Receiver filed for bankruptcy for five business under state receivership. Question as to whether filing was in bad faith when Superior Court entered order nunc pro tunc after the filing. Held that nunc pro tunc order is void, and that bankruptcy estate retains exclusive jurisdiction. Also, debtors' principals were not in position to act as fiduciaries due to the fact that they were indicted and currently under trial for various Georgia criminal charges.
Opinions
The Middle District of Georgia offers opinions in PDF format, listed by year and judge. For a more detailed search, enter the keyword or case number in the search box above.
Please note: These opinions are not a complete inventory of all judges' decisions and are not documents of record. Official court records are available at the clerk's office.
Judge John T. Laney, III
The court held that a creditor can seek relief from the discharge injunction to pursue a judgment of liability against the debtor for the sake of recovering against the debtor.s insurer. The court also relied upon 11 U.S.C. §524(e) for the proposition that a creditor may seek relief from the permanent injunction in order to establish liability of the debtor to recover from a third party.
Plaintiff filed complaint against Defendant in Superior Court alleging breaches of fiduciary duty under Georgia Partnership law. Defendant removed to bankruptcy court. Trustee intervened in Superior Court and filed answer and counterclaim. Trustee issued a bill of sale to the Defendant transferring any interest in business partnership to Defendant. Defendant erroneously believed this to automatically substituted him for the Trustee. Defendant failed to file an answer or other response within 10 days; thus, Defendant was in default. The "good cause" standard of Fed. R. Civ. P. 55(c) governs whether a clerk.s entry of default should be set aside. The four factor test is (1) whether the defaulting party took prompt action to vacate the default; (2) whether the defaulting party provides a plausible excuse for the default; (3) whether the defaulting party presents a meritorious defense; and (4) whether the party not in default will be prejudiced if the default is set aside. Turner Broadcasting Systems, Inc. v. Sanyo Electric, Inc., 33 B.R. 996, 1001 (N.D. Ga. 1983), aff.d, 742 F.2d 1465 (11th Cir. 1984). In this case, Defendant failed to satisfy the 2nd, 3rd, and 4th factors. Therefore, the motion to reconsider order striking Defendant.s untimely answer was denied.
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.
Creditor Wells Fargo Corp. (Fargo) filed an objection to the confirmation of Debtor's Chapter 13 plan. In his plan, Debtor proposed to bifurcate and cramdown Fargo's undersecured claim using § 506 of the Code as was common practice prior to the enactment of certain provisions of BAPCPA. The "hanging paragraph" of § 1325(a), which was added by BAPCPA and became effective on October 17, 2005, prohibits bifurcation and cramdown where (1) the creditor has a purchase money security interest; (2) the debt was incurred within 910 days preceding the filing of the bankruptcy case; (3) the collateral for the debt is a motor vehicle; and (4) the motor vehicle was acquired for the personal use of the debtor.The Court SUSTAINED Fargo's objection holding that in the context of the retail installment sale of a motor vehicle in Georgia, "price," for purposes of Georgia's purchase money security interest statute, can include monies paid for an extended service contract and gap insurance.
Creditor objected to confirmation of Debtor's Chapter 13 Plan, where Debtor proposed to bifurcate the Creditor's claim on a vehicle driven and used exclusively by his wife. Overruling Creditor's objection, the court held that the hanging paragraph of 1325(a)(*) does not prevent bifurcation of a purchase money security interest on a 910 day vehicle where the vehicle was not purchased for the personal use of the Debtor.
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.
The discharge of student loans is reserved for those most extreme instances of financial destitution. It is the Court’s finding that this debtor finds herself in such a situation. The Court holds that Debtor has carried her burden of proving, under the standard set forth in In re Brunner and adopted by the Eleventh Circuit Court of Appeals in In re Cox, that excepting Debtor’s student loan debt from discharge would impose an undue hardship on Debtor and her dependent son. As such, the student loan debt at issue, representing loans made by ECMC and the DOE, is held to be dischargeable.
Chapter 7 Trustee filed an objection to the claimed exemptions by Debtors in a singlewide mobile home (“Singlewide”) and in real property on which a block house was constructed. Debtors claimed the exemption under O.C.G.A. § 44-13-100(a)(1), Georgia’s opt-out homestead exemption statute. Debtors argued that their equity interest in the Singlewide could be exempted under O.C.G.A. § 44-13-100(a)(1) since their 22 year-old daughter and minor grandson occupied the Singlewide at the time Debtors’ bankruptcy petition was filed. Debtors claimed that their daughter and grandson were “dependent” for purposes of the homestead exemption statute. The evidence at the hearing revealed that Debtors had claimed their daughter and grandson as “dependents” on their 2005 income tax returns and that the daughter and grandson did, in fact, occupy the Singlewide at the time Debtors’ petition was filed. With regard to the Singlewide, the Court found that the Trustee did not present evidence sufficient to prove that Debtors’ daughter and grandson were not dependents of Debtors for purposes of O.C.G.A. § 44-13-100(a)(1). Therefore, the claim of exemption in the Singlewide was proper since the Singlewide was the residence of Debtors or their dependents. As to the block house property, however, the Court found that there was no legal basis for exempting the equity interest in a rental property owned by a debtor just because that property was located contiguous to the homestead or residence of the debtors. The Court, therefore, sustained the objection of the Trustee as to the claim of exemption in the block house property.
Creditor Nuvell Credit Corp. (“Nuvell”) filed an objection to the confirmation of Debtor’s Chapter 13 Plan. In his plan, Debtor proposed to bifurcate and cramdown Nuvell’s undersecured claim using § 506 of the Code as was common practice prior to the enactment of certain provisions of BAPCPA. The “hanging paragraph” of § 1325(a), which was added by BAPCPA and became effective on October 17, 2005, prohibits bifurcation and cramdown where (1) the creditor has a purchase money security interest; (2) the debt was incurred within 910 days preceding the filing of the bankruptcy case; (3) the collateral for the debt is a motor vehicle; and (4) the motor vehicle was acquired for the personal use of the debtor. The Court SUSTAINED Nuvell’s objection holding that in the context of the retail installment sale of a motor vehicle in Georgia, “price,” for purposes of Georgia’s purchase money security interest statute, can include negative equity in a trade-in vehicle.