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 descending Summary Case Number PDF
07/02/2014

In re: Johnson

Summary:  The trustee moved for turnover of all indicia of debtor Jerry Johnson’s fractional “working interest” in an oil well, and of all revenue received by Jerry Johnson from that oil well since the commencement of the chapter 7 case.    The trustee argued that, under Illinois law, the “working interest” was an interest in realty and that the revenue earned from sale of the oil were proceeds of that freehold estate.  The debtors opposed the motion on the basis that Jerry Johnson had only a contractual right to payment under the oil and gas assignment, with the result that the revenue was excluded from the bankruptcy estate as income.  The Court concluded that the “working interest” was not an interest in real estate but was a personal property interest that included both the oil extracted pre-petition and Jerry Johnson’s contractual rights to profits earned post-petition.  The Court also held that because the revenue did not arise from personal services performed by the debtors post-petition, it was not excluded from the bankruptcy estate   under § 541(a)(6). 

The trustee also moved for turnover of a trust of which Jerry Johnson was the settlor, the trustee and a beneficiary with retained powers to amend or revoke the trust and to use the profits and/or principal of the trust without restriction.  The Court held that the trustee assumed these powers upon commencement of the case and could use them for the benefit of the bankruptcy estate.  The Court held further that the trust corpus was not excluded from property of the estate under § 541(b)(1) because Jerry Johnson’s powers under the trust were not for the exclusive benefit of a non-debtor.  The Court also rejected the debtors’ argument that equitable considerations should prevail in deciding the issues raised.

13-40605 View
07/16/2014

In re: Downer

Summary:  Debtor objected to a claim filed by his ex-spouse, alleging that the debt at issue was based on debt allocation in the Dissolution Judgment and was not in the nature of alimony, maintenance, or support (and therefore the claim should be allowed only as a general unsecured non-priority claim). In the same vein, the ex-spouse objected to the debtor’s proposed first amended plan because it did not provide for payment of her priority claim of $1,758.26.  She alleged that the claim was for medical expenses and additional healthcare costs of the parties’ child, and that debtor was previously ordered to pay these costs.  She argued that the claim was entitled to priority treatment under § 507(a)(1)(A) as a domestic support obligation.

The Court held that the obligation of the debtor to pay these medical and health care costs was in the nature of child support and therefore constituted a domestic support obligation as defined by 101(14A).  As such, the claim filed by debtor’s ex-spouse was entitled to priority treatment.  The Court overruled the debtor’s objection to claim and sustained the objection to confirmation filed by the debtor’s ex-spouse.

13-40939 View
08/28/2014

In re: Schablowsky

Summary:  The debtors objected to a secured claim filed by FLS Physical Therapy Associates, PC (FLS) alleging that a lien claimed by FLS in an award the debtors had received from the Client Protection Fund of the Illinois Attorney Registration and Disciplinary Commission was invalid. The debtors asserted that no lien can be perfected against awards under the Client Protection Fund. The debtors further asserted that FLS had likewise failed to perfect a lien on settlement funds from a pre-petition personal injury action which had been wrongfully converted by their personal injury attorney.

The Court held that under Illinois Supreme Court rules there can be no lien in favor of a third party on awards under the Client Protection Fund. The Court further held that FLS had failed to perfect a lien under 770 ILCS 23/10 (The Illinois Health Care Services Lien Act) on the settlement funds of the debtors’ personal injury action. The Court sustained the debtors’ objection as to FLS’ secured claim but allowed FLS an unsecured claim in the amount of $10,947.17.

 

13-31378 View
10/02/2014

In re: Altmeyer

Summary: Debtor David Altmeyer moved to sell a parcel of commercial real estate free and clear of liens pursuant to 11 U.S.C. § 363(f).  When the debtor filed his Chapter 13 petition on May 17, 2010, the property was encumbered by a first mortgage in favor of Regions Bank (“Regions”), a second mortgage in favor of USAA Federal Savings Bank (“USAA”) and several real estate tax liens in favor of the county taxing authority.  Although the confirmed Chapter 13 plan provided for surrender of the property to Regions, due to the property’s poor condition, Regions refused to take possession. In an effort to relieve himself of the ongoing burden of maintaining the property, the debtor sought to sell the property free and clear of creditors’ liens.  However, because the proposed purchase price was substantially less than the value of the liens against the property, second mortgage holder USAA objected to the sale.

In denying the debtor’s motion, the Court held that it did not have the authority to authorize a sale free and clear of liens after plan confirmation because the property was no longer property of the bankruptcy estate. The Court further concluded that property should not be sold free and clear of liens unless the proposed sales proceeds are sufficient to fully compensate the secured lienholders and produce some equity for the benefit of the debtor’s bankruptcy estate.

10-60275 View
10/23/2014

In re: Meyer v. Walters et al

Summary: Debtors/defendants entered into an Agreement for Sale of Real Estate with plaintiff.  The Agreement obligated the defendants to purchase certain real estate from the plaintiff.  The property was later damaged in a hail storm.  The defendants received a check from their insurer and represented to the plaintiff that (1) the insurance proceeds would be used to purchase building materials to repair the hail damage and (2) defendant Thomas Walters, a skilled carpenter, would make the necessary repairs. Based on these representations, the plaintiff authorized the defendants to endorse the check on the plaintiff’s behalf and to deposit the insurance proceeds into their bank account.  In the defendants’ bankruptcy case, the plaintiff filed a complaint objecting to the dischargeability of a debt under 11 U.S.C. §523(a)(2)(A). Trial was held. The Court found in favor of the plaintiff and entered judgment in the amount of $19,516.22, representing homeowner's insurance proceeds misappropriated by the debtors.

14-3035 View

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