Post-confirmation inheritance acquired by Chapter 13 debtor determined to be property of the estate that supported the Trustee’s proposed plan modification to increase the distribution to unsecured creditors.

The sections are 541(a)(5), 1306 and 1327.

Debts incurred by Debtor in her husband’s probate proceeding were not incurred by fraud or willful and malicious conduct and were dischargeable.  The doctrine of collateral estoppel did not apply to the probate court orders despite the probate court’s finding that the Debtor’s actions were willful and malicious, where the issues of the Debtor’s conduct were not shown to be substantively identical to the issues in bankruptcy, were not necessary to the orders, and were not fully litigated in the probate proceeding. 

The sections are 523(a)(2)(A) and (a)(6).

In farm Chapter 11 case, where Debtors obtained crop input financing by agreeing to sell future farm receipts to finance company, contrary to interest of Bank with prior perfected security interest in crops and proceeds, and where the Bank and the finance company claimed a competing interest in certain crop proceeds, Court determined on the facts at trial that Bank had not “authorized the disposition free of” its security interest under U.C.C. 9-315(a)(1), so that the Bank retained its lien on Debtors’ crops and proceeds notwithstanding alleged sale to finance company. Court also determined that the evidence did not support finance company’s alternative theory of Equitable Subordination under Bankruptcy Code section 510(c), finding that Bank did not exert excessive control over Debtors’ business, and thus was not an insider, and took no inequitable action with an intent to harm the finance company.

The section number is 735 ILCS 5/12-1001(h)(4).

Exempt proceeds from personal injury settlement used to pay off lien on motor vehicle owned by debtor, were traceable to the vehicle, thereby enabling the debtor to claim an exemption in the vehicle as “property traceable to” the settlement proceeds under § 5/12–1001(h)(4). Traceability is not restricted to situations where the debtor uses the exempt funds to purchase the secondary asset.

§ 541(a)(1)
Annual bonus payable only in employer’s absolute discretion was a mere expectancy under Illinois law, not a property interest, and therefore was not property of the estate.  Court determined that the “sufficiently rooted” test of Segal v. Rochelle was largely supplanted by § 541(a)(1).

§  303

Punitive damages of $15,000 each, assessed against two individuals who acted in bad faith by filing an involuntary petition against a debtor who was not indebted to them.

§  544
Security interest was unperfected and avoidable by Trustee, where financing statement identified security agreement as containing description of collateral, but financing statement failed to indicate or identify any collateral and failed to use supergeneric description.

§ 1328
Chapter 13 debtors’ failure to pay direct payments on 2nd mortgage did not warrant dismissal of case without discharge as sought by Trustee after completion of all plan payments due Trustee.

740 ILCS 160/5(a)(2)
Where Debtor LLC made mortgage loan payments to Bank for loan obtained personally by Debtor’s members, where the evidence established that the payments were in lieu of paying rent to the members who owned the commercial real estate and leased it to the Debtor, the Debtor received “reasonably equivalent value” for the payments, so that the payments were not avoidable as constructively fraudulent transfers.

Debtor's motion for summary judgement Denied on nondischargeability complaint for securities fraud where prepetition settlement agreement had a "no admission of liability" provision.
The appropriate section of the Bankruptcy Code is sec. 523(a)(19).

Motion to Dismiss denied as breach of fiduciary duty claim by officer of agricultural cooperative was adequately alleged.

§ 109(e) Debtor's liability on Guaranty of payment where, under Illinois law, guarantor's liability is contingent on default by primary obligor, and where underlying note was not in default on petition date, was a contingent debt for purposes of Chapter 13 eligibility.

District Court affirms Bankruptcy Court's November 20, 2014 Opinion/Order and March 12, 2015 Order.

Amended Complaint dismissed where Trustee failed to allege an actual transfer of property of the Debtor.  Court rejected implied transfer theory.

Substantive consolidation of individual Debtor and Corporate Debtor denied.

Stay relief motion granted.

Student loans determined nondischargeable for Debtor who is 33 years old and holds a master's degree.

§544(a) Creditor whose lien was noted on vehicle certificate of title under its former corporate name, nonetheless retained perfected status.

§506(b) Oversecured creditor whose secured status was preserved via marshaling, was entitled to postpetition interest under §506(b).

§§541 (a)(1) & (a)(6)  Debtor's contingent right under CBA to receive profit sharing payment was property of the estate, on a pro rata basis to exclude earnings from post-petition services.

28 U.S.C. § 407 & 11 U.S.C. § 522, Social Security proceeds excluded from the estate; no equitable exceptions to exemptions permitted. 

Rule 4004(b)  Order extending discharge objection deadline to earlier of fixed date or debtors' compliance with turnover order must be enforced literally.

§ 1325(b)(2)
Child support payments were fully excludable from chapter 13 debtor's current monthly income.
Issued: Sept. 12, 2013

Marshalling allowed following conversion and liquidation of real estate.