New Cases - Week of December 22, 2003

In re McGee (DBN Subscription Required)	7th Cir.	Federal law preempts any effort by state and local governments to determine which assets may be reached, for what purposes, by particular creditors. A State law that requires landlords to hold tenants' deposits in a segregated account for the benefit of the tenants creates a fiduciary relationship for the purposes of 11 USC 523(a)(4) nondischargeability. A landlord who takes and spends such money during lease litigation "defalcates," rendering the debt to the tenant nondischargeable.
In re Grogan (DBN Subscription Required)	Bankr. UT.	A debtor is not entitled to a claim of exemption on an asset which she knowingly concealed and failed to disclose and then later disclosed and claimed as exempt.
In re Gray (DBN Subscription Required)	Bankr. W.D. Mo.	Horses and heifers are tools of trade.

In re Aquatic Development Group, Inc. (DBN Subscription Required)	2nd Cir.	The bankruptcy court abused its discretion in closing a bankruptcy case nunc pro tunc to 1996 to avoid the payment of United States Trustee fees.
In re Brookover (DBN Subscription Required)	6th Cir.	The authority to accept the voluntary resignation of a bankruptcy trustee is vested entirely within the purview of the UST's congressionally conferred authority. The Court has no role is accepting or denying the voluntary resignation of a trustee.
In re Moroney (DBN Subscription Required)	4th Cir.	Income tax forms unjustifiably filed years late, where the IRS has already prepared substitute returns and assessed taxes, do not constitute "returns" for purposes of 11 U.S.C. § 523(a)(1)(B)(i).
In re Fredrika (DBN Subscription Required)	9th Cir. BAP	In evaluating the market rate of interest for confirmation of a plan, the bankruptcy court did not err in using the "formula approach" rather than the "comparable loan" approach. However the court did err in its implementation of the formula approach when it excessive weight to the first lien nature of the collateral and it gave insufficient weight to the risk of the debtor's default.
In re Krag (DBN Subscription Required)	9th Cir. BAP	A plan that provides that all holders of allowed unsecured claims except for one will receive prompt payment of their claims in cash violates 11 USC 1123(a)(4). The bankruptcy court has equitable authority to order the holder of a nondischargeable debt to seek payment only under a 100% plan so long as the debtor is not in default. In cases involving corporate debtors, a new value contribution will presumably always have some use, whether it be for operating capital, financing for capital improvements or purchases, or to establish and maintain cash reserves, for example. But, in the case of an individual Chapter 11 debtor who works for wages or a salary, a new value contribution in excess of that necessary to fund payments under the plan serves no reorganization purpose absent some identifiable use, other than to arguably manipulate the new value analysis.
In re Dwyer (DBN Subscription Required)	9th Cir. BAP	In California, the day after Thanksgiving is a legal holiday for purposes of calculating time in bankruptcy matters.