Opinions

 

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The Court found that an oversecured creditor was entitled to pre- and post-petition interest at the contract default rate.  With respect to post-petition interest, the Court found that the Trustee had failed to rebut the presumption that the contract rate should apply.  The Court also found that adequate protection payments made by the debtor while the case was administratively consolidated should be credited to debt at issue.  To determine the appropriateness of a request for post-petition attorneys' fees, the court looked to the underlying loan documents.

Claims, Published No

Plaintiff/Trustee filed two motions in limine to exclude any evidence at trial that the Defendant failed to disclose as required in discovery. Declining to impose a harsher or lesser sanction for Defendant's failure to respond to discovery as required by the rules of civil procedure, the Court granted Plaintiff's motions pursuant to Rule 37 and determined that it would exclude any evidence of solvency or valuation offered by the Defendant at trial to the extent such evidence contradicted or supplemented Debtor's schedules.

Discovery, Published No

Former business associate of the Debtor obtained a default judgment against the Debtor in Connecticut state court prior to the petition date, and filed an adversary proceeding to assert nondischargeability pursuant 523(a)(2)(A) and 523(a)(4). The Debtor failed to answer or otherwise plead, and after re-issuing summons, the plaintiff obtained a default judgment in the proceeding. The Debtor motioned to vacate the default judgment and entry of default pursuant to Rule 60(b)(4) and (6) on the grounds that the Debtor was never served despite plaintiff's attempts. The Court ruled that the Debtor's Motion was timely; that the Debtor could assert meritorious defenses, and that the Connecticut judgment was did not collaterally estop the Debtor from opposing the claims in the current proceeding; that no party was unfairly prejudiced by vacating the default judgment; that the Debtor was never properly served pursuant to Bankruptcy Rule 7004; and that entry of default could be set aside.

Default Judgment, Published Yes

Court reconsidered interlocutory order, sua sponte, to clarify that Pricing Confirmation Documents, not Sales Settlement Sheets, constituted forward contracts under section 546(e)

Preferences, Published No

Trustee brought this adversary proceeding against other parties to a trust agreement seeking to recover damages for funds that had been absconded with from the trust.  The claims were for breach of contract against both Dealers Assurance Company and The Fidelity Bank, as well as numerous tort claims solely against Fidelity Bank.  Dealers Assurance moved to dismiss pursuant to Rule 12(b)(6) based on the statute of limitations.  This motion to dismiss was denied because the Court found that the facts were sufficient to raise the possibility of equitable estoppel, barring Dealers Assurance from arguing the statute of limitations, and therefore would not dismiss at this early stage of the proceeding.  Fidelity Bank filed a separate motion to dismiss all claims against it.  The Court denied this motion to dismiss as well due to an earlier stipulation from both the Trustee and Fidelity Bank that these defenses under Rule 12(b)(6) would be raised at the summary judgment stage of the proceeding.

Dismissal, Published No

Trustee moved the Court to reconsider its Order Granting Summary Judgment in Part and Denying in Part. The Trustee sought reconsideration that the reflection of solvency in the Debtor's schedules was sufficient to rebut the presumption of solvency under 11 U.S.C. § 547(f). The Court denied the motion, finding the Trustee had not put forth a proper basis for the Court to reconsider its partial summary judgment.

Reconsider/Amend, Published No

Debtor filed an adversary proceeding seeking to recover real property sold at foreclosure prior to the petition date pursuant to § 548, and the Trustee was added as a co-plaintiff. Defendant purchaser moved to dismiss the case, claiming (a) that Plaintiffs failed to state a claim and that the Court's prior ruling on a Motion for Preliminary Injunction evidenced as much; (b) that Defendant's status as a good faith, third party purchaser protected Defendant pursuant to state law; and (c) that the Rooker Feldman doctrine, res judicata, and collateral estoppel preclude the Plaintiffs from bringing their claim. The Court ruled that Plaintiffs did sufficiently plead pursuant to Iqbal and Twombley, and that the standard used in adjudicating a Motion to Dismiss is distinct from an injunction analysis. Further, the Court dismissed Defendant's assertion that it was protected under state law as a good faith, third party purchaser as irrelevant pursuant to § 550. Finally, the Court found that the Rooker Feldman doctrine, res judicat, and collateral estoppel did not apply in this proceeding. Motion Denied.

Dismissal, Published Yes
In re Lundy (Case No. 14-10421) 08/25/2016
(Judge Catharine R. Aron)

Attorney for Debtor filed application for compensation with respect to efforts to determine that debtor had paid mortgage account in full, relying on the American Rule and its judicially fashioned exceptions.  Court found that fees could be awarded for willful violation of the automatic stay, in light of unauthorized notices sent to debtor with respect to mortgage account.

Automatic Stay, Published No

The Court granted summary judgment in favor of Plaintiff, Trustee, bringing a 547(b) action against the Defendant, on cross motions for summary judgment.  The Court found that two payments made from the Debtor to the Defendant five days before the petition date were preferential.  The Debtor made two payments from an account created as the result of a contract between Debtor and Defendant, which set up a relationship whereby the Defendant sold warranties and the Debtor administered the warranties, paying claims and insuring the warranties through its relationship with a third party.  In dispute was the interest of the Debtor in the account, whether the Defendant was a creator, and whether the court should impose a constructive trust over the funds in the account to the benefit of the Defendant.

Preferences, Published No

Defendants filed a motion to dismiss adversary proceeding under Rule 12(b)(6).  The Court held that the complaint sufficiently stated a claim for breach of contract; that the plaintiff had successfully pled facts to support the claim that the Debtor was an intended third-party benficiary of a confidentiality agreement; that the plaintiff had plausibly alleged that the corporate defendants acted as the alter ego of an individual defendant; that the complaint properly pled a cause of action for breach of the implied duty to negotiate in good faith; and that the complaint sufficiently stated a claim for fraud in the inducement.  Court dismissed final request for relief, an objection to claim on the sole basis that the debt was procured by misrepresentation, concealment of material facts, unfair and deceptive actions, and failures to act in good faith.

Dismissal, Published No

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