(U.S. Sup. Ct. May 16, 2016)

(W.D. Ky. Mar. 31, 2016)

The district court affirms the bankruptcy court’s decision finding that Seven Counties Services, Inc. was permitted to file for Chapter 11 bankruptcy relief because it was not a “governmental unit” as defined in the bankruptcy code. Further, the debtor’s contract with KERS was properly deemed an executory contract that could be rejected by the debtor. The court makes one factual correction to the record, but the bankruptcy court’s decision is affirmed in all other respects. Opinion below.

Judge: Hale

(Bankr. W.D. Ky. Feb. 18, 2016)

(6th Cir. Nov. 14, 2017)

(Bankr. E.D. Ky. Sep. 15, 2017)

The bankruptcy court denies the lender’s motion to dismiss the Chapter 11 bankruptcy. The lender argued that the party signing the debtor’s petition did not have the requisite authority to commence a bankruptcy case for the debtor. The bankruptcy court finds that amendments to the debtor’s operating agreement were made for the sole purpose of eliminating the debtor’s ability to file for bankruptcy without the lender’s consent. The court finds this violates Federal public policy and the provisions are unenforceable. Opinion below.

Judge: Schaaf

(Bankr. S.D. Ind. July 14, 2017)

The bankruptcy court denies the creditor’s motion for summary judgment in this nondischargeability action under 11 U.S.C. § 523(a)(2), (4), and (6). The creditor argued the debtor should be collaterally estopped from defending based on a prepetition judgment entered against the debtor. The court concludes that the issues were not “fairly and fully litigated” in the state court, and thus summary judgment based on collateral estoppel is not appropriate. Opinion below.

Judge: Moberly

(6th Cir. May 2, 2017)

The Sixth Circuit reverses the bankruptcy court, finding that the assignment of rents acted as a complete transfer of ownership and the assignor did not retain any interest in the rents. The court analyzes Michigan law on such assignments and concludes that because the debtor/assignor had no rights in the rents assigned, they were not property of the bankruptcy estate. Opinion below.

Judge: Stranch

Attorney for Appellant: Robert N. Bassel

Attorney for Appellee: Jeremy S. Friedberg

(Bankr. E.D. Ky. Mar. 8, 2017)

The bankruptcy court grants the creditor’s motion to dismiss the debtor’s counterclaim in this nondischargeability action. The debtor failed to state a claim for conversion under Kentucky law. The debtor also failed to state claims under Kentucky’s statutes governing corporations, derivative actions, and shareholder claims. Opinion below.

Judge: Wise

Attorney for Debtor: Stuart P. Brown

Attorney for Creditor: Michael L. Baker

(7th Cir. Jan. 30, 2017)

(Bankr. E.D. Ky. Nov. 22, 2016)

The bankruptcy court grants the creditor’s motion to modify the stay to allow the creditor to proceed with the state court real property foreclosure action. The court finds that cause exists for stay relief for reasons including that this second bankruptcy filing by the debtor was pending for three months, the debtor’s plan depended on a sale of the property, the debtor had not taken any action to proceed with the sale, and there was no proof that the debtor’s spouse (co-owner of the property) would consent to the sale. Opinion below.