Illinois Bankruptcy Lawyer Blog

Reed v. City of Arlington (Sept. 17)

In a Chapter 7 bankruptcy case in which debtors omitted a pending $1 million-plus judgment from their sworn statements and bankruptcy filings, the district court's order discharging debtors' debts is reversed where, to protect the integrity of judicial processes, judicial estoppel barred the trustee from collecting the judgment.

Deutsche Bank Nat'l Trust v. Tucker (Sept. 15)

In Chapter 13 proceedings, bankruptcy court's judgment sustaining the debtor's claim that she need only cure the amount of default that is secured and that the fees and expenses in connection with her underlying mortgage should be treated as unsecured amounts is vacated and remanded as the bank's fees and advances, which were allowed under the parties' agreement and applicable nonbankruptcy law, must be included in the cure amount.

Cir. 9

In re: Gebhart (Sept. 14)

In consolidated Chapter 7 bankruptcy petitions in which the value of debtors' homes increased so that they had equity in excess of the homestead exemptions, the bankruptcy court's order approving the appointment of a real estate broker to sell the home for the benefit of the estate is affirmed where the fact that the value of the claimed exemption plus the amount of the encumbrances on the debtor"s residence was, in each case, equal to the market value of the residence at the time of filing the petition did not remove the entire asset from the estate.

Cir. 10

In re: Dittmar (Sept. 14)

In bankruptcy trustees' appeal from the judgment of the bankruptcy appellate panel holding that debtors' stock appreciation rights (SARs) were not part of debtors' bankruptcy estates under 11 U.S.C. section 541, the order is reversed where: 1) while the value of the SARs before any payment event occurred may have been de minimis, that did not mean that debtors did not have a property interest in the SARs; and 2) the SARs created by the collective bargaining agreement at issue were more akin to contingent pre-petition property rights than mere expectancies based on discretionary bonuses.

In re Vito O. Roppo, 09 B 37273

Opinion Sept. 16, 2010

Judge: John H. Squires

Debtor's lavish living warranted dismissal of Chapter 7 case as abusive.

A Chapter 7 case that was not filed in response to any sudden illness, calamity, disability or unemployment by a debtor who budgeted expenses consistently exceeded those permitted under Internal Revenue Service (IRS) standards, including the $2,250 per month that the debtor budgeted as a rental expense for a four-bedroom, 3,750-square-foot home for himself, his wife and their one child, had to be dismissed based on the totality of circumstances of the debtor's financial situation as an abuse of the provisions of Chapter 7. Inexplicably, despite the fact that his wife had recently emerged from her own Chapter 7 case and did not work outside the home, the debtor had purchased a luxury automobile on her behalf, on which the payments were $520 per month. The debtor had the ability to fund a Chapter 13 plan to make a distribution on unsecured claims.

To view the opinion in PDF format click here.