7-1-360 that requires a financial institution to provide its customer an opportunity to object to the production of confidential information. The Court granted the motion, directed service of the order on Debtors and delayed the examination for two weeks to give Debtors time to object.
NOT INTENDED FOR PUBLICATION
Movants sought stay relief alleging only that Debtor had another case pending within one year of the filing of the present case and that they were entitled to an order under section 362(c)(3)(A). Motions denied. The condition that no stay exists with respect to property of the debtor is not congruent with the condition that no stay exists with respect to property of the estate. Argument that motions should be granted because Trustee did not oppose them was without merit. The motions failed to allege facts that entitled them to the relief requested.
NOT INTENDED FOR PUBLICATION
Judge Joyce Bihary (Retired)
(Defendants filed motion to dismiss complaint which sought imposition of constructive trust on funds being held by one of Defendants. The Chapter 7 Trustee claimed no interest in the funds, and the Court concludes it is without jurisdiction to decide this dispute among non-debtor parties. The Court granted Defendants’ motion to dismiss without prejudice to the parties pursuing any claims and remedies they have in another forum)
Honorable Paul W. Bonapfel
Contract for purchase of debtor’s real estate pursuant to § 363, executed in accordance with bidding procedures by “stalking horse” bidder who was also successful bidder at auction sale, provided for earnest money of $ 1 million and for the debtor to retain the earnest money as liquidated damages if the stalking horse bidder defaulted. The stalking horse bidder failed to close, and the debtor sold the property to the back-up bidder for $100,000 less. The stalking horse bidder contends that the debtor is not entitled to retain the earnest money because the liquidated damages provision is an unenforceable penalty under Georgia law. On cross-motions for summary judgment, the court held that a bidder participating in a bankruptcy sale is bound by the orders governing the sale and that the liquidated damages provision is enforceable as a judicially approved material term of the sale. Alternatively, the court ruled that the liquidated damages provision is not a penalty under Georgia law. The court declines to decide, on motions for summary judgment, other issues relating to the debtor’s alleged defaults that, the stalking horse bidder contends, excused its performance.
Proposed Findings of Fact and Conclusions of Law with respect to the Debtor’s non-core Truth in Lending Act claim for review de novo by the District Court. Court found that the creditor’s disclosure of the contract’s payment schedule (semi-monthly payments with only the starting date of the semi-monthly payments)does not comply with the requirement to disclose “the number, amount, and due dates or period of payments scheduled to repay the total of payments” as required by 15 U.S.C. § 1638(a)(6). However, the court found the defendant in good faith relied on Regulation Z, 12 C.F.R. § 226.18(g), and the accompanying Commentary of the Federal Reserve Board in its disclosure of payment terms and that based upon the defendant’s reliance on Regulation Z and the Board’s Commentary, it is shielded from liability pursuant to the good faith defense of 15 U.S.C. § 1640(f).
The Defendant admitted receipt of preferential transfers under 11 U.S.C. § 547(b) and raised the ordinary course of business defense of § 547(c)(2). The payments were later than 88% of the payments in the prepreference period, but not as late as a few. Under the pre-BAPCPA law that applies in this proceeding, the Defendant must show that the transfers were in the ordinary course of business as between the debtor and the transferee, § 547(c)(2)(B), and that the transfers were made according to ordinary business terms, § 547(c)(2)(C). The Court found that the payments at issue were made according to ordinary business terms in the industry and thus met the (c)(2)(C) requirement. With regard to the (c)(2)(B) requirement, the Court determined that preferential payments within the historical range that vary significantly from the typical payment pattern during the historical period are ordinary for purposes of § 547(c)(2)(B) only if the reasons for the variation in both the historical and preference periods are similar. Because the defendant had not shown the reasons for the variations from the typical pattern, the Court determined that the defendant could not invoke the ordinary course defense. The Court exercised its discretion to deny prejudgment interest requested by the trustee based on the defendant’s credible, good faith affirmative defense that, although not successful, nevertheless presented a close and difficult question for resolution.