Creditor filed a complaint of objection debtor’s bankruptcy case. However, because the complaint contained no allegations, even when read liberally in creditor’s favor, that would entitle him to relief under Section 523(a) or any other provision of the Bankruptcy Code, the Court granted the debtor’s motion for judgment on the pleadings and dismissed the adversary proceeding.
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Judge James D. Walker Jr. (Retired)
Court granted creditor’s motion to reopen case to file a § 523(c) nondischargeability complaint. Despite passage of deadline for filing the complaint, creditor could present a colorable argument for the equitable tolling of the deadline. Thus, allowing the case to be reopened would not be futile.
The court found that under Georgia law, a corporation may seek to pierce its own corporate veil. Thus, in a Chapter 11 case, a veil piercing alter ego action is property of the estate and may only be brought by the trustee unless abandoned. Any alter ego suits brought by individual creditors are subject to the automatic stay.
When several pieces of sevarable collateral secure a single debt, a Chapter 13 debtor may satisfy Section 1325(a)(5) by retaining a portion of the collateral and surrendering a portion of the collateral.
Judge John T. Laney, III
Analyzing Debtor’s Motion to Compel deposition testimony of the Official Committee’s testifying expert and to produce certain documents that had been withheld from discovery, the court reasoned under Rule 26(a)(2)(B) that the attorney-client and work product doctrine protections are trumped by the Rule 26 discovery rules pertaining to testifying experts. The court granted the motion in part, to the extent that the Official Committee had waived attorney-client privilege and work product doctrine protections in communications with and information given to/from the testifying expert.
Zlatava Davidova, Trustee of LET, a.s. ("Movant") asked the court to reconsider its August 21, 2002 Memorandum Opinion and Order regarding the validity, priority, and extent of liens or competing interests in an aircraft and its two engines. Upon reconsideration, the court found that Movant did meet its burden to prove Czech Republic law. Thus, the court applied the facts to the applicable Czech Republic law. Accordingly, the court found that the purported transfer of the L610-301 aircraft from LET, a.s. to Ayres Aviation Holdings ("Debtor") was not effective pursuant to the Czech Civil Aviation Act. However, the court found that the purported transfer of the 002 engine from LET a.s. to Debtor was valid and First National Bank of South Georgia does have a valid perfected security interest in the 002 engine. The court did not change its holding that the 998 engine belonged to General Electric. Nor did the court change its holding denying relief from the stay as to GATX Capital Corporation.
Two judgment creditors made objections to Debtor’s proposed Chapter 13 plan. The court ruled that Debtor bears the burden to prove that his Chapter 13 plan is in conformity with the statutory requirements for confirmation. Debtor had to overcome both objections or he would be required to modify his Chapter 13 plan. In failing to provide court with proper evidence and case law to overcome the creditors’ objections, the objections were sustained and Debtor was ordered to modify his Chapter 13 plan to give the creditors’ claim proper treatment.
The court was asked to reconsider an order dated September 3, 2002 in which the court ruled that Deere Credit, Inc. did not have a security interest in a 548G skidder that had been mislabeled on both the security agreement and the financing statement. Upon reconsideration, the court held that it was correct in the September 3, 2002 order and did not change its ruling. While the serial number and model number were both off by just one digit, the combination of both incorrect numbers did not raise a red flag to a third party. Therefore, the description of the collateral did not meet the requirements of O.C.G.A. § 11-9-108(a).
The court was asked to consider whether, under Banks v. Sallie Mae Servicing Corporation (In re Banks), 299 F.3d 296 (4th Cir. 2002), Debtors’ adversary proceeding should be dismissed for failure to state a claim upon which relief can be granted. Reserving judgment on whether Banks was applicable and should be followed, the court ruled that the record and admitted pleadings did not provide grounds to dismiss the adversary proceeding.
Robert F. Hershner, Jr. (Retired)
Chapter 11 debtor filed ad valorem tax returns, asserting the true market value of its equipment was $8.8 million. Debtor began liquidating its assets and would not reorganize as a going concern. Several months later, debtor asked the court to determine, under 11 U.S.C.A. section 505, that the value of its equipment was $1,296,000. The Court was not persuaded by testimony of Debtor's expert witness and held that valuation in ad valorem tax returns must stand. The Court also refused to excuse the debtor's untimely filing of its freeport exemption application.