At issue in this preference action was whether a credit card charge used to pay a debt constituted an interest in property of the debtor. The Court found it did because the debtor could not have initiated and directed the transfer of funds from his credit card account if he had no interest in the funds.
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Judge James D. Walker Jr. (Retired)
The Court remanded adversary proceeding to state court because the claims were premised solely on state law and no bankruptcy case was pending.
Plaintiff's PACA claim was nondischargeable due to defalcation by the debtor. Defalcation requires fiduciary capacity, which PACA creates by providing for an identifiable res, specifying fiduciary duties, and arising prior to and without relation to the wrongdoing creating the debt. In addition, defalcation requires some knowing wrongful conduct by the fiduciary. Here, the debtor diverted PACA trust funds to pay non-PACA debts.
Pursuant to the Tennessee Rental-Purchase Agreement Act, a contract governing a storage shed rented by the debtors was a lease rather than a security interest. The Court ordered debtors to modify their Chapter 13 plan to provide for payment of the lease in accordance with § 365.
For purposes of plan confirmation, the plain language of § 1325(b) requires an above-median-income debtor.' projected disposable income to be determined in accordance with current monthly income minus expenses set forth in the means test in § 707(b). Debtors are not obligated to pay more than the disposable income calculated on Form B22C, regardless of any known changes in their expenses.
Court denied summary judgment on contract action because parties disputed essential terms of the contract.
Multiple documents signed by the debtor when he borrowed money from the creditor to purchase a truck demonstrated the parties. intent to create a security agreement. The documents included a note, a bill of sale, and a title application that listed the creditor as a lienholder on the truck. Therefore, the creditor was entitled to be treated as a secured creditor in the debtor's Chapter 13 plan.
A creditor with a 910 claim objected to confirmation because the debtor filed his case 915 days after purchasing a car. The Court overruled the objection, finding the timing was not a bad-faith attempt to run out the 910 clock, but rather resulted from the debtor's sincere efforts to negotiate a feasible payment plan.
Chief Judge John T. Laney, III
The Court finds that there is no issue of material fact remaining to be determined and that MSDW has carried its burden of proving that § 546(e) is applicable to bar the Trustee from avoiding the transfers in question. As such, MSDW’s Motion for Summary Judgment is granted as to all counts of the Trustee’s Amended and Restated Complaint.
Robert F. Hershner, Jr. (Retired)
The debtor failed to make his lease payments on two aircraft. The lessor sold the aircraft to a third party. The debtor demanded a return of his security deposits and damages for breach of contract, tortious interference with contract, and fraud. The court held that the lessor had acted in good faith, had committed no fraud, and was entitled to the stipulated loss value of the aircraft. The court also held that the lessor was entitled to liquidated damages and 18% default interest under the terms of the aircraft lease. The court held that the lessor was entitled to retain the security deposits and that the debtor was liable under his personal guarantee for $2.5 million.