Opinions

 

The NCMB offers a database of opinions for the years 2000 onward, listed by year and judge. For a more detailed search, enter the keyword or case number in the search box above.

Trustee moved for summary judgment on a preference action.  Defendant argued against summary judgment for three main reasons: (1) the Trustee had failed to prove that the Debtor was insolvent at the time of the alleged payments as required by 11 U.S.C. §547(b)(3); (2) the payments were made in the ordinary course of business and could not be avoided pursuant to 11 U.S.C. §547(c)(2); and (3) the loans made by the Defendant during the preference period constituted "new value" which barred any preference recovery pursuant to 11 U.S.C. §547(c)(4).  The Court entered partial summary judgment for the Plaintiff ruling that: (1) the Trustee had failed to provide evidence proving that the Debtor was insolvent at the time of the transfers; (2) the payments were not in the ordinary course of business and the ordinary course of business defense could not be met; and (3) the loans made by the Defendant during the preference period to the Debtor constituted new value which would be a partial defense, reducing any preference amounts by the amounts loaned.  

Preferences, Published Yes
In re Reed (Case No. 11-50343) 08/05/2016
(Judge Catharine R. Aron)

Court denied motion to reconsider order granting relief from automatic stay with respect to a manufactured home, finding that the creditor had not accepted a reaffirmation agreement, and the debtor had failed to redeem the property. 

Reconsider/Amend, Published No
In re Hamlet (14-50836) 08/05/2016
(Judge Lena M. James)

Chapter 13 Trustee and creditor who failed to properly perfect a vehicle covered under the hanging paragraph of 1325(a) reached a settlement with the Debtor on the Trustee's 549 avoidance action. The Consent Order found the value of the avoidance was equal to the creditor's fully secured claim, and the order further directed that the equity be preserved for unsecured general claims. The Trustee brought a Motion to Modify Plan to incorporate that requirement into the Plan, and the Debtor objected, arguing that only the collateral's value need be paid into the Plan, as in addition to the claim being voidable under 549, it was also void ab initio.  In ruling for the Trustee, the Court declined to answer whether the claim was void, as the Consent Order already established the lien's status as avoidable.

 

Property of the Estate, Published No
In re Daniel (16-80216) 07/11/2016
(Judge Lena M. James)

Prior to filing, a Debtor's residence was foreclosed upon by his homeowners association and sold via a non-judicial sale.  The real property was purchased, a foreclosure deed was delivered, an order for eviction was obtained, and a Sheriff's eviction was scheduled.  Prior to eviction, the Debtor filed for bankruptcy.  The purchaser moved to lift the automatic stay pursuant to § 362(d)(1)-(2) to continue with eviction under state law, and the Debtor opposed the motion, arguing that as he had filed an adversary proceeding under § 548 that went to the heart of the purchaser's claimed ownership, that relief from stay should be denied.  The Court found that legal title to the property had passed to the purchaser under North Carolina law, and that cause existed to modify the stay under subsection (d)(1). Further, the Court found that, as legal title had passed, the Debtor had no equity in the property, and that the Debtor made no argument as to the property's necessity for an effective reorganization such that the stay could be modified under subsection (d)(2).  The Court also found that the pendency of the Debtor's adversary proceeding was no impediment to granting the purchaser's requested relief.

Automatic Stay, Published No

Court granted motion for waiver of financial management course requirement under section 727(a)(11) for a Chapter 7 who died prior to taking the course.

Discharge Requirements, Published No
In re Dean (Case No. 10-5773) 07/07/2016
(Judge Catharine R. Aron)

Court allowed judicial lien avoidance in case that was reopened without objection, finding that the creditor had not carried its burden of proving that any alleged prejudice it may have suffered outweighed harm to the debtors in not allowing avoidance.

Lien Avoidance, Published No

Court first determined the ownership interests of the parties in certain companies, after an analysis of several agreements between the parties and the Trustee's request to avoid and recover certain transfers under sections 548, 549, and 550.  Court then determined that certain intellectual property constituted an asset of the companies, in light of precendent distinguishing a patent assignment from an agreement to assign a patent.  While the former must be in writing, the later may be oral.  Ultimately, Court ordered assignment of the patents to the companies, as an agreement to assign a patent constitutes the proper subject of an action for specific performance.

Property of the Estate, Published No

The debtor filed a complaint seeking equitable review of a foreclosure sale conducted against the debtor's residence on the grounds that the foreclosure was inadequate and contained a material irregulairty.  The foreclosure sale resulted in a coveyance of  the debtor's residence to Bayview by credit bid.  The debtor alleged that the foreclosure, initiated and completed by a trustee on behalf of Bayview when Bayview was the holder of the note and deed of trust, was improper because the trustee did not obtain an order from the state court finding that Bayview was the property holder of the note and deed of trust.  Instead, the trustee relied upon a previous order issued to approve of the foreclosure at a time when Bayview's assignor was the holder of the note and deed of trust. The Court found that nothing in N.C. Gen. Stat. 45-21.1 et seq. prevented the assignment of the mortgage post-foreclosure hearing or requires the trustee or new holder of the note and deed of trust to re-initiate the foreclosure hearing upon receipt of the note. The debtor had notice of the original foreclosure initiated by the same trustee throughout the netire process, and the debtor's right to notice of foreclosure was not harmed by the subsequent transfer of the mortgage after the foreclosure hearing and before the foreclosure sale.  The proposed amendment to the complaint was denied as it was futile.

UCC & other State Law Issues, Published No

Decedent Chapter 7 Debtor's wife filed a motion, acting as personal representative of the probate estate, to avoid two judicial liens against the Debtor's real property that were not avoided during the bankruptcy. While courts have allowed lien avoidance nunc pro tunc by personal representatives, here the Debtor transferred the real property to entireties property prior to his death and discharge. Here, the property is now, and has always been, outside the probate estate. Thus, the wife lacks standing to reopen the case, as the property is not within the probate estate, and the judgment creditor has no claim against an asset of the estate or the estate itself. 

Reopenings, Published No
In re Rose (Case No. 14-51269) 04/06/2016
(Judge Catharine R. Aron)

Court overruled objection to claim on basis that creditor failed to comply with Rule 3001(c)(3)(B).  Court noted that failure to comply with the rule does not constitute sufficient cause to disallow a claim.

Claims, Published No

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