The trustee alleged that the defendant, a member of the debtor’s board of directors, created a direct competitor to the debtor and took other actions for his personal gain to the detriment of the debtor. The defendant asserted that an arbitration clause in his employment contract should be enforced to adjudicate the trustee’s claims. The Court, however, found that the causes of action for breach of fiduciary duty, negligence, constructive fraud and/or negligent misrepresentation of facts, and a violation of the Uniform Trade Secrets Act, were not subject to the employment agreement’s arbitration clause. Additionally, the Court determined that the trustee’s causes of action survived challenges based on the “gist of the action” and the “economic loss” doctrine.

The debtor was paying the IRS in full through a confirmed Chapter 13 plan. Subsequently, the IRS seized the debtor’s tax refund to apply it to the same delinquent tax liability that was being paid through the plan. Accordingly, the debtor moved to hold the IRS in contempt for violating the order of confirmation. The precise language of the Court’s model plan and the Trustee’s confirmation order, however, did not specifically address how the IRS could treat post-confirmation tax refunds owed to the debtor. Because there was a failure to address the permissibility of the IRS’s offset, the debtor failed to state a claim for contempt.

Amore v. Ridgely (In re Doc’s Truck Center, LLC), 20-ap-25

In adjudging the Third-Party Defendants’ motion for summary judgment, the court dismissed the third-party complaint—an avoidance action belonging to the bankruptcy estate—based upon the Defendant/Third-Party Plaintiff’s lack of standing.  Although the Defendant/Third-Party Plaintiff did not seek derivative standing, the court held that such standing is unavailable in this context.

Debtor alleged a violation of the automatic stay and sought a declaration of contempt for notification of child support arrearage addressed in the Chapter 13 plan after child relocated to another state. Mere notification does not amount to a willful violation of the automatic stay and the agency was exercising its state police and regulatory powers.

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.

In adjudicating a contractual fee shifting agreement in a contract, the court found that two parties (Wells Fargo and U.S. Bank) failed to file a proof of claim were therefore prohibited from asserting claims against the estate. A third party (Comm 2013),  however, had filed a timely proof of claim and was entitled to recover its attorney’s fees from the estate. Whether Wells Fargo or U.S. Bank could recover attorney’s fees under a pooling and services agreement was not adjudicated by the court as that agreement was not before it. In reviewing whether a reduction to Comm 2013 $549,988.23 attorney fee and expense request was warranted, the court determined that the attorneys’ hourly compensation rates between $375 and $775 were reasonable under the circumstances, but in reviewing paralegal rates between $200 and $440 per hour,  the court capped the requested hourly compensation at $250 per hour. Among other things, the court countered “block billing” practices by reducing the requested fees by 10% for each block billing entry over 0.5 hours and determined that pro hac vice fees were personal to the attorney and not compensable from the estate.

The Court determined that it had the authority to enter a final order in the case. Because the court found that the debtor-creditor relationship did not rise to the level of a “special relationship” under West Virginia law that was sufficient to support a cause of action for breach of a fiduciary duty, the Court dismissed that cause of action in the complaint and also dismissed a cause of action for an accounting.

The debtor-seller failed to provide insurable access to a hotel pursuant to an express provision in the purchase and sell agreement. The buyer was not obligated to purchase the hotel and was entitled to a return of its earnest money deposit.