Section 1123(b) addresses the kinds of provisions that may be included in a Chapter 11 plan. That section contains five specific paragraphs, followed by a catchall provision. The first five paragraphs all concern the debtor’s rights and responsibilities, as well as its relationship with its creditors. The catchall provides that a plan “may” also “include any other appropriate provision not inconsistent with the applicable provisions of this title.” All agree that the first five paragraphs do not authorize the Sackler discharge. But, according to the plan proponents and the Second Circuit, paragraph (6) broadly permits any term not expressly forbidden by the code so long as a judge deems it “appropriate.” Because provisions like the Sackler discharge are not expressly prohibited, they reason, paragraph (6) necessarily permits them. That is not correct. When faced with a catchall phrase like paragraph (6), courts do not necessarily afford it the broadest possible construction it can bear. Epic Systems Corp. v. Lewis, 584 U. S. 497, 512. Instead, we generally appreciate that the catchall must be interpreted in light of its surrounding context and read to “embrace only objects similar in nature” to the specific examples preceding it. Ibid. Here, each of the preceding paragraphs concerns the rights and responsibilities of the debtor; and they authorize a bankruptcy court to adjust claims without consent only to the extent such claims concern the debtor. While paragraph (6) doubtlessly confers additional authorities on a bankruptcy court, it cannot be read under the canon of ejusdem generis to endow a bankruptcy court with the “radically different” power to discharge the debts of a nondebtor without the consent of affected claimants. Epic Systems Corp., 584 U. S., at 513. And while the dissent reaches a contrary conclusion, it does so only by elevating its view of the bankruptcy code’s purported purpose over the text’s clear focus on the debtor.

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History offers a final strike against the plan proponents’ construction of §1123(b)(6). Pre-code practice, we have said, may sometimes inform the meaning of the code’s more “ambiguous” provisions. RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 566 U. S. 639, 649. And every bankruptcy law cited by the parties and their amici— from 1800 until the enactment of the present bankruptcy code in 1978—generally reserved the benefits of discharge to the debtor who offered a “fair and full surrender of [its] property.” Sturges v. Crowninshield, 4 Wheat. 122, 176. Had Congress meant to reshape traditional practice so profoundly in the present bankruptcy code, extending to courts the capacious new power the plan proponents claim, one might have expected it to say so expressly “somewhere in the [c]ode itself.”

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In the end, the plan proponents default to policy. The Sacklers, they say, will not return any funds to Purdue’s estate unless the bankruptcy court grants them the sweeping nonconsensual release and injunction they seek. Without the Sackler discharge, they predict, victims will be left without any means of recovery. But the U. S. Trustee disagrees. As he tells it, the potentially massive liability the Sacklers face may induce them to negotiate for consensual releases on terms more favorable to all the claimants. In addition, the Trustee warns, a ruling for the Sacklers would provide a roadmap for tortfeasors to misuse the bankruptcy system in future cases. While both sides may have their points, this Court is the wrong audience for such policy disputes. Our only proper task is to interpret and apply the law; and nothing in present law authorizes the Sackler discharge.

Bankruptcy courts are often called upon to estimate the value of claims against a debtor’s estate. It can frequently be an arduous task involving competing expert witnesses applying different methodologies reaching vastly different conclusions. This is one of those cases. Here, FTX Trading Ltd. (“FTX”) and its affiliates (collectively, “Debtors”) seek to estimate the value of certain cryptocurrencies held by the Debtors for the benefit of several third parties. As with any estimation, the value of the claims must be determined as of the petition date as if the bankruptcy had never occurred. 11 U.S.C. § 502(b). No bankruptcy court has ever estimated the value of cryptocurrency-based claims, nor, as far as I can determine, has any court ever conducted a valuation of crypto type assets. Estimation of the claims here, therefore, presents a matter of first impression.

Valuing cryptocurrencies is complicated by a number of factors. First, cryptocurrencies have no inherent value. Unlike corporate stock, which is backed by hard assets held by the company, or fiat currency that is back by the issuing government entity, cryptocurrencies are only worth what someone is willing to pay for them on any given day. They trade solely on sentiment, similar to artwork or baseball cards.

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Second, over 20,000 different types of cryptocurrencies have been created in the last ten years. Unlike standard equity trading, which occurs across only a handful of heavily regulated exchanges, cryptocurrencies are traded on more than 1500 exchanges and regulation has been described as somewhere between sparse and non-existent. This raises questions about the reliability and trustworthiness of the sources from which valuation data is obtained.

Third, in this case, most of the tokens held by the Debtors as of the Petition Date could not be sold. Instead, the tokens are subject to a contractual obligation to keep the tokens “locked” until a future date. Pursuant to the contract, tokens will be unlocked on a daily basis over several years. This raises questions about how to value the locked tokens.

Fourth, while the objecting creditors here lay claim to millions of the three tokens at issue, it is the Debtors who own the vast majority of the supply. The Debtors take the position that to determine the value of the tokens, any analysis must consider that both the Debtors’ and the creditors’ tokens would be sold as they became unlocked. The creditors’ position is that only their tokens should be considered in analyzing the value.

Despite these challenges, the Debtors and the Creditors presented expert testimony in an attempt to establish an estimated value for the tokens. The Debtors’ experts concluded that two of the three tokens were worth nothing as of the petition date and the third was worth less than half of its market value. The creditors’ experts concluded that the tokens had a value in the hundreds of millions of dollars. The parties’ disparate conclusions about the value of the tokens at issue here is owing, at least in part, to the fact that none of the experts valued the same thing. Consequently, in many respects the competing valuations cannot be easily compared to one another, nor can they be easily modified to adjust specific concerns. Nevertheless, as discussed below, while I find that the initial valuations offered by each of the experts are flawed, I am satisfied that the sensitivity analysis performed by the Debtors’ expert adequately addresses my concerns and provides a reasonable basis for an estimated value of the tokens that are the subject of the claims.

Based on the facts of this case and applicable law, the court holds that administering the ownership interests of LLCs that engage in marijuana business is not necessarily equivalent to administering marijuana assets. The court also holds the trustee’s own personal determination that he cannot lawfully administer the assets of this case is insufficient cause to dismiss the debtor’s case as there are other options for the trustee.

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The Dismissal Motions do not justify a discretionary dismissal of this case. There is no clear basis to disqualify a debtor from the benefits of chapter 7 because of perceived but unanalyzed difficulties the chapter 7 trustee might face when administering the bankruptcy estate. To somehow equate the trustee’s dilemma with cause to deny this debtor’s right to file and stay in chapter 7 has not been explained by the Dismissal Motions, and the court would be abusing its discretion under Section 707(a) to grant them for the reasons argued in those motions.

The parties signed Amendment 15 to the APA on January 31, 2024—Paragraph 3 of which clearly establishes that “the Estimated Closing Working Capital shall be deemed to be an amount equal to negative $192,288,920.” This figure is consistent with the reported figure for NWC since the inception of the parties’ negotiations. A reasonable person in the position of the parties—with access to the financial information exchanged between the parties, including Exhibit E—would understand the Estimated Closing Working Capital figure to include and account for the Disputed Liability Types. This is the only logical interpretation.

The Court is cognizant that the Estimated Closing Working Capital figure was reached with the understanding that it could be adjusted post-closing pursuant to § 2.7 of the APA. There is no dispute that the APA provides the parties with purchase price adjustments to account for postsigning and post-closing changes in working capital to preserve the economics of the transaction. MedImpact took advantage of its right to make a post-closing purchase price adjustment and changed the NWC figure from negative $192 Million to a positive $84 Million: a $276 Million swing. MedImpact achieved this result by backing out many of the Disputed Liability Types from the calculation of NWC. The Court cannot accept that a reasonable person in the position of the parties would understand the contract to permit this size of adjustment, even taking into account that the increased NWC figure requires an additional payment by the purchaser-capped at $50 Million. See APA § 2.7(a)(i). Frankly, a $276 Million adjustment on a transaction with anticipated consideration in the range of $770 Million (representing nearly 35% of the value flowing to the bankruptcy estate) is shocking, and to use the term employed repeatedly the Debtors: “absurd.”

Railroad employee Plaintiff Ricky Hughes was injured at work twice in separate incidents during the pendency of his Chapter 13 bankruptcy. Approximately 19 months after his bankruptcy closed, Mr. Hughes filed the present personal injury lawsuit. Because Mr. Hughes had not disclosed the potential lawsuit in his bankruptcy, the district court granted summary judgment against Mr. Hughes based on standing and judicial estoppel. We conclude Mr. Hughes has standing. We also conclude judicial estoppel applies to claims arising from the first incident but not the second. Accordingly, we affirm in part and reverse in part.

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In practical effect, the absence of a discharge order in Mr. Hughes’s bankruptcy prior to August 2017 appears to have been mere happenstance. The Code mandates that a discharge order be issued as “as soon as practicable after completion by the debtor of all payments under the plan” subject to several exceptions not alleged to be applicable here. 11 U.S.C. § 1328(a). The bankruptcy court had entered an order in Spring 2017 recognizing the completion of required payments. Given these time frames, there appears to have been nothing of substance left for the bankruptcy court to do. Importantly, Defendants identify no source of authority for denying discharge after Mr. Hughes’s completion of payments. As such, the bankruptcy court in no manner “relied” on the second nondisclosure. There was no risk or appearance of the bankruptcy court having been “misled” and “no risk of inconsistent court determinations” or “threat[s] to judicial integrity.”

Debtor, in this case, has the responsibility to inform herself of her duties under the Bankruptcy Code. It is Debtor’s duty to be forthcoming with this Court to accurately state her income and expenses in a timely manner. The Amended Plan was confirmed on June 25, 2018, and Debtor did not provide any amended Schedules to the Court to show her substantial increase in income until two months prior to the conclusion of the Plan. Debtor was not forthcoming with the Court with respect to her income. Debtor’s tax returns show a substantial, and unanticipated, increase in income from $76,700 in 2018 to $155,520 in 2021. ECF No. 28 ¶ 10. The Court finds that Debtor’s submission of her 2021 tax returns to the Trustee at the end of August 2022 was untimely, especially considering that her submission of those tax returns were two months from the conclusion of the plan. Debtor’s untimely submission is a lack of candor and a breach of her duty to be forthcoming and accurately state her income and expenses in a timely manner with this Court. Debtor does not provide any reasonable justification or response to this delay in providing the Trustee with her 2021 tax return, and the Court finds that the delay was unreasonable and prejudicial to creditors as the increase in income would have provided creditors with a higher dividend.

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The Court finds that Debtor had no intention to be forthcoming about her substantial increase in disposable income, as it was not until the Trustee filed the Motion that Debtor filed Amended Schedules I and J. Debtor’s failure to be forthcoming with the Court to accurately state her income, provided that the increase in income was substantial, misled the Court about Debtor’s income. ]Debtor’s actions misled the Court, which provides cause for dismissal under § 1307(c).

Here, almost all of the conduct complained of occurred prepetition and the Court did not receive sufficient evidence to conclude that Debtor is deliberately abusing the bankruptcy process or does not intend to propose a confirmable plan. However, with this said, the Court did receive some concerning evidence that the Debtor and her non-filing spouse have not yet paid their 2023 taxes (although have obtained an extension to file), and that Debtor’s non-filing spouse, whose income is essential to the plan, has been under withholding his W2 taxes during the pendency of this case. This, in conjunction with the egregious nature of Debtor and her non-filing spouse’s years long prepetition failure to fulfill their tax obligations to the tune of millions, makes this Motion a close call. Should Debtor or her non-filing spouse fail to fulfill their obligations to the IRS in the future during the pendency of this case, it could be cause for reconsideration of dismissal with prejudice under § 1307. However, for now, as stated, the Court finds that cause does not exist to dismiss this case.

Accordingly, the Motion is denied without prejudice subject to Debtor meeting the conditions and requirements as delineated in this Court’s accompanying Order.

The most basic tenet of the Bankruptcy Code is the inviolability of the bankruptcy estate. Yet prior to a scheduled auction under section 363(b), most of the scheduled tangible assets of the debtor U Lock, Inc. disappeared from its business premises (the “Property”). Further proceedings, including on-site inspections, revealed that both George Snyder (U Lock’s principal) and creditor Christine Biros (the owner of the Property) gained possession of estate assets. Their actions appearing to be willful violations of the automatic stay, an Order to Show Cause followed. After considering the responses filed by Mr. Snyder and Ms. Biros, the Court finds that his removal and possession of estate assets was authorized by the chapter 7 trustee (“Trustee”), but hers was not. In fact, Ms. Biros’ offers only post-facto justifications as a smokescreen to distract from her willful overreach after the Court denied her greater relief.

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The egregiousness of Ms. Biros’ contemptuous interference with estate property and its sale requires a penalty that will be felt despite her significant administrative expense and unsecured claims. Punitive damages must “bear some reasonable relationship” to the actual damages, but “particularly egregious act[s]” resulting in only a small economic harm justify a higher ratio of punitive-to-actual damages. Here, the Court awarded compensatory damages totaling $6,300, though the actual damages are probably slightly higher since the Court equitably denied Ms. Snyder her attorneys’ fees. The Court concludes a punitive award of $15,000 payable to the estate without setoff is justified. This represents roughly a 2-to-1 ratio between the punitive and actual damages, which is in line with what has been approved in other cases

As to the applicable sections relevant to actions against property of the debtor, Section § 362(a)(5) stays “any act to create, perfect, or enforce against property of the debtor any lien” to the extent it secures a prepetition claim; and § 362(a)(6) stays “any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title.”

The claims in the District Court Action arose prepetition. By first claiming to obtain the Potential Claims via the Transfer Document, regardless of whether that transfer was successful, and then by bringing the District Court Action, regardless of whether they assert the estate’s Intellectual Property rights therein, Mr. and Mrs. Gross, attempt for themselves to “collect, assess, or recover a claim” that belonged to the debtor WSS prepetition. These actions violate the automatic stay as imposed by section 362(a)(6).

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Whether by (1) an invalid transfer under state law, leaving the Potential Claims with WSS only; (2) the transfer of debtor property interests in the Potential Claims existing prepetition without obtaining stay relief as required by the Bankruptcy Code; or (3) the Intellectual Property aspects specifically retained by the bankruptcy estate (as acknowledged by Mr. and Mrs. Gross) being asserted in the District Court Action, Mr. and Mrs. Gross have violated the automatic stay of 11 U.S.C. § 362(a), and they continue to violate the stay by asserting ownership over the Potential Claims by pursuing recovery tied to the Intellectual Property in the District Court Action.

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For the reasons expressed below, the court will order Mr. and Mrs. Gross cease pursuing any aspects of the WSS Intellectual Property in the District Court Action, but declines to impose fines, attorney fees, or other monetary sanctions retroactively at this time, holding the matter open pending further outcome of the District Court Action.

Despite the litany of violations described above, according to their Response and statements made at the hearing (as proffer, not testimony), the court finds that Mr. and Mrs. Gross subjectively believed that the Order Abandoning Property, minus the stated exceptions, abandoned the remaining tangible and intangible assets including the claims they assert in the District Court Action While they are sorely mistaken in failing to recognize those claims include the WSS Intellectual Property, and that the WSS Potential Claims were not transferred to them, nothing in this bankruptcy case prevents Mr. and Mrs. Gross from pursuing claims in the District Court Action (or elsewhere) that solely belong to them personally. Further, Mr. and Mrs. Gross explicitly asserted in their Response that they do not seek redress related to WSS’s intellectual property as part of the estate retained by the Trustee, but rather seek redress for damages suffered in their personal capacity They are now placed on notice, however, that the claims asserted include bankruptcy estate assets.

"Few matters before bankruptcy courts are as distasteful as the duty to examine transactions between a debtor and its attorney .... Fulfilling this duty, though unpleasant, is also one of the most integral parts of the bankruptcy system." In re Chris Pettit & Assocs., P.C., No. 22-50591-CAG, 2022 WL 17722853, at *8 (Bankr. W.D. Tex. Dec. 13, 2022). This Miscellaneous Proceeding was commenced because the structure of attorney client relationships between Chris Mudd ("Mudd") and the bulk of his chapter 7 debtor clients raised multiple red flags after investigation and review by the United States Trustee ("UST") and this Court. The exact claims raised are set forth in the Agreed Order Establishing Issues for Review and Determination [Doc. 2] (the "Agreed Order").

A compromise has been reached between Mudd and the UST, which will be approved. However, (i) the nature and extent of the statutory and rule violations identified in his attorney client relationships, and (ii) the proliferation of similar unpalatable practices by other attorneys representing chapter 7 debtors in the Western District of Oklahoma designed to generate more clients, thereby threatening the integrity of the system, mandates an order from the Court, sitting en bane, identifying the objectionable practices and clearly establishing prohibited practices in the context of attorneys' representation of chapter 7 debtors in the Western District of Oklahoma. This Order, which takes effect immediately, addresses such conduct and establishes benchmarks for attorney conduct in representing chapter 7 debtors in the Western District of Oklahoma, specifically the Court will address: (i) unbundled essential bankruptcy legal services; (ii) bifurcated fee contracts; (iii) attorney disclosure to the Court; (iv) attorney disclosure to the client; (v) payment of filing fees in installments; and (vi) attorney advancement of filing fees.

Movant asks that the Court require Debtor to add to the list the name of a priest she identified in her proof of claim as having abused her. Debtor opposes the request, saying that movant lacks standing to enforce the covenants. Debtor further argues that the priest should not be added to the list because he was determined not to have been “credibly accused” of sexual abuse.

The Court has reviewed the covenants, the confirmed plan, and related documents and has heard oral argument on the dispute. It now rules that movant lacks standing to enforce the particular covenant in question. Alternatively, on the merits, the Court rules that the covenants do not obligate Debtor to add a priest to the list unless Debtor has made a “credibly accused” finding for that priest.

The Debtor’s principal strongly feels that he is a victim of unusual circumstance, COVID but mostly the actions of NBK. He strongly complains that the actions of NBK have caused him to default, face foreclosure and that it should pay for its actions [whatever they may be]. However, this totally ignores two distinct facts (1) that the Debtor via his principal has never been able to pay the original note, or his Confidential Settlement Payment or his extended Confidential Settlement Payment which was a sizable discount on the original amount of the Note; (2) the record in this case does not support his sizable but implausible claims. The Court notes two specific allegations. First, the allegation that NBK faces a large lender liability claim based on the CSA and second, that NBK breached that agreement first and therefore the Debtor’s breach of the CSA by not paying over $26 million dollars was somehow acceptable. The Court invites the parties to examine the record to find any evidence that either of these facts are true. Yes, the Debtor had lawyers testify that the Debtor had claims but they never explained how or why these claims arose, just that they existed. Additionally, the Court notes that the Chapter 11 Trustee interviewed these attorneys and discounted their claims. Their testimony was incomplete and not believable given the lack of documentary evidence. Just because a lawyer tells this Court or any Court that its client or potential client has a great claim for damages does not make it so or the presentation of evidence in hearings would become superfluous.

This Court having spent considerable time attempting to evaluate the actions and testimony of Ali Choudhri in this case both as a witness and as a pro se litigant The Court, based on this analysis, holds that Choudhri must at times believe what he is telling the Court. Unfortunately, what he has told the Court, often in broad terms, is not supported by rational facts or any documentary evidence. It additionally often is totally untrue. The Chapter 11 Trustee found that Choudhri’s veracity was troubling, the Court strongly agrees with this assessment. Based on the testimony of the Chapter 11 Trustee the Court believes that, in part, Choudhri’s reputation in the community for a lack of veracity has damaged his ability to conduct business as a real estate developer. The Court can only look to repeated promises of payment to NBK, that were repeatedly broken to make such a holding.

Lastly, the Court must comment on Choudhri’s claims that the process of confirming this Chapter 11 Plan has been unfair, rushed, not transparent, that he and the debtor have not been afforded due process or that this Court is prejudiced against him personally. This debtor has been in two bankruptcies. The first was filed on July 5, 2023, and the second will conclude with the confirmation of the plan in this case. This is a span of almost a year, and his ongoing litigation with NBK spans multiple years. During that time the debtor and Choudhri have failed to propose a viable plan of reorganization for the debtor because they are incapable of proposing one. Additionally, they have been unable to pay what they have promised on multiple occasions. The claims that this process have been rushed or lack due process given the timeline are not credible. That this Court is simply doing what it is constitutionally tasked to do and that Choudhri is by appearance very unhappy with the results does not give rise to his numerous false claims of denial of procedural due process.

Here, both VOL and MCG filed a proof of claim for the full amount of the money judgment and an objection to each other’s claims. By doing so, they initiated a core “allowance or disallowance of claims” proceeding as contemplated by § 157(b)(2)(B). Under 11 U.S.C. § 502, proofs of claim are “deemed allowed[] unless a party in interest … objects,” id. § 502(a), in which case “the court, after notice and a hearing, shall determine the amount of such claim … and shall allow such claim in such amount,” id. § 502(b).

Where, as here, claims and objections thereto have been filed in a Chapter 11 proceeding, it is a core function of the bankruptcy court to determine whether such claims should be allowed and in what amount, pursuant to the procedure laid out in § 502. That is true even if adjudicating the underlying dispute regarding the engagement letter is “a non-core issue.”

Debtor’s primary argument is that Trustee was not authorized to stipulate to dismissal of the Complaint with prejudice, because not all claims asserted in the Complaint are owned by the estate. According to Debtor, some claims against Lexington accrued after conversion of her chapter 11 case to chapter 7, and such postconversion claims are owned by Debtor, not the estate.

This Court disagrees. All of the claims at issue belonged to the bankruptcy estate, and Trustee was authorized to settle them and dismiss the Lexington Action with prejudice.

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Debtor apparently asserts that her claims accrued post-conversion because, although the water intrusion and balcony collapse occurred prepetition and preconversion, Lexington’s handling of that claim may have included allegedly wrongful acts or omissions both pre- and post-conversion. Debtor’s arguments fail both factually and legally.

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As a legal matter, even supposing that there were some disputes with Lexington post-conversion (which, so far as the record before this Court reveals, there were not), such post-conversion disputes are inseparable from the pre-conversion claims.

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Debtor’s argument would also lead to an absurdity. Under her approach, Trustee would own claims for the entire amount of damages arising from the water intrusion and balcony collapse claims, and yet Debtor would own overlapping claims that Lexington, for example, had under-paid for repairs arising from the same water intrusion. It would make no sense to read the statute in a way that would create overlapping ownership of claims, which would effectively bar Trustee from ever settling with Lexington.

Section 365(d)(3) of the Bankruptcy Code provides "[t]he trustee shall timely perform all the obligations of the debtor, except those specified in section 365(b)(2), arising from and after the order for relief under any unexpired lease of nonresidential real property, until such lease is assumed or rejected, notwithstanding section 503(b)(l) of this title."18 Section 365(b)(2) states: "Paragraph ( 1) of this subsection," which addresses the cure of defaults under a contract or lease that the debtor seeks to assume, "does not apply to a default that is a breach of a provision relating to ... ( d) the satisfaction of any penalty rate or penalty provision relating to a default arising from any failure by the debtor to perform nonmonetary obligations under the executory contract or unexpired lease." Based on the plain language of the statute, this subsection only applies if a default has occurred.

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Based on Article 50, the Debtor covenanted to surrender the Premises to the Landlord at the expiration or termination of the Lease term. It is undisputed that the Debtor did not surrender the Premises at the expiration of the Lease term in January 2022. The violation of this covenant constitutes a default under the Lease pursuant to the unambiguous language contained in the introductory paragraph and Articles 17 and 50 of the Lease.

As a penalty for failing to surrender the Premises, Article 50 required the Debtor to pay "a sum equal to three times the average rent and additional rent which was payable per month under this lease during the last six months of the te1m thereof. " The Court dete1mined that the "Monthly Treble Damages" were a penalty rate that did not reflect "the Landlord's actual damages or the loss caused by the Debtor's holdover occupancy." This penalty rate was triggered by the Debtor's failure to surrender the Premises at the expiration of the Lease te1m, which is a non-monetary default. Therefore, the provision requiring the Debtor to pay Monthly Treble Damages was a penalty rate relating to a non-monetary default under the Lease. This places the obligation to pay Monthly Treble Damages squarely within the exception contained section 365(b)(2)(D) of the Bankruptcy Code. Because section 365(d)(3) does not require the Debtor to timely perform obligations that fall under section 365(b )(2), the Debtor was not obligated to pay the Monthly Treble Damages.

As explained below, the Defendants base their argument on “the doctrines of contribution and unjust enrichment.”

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Although the Defendants admit that the Debtor did not receive any value in exchange for the 2020 Transfer, they argue that the Debtor was not entitled to receive any value in exchange for the 2020 Transfer. This is so, according to the Defendants, because the Debtor never contributed any money toward the purchase of the Property. Under these circumstances, the Defendants argue that the equitable doctrines of unjust enrichment and contribution are defenses to the Plaintiff’s constructive fraudulent transfer claim, and prevent the Trustee from avoiding the 2020 Transfer and recovering any portion of the sale proceeds for the benefit of the bankruptcy estate.

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The evidence, including the unambiguous language of the 2017 Quit Claim Deed, establishes beyond any genuine dispute that the Defendants’ March 22, 2017 transfer of a one-third ownership interest in the Property to the Debtor was a gift, and that it made the Debtor a true owner of a one-third ownership interest in the Property. The Defendants intended to, and did, unconditionally give the Debtor such interest, for no consideration. As will be discussed in Part V.E.5 of this Opinion, below, this point alone substantially undermines the Defendants’ contribution and unjust enrichment defenses.

The Debtor testified in narrative form that Community Promise’s branch manager, Angela Banuelos, called her in March of this year, threatening to garnish her wages or other property if she did not surrender the Outlander. The court credits her testimony in that respect.

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Rob Viland, Community Promise’s chief executive officer, testified on behalf of the credit union. He explained that Ms. Banuelos was not available to testify because of her pre-planned vacation, but that he was familiar with the Debtor’s file.

Mr. Viland testified that he had no knowledge of threatening phone calls between Ms. Banuelos and the Debtor, nor did he ever instruct her or anyone else at Community Promise to threaten to garnish the Debtor’s wages or other property. Community Promise also introduced two exhibits that Mr. Viland claimed comprised all of the communications between the Debtor and the credit union regarding the Debtor’s loan. (Exhibits 1 and 2, the “Communications”). Nothing in the Communications constituted a threat, after entry of the Discharge, to collect the Debtor’s car loan as her personal obligation.

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The court finds by the requisite proofs that Community Promise violated the Discharge through its agents (Ms. Banuelos and Repocast) first when the branch manager threatened to pursue garnishment -- legal process not directed at the creditor’s collateral but at the Debtor herself -- and again when the repossession company sent the Notice of Lien Holder’s Plan to Sell. The Debtor consistently and credibly testified that Ms. Banuelos raised the specter of garnishment in March, post-discharge, and the Communications demonstrate that Community Promise was aware of the Discharge by then.

* * *

Although the only evidence that Ms. Banuelos threatened to garnish the Debtor’s wages or other property comes from the Debtor’s testimony, the court nevertheless credits that testimony. Community Promise’s counsel conceded that the call in March may have taken place, but its CEO testified that he had no personal knowledge of the existence or content of communications between Ms. Banuelos and the Debtor. Even crediting Mr. Viland’s testimony that he did not instruct Ms. Banuelos to threaten collection activity beyond repossession, it is easy to infer that in the heat of dealing with an uncooperative debtor, a branch manager of a small credit union, under pressure to collect debts for the sake of all credit union members, may fall short of the mark, making less-than-carefully-calibrated word choices.

While Mrs. Lyle may truthfully perceive these mailings were an attempt to collect from her, and the court does not downplay the reality of her serious medical issues or question the credibility of her testimony, the limited evidence from the hearing and the remainder of the case record does not support a finding of damages directly resulting from the invoices, which did not attempt to collect directly from Mrs. Lyle individually. Beyond the invoices, Corey Inc. employed no other method of collection, such as phone calls, threats from a collection agency, a demand letter, or the threat, or filing, of litigation. Her name does not appear on any of the invoices presented into evidence at the hearing, and there is no evidence in the record to show that Corey Inc. was attempting to collect a joint debt that included Mrs. Lyle. She has not shown that any stay violation caused direct and actual damages to her as a debtor individually.

Although the Motion was filed by the Debtors jointly, according to Mrs. Lyle’s testimony, Mr. Lyle was not troubled or bothered by the invoices, and he did not wish to pursue the matter. He did not appear at the hearing to testify, nor did he submit an affidavit to assert a claim for recovery of damages. He has made no effort to pursue this matter and shown no injury sufficient to support a finding of damages resulting from a violation of section 362(a)(6) as a debtor.