The Court found following trial that Debtor did not receive any value in exchange for a transfer of Persian rugs to its principal that occurred less than two years before its petition date, that this property belonged to the Debtor, and that the Debtor was insolvent either before or immediately following this transfer. The Court concluded that the trustee was entitled to avoid this transfer pursuant to either 11 U.S.C. Section 544(b) or 548(a) and recover it pursuant to 11 U.S.C. Section 550.
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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 James R. Sacca
The Court found following trial that Debtor did not receive any value in exchange for a transfer of $472,806 to the Defendant that occurred less than two years before its petition date, that these funds were the Debtor's property and not the Defendant's (as he testified at trial), and that the Debtor was insolvent at the time of the transfer. The Court concluded that the trustee was entitled to avoid this transfer pursuant to 11 U.S.C. Section 548(a)(1)(B) and recover it pursuant to 11 U.S.C. Section 550.
Honorable Paul W. Bonapfel
Creditor repossessed debtor's car prior to the filing of the petition, refused to return it, and sold it. Court awarded actual damages of $1,559, attorney's fees of $4,325, and punitive damages of $17,890. Court observes that creditor who repossesses car prior to bankruptcy filing cannot condition the turnover of the vehicle on the provision of adequate protection, such as proof of insurance, unless the creditor moves promptly for relief in the bankruptcy court.
Honorable Barbara Ellis-Monro, Chief Judge
Order that debts owed to business were dischargeable under section 523(a)(4). While Debtor's actions in terminating his relationship with a former business and partner were not consistent with the business' operating agreement,the actions did not evidence the requisite fraudulent intent necessary under section 523(a)(4). Additionally, there was insufficient evidence presented to support a finding that Debtor's current business was a mere alter-ego of his former business, precluding the imposition of successor liability.
NOT INTENDED FOR PUBLICATION
Order granting judgment in favor of Defendant. Plaintiff sought a determination that a debt was non-dischargeable pursuant to section 523(a)(4). After holding a trial on the complaint, the Court found that Plaintiff had not proved by a preponderance of the evidence that the Debtor’s actions constituted a defalcation within the meaning of section 523(a)(4). The Court applied the heightened standard announced in the recent Supreme Court decision Bullock v. BankChampaign, N.A., 133 S. Ct. 1754 (2013), and found that the evidence did not establish that Defendant knew of, or consciously disregarded, a substantial and unjustifiable risk that her conduct would violate a fiduciary duty. While Defendant may have exercised poor judgment in trying to help her husband with his business, Defendant’s actions did not rise to the level of intentional wrongdoing, moral turpitude, or scienter required to prove a defalcation.
(Court sustained the Chapter 13 Trustee's Objection to Confirmation pursuant to Section 1325(b) of the United States Bankruptcy Code, holding that a debtor's calculation of disposable income may not incorporate a deduction for an "ownership expense" in an automobile, unless the automobile is secured by a loan related to the financing of acquisition of said automobile.)
(Court denied Defendant's Motion to Dismiss Amended Complaint, finding that under Maryland law the Trust Agreement in question had a valid spendthrift clause, but that the Debtor's control, through "voluntary withdrawals," of a portion of the corpus of the Trust, coupled with the estate's interest in any income received by the Debtor within 180 days of the petition date, resulted in the Trustee appearing to have a plausible claim as to at least some portion of the Trust and its income sufficient to defeat a motion to dismiss for failure to state a claim upon relief can be granted.)
Honorable Mary Grace Diehl (Recall)
Pro se Debtor filed a motion requesting reconsideration of the Court’s order lifting the automatic stay as to Everbank, a servicer of The Bank of New York Mellon. The Court denied the motion, finding that none of the limited circumstances under which reconsideration is appropriate were present in this case. Debtor did not present any mistake or change of law or fact. He merely restated arguments already heard before the Court. Debtor’s arguments as to the propriety of Everbank’s ability to foreclose on Debtor’s property were irrelevant to the Court’s jurisdiction and administration of the estate. The Court was not in the position to be concerned with Debtor’s individual property rights. Everbank also satisfied its burden under 11 U.S.C. § 362(e) to get the automatic stay lifted. The court relied on established caselaw regardin a servicer’s ability to file a proof of claim. Furthermore, Debtor’s objection based on the fact that Everbank did not file a proof of claim is irrelevant because due to its nature as a no-asset case, creditors were ordered not to file proof of claims.
Debtor filed objections to a claim filed by Homeward Residential, Inc., which was later transferred to Ocwen Loan Servicing, LLC. Debtor objected on the basis of a payment dispute and on legal grounds that due to a defect in the chain of title, U.S. National Bank Association, for whom Ocwen was servicing the loan, was not the proper security holder. Debtor’s payment dispute was based on an alleged modification of her first mortgage before it was transferred to Ocwen. At an evidentiary hearing, Debtor was unable to provide anything more than her own testimony that a modification had occurred and the statute of frauds applied. Addressing the legal arguments, the Court held that Debtor was judicially estopped from challenging the secured nature of the first mortgage because she had already taken a stance in an earlier proceeding that it was a secured claim so that she could strip the junior lien on the same property. The Court also disagreed with Debtor’s assertion that there was a defect in the chain of title, holding ultimately that Debtor failed to satisfy her burden of presenting evidence to go forward. Transfer of the title was found to be appropriate under the 2007 and current versions of O.C.G.A § 14-5-7.
Debtor in this closed Chapter 7 case filed an emergency petition seeking to stay the discharge order and reopen the case so as to get relief from three creditors: JP Morgan Chase Bank, a Townhome Association, and Debtor’s counsel. Debtor’s challenge as to JP Morgan was inappropriate for the Court as it was a claim involving Debtor’s individual property rights, which should be handled in the proper state court forum. Debtor also sought to add the Townhome Association to her schedule of creditors in an attempt to obtain relief from them for her prepetition debt. The Court denied her the relief while noting that in a no-asset, no-bar date case scheduling does not affect the Court’s ability to grant a discharge.