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By Ed Boltz, 19 June, 2012

Bankr. E.D.N.C.: In re McGarry- Requirements for Setoff

Summary: The Debtor was entitled to one-half of her ex-husband’s military retirement, but was also liable for one of their children’s student loan debts. The Debtor was in default on such payments and her ex-husband paid $4,183.07 on that debt. The property settlement required the Debtor to indemnify her ex-husband for payments on the student loan debt. 11 U.S.C.
By Ed Boltz, 19 June, 2012

Bankr. E.D.N.C.: In re Mangum- Fraudulent Identity in Filing Bankruptcy

Summary: This case involves two bankruptcy cases putatively filed by Melanie Mangum. At a hearing in November 2011, the Trustee raised several concerns regarding that case- First, no Power of Attorney had ever been presented authorizing Ms. Mangum’s husband, Donald Mangum, to represent his wife. The two parties also had several previous bankruptcies. Third, the Trustee had discovered (while reviewing Ms. Mangum’s Facebook statement that she enjoyed spending time at her beach house) that Ms. Mangum had unscheduled real property located at Carolina Beach. Further, Ms.
By Ed Boltz, 19 June, 2012

Bankr. E.D.N.C.: In re Hamilton & In re Mitchell- Appointment of Chapter 11 Trustee/Disqualification of Attorney for the Debtor

Summary: Creditor sought the appointment of a Trustee(s) in these related Chapter 11 cases. The Bankruptcy Court held pursuant to 11 U.S.C.
By Ed Boltz, 19 June, 2012

Bankr. E.D.N.C.: In re Croatan Surf Club, L.L.C.- Objection to Claim regarding Attorneys’ Fees and Default Interest Rate

Summary: The Debtor granted Royal Bank America (“RBA”) a first Deed of Trust against a 36-unit condominium complex, in the amount of $17,000,000 and also a “Put Agreement”, which obliged the guarantors of the Deed of Trust, to obtain permanent financing for 10 of the units. At the same time, the Edwards Family Partnership, L.P. (“EFP”) was granted a junior Deed of Trust for $3,000,000. The RBA loan originally matured on July 1, 2009, but the Debtor exercised its right to extend the loan to January 1, 2010.
By Ed Boltz, 19 June, 2012

Bankr. E.D.N.C.: In re Cowstone, L.L.C.- Contempt for Violation of Consent Order

Summary: The Debtor and Nicholas Stratas, the sole manager of the Debtor, agreed to a Consent Order, to allow and cooperate with Paragon in its foreclosure against real property owned by the Debtor. Despite this agreement, Stratas filed a motion to set aside the subsequent foreclosure proceeding because the Substitute Trustee mumbled and was rude at the Foreclosure Hearing, depriving him of the opportunity (preserved in the earlier Consent Order) to bid at the foreclosure.
By Ed Boltz, 19 June, 2012

Bankr. M.D.N.C.: Burns v. Dennis-Lambert Investments, L.P.- Amendment to Complaint and Relation Back for Statute of Limitation Purposes

Summary: Trustee sought leave to amend a Complaint, which originally alleged fraudulent conveyances under 11 U.S.C. §§ 544 and 548 and N.C.G.S. § 39.23.4 and unjust enrichment, to add a claim for preferential transfers under 11 U.S.C. § 547. The Defendants, having already answered the Complaint, objected. Leave to amend should be denied, therefore, “only when the amendment would be prejudicial to the opposing party, there has been bad faith on the part of the moving party, or the amendment would  be futile.” Edwards v.
By Ed Boltz, 19 June, 2012

Bankr. W.D.N.C.: In re Alvarez- Accuracy of Schedules and Non-Filing Spouse

Summary: The Debtor filed Chapter 7 and was the subject of a random audit. The audit determined that the Debtor had understated her Current Monthly Income by $4,572. In response, the Debtor filed multiple amendments variously showing net monthly income of $589.92 (original), $4,272.71 (first amendment), $2,446.71 (second amendment), or -$179.29 (third amendment). The Bankruptcy Administrator moved to dismiss based on the schedules being a “moving target”.
By Ed Boltz, 19 June, 2012

Bankr. E.D.N.C.: Alexieff- Bankruptcy following Expiration of 10-Day Upset Period does not Stay Foreclosure

Summary: The Debtor filed his 3rd bankruptcy within 12 -months four days after the upset period in the foreclosure had expired.
By Ed Boltz, 19 June, 2012

Bankr. E.D.N.C.: Alexander- Avoidance of Judgment Lien against Debtor and Non-Debtor Spouse in Tenants by the Entireties Property

Summary: Medical Creditor obtained a judgment against the Debtor and Non-Filing Spouse, with such lien attaching to the property that the Debtor and the Non-filing Spouse own as Tenants by the Entireties. After filing Chapter 7, the Debtor sought to avoid, pursuant to 11 U.S.C.
By Ed Boltz, 16 May, 2012

E.D.N.C.: Ferguson v. Mammoth Grading, Inc.- Whether Post-Petition Claim of Liens Violated § 362

Summary: In two opinions,  In re Harrelson Utilities, Inc. , No. 09-0281S-8-ATS (E.D.N.C. Bankr. July 3D, 2009) and  In re Mammoth Grading, Inc., No. 0901286-8-ATS (E.D.N.C. Bankr. Aug. 24, 2009),  bankruptcy court  held that a subcontractor's lien rights did not constitute "an interest in property" under the  exception in 11 U.S.C.

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