Month: January 2013

E.D.N.C.: MGHC Group v. Somerset Properties- Trust or Debtor-Creditor Relationship

Summary:

Affirmed the bankruptcy court opinion from In re Somerset Props. SPE, LLC, 2012 Bankr. LEXIS 1603, 56 Bankr. Ct. Dec. 88, 2012 WL 1230268 (Bankr. E.D.N.C. Apr. 12, 2012) on the same grounds.

For a copy of the opinion, please see:

MGHC Group v. Somerset Properties- Trust or Debtor-Creditor Relationship.pdf

For a copy of the Bankruptcy opinion, please see:

http://ncbankruptcyexpert.com/?p=1153

Read More

Posted in Eastern District

E.D.N.C.: In re TP, Inc.- Involuntary Conversion of Chapter 11 to Chapter 7

Summary:

Conversion from Chapter 11 to Chapter 7 is governed by 11 U.S.C. § 1112(b), based on the best interest of the creditors and estate for cause, including:

(A) substantial or continuing loss to or diminution of the estate and the absence of a reasonable likelihood of rehabilitation;
(B) gross mismanagement of the estate;
(C) failure to maintain appropriate insurance that poses a risk to the estate or to the public;
(D) unauthorized use of cash collateral substantially harmful to one or more creditors;
(E) failure to comply with an order of the court;
(F) unexcused failure to satisfy timely any filing or reporting requirement established by this title or by any rule applicable to a case under this chapter;
(G) failure to attend the meeting of creditors convened under section 341(a) or an examination ordered under rule 2004 of the Federal Rules of Bankruptcy Procedure without good cause shown by the debtor;
(H) failure timely to provide information or attend meetings reasonably requested by the United States Trustee (or the bankruptcy adminstratot, if any)
(I) failure timely to pay taxes owed after the date of the order for relief or to file tax returns due after the date of the order for relief;
(J) failure to file a disclosure statement, or to file or confirm a plan, within the time fixed by this title or by order of the court;
(K) failure to pay any fees or charges required under chapter 123 of title 28;
(L) failure to file a disclosure statement, or to file or confirm a plan, within the time fixed by this title or by order of the court;
(M) inability to effectuate substantial consummation of a confirmed plan;
(N) material default by the debtor with respect to a confirmed plan;
(O) termination of a confirmed plan by reason of the occurrence of a condition specified in the plan; and
(P) failure of the debtor to pay any domestic support obligation that first becomes payable after the date of the filing of the petition.… Read More

Posted in Eastern District Tagged with: , , ,

Bankr. E.D.N.C.: In re The Willows, II- Discrepancy between the Date of Promissory Note and Deed of Trust Does not Per Se Invalidate Lien

Summary:

The Deed of Trust held by BB&T against real property references a promissory note dated September 7, 2005. The actual promissory note, however, is dated September 8, 2005. Relying on Beaman v. Head (In re Head Grading Co.), 353 B.R.122, 123- 24 (Bankr. E.D.N.C. 2006), the Debtors attacked the validity of the lien.

BB&T first argued that because the Debtor had executed a Change in Terms Agreement, explicitly affirming the note, it should be estopped from now contesting the enforceability. The knowledge of the Debtor is not, however, imputed to the debtor-in-possession in a § 544(a)(3) action, who instead proceeds as a hypothetical judgment lien creditor.… Read More

Posted in Eastern District, North Carolina Bankruptcy Cases Tagged with: , ,

N.C. Court of Appeals: Johnson v. Bank of America- Rule 11 Sanctions and Gatekeeper Orders

Summary:

In attempting to set aside a foreclosure, Johnson brought numerous state and federal lawsuits against Bank of America, its attorneys, and the Substitute Trustee, alleging FDCPA, UDTPA, and other claims. All of these suits were eventually dismissed, with obtaining on two occasions Rule 11 sanctions for attorneys’ fees. Ultimately, the Durham County Superior Court entered a “Gatekeeper Order”, prohibiting Johnson from filing any further suits related to this matter, without certification of its merit by a Durham County Superior Court judge.

The Court of Appeals affirmed finding that there are three parts to a Rule 11 analysis:
(1) factual sufficiency,
(2) legal sufficiency, and
(3) improper purpose.… Read More

Posted in Uncategorized

N.C. Court of Appeals: In re Gray- Foreclosure does Require Showing that the Underlying Debt was not Illegal

Summary:
The Homeowners argued that their mortgage closing was conducted by two non-attorneys, whose advice regarding their rights and obligations constituted the unauthorized practice of law under N.C.G.S. § 84-4. As such, relying on In re Foreclosure of a Deed of Trust Executed by Bradburn, 199 N.C. App. 549, 551, 681 S.E.2d 828 (2009), they argued that the contract was void and unenforceable.

In Bradburn, the Court of Appeals had found that a mortgage made by a broker unlicensed under N.C.G.S. § 53-243.03, was “not void ab initio, but rather, may be voidable.” Here the Grays failed to make any specific factual allegations showing a violation of N.C.G.S.… Read More

Posted in NC Court of Appeals, NC Courts Tagged with: , ,

N.C. Court of Appeals: DOCRX, Inc. V. EMI Services- Enforcement of Foreign Judgment Obtained by Fraud

Summary:

Despite the Full Faith and Credit Clause of the U.S. Constitution, the Court of Appeals held that the enforcement of foreign judgments (in this case from Alabama) can be reviewed under Rule 60(b) on the following limited grounds:

(1) the judgment is based upon extrinsic fraud;
(2) the judgment is void; or
(3) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application.

For a copy of the opinion, please see:

DOCRX, Inc. V. Read More

Posted in NC Court of Appeals, NC Courts Tagged with: , ,

Bankr. W.D.N.C.: In re Winn- Chapter 13 Plan Modification

Summary:

The Debtors moved to modify their Chapter 13 plan, surrendering two pieces of real property and seeking to reduce their plan payment to the lowest amount possible to pay a 100% dividend to unsecured creditors over a total period of 60 months. The Chapter 13 Trustee objected, seeking a higher monthly payment, which would have repaid the debts over a shorter period of time, on the basis that the Winns could afford the higher monthly payment. This higher payment would have been feasible except for the proposed housing rent and the retention of a piece of real property in South Carolina.… Read More

Posted in North Carolina Bankruptcy Cases, Western District Tagged with: ,

Law Review: Budge- United States Consumer Law Attorney Fee Survey Report 2010-2011, Top 10 Cities, 2nd Edition

Summary:

This report publishes the survey results of the United States Consumer Law Attorney Fee Survey Report 2010-2011 for the ten largest U.S. cities as of the 2010 census, which are (in order): New York, NY, Los Angeles, CA , Chicago, IL, Houston, TX, Philadelphia, PA, Phoenix, AZ , San Antonio, TX, San Diego, CA, Dallas, TX, and San Jose, CA.

For a copy of the opinion, please see:

TOP TEN Cities Edition US Consumer Law Attorney Fee Survey 2010-11.pdf Read More

Posted in Law Reviews & Studies Tagged with:

Bankr. E.D.N.C.: In re SRCR, L.L.C.- Turnover of Airplane

Summary:

SRCR pledged a Piper Navajo Airplane as collateral for a loan to Park Sterling. After default on the loan, Park Sterling repossessed the airplane on February 3, 2012. SRCR filed a Chapter 11 bankruptcy on February 21, 2012. When Park Sterling refused to return the airplane, SRCR filed a Motion for Contempt and Park Sterling responded with a Motion for Relief.

The bankruptcy court began by holding that if a creditor refuses to turnover property that was repossessed prior to the petition date, the creditor must ensure that the issue of rightful possession is promptly placed before the court. Despite not filing its own Motion for Relief for several weeks, the bankruptcy court found that the debtor’s motion for contempt and sanctions and the response filed by Park Sterling placed the issue of rightful possession of the airplane before the court in a timely manner.… Read More

Posted in Eastern District, North Carolina Bankruptcy Cases Tagged with: ,

Bankr. E.D.N.C.: In re Somerset Properties SPE- Trust or Debtor-Creditor Relationship

Summary:

MGHC filed a Proof of Claim, which was allowed as late-filed for $6 million, arising from lawsuit over a failed land development in New Jersey, where MGHC had provided funding to Mill Ridge Farms, whose principal, Kevin Wilk is is the managing member of Somerset Properties. MGHC had sued Mill Ridge Farms, Kevin Wilks and Somerset Properties alleging a civil conspiracy to convert property of and defraud MGHC, using funds intended for a New Jersey development project to finance the purchase of property in North Carolina for Wilk. Somerset Properties, however, asserted that liability should not be imputed to it merely because it has common ownership with other corporate defendants in the New Jersey Litigation, and also by denying that it used any of MGHC’s advances.… Read More

Posted in Eastern District, North Carolina Bankruptcy Cases Tagged with: