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Bar News - July 19, 2013

Bankruptcy Court Opinion Summaries

Note: The full text of the opinions below will be available on the Bankruptcy Court’s website.

In re PM Cross 2013 BNH 004, issued June 21, 2013 (Harwood, J.) (for publication) In granting the debtor’s mortgagee’s motion to dismiss a serial chapter 11 case, the court determined that: (1) the debtor was not a “small business debtor” within the meaning of 11 U.S.C. § 101(51D) and, accordingly, that § 326(n) did not operate to prevent the automatic stay of § 362(a) from taking effect upon the filing of the bankruptcy petition; (2) the debtor’s single parcel of real property was property of the bankruptcy estate pursuant to § 541(a), even though the chapter 11 petition was filed in the midst of the mortgagee’s foreclosure auction; (3) cause existed for dismissal under § 1112(b), as the debtor had filed the case in bad faith, just over six months after confirming a plan of reorganization in a prior chapter 11 case, in what was essentially a two party dispute between the debtor and the mortgagee, and only when it appeared that the debtor’s preferred purchaser would not be the high bidder at the foreclosure sale; and (4) while the mortgagee had violated the automatic stay of § 362(a) by concluding its foreclosure sale after the debtor’s bankruptcy petition was filed, an award of monetary damages to the debtor was not appropriate, given the imminent dismissal of the case.

(In re Dolinak) 2013 BNH 005, issued June 28, 2013 (Deasy, J.) Finding that chapter 13 debtors who were not eligible to receive a discharge because they received a chapter 7 discharge during the 4-year period preceding the petition date (chapter 20 debtors) could, through completion of a chapter 13 plan, void a wholly unsecured junior mortgage lien on their residence by operation of 11 U.S.C. §§ 506(a) and 1332(b), but only if the chapter 13 plan was proposed in good faith as required under 11 U.S.C. § 1325(a)(3).

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