Opinions

 

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Court Opinions Database

The court's provides free access of some opinions, at the discretion of the judges, for the years 1998 to present. The results shown below are automatically displayed for all years, all judges, and all keywords/topics.

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Keywords/Topic Date Title Description Judge
Sanctions     07/14/2025     Southwest Health Services, P.A.     

Creditor, who held a pre-petition judgment against debtor and its sole shareholder and president, reopened debtor’s bankruptcy case and filed a motion for sanctions under § 105 against debtor and its principal based on allegations that debtor filed its chapter 7 bankruptcy case for an improper purpose. The Court determined that debtor’s chapter 7 bankruptcy case was filed for no legitimate bankruptcy purpose and solely to delay or forestall creditor’s collection efforts. Debtor had virtually no assets,   listed creditor as its only creditor, was not entitled to receive a chapter 7 discharge, had no income in the two years prior to the bankruptcy filing, filed its chapter 7 case shortly before a state court trial, and resisted creditor’s stay relief motion, even though creditor’s state court action creditor sought to pursue did not seek any relief against the debtor or bankruptcy estate assets. The Court exercised its inherent authority under § 105 to sanction debtor and its principal by awarding creditor her attorneys’ fees and costs incurred in connection with the bankruptcy filing.   

Chief Judge Robert H. Jacobvitz
Chapter 11, Dismissal or Conversion     07/07/2025     Trinity Legacy Consortium, LLC     

The United States Trustee filed a motion to dismiss or convert Debtor’s chapter 11 case. The Subchapter V Trustee joined in the motion and requested dismissal rather than conversion. After a two-day evidentiary hearing, Debtor conceded that cause to dismiss or convert existed and consented to dismissal. The UST and administrative expense claimants also expressed a preference for dismissal rather than conversion. The Court determined that it must evaluate whether dismissal or conversion is in the best interests of creditors and the estate even when the Debtor concedes “cause” exists to dismiss or convert and all parties appearing before the Court request dismissal. After applying the relevant factors, the Court concluded that dismissal was in the best interests of the estate and creditors. 

 

Chief Judge Robert H. Jacobvitz
Chapter 11, Dismissal or Conversion     06/26/2025     Bright Green Corporation     

The United States Trustee filed a motion to dismiss or convert Debtor’s chapter 11 case based on Debtor’s failure to provide documentation reasonably requested by the UST that would show that Debtor had obtained authorization from the DEA to produce Schedule II – V plant-based controlled substances including cocaine and opium. Whether “cause” exists under 11 U.S.C. § 1112(b) to dismiss or convert a chapter 11 case is a threshold question. The Court determined that the UST did not satisfy its burden of demonstrating “cause” and denied the motion to dismiss or convert. Debtor did not have DEA authorization and could not produce a document that did not exist.   

 

 

Chief Judge Robert H. Jacobvitz
Cause, Chapter 11, Relief from Stay     06/12/2025     In re Bright Green     

Plaintiff asserted state law claims against Debtor in state court based on Debtor’s alleged breach of a compensation agreement with Plaintiff and the state court held a 5-day bench trial and scheduled a jury trial on Plaintiff’s damages. Before the jury trial began, Debtor filed its bankruptcy petition and removed the State Court Action to this Court, initiating adversary proceeding No. 25-1010. Plaintiff filed a motion to remand in the AP and for relief from stay to proceed with the state court jury trial in the bankruptcy case. The Court remanded the removed State Court Action back to the state court and found cause to grant the motion for relief from stay to proceed with the jury trial in state court. The Court found there is cause under 11 U.S.C. § 362(d)(1) to grant relief from the stay for the same reasons that remand was warranted. Specifically, stay relief was warranted because, among other reasons, (1) the State Court Action is based wholly on state law; (2) the Court does not have authority to issue a final judgment on Plaintiff’s claims against third-party defendants, whereas the state court may issue a final judgment as to all claims; (3) judicial economy was served by lifting the stay to proceed with the jury trial because the state court had presided over the case for four years; (4) under principles of comity, this Court should not hold a new bench trial to revisit the State Court’s findings and conclusions; and (5) Debtor had not shown that any prejudice posed to Debtor by modifying the stay outweighs the prejudice to Plaintiff if the stay is not modified. The Court therefore granted Plaintiff’s motion for relief from stay only to permit prosecution of the State Court Action to final judgment on all claims. 

Chief Judge Robert H. Jacobvitz
Abstention, Adversary, Chapter 11, Core Proceedings, Remand     06/06/2025     Bright Green v. Fikany     

The Court remanded this removed adversary proceeding to state court under the permissive abstention and equitable remand statutes:  28 U.S.C. § 1334(c)(1) and 28 U.S.C. § 1452(b). Plaintiff asserted state law claims against Debtor in state court based on Debtor’s alleged breach of a compensation agreement with Plaintiff and the state court held a 5-day bench trial and scheduled a jury trial on Plaintiff’s damages. Before the jury trial began, Debtor filed its bankruptcy petition and removed the state court action to this Court. The Court first held that, while claims against the third-party defendants are not core claims, the non-core claims against Debtor in the Adversary Proceeding were transformed into core claims upon the filing of the proof of claim and the Debtor’s objection thereto and that, because this Adversary Proceeding is a core proceeding with respect to adjudication of Plaintiff’s claims against Debtor, mandatory abstention does not apply with respect to those claims. The Court then considered the permissive abstention factors and found that Plaintiff’s claims against Debtor must be liquidated before the Court can decide whether to confirm a plan in the Bankruptcy Case. Given the State Court’s long history with the State Court Action, including the extensive pretrial proceedings, the five-day bench trial already held, and the State Court’s availability to set a jury trial in September 2025, adjudication of this proceeding is likely to occur faster in the State Court than in this Court. Further, the claims and defenses at issue in the Adversary Proceeding are governed wholly by state law. Finally, the Court found that the strong public policy interest of comity with state courts counsels against this Court revisiting the State Court’s findings of fact and conclusions of law, and the interest of judicial economy supports abstention and remand.

Chief Judge Robert H. Jacobvitz
Chapter 11, Conversion, Dischargeability, Jurisdiction, Professionals     05/13/2025     Noah Sapir     

After a New York trial court entered a judgment of over $6.8 million against him and others, the Debtor appealed. While the appeal was pending in the New York court, the Debtor filed his petition for relief under chapter 11, subchapter V in June 2023. The Court modified the automatic stay to permit the Debtor to continue to pursue his state court appeal and approved retention of counsel to represent him in the appeal pursuant to 11 U.S.C. § 327(a). In March 2025, the case was converted to a case under chapter 7 and a chapter 7 trustee was appointed, thus raising two issues: (i) whether the conversion of the bankruptcy case from a case under chapter 11 to a case under chapter 7 impacts the Debtor’s authority to prosecute the appeal, independently of the chapter 7 trustee, of the New York state court judgment and (ii) whether the law firm retained by Debtor, to represent him in the appeal while this case was pending under chapter 11 may continue to represent the Debtor without Bankruptcy Court approval after conversion of the case to chapter 7.

The Court concluded first that there is no bankruptcy law impediment to the Debtor’s authority to prosecute the New York appeal independently of the chapter 7 trustee because of the Debtor’s personal interest in its outcome. Certain creditors seek to show the judgment against the Debtor is nondischargeable in an adversary proceeding, which is a claim not against the bankruptcy estate but against the Debtor in his personal capacity because, if the creditors are successful, the Debtor will remain liable for the debt represented by the judgment after the chapter 7 case is closed. Because the New York appeal implicates the validity and amount of the debt owed by the Debtor personally, separately from any claims against the bankruptcy estate, the Debtor has the authority to prosecute the New York appeal independently of the chapter 7 trustee. Second, there is no conflict between the law firm representing the Debtor personally in the New York appeal following case conversion where the chapter 7 trustee did not object to the representation at no cost to the estate and has opted not to get involved in the appeal. Further, Court approval is not required for the Debtor to retain the law firm to continue to represent him personally in the appeal because § 327, which governs retention of professional persons by the trustee, does not apply to a chapter 7 debtor’s retention of a professional person to represent his personal interests.

 

Chief Judge Robert H. Jacobvitz
Attorneys Fees, Chapter 13, Property of the Estate     05/02/2025     Leroy and Barbara Carrillo     

Debtors’ bankruptcy case was reopened thirty years after it had been closed following entry of a discharge to administer an unscheduled tort claim resulting in a significant settlement recovery that became property of the bankruptcy estate. The Debtor, pro se, filed motions claiming, among other things, that the attorney who represented him in the tort claim “stole” his settlement recovery funds and was inappropriately paid attorney’s fees, costs, and expenses that Debtor never agreed to pay. The Court determined that the attorney was paid in accordance with the signed fee agreement; that Debtor received the settlement recovery he was entitled to receive, net of attorney’s fees, costs, and expenses, and net of the chapter 7 administrative expenses and payment of a valid pre-petition claim (with interest); that the chapter 7 trustee properly accounted for all funds received and disbursed from the estate, and that no misappropriation of settlement recovery funds or attorney misconduct occurred. Debtor received the benefit of attorney’s representation and attorney appropriately discharged her duties to her client in representing him, resulting in the Debtor’s recovery of net settlement proceeds.    

 

Chief Judge Robert H. Jacobvitz
Chapter 13, Dischargeability, Discovery     04/16/2025     Parker v. U.S. Department of Education     

Plaintiff sought to discharge her student loan debt under § 523(a)(8) based on undue hardship and provided the Department of Education (“DOE”) with an attestation form pursuant to DOE’s student loan dischargeability guidance (“Guidance”). Plaintiff refused to provide DOE with medical information and medical records regarding her medical conditions that she contends support her undue hardship claim, contending that the Guidance does not require disclosure of medical records. DOE filed a motion to compel supplemental discovery responses, which the Court granted, in part. Because Plaintiff placed her medical conditions at issue, DOE was entitled to obtain medical records relating to Plaintiff’s claimed medical conditions. Neither HIPAA nor Plaintiff’s participation in DOE’s attestation process  excused her from providing medical records. Neither Plaintiff nor the Court could force DOE to settle Plaintiff’s dischargeability claim, regardless of whether DOE complied with its internal Guidance. To address Plaintiff’s privacy and confidentiality concerns, the Court imposed confidentiality restrictions on Plaintiff’s medical records.  

 

Chief Judge Robert H. Jacobvitz
Chapter 11, Conversion, Dismissal, Dismissal or Conversion, Subchapter V     03/19/2025     Rosa Linda Guzman Ghaffari     

The Court found “cause” to dismiss or convert a pro se Debtor’s subchapter V bankruptcy case under § 1112(b) based on 1) Debtor’s failure to comply with an order of the Court requiring her to mail complete plan packages by a certain date; and 2) Debtor’s inability to propose a confirmable plan. Debtor continued to file multiple amendments and corrections to the plan after the Court-imposed deadline to mail plan packages that included the entire plan in one document, preventing creditors and parties in interest from having sufficient time to evaluate the proposed plan before the objection and voting deadline. Debtor’s plan and amendments did not comply with the requirements of the Bankruptcy Code regarding classification and treatment of secured claims and in other respects. Debtor’s filings demonstrated her inability to propose a confirmable plan absent assistance of counsel. Debtor’s pro se status did not establish unusual circumstances that would prevent the Court from dismissing or converting Debtor’s case. Dismissal, rather than conversion, was in the best interests of creditors and the estate where the UST expressed a preference for dismissal; Debtor’s properties had insufficient equity from which a chapter 7 trustee could make a meaningful distribution; and Debtor intended to maintain regular payments on various claims. Finally, because Debtor’s violation of the Court’s order was not willful, the Court did not impose refiling restrictions under § 109(g).

 

Chief Judge Robert H. Jacobvitz
Chapter 13, Exemptions, Judicial Liens - Avoidance     02/27/2025     Dennis and Darya Romo     

Debtors’ pre-petition waiver of their homestead exemption under New Mexico law with respect to foreclosure of a judgment lien did not preclude Debtors from seeking to avoid the judicial lien under § 522(f) as impairing the exemption or from claiming a homestead exemption with respect to the creditor or Trustee. Debtors could also claim the increased homestead exemption amount in effect on the petition date with respect to the judicial lien notwithstanding New Mexico law to the contrary. Section 522(f) allows a debtor to avoid the fixing of a judicial lien “notwithstanding any waver” of the exemption. Under Owen v. Owen, 500 U.S. 305 (1991), the court must consider the exemption to which a debtor “would have been entitled but for the lien itself” when determining lien avoidance under § 522(f). But for the judicial lien, the creditor would not have filed an action to foreclose the judicial lien. And but for the foreclosure action, Debtors would not have waived their homestead exemption with respect to foreclosure of the judgment lien and would have been entitled to claim the higher homestead exemption amount on the petition date that went into effect after the foreclosure action.

 

Chief Judge Robert H. Jacobvitz

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