​​​​​​​​​​​7/17/2020 – NO DOUBLE RECOVERY.  CaseName: 160 ROYAL PALM, LLC V. ALIBI, LTD. Case 19-01341-EPK Doc 94 Filed 07/01/20.  Erik P. Kimball, Judge United States Bankruptcy Court says no double recovery:  “Bankruptcy courts consistently hold that 11 U.S.C. § 550(a) is intended to restore a debtor to the same position as though the voidable transfer had never occurred, but no more. Bakst v. Wetzel (In re Kingsley), 518 F.3d 874, 877 (11th Cir. 2008); see also Bakst v. Sawran (In re Sawran), 359 B.R. 348, 354 (Bankr. S.D. Fla. 2007) (noting that the purpose of 11 U.S.C. § 550 is to “merely restor[e] the estate to its pre-transfer condition”). Bankruptcy courts also rely on 11 U.S.C. § 550(d) to reduce or prohibit recovery when the estate has already obtained return of the challenged transfer. “The crux of the argument holds that if the bankruptcy estate receives prepetition repayment of fraudulent transfers, then the estate, at filing, is in the same position it would have been in notwithstanding the transfers.” In re Pearlman, 515 B.R. at 897. To prevent an inequitable windfall, the Court may take into account pre-bankruptcy transfers back to the Debtor.” [SOME INTERNAL CITATIONS OMITTED]

12/17/2019 - "Because the purpose of bankruptcy is to provide honest but unfortunate debtors a
fresh start, “objections to discharge are to be strictly construed against the creditor and liberally in favor of the debtor.” Menotte v. Davis (In re Davis), 363 B.R. 614, 619 (Bankr.M.D. Fla. 2006) (citations omitted); Jennings v. Maxfield (In re Jennings), 533 F.3d 1333,1338-39 (11th Cir. 2008). " Case Number: 18-1371, Judge Name: EPK, CaseName: BAKST V. DUNN, Sign Date: 08/30/2019.

12/4/2019 - Small Business Reorganization Act of 2019 (“SBRA”) will provide small business debtors, which include individuals with business debt, a cost effective and efficient way of reorganizing. It offers higher debt limits than a Chapter 13, cramdown plans without the need for a consenting class, eliminates the absolute priority rule, gives the debtor the sole right to propose a plan, creates an opening to modify first mortgages on homestead, and the oversight of a subchapter v (Sub V) trustee with the objective of facilitating consensual plans and getting the debtor in and out of bankruptcy as quick as possible without the crushing administrative costs!

11/21/2019- "Pursuant to section 1327(a) and consistent with Espinosa, Wells Fargo is bound by the terms of the 6MP, even though the 6MP violates the anti-modification provision of section 1322(b)(2). In re Passavant, 444 B.R. 378, 385 (Bankr. S.D. Ohio 2010) (relying on section 1327(a) and Espinosa in granting a motion to deem post-petition mortgage obligations current, “even if the banks were correct that the provisions of the Plan . . . violated the Code [i.e., sections 1322(b)(2) and 1328(a)(1)]).
Wells Fargo is deemed to have been paid all post-petition mortgage payments provided for in, first, the 10AP and, later, the 6MP. In other words, the post-petition delinquency of $4,810.37 is unenforceable against the Debtor. “Upon satisfaction of the plan and completion of the plan’s terms, the debtor is discharged of his or her debts and, in theory, faces a future of solvency.” Case Number: 13-25698 Judge Name: EPK CaseName: CORALEE EDWARDS, Sign Date: 05/22/2019 Cite: 603 B.R. 516. Judge Kimball is a bankruptcy judge in Palm Beach County Florida.

Posted Nov 11, 2019 - "The Bankruptcy Code outlines a strict framework for the retention and
compensation of estate professionals. Estate professionals must be retained in
accordance with 11 U.S.C. §327, which requires, generally, that the estate
professional must be “disinterested,” meaning the professional “is not a creditor,
an equity security holder, or an insider”. 11 U.S.C. §101(14). Consequently, with
limited exception, an attorney who has represented the debtor pre-petition
cannot represent the bankruptcy estate. Nonetheless, recognizing this restriction
may, at times, be counter-productive, section 327(e) authorizes a trustee or
debtor in possession to employ “for a specified special purpose” an attorney who
has previously represented a debtor “if in the best interests of the estate”. Once
an estate professional has been retained, his or her paramount obligation is to
the estate. " Case Number: 17-21187 Judge Name: LMI CaseName: IN RE NESTOR Sign Date: 09/26/2019 Cite: 2019 WL 4735833.

Posted Nov 4, 2019

"Charging liens are a creation of state law and thus the Court looks to Florida law to resolve these issues. To impose a charging lien, an attorney must establish four required elements: (1) an express or implied contract between attorney and client; (2) an express or implied understanding for payment of attorney's fees out of the recovery; (3) either an avoidance of payment or a dispute as to the amount of fees; and (4) timely notice. " Case Number: 18-14506, Bankruptcy Judge Name: LMI, CaseName: MIAMI BEVERLY, Sign Date: 10/16/2019 Cite: 2019 WL 5291364. Bankruptcy Court for the Southern District of Florida.

Posted Oct 28, 2019

The Eleventh Circuit never ruled that the trustee must establish avoidability of a transfer as part of a recovery suit if the transfer has already been avoided. "Nor, does the Court think, would it ever. First, the
language of section 550 is clear. The initial transfer must be avoided, or in the Eleventh Circuit, proven avoidable, in order for the trustee to recover against the subsequent transferee. Nowhere in section 550 does it require or suggest that the transfer must always be avoided in the action brought against the subsequent transferee." Case Number: 18-1493, Judge Name: LMI CaseName: YIP V. GOOGLE, Sign Date: 10/22/2019 Cite: 2019 WL 5420012.

Posted Oct 21, 2019

Creditors need to review all of the debtor's proposed Chapter 13 plans since it will trump even explicit prohibitions in the Bankruptcy Code to noticed parties. Under the circumstances, the Bankruptcy Court here in the Southern District of Florida West Palm Beach Division found that Wells Fargo was “provided with notice reasonably calculated under all the circumstances to apprise [Wells Fargo] that its status as a secured creditor was being challenged.” Nationstar Mortg., LLC v. Iliceto (In re Iliceto), 706 Fed. Appx. 636, 642 (11th Cir. 2017) (applying Espinosa in the claims objection context and explaining that “Espinosa controls our decision”). "The Court explained that the Supreme Court’s decision in United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (2010), holding that a confirmed chapter
13 plan is binding on all parties in interest with adequate notice, even if the plan violates the Bankruptcy Code and/or the Bankruptcy Rules, displaced the Eleventh Circuit’s earlier decision in Universal Am. Mort. Co. v. Bateman (In re Bateman), 331 F.3d 821 (11th Cir. 2003), which held that the anti-modification provision of section 1322(b)(2) prevails over the binding effect of a confirmed plan under section 1327(a)). " Case Number: 13-25698A, Judge Name: EPK, CaseName: CORALEE EDWARDS, Sign Date: 08/01/2019, Cite: 604 B.R. 417.

Posted Oct 14, 2019

The Court found that there is nothing in the hanging paragraph of section 1325(a) that would lead it to conclude that the existence of a cross-collateralization clause in the security agreement between the debtors and the credit union GECU renders the hanging paragraph inapplicable. "The hanging paragraph of section 1325(a) has three requirements when the debt at issue relates to a motor vehicle. First, the creditor must have a purchase money security interest in the vehicle. Second, the debt must have been incurred within 910 days prior to the bankruptcy case. Third, the collateral for the debt must be a motor vehicle acquired for the personal use of the debtor. The debtors do not dispute that GECU has a purchase money security interest in the vehicle, that the vehicle was acquired for the personal use of the debtors, nor that the debt was incurred within 910 prior to the debtors filing this case. The debtors argue that because the vehicle is subject to cross-collateralization, meaning that the vehicle may serve as collateral for other obligations of the debtors to GECU, the hanging paragraph does not apply." Case Number: 19-13895 Judge Name: EPK, Case Name: ROBINSON AND DELPH-ROBINSON, Sign Date: 10/04/2019.

Posted Oct 7, 2019

"Under Florida law, common law indemnity allows an innocent party, who is nonetheless liable to another, to “[shift] the entire loss from one who, although without active negligence or fault, has been obligated to pay, because of some vicarious, constructive, derivative, or technical liability, to another who should bear the costs because it was the latter’s wrongdoing for which the former is held liable.” " Case Number: 18-1215, Judge Name: EPK, CaseName: VERO BEACH COUNTRY CLUB INC. V. MILLS Sign Date: 08/07/2019

Posted Oct 1, 2019

"Under Fla. Stat. § 726.110, causes of action arising under section 726.105(1)(a) are extinguished on the later of 4 years after the transfer or 1 year after it could reasonably have been discovered, and causes of action arising under section 726.105(1)(b) are extinguished 4 years after the transfer. BAICO does not dispute that $260,500 of the alleged transfers could have been discovered during the 4 years after they were made, and so the 1 year additional discovery period for claims under section 726.105(1)(a) does not apply." Case Number: 11-3118G, Judge Name: EPK, CaseName: BRITISH AMERICAN INS. CO. V. FULLERTON, Sign Date: 09/25/2019.

Posted Sep 25, 2019

"The determination of whether to grant a stay pending appeal is left to the discretion of the Court. If a stay pending appeal is warranted, the Court may condition the stay on the posting of “a bond or other security.” Fed. R. Bankr. P. 8007(a)(1)(B) (as amended effective December 1, 2018). The bond or security is intended to protect the opposing party or parties, which may include the bankruptcy estate generally, against loss that may be sustained as a result of a failed appeal. Because there is no stay pending appeal as of right under Rule 8007, the Court must first determine whether a stay is warranted and, if so, determine whether a bond or other security will be required as a condition of the stay. " Case Number: 18-19441B, Judge Name: EPK, CaseName: 160 ROYAL PALM, LLC, Sign Date: 08/19/2019

9/13/2019 - Bakst v. Dunn 8-31-2019 EPK - “[A] transfer or concealment made with the actual intent to hinder or delay a creditor is sufficient for denial of discharge, even if there is no actual fraudulent intent.” Id. at 109-10 (citing NCNB Texas Nat’l Bank v. Bowyer (In re Bowyer), 916 F.2d 1056, 1059 (5th Cir. 1990), rev’d on other grounds, 932 F.2d 1100 (5th Cir. 1991); Crews v. First Colony Life Ins. Co. (In re Barker), 168 B.R. 773, 780 (Bankr. M.D. Fla. 1994)).

4/30/2019 - Pursuant to the Southern District of Florida Local Bankruptcy Rules 4004-2(B) and 4007-1(B), if a case is dismissed prior to the expiration of the deadline for objecting to discharge and dischargeability and then subsequently reinstated, the new deadline for filing objections to discharge and dischargeability shall be 60 days after either the rescheduled §341 meeting (if the meeting was not held at the time of dismissal) or the entry of the order reinstating the case.

4/24/2019 - "The Supreme Court recently ruled that the fraud provision of section 523(a)(2)(A) does not require an explicit misrepresentation, but may arise from circumstances designed by a debtor to deceive a creditor and that are connected to the resulting debt. Husky Int’l Elecs., Inc. v. Ritz, 136 S. Ct. 1581, 1590, 194 L. Ed. 2d 655, 666 (U.S. 2016)." Case No. 17-22480-EPK.

​4/12/2019 ABSOLUTE RIGHT TO DISMISS A CHAPTER 13 PER JUDGE KIMBALL  In re: Case No. 18-25207-EPK ANNE-LAURE MARGUERITE MICHELIS, Chapter 13 , "The Court rules that a chapter 13 debtor’s right to voluntarily dismiss the case under section 1307(b) is absolute, even in the face of allegations of bad faith. The Court expressly adopts in full the discussion of the relevant case law and the analysis presented in In re Williams, 435 B.R. 552 (Bankr. N.D. Ill. 2010). See also In re Barbieri, 199 F. 3d 616 (2d. Cir. 1999).2 Section 1307(b) mandates dismissal on a debtor’s motion by using the words “at any time” and “shall.” Section 1307(b) limits this right only where the case has previously been converted from chapters 7, 11, or 12. The Court may not ignore the express language of the statute simply because a different interpretation might implement good policy. Section 105(a) “‘does not allow the bankruptcy court to override explicit mandates of other sections of the Bankruptcy Code.’” Law v. Siegel, 571 U.S. 415, 421 (2014), (quoting 2 Collier on Bankruptcy ¶105.01[2], p. 105-6 (16th ed. 2013))."  However, Judge Olson has a different view of a Chapter 13 debtor's rights to dismiss and has in at least a couple cases involuntarily converted Chapter 13 cases to Chapter 7 on the basis of bad faith.   

Posted Apr 10, 2019

In January 2019, the bankruptcy court in In re: ERIK MARTINEZ found that the homestead exemption was lost since the Debtor rented his home for approximately 2 and a half years prior to filing bankruptcy. Despite the requirement to liberally interpret the exemption in favor of the Debtor and the fact that the Debtor was transitioning to a new home, although in a convoluted manner, the court found that it was too much of a strain to find in favor of the homestead exemption after going through a detailed analysis of the facts.

Posted Apr 9, 2018

2018 WL 1626245, IN RE: EVAN BRIAN CROCKER et al v. NAVIENT SOLUTIONS, LLC and NAVIENT CREDIT FINANCE CORPORATION,(Bankr. S.D. Tex. Mar. 26, 2018), "The Court concludes that § 523(a)(8)(A)(ii) created a new category of nondischargeable debts specifically tailored to address a perceived need. That need did not include all loans that were in some way used by a debtor for education. If such were the case, would not a loan for a car used by a commuter student to travel to and from school every day be nondischargeable under § 523(a)(8)(A)(ii)? The answer is obvious."

Posted Mar 15, 2018

2018 WL 1279252, United States Bankruptcy Appellate Panel of the Sixth Circuit, IN RE: Tony Dian PERKINS, Debtor. Farmers plan confirmed. Chapter 12 of the Bankruptcy law was to “give family farmers facing bankruptcy a fighting chance to reorganize their debts and keep their land.” [citation omitted]. Prior to Chapter 12, family farmers could proceed under either Chapter 11 or Chapter 13. However, most farmers were burdened with too much debt to qualify for Chapter 13, and Chapter 11 was “needlessly complicated, unduly time-consuming, inordinately expensive and, in too many cases, unworkable.” To avoid Chapter 11's needless expense and complexity, Congress “closely modeled [Chapter 12] after existing Chapter 13,” while relaxing the debt limits and filing deadlines that had left farmers ineligible for Chapter 13. Internal Citations Omitted.

Posted Mar 14, 2018

The six year delay between debtor's chapter 7 discharge and the commencement of his dischargeability adversary proceeding regarding student loans does not require dismissal of the complaint; since there is no explicit time period for commencing an adversary regarding student loans; although the court cited to case that indicated 13 years was too long. Gimbel, 2018 WL 1229718.

Posted Mar 13, 2018

In In re Chorba, 2018 WL 1219555, the Court found no basis to bar the debtor's claims under the doctrine of res judicata due to her confirmed plan. Moreover, under Midland Funding case, the creditors' proofs of claim, based on their right to payment on the purchased debt, can stand, subject to the claims allowance process. In that process, the debtor may challenge the claims, as she has done in her Complaint. To the extent the claims are unenforceable under state law, they are subject to disallowance under section 502(b) of the Code.

Posted Mar 12, 2018

In the MATTER OF: Curtis Harold DEBERRY, 2018 WL 1178353, the Fifth Circuit held that a debtor who owned homestead property on the date that his Chapter 7 petition was filed and claimed a homestead exemption therein to which no objection was filed, thereby removing homestead property from bankruptcy estate, could sell homestead property postpetition without subjecting homestead proceeds to administration by trustee even if he did not reinvest them in another homestead. This reinforced the importance of the snapshot rule i.e. the exempt nature of a debtor's property on the date of filing a Chapter 7 is crucial.

Posted Mar 8, 2018

March 2018 Bankruptcy Courts Torn on Denying a Chapter 13 Discharge for Failure to Make Direct Payment. If you fail to make direct payments on a nondischargeable debt such as a mortgage, said failure is not grounds for denying your chapter 13 discharge, according to Bankruptcy Judge Thomas L. Perkins of Peoria, Ill. Judge Perkins may be in the minority of recent decisions favoring chapter 13 debtors who have made all payments to the trustee and whose unsecured creditors were unaffected.

1/17/2017  -  Bankruptcy Case Number 16-11831 EPK, Bankruptcy Judge ERIK P. KIMBALL, sitting in the West Palm Beach Division of the United States Bankruptcy Court for the Southern District of Florida, in the bankruptcy case of MICHELLE METZLER, order signed on 01/10/2017  - Chapter 7 Trustee Michael Bakst (panel trustee assigned to the West Palm Beach Division) can pursue stay violation claims under 362(k) that accrued in the prior Chapter 11 case.  "The Debtor’s claims under section 362(k) and, if the Debtor recovered on such claims, the proceeds of such claims, were property of the bankruptcy estate subject to administration in the chapter 11 case. When the Debtor’s case was converted to chapter 7, her claims under section 362(k) remained property of the estate. 11 U.S.C. §§ 541(a)(7) and 1115(a)(1)."  Bankruptcy Lawyers / Bankruptcy Attorneys involved in this case includes attorneys from Furr & Cohen, P.A. and Greenspoon Marder.

​1/17/2017 - Bankruptcy Case Number 15-21654 EPK , Bankruptcy Judge ERIK P. KIMBALL, sitting in the West Palm Beach Division of the United States Bankruptcy Court for the Southern District of Florida, in the bankruptcy case of FREDERICK J. KEITEL, III, order signed on 01/06/2017 - Some of the best nuggets are in footnotes, like Footnote 5,  "To the extent the present Motion to Reconsider seeks reconsideration, a second time, of the order converting Mr. Keitel’s case to chapter 7, ECF No. 410, it is procedurally inappropriate and likely does not serve to toll the period permitted for a timely appeal from that order. See Fed. R. Bankr. P. 8002(b); Valentine v. BAC Home Loans Servicing, L.P., 635 F. App'x 753, 755–56 (11th Cir. 2015); Stangel v. United States (In re Stangel), 68 F.3d 857, 859 (5th Cir. 1995)."  Chapter 7 Trustee in this case appeared to be Robert Furr, a panel trustee assigned to the West Palm Beach Division.


Bankruptcy Attorneys + Blog