In these cases, the Chapter 7 Trustee sought to avoid pre-petition payments made to insiders pursuant to 28 U.S.C. § 3304(a)(2). After an extensive trial, the Court ruled in favor of the Defendants. Although the Court found the Debtor was insolvent at the time it made the payments, the Court did not find the Trustee met his burden to show the insiders had reasonable cause to believe the Debtor was insolvent. The opinion discusses the legal standards and the evidence presented by the parties.
Opinions
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Judge John T. Laney, III
The issue before the Court was whether a creditor violated the automatic stay by applying non-bankruptcy estate funds, which the Debtor gave voluntarily to the creditor after filing, to a pre-petition dischargeable claim. The Debtor further argued that, even if the creditors application of those funds to its claim was not a violation of the automatic stay, refusing to remit the funds to the Debtor after his request was a violation. The Court rejected these arguments. It held nothing in 11 U.S.C. § 362 prevents a creditor from retaining and applying a voluntary post-petition payment from non-bankruptcy estate funds. Further, the Court rejected the Debtor’s argument that, in accepting the payment, the creditor was required to give the disclosures enumerated in 11 U.S.C. § 524(k).In re
The Movant sought relief from the automatic stay. The issue before the Court was whether the agreement between the Debtor and the Movant was a lease or a security interest. The Movant argued Tennessee law governed the agreement by the operation of a choice-of-law provision in the contract. Tennessee law explicitly provides that a rental-purchase agreement is not a security interest. The Court agreed, finding the choice-of-law provision was enforceable.
The parties sought summary judgment on an action for declaratory judgment that concerned the extension of an open-end clause in a real estate financing agreement. The issue before the Court was whether a non-borrowing grantor’s security interest also secured the borrower’s later incurred debt, even without the non-borrowing grantor’s consent. The Court found the documents memorializing the security agreement did not require consent to extend the security interest. Further, the Court found such a provision did not contravene Georgia law. Accordingly, the Court granted summary judgment for the Plaintiff.
The Court denied the Debtor’s motion to convert his Chapter 7 case to a Chapter 11 pursuant to 11 U.S.C. § 706(b). The issues before the Court were whether a debtor’s right to convert to a Chapter 11 is absolute and, if not, under what circumstances a court should deny a debtor’s request for conversion. The Court held a debtor’s right to convert is not absolute. Rather, where the debtor’s conduct would constitute grounds for immediate reconversion or dismissal, a court may deny conversion. The Court determined the totality of the circumstances surrounding this case clearly indicated conversion would immediately create grounds to dismiss or reconvert the case. In making this determination, the court considered the nonexhaustive factors set forth in 11 U.S.C. § 1112(b)(4) and the debtor’s bad-faith conduct.
The Court sustained the Debtor’s Objection to Wilmington Trust, N.A.’s claim and disallowed the claim as untimely. The issues before the Court were whether a consent order that does not address the timeliness of a late-filed proof of claim can deem such an untimely filed claim as an allowed, general non-priority unsecured claim and furthermore, whether the court has the authority to enlarge the amount of time for filing the Creditor’s proof of claim. The Court determined that the consent order did not address the timeliness for filing a proof of claim, and the Court did not have the authority to enlarge the time to file a proof of claim or allow an untimely filed proof of claim because Rule 3002(c) did not apply to the circumstances.
The Court grants partial summary judgment for the plaintiff's Motion for Full or Partial Judgment.
The Court grants partial summary judgment for the plaintiff's Motion for Full or Partial Judgment.
The Court grants partial summary judgment for the plaintiff's Motion for Full or Partial Judgment.
The issue in the case was whether a security deed executed by a husband-debtor in favor of Wells Fargo was avoidable under 11 U.S.C. § 544(a)(3). The Trustee argued that the Security Deed was patently defective due to the lack of an attesting official witness, which is required by O.C.G.A. § 44-14-33 for recordation of a security deed. The Trustee alleged that the “Attestation Page” only contains the signatures of the borrower and an unofficial witness and the notary public’s signature and seal on the following page under the term “Acknowledgment” do not satisfy the requirements for proper attestation of a security deed. Wells Fargo argued that O.C.G.A. § 44-2-18 provides for the curing of defects in security deeds through an affidavit and the signature of the official witness on the Affidavit accompanying the Waiver recorded with the Security Deed cured any such defect. Following the Eleventh Circuit opinion of Gordon v. Terrace Mortgage Co. (In re Kim), 571 F.3d 1342 (11th Cir. 2009), the Court agreed with Wells Fargo and determined that the Trustee may not avoid the security deed.