Court sustained creditors’ objection to Debtors’ claimed homestead exemption for real property on which they did not live at the time they filed bankruptcy where Debtors previously abandoned the property as a homestead and neither returned to it nor impressed upon it any characteristics of a homestead at the time they filed bankruptcy. The Court determined that the debtors’ intention to move back onto the property at some point in the future did not satisfy the requirements for claiming a homestead exemption under Arkansas law. In re Ellis, 456 B.R. 401 (Bankr. E.D. Ark. 2011).
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Opinions
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Audrey R. Evans
Court held that the compensation paid to attorney was unreasonable and excessive in light of the services provided, and ordered attorney to disgorge the entire amount of attorney fees paid to him for that representation. Court also found that attorney's inadequate representation and efforts to conceal those inadequacies warranted an entry of sanctions against him. Court sanctioned attorney by suspending him from practicing before the Arkansas Bankruptcy Courts pending a review and determination of the matter by the Arkansas Supreme Court’s Committee on Professional Conduct. In re Burnett, 450 B.R. 116 (Bankr. E.D. Ark. 2011).
Court held that mortgage creditor had standing to file proof of claim because even though it did not initially attach a copy of the note indorsed to it, it ultimately produced and filed the indorsed Note. Additional evidence showing the creditor had standing was a recorded assignment of mortgage listing it as the mortgage creditor filed prior the debtor's bankruptcy, and the fact that debtors listed the creditor as their mortgage creditor on their plan and schedules. The Court also found that Debtors successfully rebutted the validity and reasonableness of certain foreclosure fees charged by the mortgage creditor. In re Burrow, 2011 WL 1103354 (Bankr. E.D. Ark. March 22, 2011).
Court overruled objection to unredacted proof of claim because 11 U.S.C. § 502(b) does not provide for such disallowance and 11 U.S.C. § 105(a) does not provide a private cause of action. Court dismissed the Debtor's contempt claim because the Debtor alleged no specific facts showing that the violation was willful or that the Debtor suffered any monetary damages other than her attorney's fees. Court also dismissed Debtor's state law invasion of privacy claim because she failed to allege sufficient facts showing that the unredacted information actually reached or was sure to reach the public at large. Dunbar v. Cox Health Alliance, LLC (In re Dunbar), 446 B.R. 306 (Bankr. E.D. Ark. 2011).
Court held that it was not barred by collateral estoppel from making a determination on “willful and malicious” requirements of § 523(a)(6) because Debtor’s guilty plea to crime of battery may have been satisfied, in this case, by recklessness prong of criminal statute, and because civil judgment for intentional tort of battery was based on Debtor’s stipulation to liability. Following a full review of the evidence, the Court found that the Debtor’s actions were willful, but that the evidence was insufficient to support a finding that the Debtor’s actions were malicious. As a result, Court held that the judgment debt was not excepted from discharge under § 523(a)(6). Hidy v. Bullard (In re Bullard), 451 B.R. 473 (Bankr. E.D. Ark. 2011). Affirmed on appeal to 8th Circuit BAP. See Hidy v. Bullard (In re Bullard), 449 B.R. 379 (B.A.P. 8th Cir. 2011).
Court found that the Debtors' transfer of a remainder interest in real property to their mother was not actual fraud under 11 U.S.C. § 548(a)(1)(A), but was constructively fraudulent pursuant to 11 U.S.C § 548(a)(1)(B) because no consideration was provided in exchange for the transferred interest and the Debtors were insolvent at the time of the transfer. Luker v. Eubanks (In re Eubanks), 444 B.R.415 (Bankr. E.D. Ark. 2010).
Court found that debtor and creditor entered into a binding settlement agreement under Arkansas law to settle a dischargeability lawsuit under 11 U.S.C. § 523, and that the settlement was enforceable despite lack of prior court approval under Federal Rule of Bankruptcy Procedure 9019(a). Hyundai Motor Finance Co. v. McKay (In re McKay), 443 B.R.511 (Bankr. E.D. Ark. 2010).
In Chapter 11 case, the Court denied request for relief from stay made pursuant to 11 U.S.C. § 362(d) on two pieces of real property, which were the primary assets of the Debtor’s estate. The Court held that the appraisals and other evidence of value were not sufficiently reliable or persuasive for the Creditor to meet its burden of proof of a lack of equity in the properties, and furthermore, that the equity cushion, marketing strategy, and likelihood of a confirmed plan were sufficient to provide adequate protection. The Court also denied the Creditor’s request for valuation of its claims, made pursuant to Fed. R. Bankr. P. 3012, holding that the evidence presented did not lend itself to the type of specific, quantified determination necessary for such a finding. In re Panther Mountain Land Development, LLC, 438 B.R. 169 (Bankr. E.D. Ark. 2010).
Court denied Bank's motion to dismiss Chapter 11 case finding that the Debtors' plan was filed in good faith, and the Debtors' case is not otherwise subject to dismissal under 11 U.S.C. § 1112(b). Court further conditionally confirmed Chapter 11 plan overruling creditors' objections to feasibility, and finding that the proposed post-confirmation interest rate and length of payout period with respect to bank creditor's claim was fair and equitable under 11 U.S.C. § 1129(b)(2). However, Court held that Debtors must modify their plan to pay the Bank, an oversecured creditor, interest on its claim at the contract rate from the date of filing through confirmation. Finally, the Court found that Debtors' plan to pay the Farm Services Agency (FSA) $4,000 in lieu of its Junior Lien in addition to the other payments and security provided to FSA was fair and equitable under the "indubitable equivalence" test of 11 U.S.C. § 1129(b)(2)(A)(iii). In re Bryant, 439 B.R.724 (Bankr. E.D. Ark. 2010).
Default judgment denied because a default had not been entered, an answer had been filed, the Debtor provided an acceptable reason for the delay in filing the answer, and an answer filed five days late constituted only a marginal failure to comply with the deadline for filing an answer. Not selected for publication