The defendant in a fraudulent transfer case was entitled to a jury trial because both the cause of action and relief available were legal in nature. The right to a jury trial was unaffected by inclusion of a request for equitable relief in the complaint.
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Judge James D. Walker Jr. (Retired)
An ordinary debtor-creditor business relationship does not create a fiduciary duty for purposes of sustaining an action for fiduciary fraud under § 523(a)(4).
Court imposed sanctions on bankruptcy petition preparer for violations of § 110, including failure to provide identifying information on documents she prepared, failing to provide the debtor with Form 19 prior to accepting payment, and providing legal advice.
Court granted stay relief for purposes of selling debtor.s Rolls Royce automobile. However, the court did not decide whether the proceeds would benefit the secured creditor or unsecured creditors.
Under Eleventh Circuit’s Parker case, judicial estoppel can never be a defense to a cause of action omitted from the debtor’s bankruptcy schedules. Therefore, the Court allowed Debtor to reopen his case to add the cause of action so a trustee could administer the asset. His creditors stood to benefit from any recovery, and Debtor would receive no special benefit.
The debtor could discharge certain taxes, because the IRS failed to show the debtor willfully evaded their payment. The debtor did not attempt to conceal assets or spend lavishly. Instead, his deficiencies were primarily due to an inability to pay after providing for reasonable living expenses.
The court rejected the debtor's argument that a corporate Chapter 12 debtor is not subject to discharge exceptions. The Chapter 12 discharge provision, § 1228, expressly excludes certain types of debts from the discharge, regardless of whether the debtor is an individual or a corporation.
Judge John T. Laney, III
Plaintiff Omega Cotton Company brought two claims against Debtor Loyd Bill Sutton. The first claim was based on a district court judgment in the amount of $308,430.25. The second claim was based on alleged fraud by the Debtor, resulting in a claimed loss of $4,523,400.00. Omega sought to have both claims exempted from discharge. On the first claim, the court determined that res judicata did not preclude a finding that the debt was dischargeable under 11 U.S.C. § 523(a)(4), because of the narrow definitions of fraud and defalcation as applied to the bankruptcy code. The court held that debt dischargeable. The court found that the second claim was precluded by res judicata, because Omega had a full and fair opportunity to litigate those claims in the previous district court case. Summary judgment was entered for the debtor.
Robert F. Hershner, Jr. (Retired)
The Chapter 13 trustee contended that the debtor's Chapter 13 plan was not proposed in good faith. The plan proposed to pay in full the unsecured claims. The plan proposed to pay in full the secured claims and priority claims before any distributions were made on the unsecured claims. The plan also proposed to accelerate the payments on the secured claims by paying about $100 per month more than required under the terms of the contractual obligations. The trustee argued that the debtors could decide to, or circumstances may force them to, convert their Chapter 13 case to a Chapter 7 case after the secured claims are paid and before dividends are paid or completed on the unsecured claims. The Court determined that there were no unusual or exceptional circumstances that warranted preferring the secured creditors over the unsecured creditors. The Court held that the Chapter 13 plan was not proposed in good faith and sustained the trustee's objection to confirmation.
The Chapter 7 debtor claimed as exempt his right to receive income from a certain business. The debtor contended that the income was support under Georgia Code § 44-13-100(a)(2)(D) (debtor can claim as exempt his right to receive alimony, support or separate maintenance to extent reasonably necessary for support of debtor and dependents.) The Court held that the debtor's right to receive the income was not support under the Georgia exemption statute and ordered that debtor turn over to trustee the income that he had received during the pendency of his bankruptcy case.