The Chapter 7 trustee asked the court to impose sanctions under Bankruptcy Rule 9011. The court determined that respondent has continued to relitigate virtually verbatim contentions of the trustee's fraud long after the court has ruled that the contentions have no merit. The court held that the respondent should be sanctioned under Rule 9011.
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Robert F. Hershner, Jr. (Retired)
The defendant contended that a dispute concerning certain agreements was subject to binding arbitration. The court held that the agreements were contracts of insurance under Georgia law, § 9-9-2(c)(3) and were not subject to binding arbitration.
The chapter 7 debtor's sole shareholder used his personal funds to pay the debtor's obligation to deposit certain escrow funds with an escrow agent. The shareholder contended that he was equitably subrogated to the debtor's right to receive a return of the escrow funds because the shareholder had personally guaranteed the debtor's obligations. The Court held that the shareholder had not personally guaranteed the debtor's obligation to deposit the escrow funds and that the shareholder had waived any right to subrogation. The Court held that the debtor's bankruptcy estate was entitled to the funds held by the escrow agent.
The debtor purchased an unimproved parcel of land. The debtors placed a mobile home upon the land. The mobile home was financed by a thrid party. The debtors later executed a mortgage on the land. The debtors filed for Chapter 13 relief, completed their plan payments, and obtained a discharge. The debt on the land was not paid in full through the Chapter 13 plan. The debtors contended that the mortgage on the land was not secured by their principal residence and was not protected by 11 U.S.C. § 1322(b)(2). The court held that the mobile home had become part of the land and that the mortgage had survived the debtor's bankruptcy.
The plaintiffs contended that the defendant-debtor, through fraud and false financial statements, induced them to invest in a business. The debtor was a shareholder, the president of, and managed the day to day operations of the business. The business failed. The plaintiffs contended that they suffered damages due to the defendant's fraud and that their claims were nondischargeable in bankruptcy under § 523(a)(2). The court held that the debtor had knowingly made false representations and published false financial statements. The court held that the damages suffered by the plaintiffs were nondischargeable in bankruptcy.
The debtor failed to make the payments on her residence. The lender foreclosed on its deed to secure debt and was the highest bidder. The debtor filed a Chapter 13 bankruptcy case nine days later. The debtor sought to set aside the foreclosure and deal with her mortgage obligation through her confirmed Chapter 13 plan. The court held that the debtor's rights, title and equity of redemption were terminated when the lender made the highest bid at foreclosure. The court held that the debtor had no interest in her former residence when she filed for bankruptcy relief. The court granted the lender relief from the automatic stay to proceed with its remedies under state law.
Judge James D. Walker Jr. (Retired)
Court imposed sanctions on bankruptcy petition preparer for violations of § 110, including failure to identify himself on the petition and other documents he prepared, accepting fees without properly informing the debtor he is not an attorney, and unauthorized practice of law.
Although debtor was a guarantor to a mortgage but had no ownership interest in the real property, the court granted stay relief so the creditor could confirm the foreclose sale, which could result in exposing the debtor to personal liability on a deficiency claim.
In a preference action, the creditor could not prove that its sole transaction with the debtor was in the ordinary course of business, because it neither received payment according to the terms set forth in its invoice, nor did it provide any evidence to show the transaction was within industry standards
Court refused to grant stay relief when the creditor essentially ignores evidence that its records fail to reflect numerous payments made by the debtor and received by the creditor.