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Oct 19, 2021

Student loan debt discharged after finding of good cause

Where the debtor showed he could not repay his student loan debt and maintain a “minimal” standard of living, that these circumstances were likely to persist and that he had made a good faith effort to secure employment and communicate with the Department of Education, his student loan debt was discharged. Background This case involves […]

Oct 11, 2021

Dismissal of three debtors’ cases upheld

Where three debtors appealed the dismissal of their cases, the bankruptcy court did not abuse its discretion in finding the first debtor did not file in good faith; that the second did not comply with a court-directed payment process, thus causing unreasonable delay; or that the third debtor’s plan was infeasible. Background This is a […]

Oct 4, 2021

Post-petition shareholder distributions belong to estate

Where an accountant formed a new company after he filed for bankruptcy protection, and then transferred assets from his prior company to his new practice, the bankruptcy court did not err in finding that the transferred assets were the property of the estate. Background Michael Decker is a certified public accountant. On March 30, 2017, […]

Sep 6, 2021

Debtor had no obligation to hold funds in trust

Where the plain language of the Chapter 11 reorganization plan did not require the debtor to hold monies in trust for the general unsecured creditors, and an unsecured debtor did not identify extrinsic evidence showing an intent to create a trust, the bankruptcy court’s order finding no trust was affirmed. Background This appeal considers whether […]

Aug 30, 2021

Trust lacked standing to appeal order

Where a trust could not enforce the provisions of the master lease against one of the parties, because it had already been assigned to a new tenant assignee, the trust lacked standing because the litigation did not affect the trust’s pecuniary interests. Background Wilmington Trust appeals a bankruptcy court order denying the trust standing to […]

Jul 30, 2021

Trustee’s motion for stay pending appeal denied

Where the trustee was unable to cite any Fourth Circuit authority showing the bankruptcy court erred in approving nondebtor releases, and there were persuasive out-of-circuit cases against the trustee’s positions, its motion for a stay pending appeal was denied because it failed to show that it was likely to prevail on the merits. Background This […]

Jul 30, 2021

‘Reckless’ failure to list account nets dismissal

Where the debtor failed to list a savings account on her Chapter 13 schedule, her case was dismissed with prejudice for 90 days because her failure was at least the product of a reckless disregard for the truth. Background This matter came before the court on the trustee’s opposed motion to dismiss the debtor’s Chapter […]

Jun 29, 2021

Adversary proceeding remains in bankruptcy court

Where the trustee for LeClairRyan, a bankrupt law firm, brought claims against the firm’s former joint venture partner, and the partner asserted a right to money in the bankrupt estate, the adversary proceeding will remain in bankruptcy court because all claims present core issues. Background This case arises out of an adversary proceeding filed by […]

Jun 29, 2021

Trustee denied stay of disclosure, confirmation orders

Where the United States trustee moved to stay the bankruptcy court’s disclosure statement and confirmation orders pending appeal, but failed to show irreparable harm if its motion was denied or a likelihood of success on the merits of its appeal, and the record showed a stay would substantially harm other parties, the orders were not […]

Jun 11, 2021

Destruction of loan documents not spoliation

Where a dispute arose over whether a loan guarantee was forged and the lender’s practice was to scan and shred loan documents within a month of being signed, the documents here were executed/shredded in 2005 while the litigation did not commence until 2018, there was no spoliation. Background On July 10, 2018, appellant filed a […]

Jun 2, 2021

Automatic stay extended to nondebtor lawyer

Where the nondebtor’s finances were intertwined with the those of the debtors, but she could not file for bankruptcy protection because it could put her law license, and the only source of income for the debtor, at risk, there was good cause to extend the automatic stay to her. Background Cornus Montessori LLC owned and […]

May 25, 2021

Bad faith conduct results in two-year refiling bar

Where the court previously dismissed with prejudice the bankruptcy filing of the debtor’s alter-ego, this case was the ninth filed by the alter-ego since 2010 and was filed during a prior bar to refiling, and neither the debtor nor the alter ego defended their conduct, both the debtor and the alter ego were barred from […]

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