(denying defendant's motion to dismiss debtor's complaint seeking damages for violation of the automatic stay, as the complaint alleged that the defendant filed a lawsuit prepetition, but served the summons on the debtor after the filing of the bankruptcy petition).
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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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(granting UST's motion to dismiss Chapter 11 case because the petition was not properly authorized by the members).
(granting plaintiff's motion for sanctions for defendant's failure to cooperate with discovery requests).
(bankruptcy court lacks discretion to prevent Plaintiff's voluntary dismissal under FRCP 41(a)(1))
Honorable Mary Grace Diehl (Recall)
Plaintiff’s motion for contempt and sanctions, including incarceration of Debtor, was denied because the order compelling Debtor to produce discovery responses was prepared by Plaintiff’s counsel and not served on Debtor. Serving the Order on Debtor’s former counsel did not effect service or provide appropriate circumstances to impose civil contempt sanctions on Debtor.
Debtor was a majority shareholder in a corporation ("vTRax") that filed a pre-petition patent infringement suit against Avaya and other defendants. The patent infringement suit continued after Debtor filed a joint Chapter 7 case. The patent infringement suit was dismissed post-petition by the trial court when vTRax's counsel was allowed to withdraw from the case. Avaya is now seeking recovery of its attorneys' fees from vTRax and from Debtor and has filed a motion with the bankruptcy court so that its actions do not run afoul of the automatic stay. Avaya's motion is denied as to actions against the Debtor or the Debtor's estate. Avaya's actions against vTRax are not implicated.
The Court found that the automatic stay prevented Avaya from seeking recovery from Debtor individually. Avaya’s attempt to limit the recovery of attorneys’ fees to post-petition periods was rejected. The caselaw supporting Avaya’s position was inopposite. Here, the plaintiff in the suit is distinct from the debtor. The corporate form provides insulation from personal liability. E.g., State ex rel. Continental Distilling Sales Co. v. Vocelle, 27 So. 728 (Fla.1948). Here, Debtor is not a party to the Patent Case. Debtor’s 80% ownership interest in vTrax did not automatically create any personal liability.
The Court granted Defendants’ motion for summary judgment, finding that Plaintiff’s debt qualified as student loan debt under § 523(a)(8)(A)(i). The non-profit played a meaningful role in the loan program, as the guarantee, and this role constituted “funding” the loan program under the statute. Plaintiff’s argument that § 523(a)(8) shouldn’t apply because she received no educational benefit was rejected. The statutory language doesn’t require educational benefit, and, by analogy, guarantors are subject to the scope of § 523(a)(8) even though they receive no educational benefit. Because § 523(a)(8) applied to the debt, any undue hardship defense asserted by Debtor would be assessed under the Brunner factors. The facts and circumstances already litigated and settled in the prior state court class action would be limited to relevant facts under the three-pronged Brunner test. The Court’s ruling was law of the case, applicable to all consolidated adversary proceedings.
Judge Joyce Bihary (Retired)
(Case of debtor condominium association dismissed. 11 U.S.C. � 1112(b)(4)(A). Debtor could not present feasible plan of reorganization. Condominium Association is unlikely candidate for successful Chapter 11, because it generally has no mechanism for generating revenue other than the collection of association dues.)
Judge Robert E. Brizendine (Retired)
(Defendant-Debtors moved to dismiss complaint of Plaintiff on grounds Plaintiff failed to state a claim upon which relief could be granted based on Fed.R.Bankr.P. 7012 and Fed.R.Civ.P. 12(b)(6). In the complaint, Plaintiff alleged Debtors' improper sale of collateral rendered resulting claim nondischargeble under 11 U.S.C. Section 523(a)(6) as arising from a "willful and malicious injury." Court denied motion and matter proceeded to trial. Stipulation of dismissal eventually filed).
Honorable James R. Sacca
Order denying motion for relief from stay to complete proceeding under Georgia law to foreclose Debtor’s equity of redemption on residence in connection with a tax sale pursuant to O.C.G.A. §§ 48-4-40 to -48. Three days after Debtor filed her Chapter 13 bankruptcy petition, Creditor served its notice of foreclosure of right to redeem, pursuant to O.C.G.A. §§ 48-4-45 and -46. Because the stay was in place at the time the notice was served, action was void pursuant to Section 362(a). Redemption price was about $13,200 and Debtor scheduled property for $55,000: therefore, Court found Movant was adequately protected. In addition, confirmation of proposed plan had not yet come on for hearing and Movant did not provide evidence to show that the property was not necessary to an effective reorganization. Court also found that the deadline to redeem the property was determined by the state statutory scheme and the expiration of that deadline could only be stayed pursuant to Section 108 and not Section 362.