The Court granted the Chapter 11 Trustee’s motion to hold the Debtor’s chairman in civil contempt for deliberately violating the Barton Doctrine. The Respondent had initiated meritless lawsuits in Ohio against the Chapter 11 Trustee, his counsel, and their respective spouses. The Court ordered the Respondent to dismiss that lawsuit with prejudice.
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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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Judge James E. Massey (Retired)
The Court granted the Chapter 7 Trustee’s motion for summary judgment, avoiding preferential transfers made by the Debtor within 90 days of filing his petition and unauthorized postpetition transfers. Defendant could not show that there was a history of late payment from Debtor and therefore could show that the payments were made in the ordinary course of business between the parties under 11 U.S.C. § 547(c)(2)(A).
Honorable Mary Grace Diehl (Recall)
A joint trial was held on the Chapter 7 Trustee’s fraudulent transfer claims against Debtor’s former principals. Under Georgia’s Uniform Fraudulent Transfer Act and sections 544 and 550 of the Bankruptcy Code, judgment against each Defendant in the amount of $248,000 was entered for transfers made in the four-year period preceding the chapter 11 filing. . The Trustee’s expert established that Debtor was insolvent during the relevant period, and Defendants failed to establish that Debtor had any underlying promissory note or other obligation to pay Defendants in twice monthly payments. Therefore, no reasonably equivalent value was provided by Defendants in exchange for the transfers.
NOT INTENDED FOR PUBLICATION
The Court granted Defendant’s Motion to Dismiss under Rule 12(b)(6) because Plaintiff failed to state a claim for relief to be granted. As a creditor, Plaintiff did not have standing to pursue turnover claims involving property of the estate. Once the chapter 7 petition was filed, all of the Debtor’s assets became property of the estate under section 541 of the Bankruptcy Code and the Trustee was charged to pursue any action involving property of the estate.
NOT INTENDED FOR PUBLICATION
Chapter 7 Trustee’s partial motion for summary judgment was granted finding that the undisputed facts make out an actual fraudulent transfer under section 548(a)(1)(A). The transfer at issue was a quitclaim deed transferring Debtor’s half-interest in real property pursuant to Debtor and Defendant’s divorce agreement. Debtor’s sworn testimony was sufficient to establish the requisite fraudulent intent. Defendant’s intent was not relevant. The Court also granted Trustee’s claim to sell the property, including Defendant’s interest, under §363(h). Trustee was permitted to sell the property, which was a single family home used as a rental property without net positive income.
NOT INTENDED FOR PUBLICATION
A joint trial was held on the Chapter 7 Trustee’s fraudulent transfer and preference claims against purported former principals of Debtor. The Court determined that Debtor received reasonably equivalent value in the form of services provided to Debtor. Therefore, there was no fraudulent transfer liability. Alternatively, Trustee sought to avoid the transfers as preferences. Defendant was found not to be a statutory insider, so the preference period was limited to the 90-day period preceding bankruptcy. Defendant defended the preference action based on the legal theory that he was not a creditor. The Court found, however, that he was paid for his work and services in arrears, and, accordingly, such a payment scheme rendered Defendant a creditor.
NOT INTENDED FOR PUBLICATION
Honorable James R. Sacca
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 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.
Order on Plaintiff’s Motion to Dismiss Defendant’s Counterclaim. The Court granted Plaintiff’s Motion to Dismiss Counterclaim because counterclaim objecting to discharge was untimely and attempt to revoke the discharge was untimely. Equitable tolling does not apply to 11 U.S.C. §727(e)(1).
(Court denied Defendant's Motion and Combined Brief for Order Authorizing Bankruptcy Rule 2004 Examination, finding, in accordance with the "Pending Proceedings Rule," that once an adversary proceeding has been commenced, Rule 2004 is inappropriate, and in order to examine a party in interest, the discovery provisions of the Federal Rule of Civil Procedure, adopted by the Bankruptcy Rules, are required.)