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
10/30/2020

In re: Marc J and Kelly Jo Clark

Summary: Debtors are represented by a local attorney of UpRight Law, LLC (“UpRight”). In reviewing the debtors’ schedules, the Court noticed that the local attorney was charging significantly more filing as a partner for UpRight than he typically does when filing under his own practice. Further review showed that although the debtors qualified for a waiver of the filing fee, UpRight did not submit a waiver on their behalf. These concerns led the U.S. Trustee to file Motions for 2004 Examinations of the debtors and their attorney, which were granted. Even though the Examinations had not yet taken place, UpRight filed Motions to Close the case, arguing that the Court was required to close the case pursuant to 11 U.S.C. §350. In denying the Motions to Close, the Court held that not only was it not required to close the case at that time, but the Court has an independent statutory duty to review attorneys’ fees pursuant to 11 U.S.C. §329 and Federal Rule of Bankruptcy Procedure 2017. Although administratively the case was capable of being closed, the pending matters before the Court supported its decision to keep the case open.

19-30720 View
10/30/2020

In re: Betty A Corey

Summary:  Debtor is represented by a local attorney of UpRight Law, LLC (“UpRight”). In reviewing the debtor’s schedules, the Court noticed that the local attorney was charging more filing as a partner for UpRight than he typically does when filing under his own practice. Further review showed that the case was not filed until nearly one year after the debtor had first retained UpRight, and in the year prior to filing, the debtor had two lawsuits pending against her, even though the itemized fee statement submitted by UpRight showed no assistance in regards to the lawsuits. These concerns led the U.S. Trustee to file Motions for 2004 Examinations of the debtor and her attorney, which were granted. Subsequently, UpRight filed Motions to Close the case, arguing that the Court was required to close the case pursuant to 11 U.S.C. §350. In denying the Motions to Close, the Court held that not only was it not required to close the case at that time, but the Court has an independent statutory duty to review attorneys’ fees pursuant to 11 U.S.C. §329 and Federal Rule of Bankruptcy Procedure 2017. Although administratively the case was capable of being closed, the pending matters before the Court supported its decision to keep the case open.

20-40036 View
10/30/2020

In re: George H Wise

Summary: Debtor is represented by a local attorney of UpRight Law, LLC (“UpRight”). In reviewing the debtor’s schedules, the Court noticed that the local attorney was charging significantly more filing as a partner for UpRight than he typically does when filing under his own practice. Further review showed that the debtor’s case was not filed until 17 months after paying UpRight attorney’s fees in full, and although the debtor qualified for waiver of the filing fee, no waiver was submitted by UpRight on his behalf. Additionally, after the debtor had completed his payments to UpRight and was waiting for his bankruptcy to be filed, he was the subject of two creditor collection suits. One lawsuit concluded in a judgment against him, and the other was still pending at the time of the bankruptcy filing. These concerns led the U.S. Trustee to file Motions for 2004 Examinations of the debtor and his attorney. Before the Motions for 2004 Examinations were ruled upon, UpRight filed Motions to Close the case, arguing that the Court was required to close the case pursuant to 11 U.S.C. §350. At the hearing on the Motions to Close, the Court denied the Motions based on its concerns with the debtor’s representation by UpRight and the fact that the Motions for 2004 Examinations had not been rule upon. In the Court’s written Opinion denying the Motions to Close, the Court held that not only was it not required to close the case at that time, but the Court has an independent statutory duty to review attorneys’ fees pursuant to 11 U.S.C. §329 and Federal Rule of Bankruptcy Procedure 2017. Although administratively the case was capable of being closed, the pending matters before the Court supported its decision to keep the case open.

20-30346 View
10/30/2020

In re: Albert Dean Johnson, II

Summary: Debtor is represented by a local attorney of UpRight Law, LLC (“UpRight”). In reviewing the debtor’s schedules, the Court noticed that the local attorney was charging significantly more filing as a partner for UpRight than he typically does when filing under his own practice. Further review showed that the debtor’s case was not filed until one year after first retaining UpRight, and although he qualified for waiver of the filing fee, no waiver was submitted on his behalf by UpRight. Additionally, during the time the debtor was represented by UpRight, he was subjected to two creditor lawsuits in state court. One of the creditors obtained a judgment against the debtor and garnished his wages, while the other was pursuing a foreclosure action. These concerns led the U.S. Trustee to file Motions for 2004 Examinations of the debtor and his attorney, which were granted. Subsequently, UpRight filed Motions to Close the case, arguing that the Court was required to close the case pursuant to 11 U.S.C. §350. In denying the Motions to Close, the Court held that not only was it not required to close the case at that time, but the Court has an independent statutory duty to review attorneys’ fees pursuant to 11 U.S.C. §329 and Federal Rule of Bankruptcy Procedure 2017. Although administratively the case was capable of being closed, the pending matters before the Court supported its decision to keep the case open.

19-60320 View
09/15/2020

In re: Pamela Therese Miller

Summary: The question presented to the Court was whether the debtor must amend her confirmed Chapter 13 plan to increase her monthly plan payment after she lowered her mortgage payment through a mortgage modification. The debtor’s plan provided for the debtor to make her mortgage payment directly to the lender, or “outside the plan.” After confirmation, the debtor refinanced her mortgage to reduce the interest rate and lower her mortgage payment. The Trustee then filed a motion to compel, seeking to increase the debtor’s monthly plan payment by the amount that the mortgage payment had been reduced.

In denying the Trustee’s motion, the Court applied the standard set by the Seventh Circuit Court of Appeals in Germeraad v. Powers, 826 F.3d 962 (7th Cir. 2016) for considering requests to increase plan payments pursuant to 11 U.S.C. §1329. In Germeraad, the Seventh Circuit held that a bankruptcy court may exercise its discretion to require a plan modification under §1329, if the change in the debtor’s financial circumstances makes an increase in plan payments affordable. Here, the Court determined that the debtor’s mortgage modification had resulted in a monthly surplus of only $51.00, and given the debtor’s circumstances, that small surplus did not make an increase in plan payments affordable.

19-60113 View
09/09/2020

In re: Kamille V Guthery

Summary: The issue before the Court was whether the Chapter 13 debtor could deduct expenses she was not presently incurring, but expected to incur in the future, when calculating her disposable income under 11 U.S.C §1325(b)(1)(B). The Trustee objected to the debtor’s Chapter 13 plan arguing that the debtor could not reduce her disposable income by health insurance and childcare costs that she was not actually incurring. The debtor had applied for health insurance for her children, but was awaiting acceptance of her application. The childcare expense had been temporarily suspended when the debtor’s childcare facility closed due to the coronavirus pandemic.

In overruling the Trustee’s objection, the Court applied the Supreme Court’s forward looking approach for evaluating “projected disposable income” under §1325(b) as set forth in Hamilton v. Lanning, 560 U.S. 505 (2010). In so doing, the Court found both the health insurance and childcare expenses to be both “reasonably necessary” expenses and expenses that were “known or virtually certain” to be expended at the time of confirmation. 

19-40641 View
08/07/2020

In re: Keith Allen Pike

Summary: This case examines the effect of post-discharge conversion on unsecured claims. The debtor initially filed his case under Chapter 7 and received a discharge. After the entry of the discharge, the Trustee discovered previously undisclosed assets. Instead of turning the assets over to the Chapter 7 estate, the debtor converted his case to a proceeding under Chapter 13. He then objected to the unsecured claims of creditor Crown Asset Management LLC arguing that because creditor had failed to file claims in the Chapter 7, its claims were essentially extinguished upon the entry of the Chapter 7 discharge order and, therefore, were not entitled to payment in the Chapter 13.

In overruling the debtor’s objections to creditor’s claims, the Court explained that a discharge only eliminates a debtor’s personal liability for his debts--it does not eliminate the debts themselves. Upon conversion, a debtor’s debts remain obligations of the Chapter 13 estate. This approach not only reconciles a debtor’s right to convert with the discharge provisions of 11 U.S.C. § 524(a), but also deters unscrupulous debtors from concealing assets from the Chapter 7 Trustee and then “extinguishing” their debts in a subsequent Chapter 13 through conversion.

17-40736 View
07/30/2020

In re: Katrina M Bridges

Summary: The question presented was whether the Debtor, whose Chapter 13 Plan was not yet confirmed, could avail herself of the newly enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which amended §1329 of the Bankruptcy Code to allow debtors to extend the term of their confirmed plans beyond five years. The Debtor filed a Chapter 13 Petition on July 30, 2019. The Debtor’s attempts to confirm a Chapter 13 Plan were met by objections from the Trustee that the Plan did not provide sufficient funding to complete within five years. On April 30, 2020, the Court held a hearing on the Trustee’s Objection to the Debtor’s Second Amended Plan. Debtor’s counsel argued that the Court should allow the Debtor to extend the term of her Plan beyond five years pursuant to the CARES Act, which had become effective on March 27, 2020. The CARES Act amended §1329 of the Bankruptcy Code, titled “Modification of plan after confirmation”, to allow certain debtors suffering hardships due to the corona virus pandemic to modify their confirmed Chapter 13 plans to extend the term of those plans to a period not more than seven years. The Court held that the plain language of the CARES Act limits that provision to debtors whose plans were already confirmed prior to the March 27, 2020, the effective date of the CARES Act. The Debtor’s Plan had not yet been confirmed as of March 27, 2020. Therefore, the Debtor could not take advantage of the CARES Act to extend the term of her Chapter 13 Plan beyond five years.

19-31012 View
07/14/2020

In re: Bruegge v. Aker

Summary: At issue was whether the Plaintiff could avoid and recover two preferential transfers and a fraudulent conveyance under 11 U.S.C § 544, 547, 548, and 550. Plaintiff also sought the disallowance of any of the Defendant’s claims under U.S.C. § 502(d) and (j). The issues revolved around a two-part agreement involving the purchase of Defendant’s shares in the Debtor and the Defendant’s continued employment with the Debtor. Defendant recieved $200,000 for the shares and two payments totaling $24,248.82 under the employment agreement before the Debtor filed for bankruptcy on April 24, 2015. Plaintiff alleged that the $200,000 was avoidable and recoverable as a fraudulent conveyance and that the two payments of $24,248.82 were avoidable and recoverable as preferential transfers. Defendant argued that the preferential transfers were not avoidable because he received “new value” for the payments and that he was not the initial transferee or an intermediate transferee who did not take for value, in good faith, and without knowledge of the voidability.

The Court determined that both the preferential transfer and the fraudulent conveyance were avoidable but only the preferential transfers were recoverable. The Court also found that the Defendant’s claims were disallowed until the payment of the preferential transfers were made to the Plaintiff.

17-06009 View
01/29/2020

In re: William Todd Steiner

Summary: This case presented the issue of whether, for purposes of a motion to dismiss pursuant to 11 U.S.C. § 707(b)(1), a debtor’s student loan obligations must be characterized as “consumer debt.”  The United States Trustee sought to dismiss or convert the debtor’s case, asserting that the debtor’s debts were comprised primarily of consumer debt and that the presumption of abuse as defined by § 707(b) had not been sufficiently rebutted by the debtor.  Alternatively, the United States Trustee argued that even if there was no presumption of abuse, the case should still be dismissed as an abusive filing pursuant to 11 U.S.C. § 707(b)(3).  In response, the debtor argued that because his student loans were business debts, his total consumer debt constituted less than 50% of his total debt and, therefore, § 707(b)(1) was inapplicable.

Although the Court granted the United States Trustee’s motion, it refused to adopt a per se rule that student loans always constitute consumer debt.  Similarly, the Court also rejected the pure “profit motive” approach advocated by the debtor. Instead, the Court determined that the appropriate way to determine whether a student loan constitutes consumer debt is to consider the totality of the circumstances on a case by case basis.  The Court opined that while a debtor’s motive for incurring a student loan may be a relevant consideration, the purpose of the loan should be determinative.  Here, although the debtor attended college, he never completed a degree.  He was not asked to attend college by an employer and there was no indication in the record as to what the debtor studied while he attended college.  Based on the scant facts provided, the Court was unable to discern any business purpose for incurring the loans. Consequently, the Court ruled that the student loans in this case should be characterized as consumer debt.

19-60062 View

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