Creditors Look For Chapter 7 Liquidation For Ex-owner Of Hopewell Ethanol Plant

A number of lenders have submitted a petition in United States Bankruptcy Court in Richmond looking for to force the former owner and operator of a Hopewell ethanol plant to liquidate under Chapter 7 bankruptcy.

The petitioners against Vireol Bio Energy LLC include Dominion Virginia Power, which currently had actually submitted a suit versus the business declaring breach of contract.

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Judge Rules Diamondhead Casino Doesn’t Require Trustee

A United States Bankruptcy judge in Delaware has ruled that a trustee does not needhave to be selected while Diamondhead Gambling establishment Corp. combats a spontaneous petition for Chapter 7 bankruptcy.Judge Laurie Selber Silverstein composed in a 14-page opinion published Friday that the lenders of Diamondhead Gambling establishment Corp, represented by Chipman Brown Cicero amp; Cole, failed to reveal that an interim trustee is necessary.Diamondhead Casino Corp. has been trying given that the 1990s to develop a casino resort on 404 acres in Diamondhead in between Interstate 10 and the Bay of St. Louis.On Aug. 6, a group of shareholders, who also are creditors, submitted to put the corporation into Chapter 7 bankruptcy.Silverstein said in September she would think about the case in early December.

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South Arkansas Bankruptcies By County For The Week Ended Tuesday, November 17 …

South Arkansas bankruptcies by county for the week ended Tuesday, November 17, 2015, according to the United States Bankruptcy Court for the Western District of Arkansas.


Jeffrey Hardwell and Angelia Hardwell, 452 Front Street, McNeil; Chapter 13; bankruptcy filed November 5. Assets, $54,500. Liabilities, $23,699.55.

Ramon Terrill Broomfield and Kimberly Anne Broomfield, 5023 Columbia Roadway 78, Magnolia; Chapter 13; bankruptcy submitted November 11. Assets, $123,583.32. Liabilities, $122,530.91.

Gary Wayne McClellan and Elizabeth Lee McClellan, A/K/A Elizabeth Williams, 1711 Gean, St., Magnolia; Chapter 13; bankruptcy submitted November 11. Possessions, $145,676. Liabilities, $315,545.

LaMoyne Wylie, 130 Columbia Roadway 162, Magnolia; Chapter 7; bankruptcy submitted November 13. Possessions, $35,931.12. Liabilities, $40,850.03

Amanda Susan Patrick, 724 E. Union, Magnolia; Chapter 13; bankruptcy submitted November 13. $10,706. Liabilities, $116,813.50.


Anita Marie Gillard, PO Box 204, Stamps; Chapter 13; bankruptcy filed November 12.


Robert Jason Pauley, 189 Nevada 55, Emmet; Chapter 13; bankruptcy submitted November 13.


Torry Demond Lindsey, A/K/A Torry Lindsey, 207 E. Busbee St., Camden; Chapter 7; bankruptcy submitted November 5.

Terrance Porchia, 3328 Hwy 79 South, Camden; Chapter 13; bankruptcy submitted November 10.

Milton Jerome Williams, 345 East Johnson, Camden; Chapter 13; bankruptcy filed November 11.


Betty Louise Lee, 301 Moorewood St., Apt. 301, El Dorado; Chapter 13; bankruptcy filed November 5.

Connie Davis, 1215 North Miles, El Dorado; Chapter 13; bankruptcy filed November 5.

Lakisha R. Whatley, 1 Pye Court, El Dorado; Chapter 7; bankruptcy submitted November 5.

Michal Eugene Shew and Donna Kay Shew, 140 Bunny Rd, El Dorado; Chapter 7; bankruptcy submitted November 6.

Kevin Dewayne Mitchell, 902 Mount Holly Rd, Smackover; Chapter 13; bankruptcy filed November 6.

Connie Sue Ewing, 2400 North Calion Road, Apt 22, El Dorado; Chapter 13; bankruptcy submitted November 6.

Dominique Javon Noble, 401 Poplar St., Junction City; Chapter 13; bankruptcy submitted November 6.

Jennie Fay Davidson-Harris, PO Box 383, Smackover; Chapter 7; bankruptcy submitted November 13.

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See How Those Luxury Country Club Condominiums Fared At Auction

Late last month, an auction was kept in Albuquerque for 9 luxury condominiums in the Country Club passage.

The propertyhomeowner, Granite Financial investment Group from California, purchased the 11-unit complex at 1900 Central Ave. SW, called the Agave Condominiums, in 2012. Granite COO Carey Levy informed Business First in October that the property loan was current and the auction was a strategic marketing move.

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Houston Offshore Driller Steps Forward With Chapter 11 Bankruptcy

Black Elk Energy Offshore Operations LLC has actually kept Dallas-based Blackhill Partners LLC to guide the Houston-based overseas energy company through its Chapter 11 bankruptcy.

In August, Black Elk’s creditors submitted a petition to place the company into spontaneous Chapter 7 bankruptcy. The business had 20 days to respond, and it was successful in its motion to convert the case to a voluntary Chapter 11 case, according to court files.

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Nama Ought To Have Called A Halt To NI Building Loan Sale

The Stormont investigation into the sale of Namas Northern Ireland property portfolio resembles peeling an onion. As layer after layer gets slowly gotten rid of, the eyes just water more and more.

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Tuition Clawbacks

A current and emerging trend in Chapter 7 bankruptcy cases is lawsuits brought by Chapter 7 trustees to recover from institution of higher learnings pre-petition tuition payments made by Chapter 7 debtors for their adult childrens post-secondary education. While numerousa number of these cases have settled, therefore not resulting in reported decisions, there are 4 written decisions to this day on this subject.1 This post talks about the legal theory behind these avoidance actions and explores deep space of case law.

  1. Chapter 7 Trustees Fiduciary Duty

While advocates for colleges and universities and some legal analysts believe that these tuition claw back lawsuits by Chapter 7 trustees are distasteful, a Chapter 7 trustee has a fiduciary responsibility to recover and collect money for the bankruptcy estate for utmost distribution to creditors of that bankruptcy estate.See 11 USC.sect; sect; 704, 726. A Chapter 7 trustee has a duty to investigate all pre-petition transfers that might lead to a recuperation for creditors, including transfers to academic institutionsuniversities.

  1. The Legal Theory Fraudulent Transfer

The trustees legal theory is grounded in both state deceitful transfer law, which the trustee may utilize pursuant to the Bankruptcy Code, and on the fraudulent transfer provisions of the Bankruptcy Code.

  1. State Law Fraudulent Transfer Provisions 11 USC. sect; 544(b)

Pursuant to 11 USC. sect; 544(b), a Chapter 7 trustee may prevent any transfer of an interest of the debtor in home or any commitment incurred by the debtor that is preventable under state law.See 11 USC. sect; 544(b). When it come to tuition claw backs, the Chapter 7 trustee should want to the law of the state where the declared deceptive transfer was made.

All states have fraudulent transfer statutes. These statutes may differ somewhat from one state to another. Generally, the most significant difference in between jurisdictions is the statute of restrictions, or the durationamount of time during which a creditor (or in this case, a Chapter 7 trustee) can recall to recuperate the alleged deceitful transfers. Under Massachusetts law and under most state deceitful transfer statutes, the statute of limitations on deceptive transfers is four years, prior to the beginning of the debtors bankruptcy case, implying the Chapter 7 trustee can look for to recuperate four years worth of college tuition payments under state law.See MGLA c. 109A, sect; 10; Uniform Fraudulent Transfer Act (UFTA), sect; 9. While state deceptive transfer statutes generally closely look like the Bankruptcy Codes fraudulent transfer provisions, the Chapter 7 trustee must assert causes of action under the state court deceptive transfer statute, as well as under the Bankruptcy Code, where appropriate, considering that the statute of constraints on avoidance actions under the Bankruptcy Code is limited to two years prior to the commencement of the debtors bankruptcy case.See 11 USC. sect; 546(a)(1).

  1. Bankruptcy Code Fraudulent Transfer Arrangement 11 USC. sect; 548(a)(1)(B)

The large bulk of tuition claw back actions are brought under a positive deceptive transfer theory, as opposed to a real deceptive transfer theory (which would require the trustee to show that the debtor-parents made the transfer with the real intent to hinder, postpone or defraud their lenders).2 The basis of the Chapter 7 trustees useful fraud action is that while the matriculating student might receive value in the form of an education from the debtor-parents tuition payments, the payee-debtor-parents, who made such payments to the college or university while insolvent, receive nothing (or, in legal terms, received no reasonably equivalent value).

Area 548(a)(1)(B) of the Bankruptcy Code licenses a trustee to avoid a transfer of property under a positive scams theory. Area 548(a)(1)(B) supplies, in pertinent part, as follows:

The Trustee might avoid any transfer hellip; of an interest of the debtor in building, or any responsibility hellip; incurred by the debtor, that was made or sustained on or within 2 years before the date of the filing of the petition, if the debtor voluntarily or involuntarily-

(B)(i) received less than fairly equivalent value in exchange for such transfer or commitment; and

(ii)(I) was insolvent on the date that such transfer was made or such commitment was incurred, or became insolvent as an outcome of such transfer or commitment;

(II) was participated in business or a transaction, or will take part in business or a transaction, for which any home continuing to be with the debtor was an unreasonably small capital;

(III) planned to incur, or believed that the debtor would incur, financial obligations that would be beyond the debtors ability to pay as such debts grown; or

(IV) made such transfers to or for the benefit of an insider, or sustained such responsibility to or for the benefit of an expert, under an employment contract and not in the regular course of business.

See11 USC. sect; 548(a)(1)(B).

  1. Fairly Equivalent Value

The Bankruptcy Code does not specify reasonably equivalent value. Value, nevertheless, is specified in the Bankruptcy Code as home, or complete satisfaction or protecting a present or antecedent financial obligation of the debtor, but does not include an unperformed pledge to furnish support to the debtor or a relative of the debtor. 11 USC. sect; 548(d)(2)(A). Value can be in the kind of either a direct or indirect economic benefit to the debtor.See In re Wilkinson, 196 F. Appx 337, 342 (Sixth Cir. 2006 )( Value can be in the typethrough either a direct economic advantage or an indirect financial benefit. ); In re Kelsey, 270 BR 776, 781(9th Cir. BAP 2001)(value is restricted to financial or financial consideration); In re Treadwell, 699 F. 2d 1050, 1051(11th Cir. 1982)( holding that love and love in exchange for financial transfers was not reasonably comparable value); In re Green, 268 BR 628, 651(Bankr. MD Fla. 2001 )(debtors moral or household responsibility to pay for their daughters wedding event is not reasonably equivalent value); see also 3 Alan N. Resnick amp; Henry J. Sommer, Collier Bankruptcy Manual548.05 [1] [b] (Matthew Bender )(In order to determine if fair economic exchange has taken place [to constitute reasonably equivalent value], the court has to evaluate all the conditions surrounding the transfer in question.). A Split in Authority As statedsupra, there are four reported decisions to date on a Chapter 7 trustees ability

  1. to prevent and recuperate pre-petition tuition payments made by debtor-parents for their adult childrens post-secondary education. There is a split of authority on the concern, with 2 decisions denying the Chapter 7 trustee any right to recuperation and 2 favoring the Chapter 7 trustee. There are no appellate choices on the issue. Cases Versus Avoidance and Recovery of Tuition Payments In In re Cohen, No. 05-38135(JAD), 2012 WL 5460956(Bankr.
    1. WD Pa. October 31, 2012), the Chapter 7 trustee challenged$102,573.00 in

      payments made by the debtors pre-petition for their son and daughters post-secondary * 9. While the court acknowledged that Pennsylvania law did not require moms and dads to pay for their childrens post-secondary education,thecourt held that payments were reasonable and essential for the maintenance of the Debtors household for purposes of the deceptive transfer statutes just, and thus * 10. In the other Pennsylvania case, In re Oberdick, 490 BR 687(Bankr. WD Pa. 2013), the Chapter 7 trustee challenged$ 82,536.22 in payments made by the debtors pre-petition for their childrens undergraduate education at the University of Chicago and Robert Morris University. In following the reasoning of the Cohen court, the court found that although the debtors did not have any legal responsibility to pay for their kids undergraduate education, the payments were made out of an affordable sense of parental obligation and that there is something of asocietal expectation that parents will help with such cost if they have the ability to do 712. Neither of these decisions discuss or reference the definition of value state in Section 548 of the Bankruptcy Code (with respect to the college tuition payment concern)and neither find that the debtors received any economic value for the college tuition payments.

      Cases Favoring Avoidance and Recuperation of Tuition Payments In In re Leonard, 454 BR 444 (ED Mich. 2011), the Chapter 7 trustee looked for to prevent and recover, as deceitful transfers, tuition payments completing more than$21,000 made by the debtor-parents to Marquette University for their 18-year-old sons 445-446. The trustee and the University submitted cross-motions

    2. for summary judgment on the trustees positive fraudulent transfer claims.

      The concern hinged on the debtor-parents invoice of fairly comparable value for the transfers. The University suggested that the debtors received fairly comparable value for the tuition payments in the form of assurance in understanding that their son was receivinga great education and the expectation that their son would become financially independent as an outcome of his 454-455. In judgment in the trustees favor, the court reasoned that any indirect benefit received by the debtors might only be thought about value if it were a financial benefit that was concrete and 457. The court figured out that the debtor-parents did not receive any value in exchange for the tuition payments since the intangible benefits of assurance and financial freedom were not concrete and measurable. The court likewise held that the paymentof college tuition did not satisfy any legal task on the debtors part(which might make up equivalent value)considering that the parents had no legal responsibility to supply their adult kid with a college education.Id. Similarly, in In re Lindsay, No. 06-36352(CGM ), 2010 WL 1780065(Bankr. SDNY May 4, 2010), the Chapter 7 trustee sought to avoid and recuperate, as fraudulent transfers, tuition payments completing more than$35,000 made by the debtor-parents to a university for their adult sons education. On the trustees motion for summary judgment, the court found in favor of the trustee. The court rendered its choice based on the realities that(1) the debtor-parents produced no evidence of a legal obligation to pay their boys tuition, such

      as a promissory note in favor of the university or a lender, (2)no law existed obliging a parent to spend for an adult childs education, and(3)the debtors provided no authority to support their argument that they had a moral obligation to money their adult childs * 9. In an unwritten decision in the Eastern District of Massachusetts outdated September 2, 2015 in the enemy proceeding styled Mark G. DeGiacomo, Chapter 7 Trustee of Steven and Lori Palladino v. Spiritual Heart University, Adv. Pro. No. 15-1126( MSH ), the Bankruptcy Court for the Eastern District Of Massachusetts denied Sacred Hearts Universitys motion to dismiss the Chapter 7 trustees adversary complaint for the avoidance and recuperation of pre-petition tuition payments made by the debtors to the university for the advantage of the debtors adult youngster.[

      Doc. No. 24] A Move For Legislation Representative Chris Collins of New york city introduced an expense into Congress known as The PACT(Securing All College Tuition)Act of 2015. See Congressional Expenses 114th Congress HR 2267. The costs seeks to amend Area 548 of the Bankruptcy Code to except excellent faith post-secondary tuition payments made by parents for the benefit of their kids. As of the date of this short article, Congress has actually not acted upon the proposed bill.

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