The debtor was permitted to amend his schedules to claim an exemption that would serve as the basis for a lien avoidance action. The error in the original schedule and a substantial delay in the filing of the amendment were due solely to neglect by the debtor’s attorney rather than bad faith.
Opinions
The Middle District of Georgia offers opinions in PDF format, listed by year and judge. For a more detailed search, enter the keyword or case number in the search box above.
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.
Judge James D. Walker Jr. (Retired)
The court dismissed the debtors case for substantial abuse under § 707(b) because the debtors had the ability to make a substantial repayment to their unsecured creditors and they engaged in a pattern of choosing themselves over their creditors.
In a § 523(a)(5) and (a)(15) action, the court found that the debtor’s divorce obligation relating to providing shelter for his ex-wife and children, including mortgage and utility payments, were in the nature of support and nondischargeable. The debtor’s obligation on a joint tax liability was a property settlement that could be discharged because the debtor lacked the ability to pay it.
The court has no authority to permanently enjoin a creditor from collecting payment from a guarantor and, therefore, could not confirm a plan over the creditor’s objection that contained such a provision.
Robert F. Hershner, Jr. (Retired)
The debtor executed a promissory note that provided in part for (1) an eighteen percent per annum default rate of interest; (2) prepayment premiums; and (3) payment of reasonable attorney's fees, costs and expenses if the obligation was referred to an attorney for collection. The creditor's claim was over secured and the estate was insolvent. The Court held that the creditor was entitled to the eighteen percent default rate. The Court held that the creditor had failed to show that the prepayment premium was reasonable. The Court disallowed the creditor's claim for interest on attorney fees because the promissory note did not provided for that interest.
The debtors owned and operated a poultry farm. Columbia Farms placed poultry on the farm and paid the debtors a production settlement. The debtors executed an Assignment authorizing and directing Columbia Farms to pay part of each production settlement to a certain creditor. The funds so deducted were to be jointly payable to the debtors and the creditor. The Court held that the Assignment was merely an authorization directing Columbia Farms to deduct and did not transfer any right, title or interest in the funds deducted to the creditor. The Court held that the funds at issue were property of the bankruptcy estate.
The debtor transferred three parcels of real property to a trust he had established for his wife. The debtor's sons were co-trustees. The creditor contended the transfers were fraudulent and sought civil damages under state RICO from the debtor's wife and sons. The Court held the state RICO action was not property of the bankruptcy estate and that the action against the debtor's wife and sons was not subject to the automatic stay of the bankruptcy code.
Judge John T. Laney, III
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 program is unconstitutional because it does not apply in all fifty states and is therefore not a uniform law respecting bankruptcy. The Federal Courts Improvement Act allowed Alabama and North Carolina to opt out of the U.S. Trustee Program. The court determined that the debtors did not meet the heavy burden to invalidate the Act. Further, the Debtors did not show they would be harmed by having their case administered under the Bankruptcy Administrator Program rather than the U.S. Trustee Program, and therefore lacked standing to challenge the Act.
The Court held a hearing on the Movants’ Motion to Reopen the case in order to contest the prior re-opening and move to strike the amended schedules. The Farmers had completed payments on their plan when they were involved in an automobile accident. They did not immediately amend their schedules to reflect the potential cause of action. After the case was closed, the Farmers reopened the case and added the lawsuit to their schedules. The Movants, the defendants in the personal injury lawsuit, asserted judicially estoppel. The Court found that judicial estoppel did not apply because the Farmers never asserted inconsistent positions and because the Farmers’ plan was complete at the time of the injury. In addition, the cause of action was not property of the estate under Telfair v. First Union Mortgage Corp., 216 F.3d 1333 (11th Cir. 2000) and 11 U.S.C. §1329(a), because cause of action arose after the confirmation and completion of the plan.
Former employees of the Chapter 11 debtor filed proofs of claims for severance pay asserting priority status for their claims. 11 U.S.C.A. § 507(a)(3)(A) The debtor's board of directors had terminated the severance plan before the employees were terminated. The Court held that employees who were terminated after the severance plan was terminated were not entitled to severance pay.