Opinions

The Southern District of Illinois offers a database of opinions. These opinions were entered between the period of 2/1987 and the present. To conduct a detailed search, enter a keyword or case number in the search box to the right.

 

Opinions can also be viewed via the U.S. GPO's Federal Digital System

Date Filedsort ascending Summary Case Number PDF
01/23/2017

In re: Scott R Hewitt 16-30375

Summary: Chapter 7 trustee sought turnover of post-petition voluntary separation incentive payments (VSI payments) payable to the debtor from the U.S. Department of Defense.  Debtor opposed the motion on the basis that the payments were excluded from the bankruptcy estate under 11 U.S.C. §§ 541(a)(6) or 541(c)(2).  Alternatively, debtor argued that even if the VSI payments constitute estate property, they were exempt under state law as retirement benefits.  The Court found that based on the 7th Circuit’s decision in Matter of Haynes, 679 F.2d 718 (7th Cir. 1982), the VSI payments were excluded from the estate under § 541(a)(6).  The trustee’s motion for turnover was denied.

16-30375 View
12/08/2016

In re: Harley T Roehm 13-41385 & Sandra L Schlueter 14-40163

Summary: In 2 cases involving the same issue, the Court denied the Chapter 13 Trustee's motion to modify confirmed plans to increase the plan base. The Court held that after deducting the Trustee's fee, the benefit to the unsecured creditors from the additional payments they would receive is relatively small compared to the difficulty, if not hardship, of the debtors living and making additional payments with social security as their only source of income. The debtors had paid their respective plan bases off early in anticipation of reduced income. The Trustee sought modification to require the debtors to make additional payments to cover the remaining months under the terms of their confirmed plans pursuant to 11 U.S.C. § 1329. The Court found that the Trustee had failed to establish cause to modify the debtors' plans under the unique facts presented in each case.

13-41385 14-40163 View
09/15/2016

In re: Alan Lee Presswood 12-60237

Summary: The Chapter 7 debtor objected to the Trustee’s proposed settlement of a class action lawsuit in which the debtor was the class representative and sole class member.  The lawsuit was filed on February 25, 2015, nearly three years after the debtor filed his bankruptcy petition. Although the suit involved a prepetition claim, it was not initially scheduled or otherwise disclosed.  Upon learning of the suit, the Trustee, moved to settle the estate’s interest in claims against the class action defendant for $10,000.  The debtor objected on the grounds that the claim was worth no more than $500, was fully exempt, and that the settlement offer represented an attempt by the class action defendant to “buy off” the class represented in the pending litigation.  The Trustee countered that the debtor had no standing to object to the settlement.

The Court agreed with the Trustee that a Chapter 7 debtor must have a pecuniary interest in the outcome of a case in order to object.  However, in this case it was necessary to value the class action claim because, if it was worth no more than the claimed exemption, the estate would have no interest to settle.

Relying on In re Polis, 217 F.3d 899 (7th Cir. 2000), the Court found that when determining the fair market value of a legal claim in advance, it is necessary to multiply the amount of the judgment the plaintiff would recover if he litigated and won by the probability of prevailing.  Because the evidence submitted in support of the settlement figure assumed the maximum possible recovery in the class action and did not adjust for uncertainty that this value would actually be realized, the Court determined that it did not accurately reflect the actual value of the claim.  Accordingly, the debtor’s objection was sustained and the proposed settlement was not approved.
 

12-60237 View
05/16/2016

In re: Deere and Company v Grabowski et al

Summary: Debtors/defendants Paul and Tonya Grabowski filed a Chapter 12 bankruptcy case on April 22, 2015. The Notice of Chapter 12 Bankruptcy Case, Meeting of Creditors, & Deadlines fixed the deadline to file a complaint to determine dischargeability of certain debts as July 27, 2015. On January 8, 2016, the Plaintiff, Deere and Company; John Deere, f.s.b. filed a Complaint to Determine Dischargeability of Debt pursuant to 11 U.S.C. §§ 523(a)(2)(a) and 523(a)(2)(B), alleging that the Defendants had sold its collateral years before the bankruptcy filing. The Defendants moved to dismiss the Complaint, arguing that it was time-barred pursuant to Federal Rules of Bankruptcy Procedure 4007(c) and 9006(b)(3), which require that a complaint to determine the dischargeability of a debt be filed “no later than 60 days after the first date set for the meeting of creditors,” unless the party seeking to object to dischargeability files a motion for an extension of time “before the time has expired.” The Plaintiff argued that its late-filed Complaint should be allowed pursuant to the doctrine of equitable tolling.

The Court determined that the facts did not justify applying the doctrine and granted the Defendants’ Motion to Dismiss. The Plaintiff became aware that its collateral had been sold on September 28, 2015, but did not file its complaint until almost four months later. Equitable tolling is only permitted “until the fraud or concealment is, or should have been, discovered.” Therefore, the Plaintiff’s Complaint was still filed too late.

16-04000 View
04/07/2016

In re: STC Inc

Summary: STC, Inc., a locally owned business in McLeansboro, Illinois, filed a chapter 11 case after entry of a judgment against it for patent infringement. Global Traffic Technologies, LLC, the holder of the judgment and debtor’s largest unsecured creditor, objected to confirmation on the following grounds: (1) debtor gerrymandered the classes to create a potentially accepting impaired class; (2) the plan artificially impairs a class; (3) the plan was not proposed in good faith because of the alleged artificial impairment; (4) the plan is not feasible; and (5) the plan is not fair and equitable under §1129(b)(2). In an opinion entered after trial on the objections to confirmation, the Court overruled the objections.

14-41014 View
09/22/2015

In re: Edwards

Summary: Before Harris v. Viegelahn, 575 U.S. __, 135 S.Ct. 1829, 191 L.Ed.2d 783 (2015), both Chapter 13 trustees in this district distributed post-petition payments received prior to a case's conversion or dismissal in accordance with the terms of the confirmed Chapter 13 plan. Harris directly precludes trustees from continuing this policy in the event of a case's conversion. The question presented in this case is, in light of Harris, whether post-petition property and wages in the trustee's possession at the time of the dismissal of a Chapter 13 case must be distributed in accordance with the confirmed plan or returned to the debtor. The Court held that, irrespective of Harris, such property and wages must be returned to the debtor because, under § 349(b)(3) of the Bankruptcy Code, the debtor has a vested right in such post-petition property and wages.

13-30230 View
09/17/2015

In re: Alvion Properties Inc

Summary: In this chapter 11 case, the debtor owned two pieces of property:  1,294 acres of land owned fee simple, as well as the mineral rights to that land; and an additional 3,219 acres of mineral rights. The secured creditor with the mortgage on the property moved for a determination that the debtor was a single asset real estate under 11 U.S.C. § 101(51B).   In response, the debtor argued that it was not a single asset real estate because the property in question did not constitute a single property or project.  The Court ruled in favor of the debtor, finding that the creditor had failed to meet its burden of proving the existence of a single property or project.

15-40462 View
07/07/2015

In re: Forby

Summary: The creditor filed its proof of claim one day before the claims bar date. The claim was rendered deficient by the Clerk's office because it did not substantially conform to Official Form 10 but, rather, was a one-page statement of account. The creditor received notice of the claim's deficiency five days after the claims bar date. Upon receiving notice, the creditor filed an amended claim that utilized Official Form 10. The Trustee objected to the amended claim, stating that under the Seventh Circuit's decision in In re Greenig, 152 F.3d 631 (7th Cir. 1998), the claim was barred as untimely, and that the Court was without authority to hold that the timely filed deficient claim was an "informal proof of claim" pursuant to the informal proof of claim doctrine, and thus that the late filed formal claim was an adequate amendment to the deficient claim.

The Court held that the deficient claim was an informal claim and, therefore, that the late filed formal claim was a valid amendment thereto. The Court reasoned that the Seventh Circuit's Greenig decision affected a narrowing of the informal proof of claim doctrine, but that the creditor had complied with the doctrine's now limited contours. Accordingly, the Court overruled the Trustee's objection.
 
14-41229 View
07/02/2015

In re: Lockett

Summary: This matter was before the Court on the debtor's motion to extend the automatic stay and objections thereto by two of the debtor's creditors. The debtor initially filed for Chapter 13 bankruptcy on December 31, 2012. The debtor and his home mortgage lender preliminarily agreed to a loan modification. During the agreement’s trial period, the debtor fell behind on his payments and, because of this fact, the lender did not approve the modification. The lender filed a motion for relief from the automatic stay on May 14, 2013, after which time the debtor filed an amended Chapter 13 plan that provided for the surrender of his home to the lender. The Court granted the lender's motion on May 29, 2013. Less than five months after receiving relief from the stay, the lender and the debtor entered into a second loan modification agreement. The debtor remained current with his mortgage payments for roughly eight months. However, he fell behind when his spouse became unemployed. 

The lender filed a foreclosure action on February 27, 2015. On March 18, 2015, the debtor filed a voluntary motion to dismiss his case. The Court granted the debtor’s motion on April 3, 2015—674 days after the Court granted the lender's motion for relief from the stay. On April 30, 2015—27 days after obtaining the voluntary dismissal of his prior case—the debtor filed the instant case and moved for an extension of the automatic stay.  Both objecting creditors argued that the debtor was ineligible to be a debtor in the subsequent case pursuant to the plain meaning of 11 U.S.C. § 109(g)(2) and that, therefore, there was no stay in place to extend. The debtor contended that he was not precluded by § 109(g)(2) from being a debtor in the subsequent case and, further, that the stay should be extended pursuant to 11 U.S.C. § 362(c)(3)(B) because the subsequent case had been filed in good faith.
 
The Court granted the debtor's motion, holding that the debtor was eligible to be a debtor in the subsequent case because he did not dismiss his prior case in response to the motion for relief from stay.  Instead, that case had been dismissed due to family financial hardship. In addition, the Court extended the stay because neither creditor provided evidence indicating bad faith or in any way challenged the debtor's assertion that the case had been filed in good faith.
 
15-30700 View
02/12/2015

In re: Hunt

Summary: CNB Bank filed a motion for relief from the automatic stay as to all of its collateral, to which Debtor failed to object or in any way respond. The Court granted the bank’s motion. Nineteen days after the Court granted the bank’s motion for relief, Debtor moved to vacate the order. The Court denied Debtor’s motion to vacate, holding that Debtor failed to establish the requirements for relief under Bankruptcy Rules 9023 or 9024 for vacating a final order or judgment.

14-30603 View

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