The court finds cause to dismiss the Chapter 11 Debtor’s case. Among other things, the Debtor paid prepetition creditors postpetition and received an insider loan postpetition without court authorization.
You are here
Click here to view.
Honorable David L. Bissett
The court grants the Defendant’s motion for summary judgment on the Debtor’s claim that it violated the West Virginia Uniform Enforcement of Foreign Judgment Act, W. Va. Code § 55-14-1 et seq. Despite the Debtor residing and working in West Virginia, the court found that the Defendant’s enforcement of its Florida judgment by garnishing the Debtor’s wages in Florida did not constitute the enforcement of its judgment in West Virginia.
The court granted the Defendant’s motion to dismiss the Debtor’s second complaint with prejudice. Despite the Defendant’s arguments, the Debtor was permitted to amend its complaint for a second time. Moreover, res judicata did not bar litigation of the second amended complaint, because the court dismissed the previous complaint without prejudice. However, the Debtor ultimately failed to state a plausible claim regarding equitable subrogation under West Virginia law.
The court denied the Plaintiff’s motion for judgment on the pleadings. In the case, the Plaintiff obtained a money judgment against the Debtors by the Maryland State Court and a subsequent judicial lien by the West Virginia State Court. The Plaintiff did not argue that the indebtedness relating to the Maryland State Court Judgment should be excepted from discharge, but rather the judicial lien granted by the West Virginia State Court. Notably, the Debtors did not contest whether they committed actual fraud; however, they did dispute whether the debt was “obtained by” fraud. The court ultimately held that the judicial lien obtained by the Plaintiff in the West Virginia State Court was not a debt for money obtained by actual fraud which could be excepted from the Debtors’ dischargeable under § 523(a)(2)(A) of the Bankruptcy Code. As a result, the court also dismissed the Plaintiff’s adversary proceeding as it could not state a plausible claim to relief.
Honorable Paul M. Black
The Debtor alleged that the Plaintiff filed a complaint in bad faith and advanced it without first conducting a reasonable investigation in violation of Fed. R. Bankr. P. 9011. When Rule 9011 sanctions are sought by motion, the movant must comply with the safe-harbor provision of Rule 9011(c)(1)(A), which requires the offending party to be given notice and an opportunity to cure the offending conduct. Because the Debto did not comply with that requirement, the motion for sanctions was denied.
Honorable Becker McKay Wyckoff Mignault
In dismissing the Debtor’s Chapter 11 case based upon a finding of bad faith, the court found as significant the fact that the Debtor liquidated several months prepetition. In short, there was no bankruptcy purpose—reorganization or liquidation—to be served by the Debtor’s case.
The court grants the Debtor’s motion for judgment on the pleadings. Specifically, the court finds that after the Decedent entered into a binding contract with the Debtor for the sale of real property, the Defendants as co-administrators of the Decedent’s death estate were under a duty to pay the purchase price for the benefit of the death estate.