The court granted the UST’s motion to dismiss under § 707(b)(1) after finding that the debtors’ debt was primarily consumer debt and that the debtors did not rebut the presumption of abuse that arises under § 707(b)(2).
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Judge Ben T. Barry
The Court found that two separate debtors incurred a debt on account of false pretenses and actual fraud. The debt was created by a state court judgment finding that the debtors committed constructive fraud under Arkansas law. Under the doctrine of collateral estoppel, the Court was precluded from determining some, but not all, of the elements of section 523(a)(2)(A).
The Court overruled the creditor’s objection to the debtors’ claimed Arkansas state homestead exemption under § 522. The debtors’ use of a portion of their homestead property for business purposes did not change the homestead character of the property because the debtors had not manifested an intent to abandon that portion of the property from their homestead.
The court found that the creditor had standing to bring suit against other members of an LLC because he had suffered a direct injury under § 523(a)(2). However, the creditor did not have standing under § 523(a)(4); although the debtor/managing member may have had a fiduciary relationship with the LLC, he did not have a fiduciary relationship with the other members in their individual capacity. Misrepresentations relating to the payment or accrual of management fees resulted in a nondischargeable debt under § 523(a)(2).
The Court denied the chapter 7 debtor his discharge under s. 727(a)(2)(A) and (a)(4)(A).
The court denied the plaintiffs’ complaint to determine the dischargeability of a debt resulting from a state court judgment against the debtors as trustees of their respective living trusts. Because the court could not find that the debtors were individually liable on the debt, there was no debt as contemplated under § 523(a).
The Court granted the creditor’s motion for relief from stay as to real property located in Missouri. Despite an incorrect legal description listed in the deed of trust, the creditor had a secured lien on the property. In addition, the trustee did not qualify as a bona fide purchaser according to Missouri law, and therefore could not avoid the creditor’s secured lien pursuant to 11 U.S.C. § 544(a)(3).
The Court granted the debtors' motion to refund the debtors' income tax refund, which the chapter 13 trustee held pre-confirmation. In chapter 13 cases, prior to confirmation, property of the estate remains in possession of the debtors. The Court overruled the trustee's objection to confirmation, in part, because the debtor's disposable income could not be determined from the record before the Court.
Writ of garnishment and resulting execution lien was a preferential transfer that could be avoided under 11 U.S.C. § 547. In the Fayetteville Division of the Western District of Arkansas, if a debtor is insolvent and the transfer diminishes the debtor’s estate, as a matter of law, any distribution to an otherwise unsecured creditor would result in the creditor receiving more than it would in a chapter 7 liquidation had the transfer not occurred.
Court denies creditor's motion for relief from stay for lack of adequate protection payments pre- and post-confirmation. Pre-confirmation, the debtors made the payments required by 11 U.S.C. 1326, as amended by General Order 32. Post-confirmation, the debtors made payments pursuant to their confirmed plan.