Illinois Northern District

Seventh Circuit to Rule on Paying ‘13’ Trustees if Dismissal Precedes Confirmation

Within the next year, four circuits will have ruled on a split where some lower courts pay chapter 13 trustees and others don’t when dismissal precedes confirmation.

Core vs. Non-Core Doesn’t Determine Whether Arbitration Will Be Enforced

Chicago’s Judge Cleary didn’t compel arbitration of an affirmative counterclaim by the debtor against the creditor that would be determined in the course of passing on the allowance of the creditor’s proof of claim.

Harris Expanded to Bar Paying Debtor’s Counsel After Conversion from ‘13’

Harris v. Viegelahn bars any payment by a chapter 13 trustee after conversion, not just payments to creditors, Judge LaShonda Hunt says.

Property Held in a Joint Tenancy Leaves the Estate on the Debtor’s Death

If a debtor owns property as a joint tenant with right of survivorship, the trustee has nothing to sell if the debtor dies.

Plan Amendment Barred When Just a Few Claims Had Been Paid After Confirmation

Substantial consummation under Section 1193(b) was defined by the bankruptcy court to mean commencement of distributions to some but not all creditor classes.

A Receiver May Move to Dismiss an Involuntary Petition, but May Not Answer

Surprisingly, there is little authority on whether or how a receiver may respond to the filing of an involuntary petition.

Although Unusual, Postpetition Retainers Are Permissible, Chicago Judge Says

The possibility that interim compensation allowances can be disgorged means that counsel won’t have an undue advantage over other administrative creditors, Judge Cleary says.

PACA Debt Isn’t Nondischargeable, Chicago Judge Says, Siding with the Minority

Lower courts are split on whether violating a PACA trust results in a nondischargeable debt. The question is on direct appeal to the Eleventh Circuit.

Complaint Survives Against Chicago for Not Releasing Impounded Cars Immediately

Despite Fulton, a Chicago bankruptcy judge rules that the City of Chicago might have violated Section 362(a)(4), (a)(6) or (a)(7) by refusing to release impounded cars immediately after a debtor files a chapter 13 petition.

Judge Barnes Tells Gamblers What Records to Keep to Win a Discharge in Bankruptcy

The suggestion that the debtor never won undercut the poker player’s testimony about uncorroborated gambling losses.