Debtor objected to the third fee application of her chapter 13 counsel. The fees requested in the application accrued post-confirmation for legal work to resolve persistent issues with debtor’s mortgage servicer and her homeowner’s insurance company. The work performed was necessary and beneficial to debtor. With the exception of excessive time billed for some email correspondence, the fees sought in the application were reasonable. Reducing the bill by $180, the Court allows $1,000 in fees and costs of $77.49 to be paid through debtor’s chapter 13 plan.    

Debtor Plaintiff filed a motion for partial summary judgment, seeking to avoid a security interest that Defendant, a director of Debtor, perfected within the preference period. While Plaintiff met the statutory requirements to avoid the transfer under § 547(b), fact issues remain as to whether avoidance would benefit the estate and whether Plaintiff therefore has standing to bring the avoidance act; these fact issues preclude granting the motion for partial summary judgment.

Creditor sought stay relief under §§ 362(d)(1), (2), and (4). The Court determined that Creditor did not meet its burden under §§ 362(d)(1) or (2) but established its entitlement to in rem stay relief under § 362(d)(4). The equity determination under § 362(d)(2) must be based on the value of the property at or near the final hearing on the motion for relief from stay, not the petition date, which was the date of Creditor’s appraisal. Debtor’s latest bankruptcy filing was part of a scheme to hinder, delay, or defraud Creditor from foreclosing its interest in the property. Debtor or his spouse filed seven bankruptcy cases, avoided making loan payments for nearly 10 years, and filed four cases to stop scheduled foreclosure sales. Five prior chapter 13 cases were dismissed for failure to prosecute the cases, and debtor had taken no meaningful steps toward reorganization in this latest chapter 11 case, having failed to file a plan for over 17 months since commencement of the case.  

Defendant CPLG TX Properties, LLC (as seller) and Hitendra Bhakta (as buyer) executed purchase agreements for the sale of three hotels and Mr. Bhakta wired a $300,000 deposit for each hotel to an escrow agent. The sales did not close. Plaintiffs, which are single purpose LLCs that Mr. Bhakta formed to buy the hotels, brought an adversary proceeding seeking return of the deposits. Each plaintiff is a debtor in a separate chapter 11 bankruptcy case. 

Defendants moved to dismiss the complaint including for lack of standing and jurisdiction, arguing that that Plaintiffs are not valid assignees of Mr. Bhakta’s rights under the Purchase Agreements. The Court ruled: 1) errors in the assignment documents might not be fatal to effective assignments, 2) the attack on jurisdiction was a factual not facial attack warranting discovery on jurisdictional facts, and 3) parties by contract can agree that an invalid attempted assignment is void, not voidable, meaning that a defective assignment cannot be made valid by ratification.   

The Court deferred ruling on the jurisdiction/standing issue pending completion of discovery and an opportunity for an evidentiary hearing.