The U.S. Bankruptcy Court for the District of Colorado issued its opinion in In re Evans on Wednesday, March 23, 2011.

Debtor, the former president of two closely-held corporations, filed an individual Chapter 11 petition and later converted his case to Chapter 7. After conversion, the Chapter 7 Trustee sought to include in the Chapter 7 estate distributions Debtor received from the corporations postpetition, but pre-conversion. The Court concluded that Debtor had adequately demonstrated at trial that the distributions constituted “earnings” excluded from the estate under § 541(a)(6). The Chapter 7 Trustee, who bore the ultimate burden of persuasion, failed to demonstrate that any portion of the distributions were attributable to the “enterprise value” of the corporations’ assets rather than the Debtor’s services. The Court further concluded that, although an individual Chapter 11 debtor’s postpetition earnings are included in the estate under § 1115(a), those postpetition earnings revert to the Debtor upon conversion to Chapter 7 pursuant to § 348(f). The Court acknowledged that, by its terms, § 348(f) applies only to conversion from Chapter 13 to Chapter 7. Nevertheless, the Court concluded that the primary policy behind § 348(f)–to avoid penalizing debtors who first attempt a repayment plan–applied equally in cases which convert from Chapter 11 to Chapter 7.

Other published Bankruptcy Court opinions can be found here. Unpublished opinions can be found here.

The U.S. Bankruptcy Court for the District of Colorado issued its opinion in In re Gentry on Monday, December 19, 2011.

11 U.S.C. §101(10A)(B)

This case presented the question of whether debtors must include unemployment compensation in their calculation of current monthly income (“CMI”) on Form 22C, and in their calculation of projected disposable income (“PDI”) in their Chapter 13 plan. Debtors argued that the unemployment compensation is a “benefit received under the Social Security Act” and thus excluded from the calculation of CMI by 11 U.S.C. § 101(10A)(B). In determining an issue of first impression in this district, the Court analyzed the relationship between the Social Security Act and unemployment compensation, and concluded that it is not a benefit received under the Social Security Act. As a result, the Court denied confirmation due to Debtors’ failure to include the income in the plan and required an amended Form 22C and plan.

Other published Bankruptcy Court opinions can be found here. Unpublished opinions can be found here.

The U.S. Bankruptcy Court for the District of Colorado issued its opinion in Diamond v. Vickery (In re Terry Kenneth Vickery) on Monday, October 17, 2011.

11 U.S.C. §§ 523(a)(2), (a)(4), and (a)(6), and collateral estoppel

Plaintiff judgment creditor’s motion for summary judgment based on issue preclusion was denied. The Court analyzed the preclusive effects of Plaintiff’s two judgments according to the law of the forums in which they were rendered. With respect to the judgment from the federal district court in California, the Court could not determine from the jury verdict that the elements necessary for nondischargeabilty under 11 U.S.C. §§ 523(a)(2), (a)(4), or (a)(6) had been necessarily decided. With respect to the Colorado judgment, issue preclusion did not apply because the judgment was pending on appeal.

Other published Bankruptcy Court opinions can be found here. Unpublished opinions can be found here.

The U.S. Bankruptcy Court for the District of Colorado issued its opinion in In re Butcher on Tuesday, September 20, 2011.

§ 1325; § 1327; § 501; § 502—Chapter 13

This case presented the question of whether a debtor may remove language from the district’s form chapter 13 plan requiring the confirmed plan to be modified following the bar date if timely proofs of claim, filed after plan confirmation, indicate that the debtor’s plan does not fully provide for secured and priority claims. The Court held that the Debtors’ alteration does not comply with the district’s L.B.R. 3015- 1(b)(1) requirement that chapter 13 plans must substantially conform to L.B. Form 3015-1.1. The Court discussed the interaction between chapter 13 plan confirmation and claim allowance in chapter 13 cases. The Court concluded that the language appearing in the form plan, which Debtors sought to remove, was necessary to give full effect to both accelerated plan confirmation under BAPCPA and the provisions in the Code and the Rules governing allowance of claims.

Other published Bankruptcy Court opinions can be found here. Unpublished opinions can be found here.