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.

A search may be performed using the Search box above, or filtering by year, judge, and/or keyword/topic. To search for more than one judge and/or keywords/topics simultaneously, hold down the Ctrl key (or Command key) and select each item.

Keywords/Topic Date Title Description Judge
Chapter 11, Claim Objection     11/04/2021     Twin Pines, LLC     

Bank asserted a secured claim against equipment Debtor acquired post-petition under the theory that 1) the equipment was proceeds of encumbered LLC membership interests initially pledged by Debtor’s individual members to secure payment to acquire their membership interests in the Debtor; 2) the pledged membership interests would be transferred to a new investor upon confirmation of debtor’s plan in exchange for the investor’s prior contribution to the purchase of the equipment; and 3) the after-acquired equipment became property of the debtor’s bankruptcy estate. Creditor who held the initial security interest in the pledged membership interests had assigned  his security interest to the Bank. The Court sustained Debtor’s objection to the Bank’s claim, in part, because the evidence before the Court did  not establish that pledged membership interests would be transferred to the new investor. Consequently, the Bank did not establish under the Uniform Commercial Code that the after-acquired equipment was proceeds of the security interest in the pledged membership interests. The Court sustained Debtor’s objection to Creditor’s claim because his secured claim was premised on the same theory as the Bank’s and because his unsecured claim was not a claim against the Debtor, but rather, a claim against the non-debtor individual members of the Debtor. 

 Chief Judge Robert H. Jacobvitz
Chapter 11, Employment of Professionals     10/19/2021     S-Tek 1, LLC     

The chapter 11 debtor asked the Court to approve its counsel jointly representing debtor and debtor’s principals in an adversary proceeding. The Court found no actual conflict of interest in the joint representation but found potential conflicts. The Court approved the joint representation subject to satisfaction of four conditions, which included a waiver by the principals of indemnification claims against the estate. The Court also found that indemnification claims arising from a prepetition contract are prepetition claims subject to the claims bar date and construed the ultra vires defense to liability narrowly.

 

 Chief Judge Robert H. Jacobvitz
Chapter 11, Chapter 13, Conversion, Dismissal, Dismissal or Conversion     10/13/2021     Chuck and Chuthamard McCune     

Creditor filed a motion to dismiss debtor’s chapter 13 bankruptcy case on eligibility grounds. Debtors determined not to contest chapter 13 eligibility and filed a motion to convert their chapter 13 case to a subchapter V case under chapter 11. Creditor responded by filing a motion to convert Debtors’ chapter 13 case to chapter 7 premised on Debtors’ bad faith filing and prosecution of their chapter 13 case and certain pre-petition transfers. Debtors later asked to convert to a non-subchapter V chapter 11 case in the alternative. The opinion discusses what a debtor must show to convert a case to chapter 11. It also discusses when a debt is unliquidated for purposes of chapter 13 eligibility. The Court determined that Debtors were not eligible to be Debtors under subchapter V, could not convert to a non-subchapter V case under chapter 11, and did not file or prosecute their chapter 13 case in bad faith. Because the Debtors conceded for purposes of the pending motions that they were not eligible for chapter 13 relief, the only remaining possible outcomes were conversion to another chapter or dismissal. Because Debtors had an absolute right to voluntarily dismiss their chapter 13 case that had not previously been converted, the Court granted Debtors an opportunity to elect voluntary dismissal under § 1307(b). If the Debtors do not elect voluntary dismissal, the Court will convert the case to chapter 7.  

 

 Chief Judge Robert H. Jacobvitz
Cause, Chapter 11, Dismissal, Good Faith, Subchapter V     09/02/2021     In re S-Tek 1, LLC     

In a motion to dismiss, creditor Surv-Tek, Inc. asserted that Debtor’s bankruptcy case must be dismissed because Debtor filed the case in bad faith merely to gain a strategic litigation advantage in a dispute with Surv-Tek after the state court entered an order in favor of Surv-Tek. The Court analyzed the totality of the circumstances and determined that Debtor’s bankruptcy case served a legitimate bankruptcy purpose: to preserve Debtor’s ongoing business and preserve jobs. The Court also found that the petition was not filed merely to obtain a litigation advantage and that Debtor’s pre-petition conduct and other factors were either neutral or did not weigh heavily toward dismissal. The creditor also argued that the case should be dismissed because Debtor’s proposed plan is not confirmable on its face. The plan relied on 11 U.S.C. § 510(b) to subordinate part of Surv-Tek’s claim. The Court found that § 510(b) was not applicable to the transaction at issue as a matter of law but that fact did not establish that Debtor is unable to propose a confirmable plan. Debtor may amend the plan to address the creditor’s claim without reliance on § 510(b). Finally, Surv-Tek argued that Debtor’s principal had falsely testified, demonstrating Debtor’s bad faith in pursuing its bankruptcy case. The Court found that Debtor’s principal had not willfully testified falsely. The Court denied the motion to dismiss.

 Chief Judge Robert H. Jacobvitz
Chapter 11, Contract Interpretation, Sales of Assets     07/19/2021     Sandia Tobacco Manufacturers, Inc.     

Debtor, a non-participating tobacco product manufacturer (“NPM”) under the Master Settlement Agreement between various settling states and major tobacco product manufacturers,  sought to sell its rights to receive the interest earned and residual amounts remaining twenty-five years after deposit in qualified escrow accounts established under state escrow statutes applicable to NPMs. The Court denied the motion and the related motions to approve auction procedures and to assume and assign escrow agreements concluding that Debtor had already assigned the rights at issue under a Supply Agreement for the manufacture of tobacco products for distribution and sale by another tobacco business. Debtor’s rejection of the Supply Agreement had no effect on the rights already assigned through allocation under the Supply Agreement.  

 

 Chief Judge Robert H. Jacobvitz
Chapter 11, Contract Interpretation, Executory Contract     07/12/2021     S-Tek 1, LLC     

Debtor sought to reject a pre-petition settlement agreement as an executory contract. The Court determined that the release provisions in the settlement agreement were effective upon payment of the settlement amount to Debtor and that rejection of the settlement agreement would not  undo the releases to allow Debtor to resume its claims against the settling party. The Court deferred its determination of whether the settlement agreement remains executory based on mutual non-disparagement provisions. The Court did not need to decide whether a provision in the settlement agreement rendered the entire agreement unenforceable as against public policy because the settlement agreement contained a severability provision.

 Chief Judge Robert H. Jacobvitz
Chapter 11     12/11/2020     S-Tek 1, LLC, a New Mexico Limited Liability Corporation     

The Court granted the debtor’s request for use of cash collateral on an emergency basis, pending a final hearing on use of cash collateral. Before the bankruptcy filing, the debtor filed a lawsuit in state court against Surv-Tek, Inc., the business entity from which the debtor purchased its business.  Surv-Tek, Inc. filed a counter-claim and obtained a judgment from the state court ordering the debtor and its principals to cease and desist competing with Surv-Tek, Inc. The Court determined that the Rooker-Feldman doctrine, which prevents a state court loser from seeking federal court review and rejection of the state court judgment, did not preclude the debtor from seeking an order for use of cash collateral in a subsequent bankruptcy case. In addition, the automatic stay precluded enforcement of the state court order. Surv-Tek, Inc. was granted adequate protection in the form of a replacement lien in property of the same time it had a lien on the petition date that the debtor acquired post-petition to the extent the combined value of the debtor’s accounts receivable, cash on hand, and other cash equivalents, was less at the end of the interim, emergency period, than the value of those assets on the petition date. 

 

 Chief Judge Robert H. Jacobvitz
Chapter 11, Extension of Time, Statutory Construction, Subchapter V     04/30/2020     Twin Pines, LLC.     

After its case had been pending for approximately one year, the Debtor filed an amended petition in which it elected to proceed under subchapter V of chapter 11 of the Bankruptcy Code. The Court overruled the United States Trustee’s objection to Debtor’s amended petition. The Court held that nothing in the Small Business Reorganization Act (SBRA) precluded Debtor’s election to proceed under subchapter V and exercised its discretion to extend the deadlines set forth in subchapter V.

 

 Chief Judge Robert H. Jacobvitz
Chapter 11, Dismissal or Conversion     12/05/2016     Sandia Resorts, Inc.     

The Court converted debtor’s chapter 7 case, finding that conversion, rather than dismissal, was in the best interest of the estate and its creditors.  Creditor who had filed a competing reorganization plan made an offer to purchase the estate’s assets which, if accepted, could result in a 20% distribution on  non-priority unsecured claims. 

 Chief Judge Robert H. Jacobvitz
Chapter 11, Confirmation     11/04/2016     Sandia Resorts, Inc.     

The Court denied debtor’s motion to designate creditor’s ballots under 11 U.S.C. § 1126(e) as having been solicited in bad faith.  Designation under 11 U.S.C. § 1126(e) is permissive and falls within the Court’s sound discretion. Debtor presented insufficient evidence of improper solicitation necessary to designate creditor so that its ballot rejecting debtor’s plan would not be counted. 

 Chief Judge Robert H. Jacobvitz

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