Debtors' attorney suspended from practice in the United States Bankruptcy Court for the Eastern and Western Districts of Arkansas for violations of Federal Rule of Bankruptcy Procedure 9011 and pursuant to Local Rule 2090-2.
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Opinions
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Judge Ben T. Barry
The Court denied the trustee's motion for turnover and overruled his objection to the debtor's exemption. The Court could not determine whether the property interest at issue--the right to payments pursuant to a judgment for past due child support--was an interest of the debtor in accordance with applicable state law based on insufficient record before it. The judgment was not in evidence and state laws differ as to whether child support arrearages are property of the custodial parent or property of the child.
In this case, the debtors claimed a homestead exemption under Arkansas law on 0.3 acres in a subdivision that prohibited further division of the property. The creditors objected to the claimed exemption and argued that because the property is indivisible and exceeds one-quarter of an acre, the exemption should be denied or limited in value to $2500.00 under the Arkansas Constitution. In the alternative, the creditors argued that the property should be sold for the estate to realize the non-exempt portion of the claimed exemption. The Court recognized that the highest return to the estate would result from a sale of the property, but further recognized that the trustee’s share of the proceeds could also be determined prior to a sale, resulting in a benefit to the estate without the additional costs of a sale.
The court dismissed the plaintiff’s complaint for lack of subject matter jurisdiction. Piercing the corporate veils of companies held by the debtor is not a core proceeding and, even if successful, in this instance would have no conceivable effect on the debtor’s chapter 13 bankruptcy case.
James G. Mixon
The Court ruled that a discrepancy in the description of the collateral on the security agreement and certificate of title resulted from references to two different parts of the same motor home; therefore, the Court reinstated its original order, finding the order was accurate in granting the creditor relief from stay and abandonment as to the motor home as described in the security agreement.
Upon objection to confirmation of a chapter 13 plan, the Court ruled that the debtor could cure her mortgage default and resume mortgage payments on her principal residence when the property had been sold in a foreclosure sale pre-bankruptcy but the trustee's deed had not been recorded before the debtor filed her bankruptcy petition.
The acknowledgment in question did not contain the Debtor's signature and the wrong pronoun was used. As a result, the Court found the acknowledgement did not substantially comply with the Arkansas Code and the Trustee is allowed to avoid the mortgage lien.
Judge Richard D. Taylor
Pursuant to Federal Rule of Civil Procedure 12(b)(6), made applicable to the proceeding by Federal Rule of Bankruptcy Procedure 7012, the court grants the defendant's motion to dismiss the debtor's claims for turnover and violation of the automatic stay based on the defendant's post-petition retention of funds garnished pre-petition.
Court adopts Judge James G. Mixon’s ruling in In re Johnson, 407 B.R. 364 (Bankr. E.D. Ark. 2009), holding that an assignee does not have to take further action to be a properly perfected lienholder.
Civil contempt is not the appropriate remedy for enforcement of a monetary judgment.