In ruling on creditors’ Third Motion for Relief from Stay, the Court determined the law of the case doctrine applied to prior orders of the Court denying the relief sought; however, changed circumstances existed to allow the Court to revisit the prior orders and grant creditors’ request for relief to pursue their state law remedies as to a note and mortgage, but the Court did not find changed circumstances sufficient to allow collection of a $400,000 judgment. A five acre tract of land was also abandoned from the bankruptcy estate.
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Opinions
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Chief Judge Phyllis M. Jones
Abstaining from and remanding lawsuit to Lonoke County Circuit Court, where it originated prior to removal by debtor/defendant.
Relief from stay to pursue eviction proceedings against the Debtor is denied where, although the subject property was not property of the Debtor’s bankruptcy estate due to the completion pre-petition of a foreclosure action against the Debtor and property, the Debtor provided treatment for the creditor’s claim in its plan and the plan was confirmed without objection from the creditor. The Debtor may continue to reside on the property not as owner, but as lessee.
Judge Ben T. Barry
The court denied the defendants’ motions to dismiss the complaints filed by the PACA creditors for the disgorgement of funds paid to the defendants in an amount sufficient to pay the remainder of the PACA creditors’ claims in full.
The court overruled the creditor’s objection to confirmation of the debtor’s plan for the debtor’s failure to file an insurance claim for pre-petition damage to the debtor’s vehicle. The debtor stated an approximate value of the damaged vehicle in her petition but the creditor argued that it was not adequately protected because the debtor refused to file a claim for the damage with her insurance company.
Based upon the court's findings that (1) the debtor could not effectuate a confirmable plan of reorganization and (2) the debtor's estate had incurred substantial and continuing losses and was not reasonably likely to be rehabilitated, the court converted the chapter 11 case filed by a bank holding company to a case under chapter 7 pursuant to § 1112(b) upon the motions of three of the debtor's creditors.
The debtors’ amended their confirmed plan to require the creditor to release its lien on a vehicle upon completion of the debtors’ payments under the plan, even though the debtors were not paying the contract rate of interest under their plan. At issue was a third party’s ownership interest in the subject vehicle. The court found that because the third party had also given a security interest in the vehicle to the creditor, the debtors could not provide for the release of the creditor’s lien in their amended plan unless the underlying debt as determined by non-bankruptcy law was paid.
In this case, the court found that attorney fees that were awarded to the non-debtor in a state court action were non-dischargeable under § 523(a)(5) because the state court action focused on the health and welfare of the minor child.
In this case, the court found that a chapter 13 debtor whose plan payments were funded by his wife’s income through automatic withdrawal was an “individual with regular income” and eligible to be a chapter 13 debtor under § 109(e).
Judge Richard D. Taylor
The homeowners' association fees of a Chapter 13 debtor are nondischargeable when the creditor has not filed a proof of claim and the debt accrues postpetition.