The Chapter 11 debtor filed a motion for authorization to schedule an auction for the sale of substantially all of its assets. The debtor also requested approval of certain bidding procedures to govern the auction. Certain lenders agreed to be a "stalking horse bidder." The court granted the debtor's motion noting that, after the auction, the debtor must return to the court for approval of the sale.
Opinions
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Please note: These opinions are not a complete inventory of all judges' decisions and are not documents of record. Official court records are available at the clerk's office.
Robert F. Hershner, Jr. (Retired)
Plaintiff's counsel filed a complaint to determine the dischargeability of a debt two days after the deadline provided by Bankruptcy Rule 4007(c). Plaintiff's counsel contended that his failure to timely file the complaint was excusable neglect. The court held that Bankruptcy Rules 4007(c) and 9006(b)(3) do not authorize the court to extend the deadline for excusable neglect. The court held that Plaintiff's untimely complaint must be dismissed.
The debtor signed a promissory note that required the debtor to repay the principal plus interest by making a single payment. The promissory note provided for a five percent late charge if any periodic payment was not timely made. The debtor failed to make her payment and the creditor demanded payment of the late charge. The court held that a single payment for the full amount of the obligation was not a periodic payment and that the debtor was not required to pay the late charge.
The defendant failed to timely serve an answer to a cross-claim. The court signed a judgment by default that was prepared by the trustee's counsel. The court set aside the judgment by default because the defendant did not have the three-days notice required by Rule 55(b)(2) for parties who have made an appearance in the action. The court also held that the relief granted in the judgment by default was different in kind and exceeded the relief sought in the cross-claim.
The debtor's chicken farm was destroyed by arson. The insurance company denied the debtor's claim because the debtor failed to provide information and cooperate. The insurance company agreed to pay the mortgagee under a "standard mortgage clause". The Court held that the debtor had no interest in the insurance proceeds paid to the mortgagee.
Judge John T. Laney, III
Plaintiffs filed an Adversary Proceeding against Ms. Mock. Ms. Mock had hired National Child Support to collect back child support owed on a judgment. National Child Support hired an attorney to represent Ms. Mock, but there was a miscommunication as to whom the attorney represented. As a result, the attorney filed a response in the name of National Child support only. A default judgment was entered against Ms. Mock. Ms. Mock filed a motion to set aside the default judgment. The "excusable neglect" standard of Fed. R. Civ. P. 60(b) governs whether a default judgment should be set aside. In this case, the misunderstanding of the attorney for Ms. Mock falls within the parameters of "excusable neglect." Therefore, the default judgment was set aside.
The Plaintiff’s filed a complaint against the Debtor/Defendant alleging the conversion of property used as collateral for a security agreement. The Debtor/Defendant failed to answer the complaint due to a clerical mistake. A clerk’s entry of default was entered in accordance with Fed. R. Bankr. P. 7055(a). Less than a week later, the Debtor/Defendant filed a motion to open the default, as well as a late filed answer to the complaint. The "good cause" standard of Fed. R. Civ. P. 55(c) governs whether a clerk’s entry of default should be set aside. The four factor test is (1) whether the defaulting party took prompt action to vacate the default; (2) whether the defaulting party provides a plausible excuse for the default; (3) whether the defaulting party presents a meritorious defense; and (4) whether the party not in default will be prejudiced if the default is set aside. Turner Broadcasting Systems, Inc. v. Sanyo Electric, Inc., 33 B.R. 996, 1001 (N.D. Ga. 1983), aff’d, 742 F.2d 1465 (11th Cir. 1984). In this case, the Debtor/Defendant failed to show a meritorious defense. Therefore, the entry of default was granted as to liability.
(Also: Bruce, Case No. 04-42805; McRae, Case No. 04-42887; Cook, Case No. 04-42810; LaGrand, Case No. 04-42787; Cooper, Case No. 04-42754; Burrell, Case No. 04-42793; Gilboy, Case No. 04-42888; Skinner, Case No. 04-43011; Kirkland, Case No. 05-40241; Voss, Case No. 05-40018; Cochran, Case No. 05-40483; Carr, Case No. 05-40559 - July 15, 2005) - The United States Trustee brought this motion because the Debtors are residents of Alabama. The Debtors opposed the motion and argued that the U.S. Trustee’s motions were untimely. The court did not adopt a bright-line rule that motions brought sixty days after filing are untimely. To determine whether a motion is timely, the court must look to the facts and circumstances of each case. The court found that the motions in the majority of the cases were untimely under the Advisory Committee Notes, Fed. R. Bankr. P. 1014(a) because too much had transpired when the motions were brought. The court found two of the motions were timely because "the first major motion[s] were not yet decided before the motion[s] were filed." In re 1606 New Hampshire Avenue Associates., 85 B.R. 298, 305 (Bankr. E.D. Pa. 1988).
Judge James D. Walker Jr. (Retired)
The debtor’s personal injury attorney failed to satisfy the rules of professional conduct by conducting his representation without any direct communication with the debtor and settling the case without the debtor’s authority.
"Escrow agreement" under which a creditor secured by a lien on the debtor’s mobile home loaned the debtors additional funds was a separate contract from the mobile home loan contract rather than a modification of the mobile home loan contract. The escrow agreement contained no language of modification and contained a separate repayment schedule. Therefore, the claim arising out of the escrow agreement was not secured by the mobile home.