Decisions of 2011

Baker Chapter 13 Confirmation - February 9, 2011

Case No. 10-61317-13

In this Chapter 13 bankruptcy, after due notice, a hearing was held August 10, 2010, in Butte on confirmation of Debtors’ Chapter 13 Plan filed May 31, 2010. Edward A. Murphy of Missoula, Montana appeared at the hearing on behalf of Debtors and in support of confirmation. The Chapter 13 Trustee, Robert G. Drummond of Great Falls, Montana, appeared in opposition to confirmation of Debtors’ Chapter 13 Plan.
The Trustee opposes confirmation of Debtors’ Chapter 13 Plan arguing Debtors have overstated their vehicle operating costs based upon the Internal Revenue Services’ allowance for vehicle operating costs for the west region. The west region entitles the Debtors to deduct $472.00 for two cars. The Debtors’ Form 22C deducts $836.00 on Line 27(a). Thus, according to the Trustee, Debtors are failing to commit 100% of their disposable income to fund their Plan as required for confirmation by 11 U.S.C. § 1325(b). Debtors counter that they have actually understated their allowable deduction by $36.00 and that they are committing all their disposable income to their Plan.

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BLX Group Disclosure Statement - May 26, 2011

Case No. 09-61893-11

In this Chapter 13 bankruptcy, after due notice, the Court conducted a hearing on May 24, 2011, in Billings concerning: (1) confirmation of Debtor’s First Amended Chapter 13 Plan filed May 23, 2011; (2) Debtor’s Motion for Valuation of Security filed January 27, 2011, at docket entry no. 39, wherein Debtor seeks to fix, as permitted by F.R.B.P. 3012, the amount of Altana Federal Credit Union’s1 allowed secured claim (Claim No. 13 on the claims register) at $1,500; (3) Debtor’s Motion for Valuation of Security filed January 27, 2011, at docket entry no. 40, wherein Debtor seeks to fix the amount of Altana Federal Credit Union’s allowed secured claim (Claim No. 12 on the claims register) at $8,000; (4) Debtor’s Objection to Proof of Claim Nos. 2, 3 and 4 filed by Altana Federal Credit Union; (5) Debtor’s Objection to Proof of Claim No. 14 filed by Altana Federal Credit Union; (6) Debtor’s Second Amended Objection to Proof of Claim No. 12 filed by Altana Federal Credit Union; and (7) Debtor’s Amended Objection to Proof of 1 The proofs of claim filed in this case and the motions and objections filed by Debtor identify the creditor as Altana Federal Credit Union. However, the loan and security documents identify the creditor as Avanta Federal Credit Union. For purposes of this memorandum, the Court will refer to Altana Federal Credit Union and Avanta Federal Credit Union as “Avanta” given the documents.

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Brannan Chapter 13 Confirmation - May 26, 2011

Case No. 10-62399-13

In this Chapter 13 bankruptcy, after due notice, the Court conducted a hearing on May 24, 2011, in Billings concerning: (1) confirmation of Debtor’s First Amended Chapter 13 Plan filed May 23, 2011; (2) Debtor’s Motion for Valuation of Security filed January 27, 2011, at docket entry no. 39, wherein Debtor seeks to fix, as permitted by F.R.B.P. 3012, the amount of Altana Federal Credit Union’s1 allowed secured claim (Claim No. 13 on the claims register) at $1,500; (3) Debtor’s Motion for Valuation of Security filed January 27, 2011, at docket entry no. 40, wherein Debtor seeks to fix the amount of Altana Federal Credit Union’s allowed secured claim (Claim No. 12 on the claims register) at $8,000; (4) Debtor’s Objection to Proof of Claim Nos. 2, 3 and 4 filed by Altana Federal Credit Union; (5) Debtor’s Objection to Proof of Claim No. 14 filed by Altana Federal Credit Union; (6) Debtor’s Second Amended Objection to Proof of Claim No. 12 filed by Altana Federal Credit Union; and (7) Debtor’s Amended Objection to Proof of 1 The proofs of claim filed in this case and the motions and objections filed by Debtor identify the creditor as Altana Federal Credit Union. However, the loan and security documents identify the creditor as Avanta Federal Credit Union. For purposes of this memorandum, the Court will refer to Altana Federal Credit Union and Avanta Federal Credit Union as “Avanta” given the documents.

Canyon Holdings - August 23, 2011

Case No. 11-60814-11

In the above-captioned Chapter 11 case, after due notice, the Court held a hearing at Missoula on July 27, 2011, on the Motion to Modify Stay (Docket No. 11) by Intervest-Mortgage Investment Company (“Intervest”) pursuant to 11 U.S.C. §§ 362(d)(1) and (d)(2), and Debtor Canyon Holdings, LLC, Series 39’s (“Debtor” or “Series 39") objection thereto. Intervest was represented by attorney Benjamin P. Hursh (“Hursh”) of Crowley Fleck PLLP, Missoula. Debtor was represented by Steven M. Johnson (“Johnson”) of Church, Harris, Johnson & Williams, P.C., Great Falls. Testimony of witnesses was heard and exhibits were admitted. At the conclusion of the parties’ cases-in-chief the Court took Intervest’s Motion under advisement. After review of the Motion and the record, and applicable law, this matter is ready for decision. For the reasons set forth below a separate Order will be entered denying Intervest’s Motion to Modify Stay.

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Cini v. Viscomi - Cini Summary Judgment - May 27, 2011

Case No. 10-62715-13

Pending in this adversary proceeding are: Plaintiff’s motion for partial summary judgment (Docket No. 16); and Defendant Peter F. Carroll’s (“Carroll”) motion to dismiss Counts I, III and IV of the 1 amended and substituted complaint (“amended complaint”) for lack of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1) (Dkt. 11). Hearings on both of these motions were held at Missoula on April 7, 2011. Carroll, who is a licensed attorney, appeared pro se. Defendant Nigel Cini appeared pro se. The Plaintiff was represented by attorney Jeffrey Greenwell (“Greewell”) of Kalispell. Brian M. Joos appeared representing Defendants John Darren Cogar and Susanne Cogar (“Cogars”). No testimony was admitted. Exhibits (“Ex.”) 1, 2, 3, 4, and 5 were admitted into evidence without objection. The Court heard argument of counsel, and at the conclusion of the hearing took both motions under advisement. After review of the record and applicable law, these matters are ready for decision. For the reasons set forth below, Plaintiff’s motion for partial summary judgment will be granted and partial judgment will be entered in favor of the Plaintiff under Count I of the amended complaint providing that $5,840.81 in funds held in the trust account of Defendant Viscomi & Gersh, PLLP, (“Viscomi”) is property of the estate. Carroll’s motion to dismiss for lack of subject matter jurisdiction of that $5,840.81 will be denied. This Memorandum of Decision includes the Court’s findings of fact and conclusions of law under F.R.B.P. 7052 (applying FED. R. CIV. P. 52 in adversary proceedings).

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Cini v. Viscomi - Motion to Amend Order - July 29, 2011

Case No. 10-62715-13

In this adversary proceeding the Court entered a Memorandum of Decision (Docket No. 73) and Order on June 22, 2011, which denied the Plaintiff/Debtor Robin Jean Cini’s (“Robin”) second motion for summary judgment (Dkt. 61) against Defendant Nigel Cini (“Nigel”), concluding that Robin failed to satisfy her burden under Rule 56, Fed. R. Civ. P. (applicable under F.R.B.P. 7056), of showing that there are no genuine issues of material fact about whether the sheriff’s sale of Nigel’s interests was conducted in accordance with applicable law. On June 28, 2011, Robin filed a motion to alter and amend, asking that the Court reconsider and grant her second motion for summary judgment, and contending that this Court is required by the Rooker Feldman doctrine to abstain from reviewing the state court’s final decision, or from reviewing Robin’s levy on execution of her judgment. Nigel filed a response in opposition. Defendant Peter F. Carroll (“Carroll”) also filed a response and brief in opposition. The Court has reviewed Robin’s motion and the responses. This matter is ready for decision. For the reasons set forth below Robin’s motion to alter or amend order will be denied.

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Cini v. Viscomi - Summary Judgment - August 24, 2011

Case No. 10-62715-13

Pending in this adversary proceeding is Defendant Peter F. Carroll’s (“Carroll”) “Motion for Declaratory and Summary Judgment (“Motion”) against the Plaintiff Robin Jean Lyon Cini (“Robin”) and for release of funds, filed on July 29, 2011, and amended on August 1, 2011 (Docket No. 89). Objections were filed by Defendants John Darren Cogar and Susanne J. Cogar (“Cogars”) and by Robin, and Robin set the matter for hearing on September 20, 2011. Montana Local Bankruptcy Rule (“Mont. LBR”) 7056-1(d) provides that unless the Court orders otherwise, no formal hearing on a motion for summary judgment will be conducted and the Court shall proceed to consider and rule upon the merits of any such motion. After review of Carroll’s Motion, and objections thereto, the briefs, and applicable law, the Court deems no hearing necessary. For the reasons set forth below Carroll’s Motion will be denied by separate Order because the Court finds that Carroll failed to satisfy his burden of showing that no genuine issues of material fact exist. This Memorandum of Decision includes the Court’s findings of fact and conclusions of law under F.R.B.P. 7052 (applying FED. R. CIV. P. 52 in adversary proceedings).

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Cini - Approve Compromise - October 4, 2011

Case No. 10-62715-13

In this Chapter 13 case, after due notice a hearing was held at Missoula on September 20, 2011, on the Debtor’s Motion (Docket No. 123) to approve a compromise settlement with creditors John & Susan Cogar (hereinafter together “Cogars”) of Cogars’ claim against the estate asserted in Proof of Claim No. 10, and their claims in Adversary Proceeding No. 11-00007 (“Adv. Pro. 11-7), for the sum of $10,000. Objections were filed by the Debtor’s former spouse Nigel Cini (“Nigel”) and by Nigel’s former attorney Peter F. Carroll (“Carroll”). Robin appeared and testified, represented by attorney James H. Cossitt (“Cossitt”) of Kalispell, Montana. Nigel and Carroll each appeared pro se, but did not call any witnesses or offer any exhibits. The Chapter 13 Trustee Robert G. Drummond appeared and testified in support of the compromise settlement. Debtor’s Exhibits (“Ex.”) RC1, 9, 10, 11, 12, and 13 were admitted without objection. The Court heard argument of counsel, and at the conclusion of the parties’ cases-in-chief the Court took Debtor’s motion under advisement. After review of the record and applicable law, the Court finds that the proposed compromise between the Debtor and Cogars is fair and equitable and satisfies the requirements of F.R.B.P. 9019(a), after consideration of the factors listed in Martin v. Kane (In re A & C Properties), 784 F.2d1377, 1380-81 (9 Cir.) cert. denied sub nom. Martin v. Robinson, 479 U.S. 854, 107 S.Ct. 189, 93 L.Ed. 2d 122 (1986). The objections will be overruled and the compromise settlement approved by separate Order.
This Court has jurisdiction of this Chapter 13 case and Adv. Pro. 11-7 under 28 U.S.C. § 1334. The Debtors’ Motion to approve compromise settlement is a core proceeding under 28 U.S.C. § 157(b)(2). This Memorandum of Decision includes the Court’s findings of fact and conclusions of law.

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Covenant Investments - Fee Application - August 2011

Case No. 10-62105-11

In this Chapter 11 case, Calvin L. Braaksma, attorney for First Security Bank (“First Security”) filed an Application for Professional Fees and Costs (“Application”) on June 2, 2011, requesting an award of attorney’s fees in the amount of $15,030.00 and reimbursement of expenses in the amount of $150.49. The Application was accompanied by a Notice which gave parties-in-interest fourteen (14) days to file a response and request a hearing, and advising that failure to respond shall be deemed an admission that the relief requested in the Application should be granted. Debtor filed an Objection to the Application on June 16, 2011, and scheduled the matter for hearing. Prior to the scheduled hearing, Debtor and First Security, through counsel, filed a joint motion to vacate the hearing and submit approval of the Application to the Court on stipulated facts. The Court granted the parties’ joint motion.

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Crocker Intent to Sell - July 27, 2011

Case No. 09-60139-7

In this Chapter 7 bankruptcy, after due notice, a hearing was held June 13, 2011, in Butte, on the Chapter 7 Trustee’s Notice of Intent to Sell Property - Statutory Right of Redemption in Story Mill Project, together with the objection thereto filed by creditor Hyalite Engineers, PLLC.� The Chapter 7 Trustee, Joseph V. Womack of Billings, Montana appeared at the hearing in support of his proposed sale. William D. Lamdin of Billings, Montana also appeared at the hearing on behalf of American Bank and in support of the Trustee’s proposed sale. Dorie Benesh Refling of Bozeman, Montana appeared at the hearing on behalf of Hyalite Engineers, PLLC and in opposition to the Trustee’s proposed sale. Hyalite Engineers, PLLC’s Exhibit G and American Bank’s Exhibit 4 were admitted into evidence without objection.

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Dunbar Exception to Discharge - August 5, 2011

Case No. 10-62401-7

In this adversary proceeding the Plaintiff FIA Card Services, N.A. (hereinafter “FIA”) filed a complaint claim seeking exception from the Debtor/Defendant John P. Dunbar’s (“Dunbar”) discharge of $9,000 of cash advances under 11 U.S.C. § 523(a)(2). Dunbar answered denying the material allegations and asserted a counterclaim for attorney’s fees and costs pursuant to § 523(d). Trial was scheduled to begin on July 13, 2011. On July 12, 2011, the parties filed a stipulation to dismiss FIA’s complaint and consider only Dunbar’s counterclaim. On the scheduled trial date the Court heard argument of counsel regarding the counterclaim, and exhibits were admitted. At the conclusion of the hearing the Court took Dunbar’s counterclaim under advisement. After review of the record and applicable law, this matter is ready for decision. For the reasons set forth below, a separate Judgment shall be entered against FIA under § 523(d) for Dunbar’s attorney’s fees and costs in amounts to be determined.
FIA was represented at the hearing by attorney Richard S. Ralston (“Ralston”) of Weinstein & Riley, P.S., of Seattle, Washington. Dunbar was represented by Harold V. Dye (“Dye”) of Dye & Moe, P.L.L.P., Missoula. Ex. A, B, C, D, E, F, G, H, I, J, K, L, M, and 9 were admitted into evidence without objection.
This Court has jurisdiction of this adversary proceeding under 28 U.S.C. § 1334(b). This is a core proceeding under 28 U.S.C. § 157(b)(2)(I) as to the dischargeability of FIA’s particular debt. This Memorandum includes the Court’s findings of fact and conclusions of law regarding Dunbar’s counterclaim under § 523(d) and F.R.B.P. 7052 (applying FED. R. CIV. P. 52 in adversary proceedings).

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Edra Blixseth - Atigeo v. Samson, Dismiss - January, 2011

Case No. 09-60452-7

In this Adversary Proceeding, after due notice, a hearing was held January 4, 2011, in Butte on Plaintiffs’ FED.R.CIV.P. 12(b)(6) Motion to Dismiss Count II of Western Capital Partners’ Amended Third Party Complaint and Third Party Defendant Michael Sandoval’s Motion to Dismiss Third Party Complaint of Western Capital Partners filed November 17, 2010, at docket entry no. 158. At Michael Sandoval’s request, the Court also conducted on January 4,

2011, a pretrial conference on discovery issues. Plaintiffs Atigeo LLC (“Atigeo”) and xPatterns LLC (“xPatterns”) were represented at the hearing by Brian C. Park of Seattle, Washington; Third Party Defendant Michael Sandoval (“Sandoval”) was represented by Roland Tellis and Patricia K. Oliver of Los Angeles, California and John H. Grant of Helena, Montana; Western Capital Partners LLC (“Western Capital”) was represented by Robert W. Hatch, II of Denver, Colorado; and the Chapter 7 Trustee of Debtor’s bankruptcy estate, Richard J. Samson, was represented by David B. Cotner of Missoula, Montana. The Court heard argument from they attorneys, but no witness testimony or exhibits were offered at the hearing.

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Edra Blixseth - Atigeo v. Samson Reconsider - November 10, 2011

Case No. 09-60452-7

In the above-referenced Chapter 7 bankruptcy proceeding, and in related Adversary Proceeding 09-00105, after due notice, a hearing was held October 24, 2011, in Butte on Third-Party Plaintiff, Western Capital Partners LLC’s “Motion to Reconsider this Court’s Finding of Fact Conclusion of Law and Order Dated September 27, 2011, at Docket #1054 and Order at #1055" filed at docket entry no. 1059 in Debtor’s main bankruptcy case and filed at docket entry no. 289 in the Adversary Proceeding. Moving party Western Capital Partners, LLC (“WCP”) was represented at the October 24, 2011, hearing by Robert W. Hatch, II of Denver, Colorado; Richard J. Samson (“Samson”), the Chapter 7 Trustee for Edra Blixseth, was represented at the hearing by David B. Cotner of Missoula, Montana; Atigeo LLC and xPatterns, LLC were represented by Brian C. Park of Seattle, Washington.
This Memorandum of Decision includes the Court’s findings of fact and conclusions of law. For the reasons discussed below, the Court denies WCP’ Motions to Reconsider.

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Edra Blixseth - Blixseth v. Blixseth Debtors Motion for Summary Judgment - January 2011

Case No. 09-60452-7

In this Adversary Proceeding, after due notice, a hearing was held January 4, 2011, in Butte on: (1) Plaintiffs’ Motion to Compel Discovery filed November 15, 2010; (2) Defendant’s Motion to Compel Answers to Discovery Requests filed November 29, 2010; (3) Defendant’s Motion for Summary Judgment filed December 1, 2010; and (4) Defendant’s Motion for Protective Order filed December 30, 2010. The Plaintiffs were represented at the hearing by Jon R. Binney of Missoula, Montana and Defendant was represented by Gary S. Deschenes of Great Falls, Montana. The Court heard statements from counsel, but no witness testimony or exhibits were offered.

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Edra Blixseth  - Blixseth v. Blixseth Deny Discharge - September 28, 2011

Case No. 09-60452-7

In this Adversary Proceeding, after due notice, the Court conducted a trial on June 20, 2011, in Missoula on the Plaintiffs Beau and Morgan Blixseth’s (collectively “the Blixseths”) complaint to deny Debtor/Defendant Edra D. Blixseth’s (“Edra”) discharge under 11 U.S.C. § 523(a)(4).1 The Blixseths were represented at trial by Kevin O’Connell and Mark R. Sandri of unless specified otherwise, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and all “Rule” references are to the Federal Rules of Bankruptcy Procedure, Rules 1001-9037.
Portland, Oregon and Jon Binney of Missoula, Montana; Edra was represented at trial by Gary S. Deschenes of Great Falls, Montana. Edra, Morgan Blixseth (“Morgan”), Beau Blixseth (“Beau”) and Richard Samson (“Samson”), the Chapter 7 Trustee in Debtor’s main bankruptcy case, testified. The Blixseths’ Exhibits 101 through 205 and Edra’s Exhibits A through E were admitted into evidence. The Court also agreed at trial to take judicial notice of Blixseth Family Investment’s proof of claim no. 53 filed August 6, 2009, which Proof of Claim was also admitted into evidence as the Blixseths’ Exhibit 198. The Court entered an Order on June 30, 2011, granting the Blixseths’ Motion for Leave to File Deposition of Alan Rye For Use As Perpetuated Testimony, subject to the errata sheet filed separately on June 29, 2011, at docket entry no. 112.� At the conclusion of the Blixseths’ case-in-chief, Edra’s counsel made an oral request for directed verdict. The Court took Edra’s request under advisement and proceeded with trial. At the conclusion of trial, the Court gave the parties additional time to file post-trial briefs. The Blixseths and Edra have filed their post-trial briefs and the matter is ready for decision. This Memorandum of Decision and Order sets forth the Court’s findings of fact and conclusions of law.

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Edra Blixseth  - Blixseth v. Blixseth Summary Judgment - June, 2011

Case No. 09-60452-7

Plaintiffs, through counsel, filed a Motion for Summary Judgment on May 11, 2011.� Plaintiffs’ Motion for Summary Judgment was accompanied by a Brief in support thereof, a Statement of Undisputed Facts and an Affidavit of attorney Mark R. Sandri. Plaintiffs argue the following are undisputed facts:

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Edra Blixseth Motion for Sale - April 20, 2011

Case No. 09-60452-7

In this Chapter 7 case the Trustee Richard J. Samson (“Samson”) filed on January 26, 2011, a combined “Motion” (Docket Nos. 860-863; supplemented by Dkt. 910) to: (A) Approve the sale of real property known as the “Family Compound” at Yellowstone Mountain Club free and clear of liens, claims, interests and encumbrances under 11 U.S.C. §§ 105(a), 363, and 365; (B) to approve bidding procedures and authorize the Trustee to solicit higher and better offers pursuant to a proposed notice of sale; (C) to grant relief from the stay on the Family Compound to “stalking horse bidder” CIP Yellowstone Lending LLC (“CIP”); (D) to approve settlement of claims of the estate against CIP; and (E) for related relief. The Court conducted a hearing on the Trustee’s Motion at Missoula on April 7, 2011, at which Samson appeared represented by counsel and testified. The only objection to the Trustee’s Motion was filed by Timothy Blixseth (“Blixseth”) on February 14, 2011 (Dkt. 882), and Blixseth was represented by counsel at the hearing in opposition. Other witnesses testified, and exhibits were admitted. At the conclusion of the parties’ cases-in-chief the Court took the Motion under advisement. After review of the Motion, Blixseth’s objection, the exhibits, record and applicable law, the Trustee’s Motion will be granted for the reasons set forth below, and Blixseth’s objections will be overruled.
This Court has jurisdiction of this Chapter 7 bankruptcy under 28 U.S.C. § 1334(a). The Trustee’s Motion to sell property of the estate and resolve claims is a core proceeding under 28 U.S.C. § 157(b)(2). This Memorandum includes the Court’s findings of fact and conclusion of law. Samson appeared and testified at the hearing, represented by attorneys David B. Cotner (“Cotner”) of Missoula, Montana, Hugh R. McCullough and Bradley R. Duncan of Seattle, Washington. Blixseth was represented by Patrick T. Fox of Helena, Montana, and Christopher J. Conant (“Conant”) of Denver, Colorado. CIP was represented by attorneys Paul D. Moore (“Moore”) and Barry Green of Boston, Massachusetts, and by Benjamin P. Hursh of Missoula. The Trustee’s Exhibits (“Ex.”) 1, 2, 4, 5, and 6, and Blixseth’s Ex. 2 and 17, were admitted into evidence. In addition the Court granted the Trustee’s motion (Dkt. 898) to take judicial notice of testimony and exhibits admitted at a hearing held on June 7, 2010, in Case No. 09-61893, and this Court’s Memoranda entered in Adversary Proceeding No. 09-00014 (Dkt. 575), and in Case No. 08-61570 (Dkt. 1025). The Court also granted Blixseth’s request for judicial notice (Dkt. 937) of motions, hearing transcripts, pleadings and other documents. In addition to Samson, the Trustee called to testify at the hearing real estate broker Tim Murphy (“Murphy”) of Hall & Hall of Bozeman. Blixseth called Matthew E. Kidd (“Kidd”) who is a principal in CrossHarbor Capital Partner’s (“CrossHarbor”) acquisition group, to testify in Blixseth’s case-in-chief.

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Edra Blixseth - Samson v. Cincinnati Insurance - November 14, 2011

Case No. 09-60452-7

In this Adversary Proceeding, Plaintiff Ross P. Richardson, the duly-appointed Chapter 7 Trustee for Yellowstone Club World, LLC and Plaintiff Richard J. Samson, the duly-appointed Chapter 7 Trustee for the Estate of Edra D. Blixseth filed a First Amended Joint Complaint on April 4, 2011, asserting Breach of Contract, Bad Faith and violation of the automatic stay claims against the Defendant, Cincinnati Insurance Company. The Plaintiffs also seek declaratory relief in their First Amended Joint Complaint. Trial in this matter is scheduled to commence December 1, 2011.

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Edra Blixseth - Samson v. Blixseth Motion to Dismiss - August 1, 2011

Case No. 09-60452-7

In this Adversary Proceeding, after due notice, the Court held a hearing on February 14, 2011, in Butte on Defendant Timothy Blixseth’s Motion for Mandatory Abstention or Permissive Abstention, filed November 11, 2010 at docket entry no. 9, and on Defendant Timothy Blixseth’s Motion to Dismiss Adversary Complaint Pursuant to Fed.R.Bankr.P. 7012(b), filed November 12, 2010 at docket entry no. 12. Defendant Timothy Blixseth (“Blixseth”) was represented at the hearing by Patrick T. Fox of Helena, Montana; Plaintiff Richard Samson, the Chapter 7 Trustee (“Trustee”) in the associated bankruptcy of Edra Blixseth (“Edra”), was represented at the hearing by Hugh McCullough of Seattle, Washington. The Court heard oral argument from counsel. None of the parties presented any witness testimony or offered any exhibits into evidence. The Court held these contested matters in abeyance for a period of time given the involuntary bankruptcy case filed against Blixseth in Nevada, which has now been dismissed.

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Edra Blixseth - Samson v. Blixseth Motion to Dismiss Jursdiction - March 30,2011

Case No. 09-60452-7

In this Adversary Proceeding, after due notice, a hearing was held February 14, 2011, in Butte on the Motion to Dismiss for Lack of Personal Jurisdiction filed on November 11, 2010, by Defendants Desert Ranch, LLLP and Desert Ranch Management, LLC. Hugh McCullough of Seattle, Washington, appeared at the hearing on behalf of the Plaintiff; Patrick T. Fox of Helena, Montana appeared at the hearing on behalf of the Defendants. The Court heard oral argument from counsel. None of the parties presented any witness testimony and no exhibits were offered into evidence.

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Fechter Dismiss for Abuse - May 19, 2011

Case No. 10-62688-7

In this Chapter 7 case the Office of U.S. Trustee (“UST”) filed a Motion to Dismiss (“Motion”) (Docket No. 16) this case under 11 U.S.C. §§ 707(b)(1) based on the presumption of abuse under § 707(b)(2)(A)(i). The Debtors filed an objection admitting that the presumption of abuse exists but contending that, because their child support income would be deducted in a Chapter 13 case, requiring conversion to Chapter 13 would be an absurd and senseless result, and the Court should take these “special circumstances” into account and conclude that the presumption of abuse is rebutted under § 727(b)(2)(B). A hearing on the Motion was held at Great Falls on March 11, 2011. Debtors appeared represented by attorney Gary S. Deschenes (“Deschenes”) of Great Falls, and Debtor Wendy Sue Fechter (“Wendy”) testified. The UST was represented by attorney Daniel P. McKay (“McKay”). Without objection the Court took judicial notice of Debtors’ Exhibits (“Ex”) A, B and C, which are Debtors’ Form B22A, B22C and Schedules I and J, respectively. At the conclusion of the parties’ cases-in-chief the Court granted the parties time to file briefs, which have been filed and reviewed by the Court together with the record and applicable law. This matter is ready for decision. For the reasons set forth below the Debtors’ objection is overruled, the UST’s Motion is granted and this case is dismissed for abuse under § 707(b)(2)(A)(i).
This Court has jurisdiction of this case under 28 U.S.C. § 1334(a). The UST’s Motion to Dismiss is a core proceeding under 28 U.S.C. §§ 157(b)(2). This Memorandum includes the Court’s findings of fact and conclusions of law.

French Motion for Turnover - October 12, 2011

Case No. 09-60937-12

In this Chapter 12 case the Debtors’ Plan was confirmed by Order (Docket No. 206) entered on April 15, 2011. On July 21, 2011, secured creditor CNH Capital America, LLC (“CNH”), filed a “Motion for Order Adjusting Allowed Amount of Secured Claim and for Order Compelling Turnover of Leased Equipment” (“CNH’s Motion”) (Dkt. 231/232) seeking turnover of a Case IH Square Wagon which is listed as CNH’s security on its Proof of Claim No. 10. Debtor filed an objection on the grounds that CNH’s secured claims are dealt with in the confirmed Plan. After due notice a hearing on CNH’s Motion was held at Great Falls on October 7, 2011. CNH was represented by attorney John P. Paul (“Paul”) of Great Falls. Debtors were represented by attorney Gary S. Deschenes of Great Falls, and Debtor Daniel Thomas French testified. CNH’s Proofs of Claim and the Debtors’ confirmed Plan were admitted as Exhibits 1 and 2. At the conclusion of the hearing the Court took the matter under advisement.

 

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Gladwin Chapter 13 Confirmation - February 9, 2011

Case No. 10-62276-13

Pending in this Chapter 13 case is confirmation of Debtor Benjamin W. Gladwin’s (“Gladwin” or “Debtor”) Chapter 13 Plan (Docket No. 4). The Chapter 13 Trustee objects to confirmation on the grounds the Plan fails to satisfy the “disposable income” requirement of 11 U.S.C. § 1325(b) since the Debtor, a “below median” income debtor, proposes to continue making monthly payments on a claim secured by a boat and trailer used solely for recreation. By stipulation the parties agreed to submit this matter on agreed facts and briefs, which have been filed and reviewed by the Court, together with applicable law. This matter is ready for decision. At issue is whether the disposable income requirement of § 1325(b), after enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”), allows a below median income debtor to continue making monthly payments for a debt secured by a boat used solely for recreational purposes. For the reasons set forth below, this Court concludes that the Debtor failed to satisfy § 1325(b)(1)(B), and that the Debtor’s monthly boat/trailer payments are not reasonably necessary to be expended for the maintenance and support of the Debtor or a dependent of the Debtor. This Court’s pre-BAPCPA decision In re Opper, 20 Mont. B.R. 123, 128-30 (Bankr. D. Mont. 2002) (installment payments for a boat and trailer used exclusively for recreation are not reasonably necessary for the maintenance and support of a debtor or dependent of the debtor, and therefore constitute disposable income under § 1325(b)(2)(A)) remains good law. The Trustee’s disposable income objection will be sustained and confirmation denied. This Court has jurisdiction in this Chapter 13 case under 28 U.S.C. § 1334(a). Confirmation of Debtor’s Plan is a core proceeding under 28 U.S.C. § 157(b)(2)(L). This Memorandum includes the Court’s findings of fact and conclusions of law as provided at F.R.B.P. 7052 (applying Fed. R. Civ. P. 52)

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Glacier Stone Supply Motion to Compel - July 25, 2011

Case No. 10-61638-11

In this Chapter 11 case James H. Cossitt (“Cossitt”) of James H. Cossitt, PC, Kalispell, Montana, counsel for the Unsecured Creditors Committee (“UCC”) filed on June 15, 2011, Motions “1) to compel payment of administrative expenses; 2) to compel an accounting of payment of administrative expenses; 3) to suspend further implementation of plan except in strict accordance with the confirmed plan.” (Docket No. 310) (hereinafter “Motions”). The Debtor objected. A hearing on Cossitt’s Motions was held after due notice on July 7, 2011. Cossitt appeared at the hearing. Debtor was represented by attorney James A. Patten of Billings. Cossitt did not testify or offer exhibits, and he objected to any testimony offered by the Debtor on the grounds it would involve offers to compromise prohibited under FED. R. EVID. 408. The Court overruled Cossitt’s objection, and Debtor’s financial manager Jeff Hider (“Hider”) testified. Debtor’s Exhibit (“Ex.”) 6 was admitted without objection. At the conclusion of the parties’ cases-in-chief the Court took Cossitt’s Motions under advisement. After review of the confirmed Plan, the record and applicable law, this matter is ready for decision. For the reasons set forth below Cossitt’s motion to compel will be granted in part and the Motions otherwise denied. The Debtor shall be ordered to pay Cossitt’s administrative claim in full on or before October 31, 2011.

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Hefty Adequate Protection - October 12, 2011

Case No. 11-60039-11

In the above-captioned Chapter 11 cases, after due notice the Court held a hearing at Missoula on September 20, 2011, on “the amount of adequate protection, if any, to be awarded to” Mountain West Bank (“MWB”) as a result of the Debtors’ unauthorized use of MWB’s cash collateral consisting of rents collected from the tenants of the University Condos in Missoula, which the Debtors had assigned to MWB prepetition. Debtors filed on July 5, 2011, a Report (Docket No. 66) and accounting of all rents received and expenditures therefrom through June 30, 2011. Debtors were represented at the hearing by attorney Harold V. Dye (“Dye”) of Missoula, and Debtor Eric Hefty (“Eric”) testified. MWB filed a statement of its position that all of the rents collected should be turned over to MWB, and MWB was represented by attorney Thomas Pardy (“Pardy”) of Helena. No exhibits were admitted. At the conclusion of the hearing the Court took the matter under advisement. After review of Debtors’ Report, the record, and applicable law, the Court is ready for decision. MWB shall be awarded a superpriority expense claim under 11 U.S.C. § 507(a)(1) and (b), to be paid before all other administrative expenses, in the amount of all rents which are MWB’s cash collateral which the Debtors collected since January 12, 2011. In addition, Debtors are ordered to segregate immediately all rents collected from the University Condos into a separate Debtor-in-Possession account (“Segregation Account”) distinct from the Debtors’ general DIP account required by the U.S. Trustee, and Debtors are ordered to deposit all unspent cash collateral into the Segregation Account within ten
(10) days of the date of this Order.

 

Hefty Relief from Stay - June 20, 2011

Case No. 11-60039-11

In the above-captioned Chapter 11 cases, after due notice the Court held hearings at Missoula on May 19, 2011, on the motion to modify stay and the motion for adequate protection filed by Mountain West Bank (“MWB”). The Debtors Eric Warren Hefty (“Eric”) and Cheryl Rae Hefty (together “Heftys”) and The Corner Development LLC (“TCD”) were represented by attorney Harold Van Dye (“Dye”) of Missoula. MWB was represented by attorney Thomas Pardy (“Pardy”) of Helena. Debtor Eric Hefty (“Eric”) testified, and Debtors called real estate broker Ken Staninger (“Staninger”) to testify. MWB called to testify Hefty’s attorney Gary Chumrau (“Chumrau”), appraiser Tom Stuckey (“Stuckey”), and MWB employees Amy Randall (“Randall”), John Seeberger (“Seeberger”) and Ron Zeiler (“Zeiler”). Debtors’ Exhbiits A, C, D, E, F, G, and H, and MWB’s Ex. 1, 1-A, 2, 2-A, 3, 4-A, 5, 5-A,7, 8 and 9 were admitted into evidence. At the conclusion of the parties’ cases in chief the Court took both motions under advisement. For the reasons set forth below, MWB’s motion to modify stay will be denied; and MWB’s motion for adequate protection will be granted in part with respect to Eric’s unauthorized use of rents.

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Hefty Summary Judgment - September 15, 2011

Case No. 11-60039-11

Pending in this adversary proceeding are two Motions for summary judgment (“Motions”) filed by Defendant Mountain West Bank, N.A. (“MWB”) (Docket Nos. 10 and 26) which seek dismissal of the Plaintiff’s complaint. Plaintiffs filed objections and set both motions for hearing on September 20, 2011. Montana Local Bankruptcy Rule (“Mont. LBR”) 7056-1(d) provides that unless the Court orders otherwise, no formal hearing on a motion for summary judgment will be conducted and the Court shall proceed to consider and rule upon the merits of any such motion ....” After review of the Motions, objections, briefs, supporting documents, and the record, for the reasons set forth below both Motions for Summary Judgment will be denied.

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Henry - April 13, 2011

Case No. 11-60118-13

After due notice, the Court held a hearing in this Chapter 13 case on March 11, 2011, on the Debtor’s “Motion for Turnover of Property and Immediate Order Preventing Creditor from Selling or Otherwise Disposing of Property” filed on February 10, 2011 (Docket No. 18), and objection thereto filed by Lithia Chrysler Jeep Dodge of Great Falls (“Lithia”), from which Debtor purchased a 2006 Chevrolet Trailblazer prior to filing his Chapter 13 petition under a Retail Installment Contract and Security Agreement. The parties appeared represented by counsel. Testimony of witnesses was heard and Exhibits (“Ex.”) 1, 2, 3, 4, and 5 were admitted by stipulation. At the conclusion of the parties’ cases-in-chief the Court granted Lithia time to file a reply brief, which has been filed and reviewed by the Court together with the record and applicable law. This matter is ready for decision. For the reasons set forth below Lithia’s objection is overruled, Debtor’s Motion for Turnover is granted, and Lithia shall turn over immediately to the Debtor the 2006 Chevrolet Trailblazer, VIN 1GNET13H462199045.

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Hinesley Family Partnership motion to Appoint Trustee - February 28, 2011

Case No. 10-61822-11

In this Chapter 11 bankruptcy, after due notice, the Court held a hearing on January 4, 2011, in Butte on the Motion to Appoint Case Trustee filed by Charles Hinesley, Jr. on November 24, 2010. Creditors West Jordan, LLC (“West Jordan”) and GCL Investments, LLC (“GCL”) joined in Charles Hinesley, Jr.’s Motion. Charles Hinesley, Jr. was represented at the hearing by Jory C. Ruggiero of Bozeman, Montana; Debtor was represented at the hearing by James A. Patten of Billings, Montana; and GCL Investments, LLC and West Jordan, LLC were represented at the hearing by Robert K. Baldwin and Trent M. Gardner of Bozeman, Montana. Charles Hinesley, Sr. and Morgan Hinesley (“Morgan”) testified; Charles Hinesley, Jr.’s Exhibits 2, 6 and 101, West Jordan’s Exhibit A and Debtor’s Exhibits A and B were admitted into evidence. After hearing witness testimony, the Court granted the parties until January 25, 2011, to file simultaneous briefs, after which time the matter would be deemed submitted and ready for.

 

 

 

Hinesley Family Partnership Objection to Claim - June 21, 2011

Case No. 10-61822-11

In this Chapter 11 bankruptcy, after due notice, the Court held a hearing on June 13, 2011, in Butte on Debtor’s Objection to Proof of Claim No. 2 filed by Charles Hinesley, Jr.� Debtor was represented at the hearing by James A. Patten of Billings, Montana; and Charles W. Hinesley, Jr. was represented at the hearing by Jory C. Ruggiero of Bozeman, Montana. Charles W. Hinesley, Jr. (“Charles”), Petra Hinesley and Charles W. Hinesley, Sr. (“Hinesley Sr.”) testified and Debtor’s Exhibits 48 and 49 and Charles’ Exhibits 2, 6, 10 and 23 were admitted into evidence without objection.

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Hogue Chapter 11 Plan - March 22, 2011

Case No. 10-61143-11

Pending in this Chapter 11 case is confirmation of the Debtor’s Chapter 11 Plan of Reorganization, filed January 7, 2011 (Docket No. 121) (hereinafter the “Plan”). The United States Trustee (“UST”) filed an objection to confirmation on the grounds the Plan is not feasible under 11 U.S.C. § 1129(a)(11) because the Debtor has not shown he has the ability or projections of cash flow to make the monthly payments under the Plan. After a hearing on confirmation held after due notice at Billings on February 22, 2011, this Court took the matter under advisement after the conclusion of the parties’ cases-in-chief. The Court has reviewed the Plan and UST’s objection, the record and applicable law. For the reasons set forth below, the UST’s objection is sustained and confirmation of Debtor’s Plan will be denied. The Court finds that the Debtor has failed his burden of proof to show that his Plan is feasible as required under § 1129(a)(11).

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Hunter v. Silvonen Exception to Discharge - July 14, 2011

Case No. 10-60224-7

In the above consolidated Adversary Proceedings, after due notice, the Court held a trial on May 26, 2011, in Butte. Debtor/Defendant Bradley Jacob Silvonen was represented at trial by
Gregory W. Duncan of Helena, Montana; Plaintiff Jeffery A. Walker (“Walker”) appeared pro se; and Plaintiff Don Hunter (“Hunter”) was represented at trial by Thomas A. Budewitz of Helena, Montana. Hunter’s Exhibits 1 through 33 and 35 through 44, Debtor’s Exhibits A through V, and Walker’s Exhibits 1 through 4 were admitted into evidence without objection. At the conclusion of the trial, the Court took the matter under advisement. The matter is ready for decision. This Memorandum of Decision includes the Court’s findings of fact and conclusions of law.

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Indian National Finals - June 20, 2011

Case No. 11-60113-11

In this Chapter 11 case the Court held a hearing at Great Falls after due notice on April 15, 2011, on the motion to dismiss the case for bad faith filing under 11 U.S.C. § 1112(b)(4) (Docket No. 24) filed by the Apache Gold Casino Resort (hereinafter “Apache Gold”). The Debtor filed an objection and was represented at the hearing in opposition by attorney Steven M. Johnson of Great Falls. Debtor’s general manager Donna Hoyt (“Hoyt”) testified. Apache Gold was represented by attorney Gary S. Deschenes (“Deschenes”) of Great Falls. Debtor’s Exhibits (“Ex.”) 6, 7, 8, 9, 10, 11, and 12 were admitted into evidence without objection. At the conclusion of the parties’ cases-in-chief the Court denied Apache Gold’s motion to dismiss for  bad faith filing at the hearing.
This Court has exclusive jurisdiction of this case under 28 U.S.C. § 1334(a). Apache Gold’s motion to dismiss is a core proceeding under 28 U.S.C. § 157(b)(2). At issue was
1 The written Order denying Apache Gold’s motion to dismiss was entered on April 15, 2011 (Dkt. 89). The Court stated that it would enter this separate Memorandum of Decision.
whether the Debtor filed this Chapter 11 case in bad faith in violation of § 1112(b)(4). This Memorandum includes the Court’s findings of fact and conclusions of law.

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Jonas v. Jonas Motion to Dismiss Adversary - June 30, 2011

Case No. 10-60248-7

Pending in this adversary proceeding is the Defendant Linda B. Jonas’ (“Linda”) motion to dismiss (Docket No. 67) on the grounds that her former spouse, the Plaintiff/Debtor Edwin Ritter Jonas III (“Edwin” or “Debtor”), lacks standing. Edwin filed an objection asserting that he has standing because he commenced the adversary proceeding when the case was under Chapter
11. A hearing on the motion was held at Missoula on May 19, 2011. Linda was represented by attorney Quentin M. Rhoades (“Rhoades”) of Missoula. Edwin was represented by attorney Edward A. Murphy (“Murphy”) of Missoula. No testimony or exhibits were admitted. Argument of counsel was heard, after which the Court took the matter under advisement. After review of the motion, Edwin’s response, the record and applicable law, this matter is ready for decision. For the reasons set forth below Linda’s motion to dismiss will be denied without prejudice.
This Court has jurisdiction of this adversary proceeding under 28 U.S.C. § 1334(b), as it is related to the above-captioned Chapter 7 bankruptcy case. This adversary proceeding includes claims for relief which are core proceedings under 28 U.S.C. § 157(b)(2).

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Jonas Objection to Claim - September 29, 2011

Case No. 10-60248-11

In this Chapter 11 case, after due notice, a hearing was held at Missoula on September 20, 2011, on the Objection filed on August 9, 2011 (Docket No. 204) to Proof of Claim No. 1 filed by Debtor’s former spouse Linda Jonas (“Linda”). The Objection was filed by Creditors John Bloomquist, the law firm Gough, Shanahan, Johnson and Waterman, PLLP, RLK Hydro, Inc., Roderick V. Hannah, and Sandra Hochman (hereinafter referred to together as “Creditors”). Linda did not file a response, but she was represented at the hearing in opposition to the Objection by attorney Quentin M. Rhoades (“Rhoades”) of Missoula. The Debtor was represented by attorney Edward A. Murphy (“Murphy”) of Missoula.
The Creditors did not file a witness and exhibit list, but were represented at the hearing by attorney Ronald F. Waterman (“Waterman”) of Helena. No testimony or exhibits were admitted. The Court heard argument of counsel, and at the conclusion of the hearing the Court took the Objection under advisement. After review of Linda’s Proof of Claim No. 1, attachments thereto, and applicable law, Creditors’ Objection will be overruled by separate Order because Creditors’ failed their burden to overcome the prima facie evidence of the validity and amount of Linda’s Proof of Claim under F.R.B.P. 3001(f).
This Court has jurisdiction of this Chapter 11 case under 28 U.S.C. § 1334(a). Allowance of claims against the estate is a core proceeding under 28 U.S.C. § 157(b)(2)(B).

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Launderville -October 14, 2011

Case No. 11-61117-13

In this Chapter 13 bankruptcy, after due notice, a hearing was held October 4, 2011, in Butte on confirmation of Debtors’ Fourth Amended Chapter 13 Plan filed September 29, 2011.� The Standing Chapter 13 Trustee, Robert G. Drummond of Great Falls, Montana, was present at the hearing. Debtors were represented at the hearing by Daniel R. Sweeney of Butte, Montana; Boomer Oil & Gas, Inc. (“Boomer Oil”) was represented at the hearing by Eli J. Patten of Billings, Montana; and Peoples Bank of Deer Lodge was represented at the hearing by John H. Grant of Helena, Montana. Debtor Gary Joe Launderville, Jack McLeod, William Bandy and Sidney Purinton testified. Exhibits 2, 3, 4 and 5 were admitted into evidence without objection.

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Lodge at Big Sky Motion to Dismiss - June, 2011

Case No. 10-62229-11, Case No. 10-62230-11

In the above-referenced Chapter 11 bankruptcy cases, after due notice, the Court held a hearing on April 4, 2011, in Butte on: (1) the United States Trustee’s Motion to Dismiss filed January 20, 2011, at docket entry no. 51 in Case No. 10-62229; (2) the United States Trustee’s Motion to Convert to Case Under Chapter 7 filed January 20, 2011, at docket entry no. 52 in Case No. 10-62229; (3) First Financial Bank, N.A.’s Joinder in the United States Trustee’s Motion to Dismiss or in the alternative, to Convert to Case Under Chapter 7; and (4) the United States Trustee’s Motion for Order Directing Appointment of Chapter 11 Trustee filed February 1, 2011, in Case No. 10-62230. James A. Patten of Billings, Montana, appeared at the hearing on behalf of The Lodge at Big Sky, Inc. (“Lodge”); Edward A. Murphy of Missoula, Montana, appeared at the hearing on behalf of The Lodge at Big Sky Management Company, LLC (“Management”); Daniel P. McKay of Great Falls, Montana, appeared on behalf of the United States Trustee (“UST”); Benjamin P. Hursh of Missoula, Montana, appeared on behalf of First Financial Bank, N.A. (“First Financial”); and William M. Kebe of Butte, Montana, appeared at the hearing on behalf of Lauren Quackenbush (“Lauren”). Scott Miller, Jeffrey Quackenbush and Lawrence Rezentes testified. First Financial’s Exhibit 4, 5, 6, 7, 8, 10 and 11, and the UST’s Exhibits C, G and H were admitted into evidence without objection.

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McCullough,Sanctions- Novbermber 15, 2011

Case No. 11-61594-7, Case No. 10-62230-11

After due notice, hearing was held in this Chapter 7 case at Missoula on November 10, 2011, on the Debtor’s Motion for Sanctions (“Motion”) (Docket No. 13) against Reid L. Steinfeld and Grant & Weber for garnishment of Debtor’s wages in California on or after the petition date of August 18, 2011. No objection was filed, and no appearance was made at the hearing in opposition to Debtor’s Motion by or on behalf of Reid L. Steinfeld or Grant & Weber. The Debtor Rocky William Wozny-McCullough appeared pro se, and affirmed under oath that he had suffered damages as a result of garnishment of his wages by the Los Angeles Sheriff’s Department post-petition, at the instigation of Reid L. Steinfeld and Grant & Weber, in the amounts of $172.03 and $166.85. At the conclusion of the hearing the Court ordered that the garnished wages, in the total amount of $338.88, shall be paid to the Debtor by Reid L. Steinfeld and Grant & Weber. In addition the Court awarded the Debtor $5.10 for mileage, plus $112.00 for the vacation date Debtor took to attend the hearing, to be paid by Reid L. Steinfeld and Grant & Weber. Finally, the Court imposed punitive damages against Reid L. Steinfeld or Grant & Weber in the amount of $1,500.00 for their failure to take corrective action to prevent the garnishment post-petition, as is required under Ninth Circuit law.

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McHenry - September 30, 2011

Case No. 11-60709-13

In this Chapter 13 bankruptcy, after due notice, a hearing was held July 14, 2011, in Billings on confirmation of Debtors’ Chapter 13 Plan filed April 29, 2011. Ralph Wood Wilkerson of Billings, Montana appeared at the hearing on behalf of the Debtors. The Chapter 13 Trustee, Robert G. Drummond of Great Falls, Montana, also appeared at the hearing. Bank of America, N.A., successor by Merger to BAC Home Loans Servicing, LP, f/k/a Countrywide Home Loans Servicing, LP filed an Objection to confirmation of the Debtors’ Plan on July 9, 2011, on grounds Debtors’ Plan provides for a prepetition arrearage of $4,400.00 when in fact the prepetition arrearage owed Bank of America, N.A. is $6,624.74 as reflected in Proof of Claim No. 12 filed June 8, 2011. Counsel for Bank of America, N.A. did not appear at the hearing.

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Novak, Modify Stay - October 11, 2011

Case N. 11-61302-13

In the above-captioned Chapter 13 case, after due notice, a hearing was held October 4, 2011, in Butte on the Motion to Modify Stay filed by Alexander D. Coutts (“Coutts”) on August 9, 2011, at docket entry no. 20, wherein Coutts seeks relief from the automatic stay pursuant to 11 U.S.C. §§ 362(d)(1) and (d)(2). The Chapter 13 Trustee filed a consent to Coutts’ Motion on August 11, 2011; Debtor Donald James Novak filed an objection to Coutts’ Motion on August 22, 2011, and noticed the matter for hearing. Coutts was represented at the hearing by attorney Scott H. Clement (“Clement”) of Helena, Montana. Debtor was represented by Jon R. Binney (“Binney”) of Missoula, Montana. Debtor and Jenni Bergum Swartz testified and Exhibits 1 and 2 were admitted into evidence without objection. At the conclusion of the parties’ cases-in-chief the Court took Coutts’s Motion under advisement. After review of the Motion, the record, and applicable law, this matter is ready for decision. For the reasons set forth below, a separate Order will be entered granting Coutts’ Motion to Modify Stay.
This Court has jurisdiction of this Chapter 11 case under 28 U.S.C. § 1334(a). Coutts’ Motion to Modify Stay is a core proceeding under 28 U.S.C. § 157(b)(2)(G). Coutts seeks relief from the stay under § 362(d)(1) for “cause” and under § 362(d)(2) alleging the Debtor lacks an equity in Coutts’ Collateral1, and that the Collateral is not necessary to Debtor’s effective reorganization. This Memorandum of Decision includes the Court’s findings of fact and conclusions of law.

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Palmer Motion for Turnover - March 10, 2011

Case No. 10-60099-7

In this Chapter 7 bankruptcy, after due notice a hearing was held February 10, 2011, in Missoula on the Trustee’s Motion for Turnover filed December 16, 2010, wherein the Trustee seeks turnover of the bankruptcy estate’s share of Debtor’s 2009 income tax refunds. The Chapter 7 Trustee, Darcy M. Crum of Great Falls, Montana, appeared at the hearing with her counsel, John P. Paul of Great Falls, Montana. Debtor James V. Palmer also appeared at the hearing with his counsel, James A. Patten of Billings, Montana. The Trustee and Debtor testified and the Trustee’s Exhibit 1 and Debtor’s Exhibits A, B and C were admitted into evidence. At the conclusion of the hearing, the Court granted the parties until February 18, 2011, to file simultaneous post-hearing briefs. The Trustee and Debtor timely filed their respective briefs. For the reasons discussed below, the Court will leave the record open and grant the parties twenty-one days to provide the Court will two calculations as discussed below.

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Parks, Retirement Contribution - June 22, 2011

Case No. 11-60050-13

In this Chapter 13 bankruptcy, after due notice, the Court conducted a hearing on April 12, 2011, in Billings on confirmation of Debtors’ First Amended Chapter 13 Plan filed February 28, 2011, and the objection thereto filed by Chapter 13 Trustee on the ground Debtors’ Plan fails to meet the disposable income requirement appearing at 11 U.S.C. § 1325(b)(1).1 Debtor Barron D. Parks (“Parks”) appeared and testified at the hearing represented by attorney Craig D. Martinson of Billings, Montana. The Standing Chapter 13 Trustee, Robert G. Drummond of Great Falls, Montana, appeared at the hearing in opposition to confirmation of Debtors’ First Amended Chapter 13 Plan. Debtors’ Exhibits A and B were admitted into evidence at the hearing without objection and, with the consent of the Trustee, the Court left the record open for Debtors to file Exhibits C and D. At the conclusion of the hearing the Court granted the parties time to file simultaneous briefs, after which the matter would be deemed submitted and taken under advisement.

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Pulliam, Contempt - March 31, 2011

Case No. 10-60725-7

    In this Chapter 7 case, the Court conducted a hearing at Missoula on March 10, 2011, on the “Motion for Order Requiring Debtors to Show Cause Why They Should Not Be Held in Contempt” (“Motion for Contempt”) (Docket No. 223) filed on January 20, 2011, by the Office of United States Trustee (“UST”) for Debtors’ failure to provide the UST with the address of Debtor Timothy J. Pulliam’s (“Pulliam”) son, Timothy J. Pulliam, Jr. (“Tim Jr.”). Debtors filed an objection on the grounds that they do not know Tim Jr.’s address or phone number, and they were represented at the hearing by attorney Edward A. Murphy (“Murphy”), but Debtors did not attend the hearing in person. The UST was represented by attorney Neal G. Jensen (“Jensen”). The Trustee Richard J. Samson appeared (“Samson”). No testimony or exhibits were admitted, but counsel for the parties did not dispute the basic facts. Murphy stated that the Debtors provided the UST with Tim Jr.’s address in open court on February 10, 2011. However, Murphy admitted that the Debtors failed to timely comply with the UST’s request and this Court’s Order. The Court took the UST’s Motion for Contempt under advisement on the amount of sanctions. After review of the record and applicable law, this Court grants the UST’s Motion and imposes a $1,000 sanction against Timothy James Pulliam under the Court’s civil contempt authority under 11 U.S.C. § 105(a), for the express purpose to coerce the Debtor’s compliance with Court Orders and his duties under the Bankruptcy Code. Timothy James Pulliam shall pay the $1,000 to the Clerk of the Bankruptcy Court within ten (10) days, subject to further proceedings.
    This Court has jurisdiction of this case under 28 U.S.C. § 1334(a). The UST’s Motion for Contempt is a core proceeding under 28 11 U.S.C. § 157(b)(2)(A) concerning administration of the estate. This Memorandum includes the Court’s findings of fact and conclusions of law.

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Rankin Chapter 13 Confirmation - January 21, 2011

Case No. 10-62340-13

    Pending in this case is confirmation of Debtor Casey Rankin’s (“Rankin”) Amended Chapter 13 Plan (Docket No. 23), and objection thereto filed by Larson Lumber Company, Inc. (“Larson Lumber”) (Dkt. 26). The Chapter 13 Trustee Robert G. Drummond previously filed an objection, but withdrew his objection and consented to confirmation on January 3, 2011. The Internal Revenue Service (“IRS”) also withdrew its objection. Larson Lumber objects that Debtor’s Plan is not proposed in good faith as required for confirmation under 11 U.S.C. § 1325(a)(3) because of the Debtor’s failure to amend his Schedules timely and his omission of assets. A hearing on confirmation was held at Missoula on January 6, 2011. Rankin appeared and testified, represented by attorney Edward A. Murphy (“Murphy”) of Missoula. Larson Lumber was represented by attorney James H. Cossitt (“Cossitt”) of Kalispell. The Trustee appeared. No exhibits were admitted. The Court took judicial notice of Schedules, Statements of Financial Affairs (“SOFA”), and the IRS’s Proof of Claim 6 filed in this case. At the conclusion of the parties’ cases-in-chief the Court took the matter under advisement. After review of the record, Larson Lumber’s objection is overruled and Debtor’s amended Plan will be confirmed for the reasons set forth below.
    This Court has jurisdiction in this Chapter 13 case under 28 U.S.C. § 1334(a). Confirmation of Debtor’s Plan is a core proceeding under 18 U.S.C. § 157(b)(2)(L). This Memorandum includes the Court’s findings of fact and conclusions of law.

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Security Bank v. Eisenbarth Deny Discharge - July 15, 2011

Case No. 10-61326-7,  Adv No. 10-00083

    In this Adversary Proceeding, after due notice, trial was held June 6, 2011, in Billings on Plaintiff Security First Bank’s complaint to deny Debtor/Defendant Jamey R. Eisenbarth’s (“Jamey”) discharge under 11 U.S.C. §§ 523(a)(2) and 523(a)(6). Security First Bank was represented at the trial by Eli J. Patten of Billings, Montana; Jamey was represented by Mark Hilario of Billings, Montana. Jamey, Ronald Peters (“Ron”), Don Middleton and Karen Eisenbarth (“Karen”) testified. Security First Bank’s Exhibits 1 through 39, 41, 42 and 43 were admitted into evidence. At the conclusion of the trial, the Court granted the parties time to file post-trial briefs. The briefs have been filed and the matter is now ready for decision. This
Memorandum of Decision includes the Court’s findings of fact and conclusions of law.

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South Gillespie - July 13th, 2011

Case No. 11-60071-13, Adv No. 11-00036

    In this Adversary Proceeding, after due notice, the Court held a hearing on July 12, 2011, in Butte on Defendant Sheryl South-Gillespie’s Motion to Dismiss Adversary Proceeding filed May 17, 2011. Plaintiff Banner Bank was represented at the hearing by Harold V. Dye of Missoula, Montana. Defendant Sheryl South-Gillespie was represented at the hearing by Gregory G. Gould of Helena, Montana. The Court argument from the attorneys, but neither party presented any witness testimony and no exhibits were offered into evidence.
    Plaintiff filed a 15-page complaint against Defendant on April 15, 2011, alleging that Defendant, in her capacity as bookkeeper for Superior Propane, LLC (“Superior”), made 1 negligent misrepresentations to Plaintiff. Based upon the alleged negligent misrepresentations, Plaintiff seeks to recover money and/or property and to except amounts owed to Plaintiff from Defendant’s discharge under 11 U.S.C. §§ 523(a)(2) and (a)(4). Defendant seeks to dismiss Plaintiff’s complaint pursuant to FED. R. CIV. P. 12(b)(6).

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Tamcke Compensation - March 2011

Case No. 09-60833-12

    In this Chapter 12 bankruptcy, after due notice, a hearing was held February 14, 2011, in Butte on over secured creditor Peoples Bank of Deer Lodge’s (“Peoples Bank”) Application for Professional Fees and Costs filed December 16, 2010, wherein Peoples Bank requests approval of fees in the amount of $18,584.25 and costs in the amount of $308.34. Debtor objects to approval of $1,892.50 of the requested fees. John H. Grant of Helena, Montana appeared at the hearing on behalf of Peoples Bank; James A. Patten of Billings, Montana appeared at the hearing on behalf of Debtor. Exhibit 1 was admitted into evidence without objection. 

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Tamcke Remove Professional - November 2011

Case No. 09-60833-12

In this Chapter 12 bankruptcy, the Chapter 12 Trustee, James D. Volk, filed on June 14, 2011, a “Motion for Order Terminating Employment of Realtor James C. Lane of Realty West/Lane & Associates, to Direct Debtor to Negotiate New Listing With Big Sky Brokers, and Notice,” to which Debtor filed opposition. On September 29, 2011, Debtor and the Trustee filed a Stipulation to Submit Dispute on Agreed Facts, which agreed facts are as follows:

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UST v. Buck Deny Discharge - March 10, 2011

Case No. 10-60383-7,  Adv No. 10-00097

    In this adversary proceeding the Plaintiff United States Trustee (“UST”) filed on February 4, 2011, a Motion (Docket No. 12) seeking summary judgment against Defendant Jesse W. Buck (“Buck”) together with a Statement of Uncontroverted Facts (“SOUF”), supporting memorandum, and exhibits. The UST moves for summary judgment denying Buck’s discharge under 11 U.S.C. §§ 727(a)(2)(A) and (B) for transferring or concealing property with intent to hinder, delay or defraud creditors and the Trustee, and under § 727(a)(4) for knowingly and fraudulently making false oaths on his Schedules and SOFA by failing to list property and transfers of property. Buck filed a response (Dkt. 16) in opposition in which he admits the transfers and failure to disclose property, but denies that the transfers and omissions were made with fraudulent intent and argues that he amended his petition to address the UST’s “concerns with the tax refund, the three horses, the utility trailer, and the riding lawn mower.” Buck did not file a Statement of Genuine Issues as provided at Montana Local Bankruptcy Rule (“Mont. 1 LBR”) 7056-1(a)(2) . The Court has reviewed the Motion and Buck’s response, and the UST’s reply, together with the record and applicable law. This matter is ready for decision. For the reasons set forth below, the UST’s Motion for summary judgment will be granted and Judgment entered denying Buck’s discharge under §§ 727(a)(2) and (a)(4).
    This Court has jurisdiction in this adversary proceeding under 28 U.S.C. § 1334(b). The UST’s objections to Buck’s discharge are core proceeding under 28 U.S.C. § 157(b)(2)(J). This Memorandum of Decision includes the Court’s findings of fact and conclusions of law pursuant to F.R.B.P. 7052.

 

 

 

 


 

Weist and Sons Modify - February 18, 2011

Case No. 10-60096-12, Case No. 10-60098-12, Case No. 09-62299-12

    In these consolidated Chapter 12 cases the Trustee James D. Volk filed on January 14, 2011, a Motion (Docket No. 147) to modify the Debtors’ confirmed Plan pursuant to 11 U.S.C. § 1229, seeking to require payment to unsecured creditors in all three cases . Debtors filed an objection on the grounds that the confirmed Plan is res judicata and binds the Trustee and other parties under § 1227(a), because the Plan’s omission of payments to unsecured creditors was set out in the Plan and spreadsheets attached thereto. After review of the Motion, objection, the record and applicable law, and after a hearing, the Trustee’s Motion will be denied for the The Plan as confirmed makes payments to creditors who filed unsecured claims in Case No. 10-60096-12, but makes no payment to unsecured creditors in the other two cases. reasons set forth below.
    A hearing on the Trustee’s Motion was held after due notice at Great Falls on February 11, 2011. The Chapter 12 Trustee James D. Volk appeared represented by attorney Darcy M. Crum (“Crum”) of Great Falls, Montana. Debtors were represented by attorney Steven M. Johnson of Great Falls. No testimony or exhibits were offered or admitted into evidence at the hearing. The Court heard argument of counsel.
Counsel agreed that approximately sixteen (16) unsecured creditors which filed Proofs of Claim in Case Nos. 10-60098-12 and/or 09-62299-12, receive no treatment or payments under the Debtors’ confirmed Plan. Johnson explained that the four unsecured claims filed in the lead Case No. 10-60096-12 are to receive payments under the confirmed Plan, but the Plan omitted any payment to unsecured creditors listed in the other two Chapter 12 cases because, in the event of liquidation under Chapter 7, those creditors would receive $0 distribution. On behalf of the Trustee, Crum admitted that the spreadsheets attached to confirmed Plan leave out the unsecured creditors Case Nos. 10-60098-12 and 09-62299-12, and she admitted that the Trustee “did not catch” that those unsecured creditors were left out. The Trustee argued that there would be no prejudice to any claimant from modification, that the Trustee is authorized to move for modification, and that the Debtors have enough funds to pay the 16 omitted unsecured creditors and they should be paid because these cases were substantively consolidated for all purposes. Crum and Johnson stated that no unsecured creditors have contacted the Trustee in these cases, or the Debtors, regarding their treatment under the Plan.
    This Court has exclusive jurisdiction in this Chapter 12 case under 28 U.S.C. § 1334(a). The Trustee’s Motion to modify Debtors’ confirmed Plan is a core proceeding under 28 U.S.C. § 157(b)(2). This Memorandum includes the Court’s findings of fact and conclusions of law.

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Yellowstone Club Confirmation - September 30, 2011

Case No. 08-61570-11, Case No. 08-61571-11, Case No. 08-61573-11, Case No. 08-61572-11
    The Court is tasked with writing yet another chapter in the Yellowstone Club bankruptcy saga, which has been ongoing for almost three years. If this were a book, the reader would most likely read the chapters of the saga in sequence and in a relatively compressed period of time.
But this is not a novel and one cannot thumb through a prior chapter to glean a forgotten fact. Thus, the Court directs the reader to prior chapters (Memoranda of Decision and Orders) that provide some insight as to why another chapter is necessary. Relevant facts may be found in this Court’s Memorandum of Decision and Order entered in this case at docket entry nos. 1025 and 1026. One may also look at the Memoranda of Decision, Order and Judgment found at docket entry nos. 292, 293, 575 and 582 in related Adversary Proceeding 09-00014, Timothy L. Blixseth v. Marc S. Kirschner, Trustee of the Yellowstone Club Liquidating Trust. Along these same lines, the Court also granted various requests for judicial notice found at docket entry nos. 2203, 2209, 2224 (including its attached Exhibit A summarizing the claims processed or prosecuted by the Liquidating Trustee under the plan), 2228 and 2240.
   The matter presently before the Court stems from a Memorandum of Decision and Order entered by the Court in the above-referenced Chapter 11 bankruptcy cases on June 2, 2009, at docket entry nos. 1025 and 1026 approving the Yellowstone Club Settlement Term Sheet and confirming the Debtors’ Third Amended Joint Plan of Reorganization filed May 29, 2009, at docket entry no. 995. Timothy L. Blixseth (“Blixseth”) appealed this Court’s June 2, 2009, Order to the United States District Court for the District of Montana on three separate grounds:
(1) whether this Court erred in approving the Plan’s exculpatory clauses and releases in favor of third parties in the Plan; (2) whether this Court erred in determining the Plan was proposed in good faith when the question of the Debtors’ bad faith remained as an unresolved factual issue in a pending adversary proceeding; and (3) whether this Court erred in approving the settlement incorporated into the Plan without a motion to approve the settlement, notice of motion, and hearing as required under F.R.B.P. 9019(a). In a Memorandum and Order entered November 2, 2010, United States District Judge Sam E. Haddon declined to rule on the issue of good faith, stating “determination of this issue on the present record is premature and unnecessary at this time.” On the other two questions presented, Judge Haddon reversed and remanded. First, Judge Haddon held this Court erred when it pcm of the Debtors’ Plan without appropriate notice and opportunity for all parties to object to a certain settlement that was incorporated into the Plan. Judge Haddon also reversed and remanded, so this Court could, “to the extent feasible . . . explicitly identify and delineate those persons or representatives determined to be within the scope of the release parameters of Section 524(e) and to state the reasons why it reached such conclusions.”

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Yellowstone Club Disqualify Judge - February 25, 2011

Case No. 08-61570-11

    In this Chapter 11 bankruptcy, after due notice, a hearing was held January 18, 2011, in Butte on Timothy L. Blixseth’s (“Mr. Blixseth”) Amended Motion to Disqualify Bankruptcy Judge Kirscher (With Exhibits) filed November 30, 2010, at docket entry no. 2042. Mr. Blixseth’s Motion is accompanied by an Amended Affidavit of Timothy L. Blixseth in Support of Motion to Disqualify. See docket entry no. 2043. Mr. Blixseth filed a Supplemental Affidavit on January 17, 2011, at docket entry no. 2117. Mr. Blixseth also filed his Amended Motion and Amended affidavit on December 14, 2010, in Adversary Proceeding Nos. 09-00014, 09-00018, 09-00064. 10-00015, and 10-00088. Mr. Blixseth was represented at the January 18, 2011, hearing by Michael J. Flynn (“Mr. Flynn”) of Boston, Massachusetts, Christopher J. Conant of Denver, Colorado and Patrick T. Fox of Helena, Montana. Mr. Blixseth’s other counsel of record in these proceedings include Benjamin A. Schwartzman, Brent Bastian, Wade L. Woodard, Thomas A. Banducci and Jennifer Schrack Dempsey of Boise, Idaho, Joel E. Guthals of Billings, Montana, Philip H. Stillman of Encinitas, California, and Daniel D. Manson and Gregory C. Black of Butte, Montana. At the conclusion of Mr. Flynn’s oral argument, the Court took the matter under advisement.

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Yellowstone Club Objection to Claims - October 12, 2011

Case No. 08-61570-11, Case No. 08-61571-11, Case No. 08-61573-11

Case No. 08-61572-11

Pending in the above Chapter 11 bankruptcy cases is a portion of the Yellowstone Club Liquidating Trust’s (“YCLT”) Third and Fourth Omnibus Objections to Claims filed December 29, 2009, in which YCLT objects to Proof of Claim Nos. 695, 696, 698, 699, 702, 703, 704 and 705. A hearing on YCLT’s objection to Proof of Claim Nos. 695, 696, 698, 699, 702, 703, 704 and 705 was scheduled for February 5, 2010, but was continued to April 6, 2010, and then June 23, 2010, September 20, 2010, October 7, 2010, and November 2, 2010.
In a joint motion filed October 29, 2010, YCLT and each of the claimants who filed Proof of Claim Nos. 695, 696, 698, 699, 702, 703, 704 and 705 agreed to continue the November 2, 2010, hearing without date, to permit YCLT to file a motion for summary judgment and for the Court to rule on said motion. As contemplated in the joint motion, YCLT filed a Motion for Summary Judgment, Docket No. (“dkt.”) 1998, of Dolan Family Proof of Claim Nos. 695, 696, 698, 699, 702, 703, 704 and 705. YCLT’s Motion for Summary Judgment is accompanied by a Memorandum in Support of Motion for Summary Judgment, dkt. 1999, a Declaration of Robert L. Sterup, dkt. 2002, and a Statement of Uncontroverted Facts, dkt. 2000. The Dolan Family, through counsel, filed a response to the Motion for Summary Judgment, dkt. 2057.
    Pursuant to an Order entered December 3, 2010, the Court has held YCLT’s aforementioned objections in abeyance while various parties appealed Judge Haddon’s November 2, 2010, Memorandum and Order to the Ninth Circuit Court of Appeals. The appeal was dismissed and this Court has since entered a subsequent Memorandum of Decision and Order, dkt. 2352, in response to Judge Haddon’s November 2, 2010, Memorandum and Order. In addition, YCLT filed on July 6, 2011, a Reply Memorandum in support of its Motion for Summary Judgment, dkt. 2200. YCLT’s Motion for Summary Judgment is ready for decision.

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Yellowstone Club Reconsideration  - August 29, 2011

Case No. 08-61570-11, Case No. 08-61571-11, Case No. 08-61573-11,

Case No. 08-61572-11

In the above-referenced Chapter 11 bankruptcy cases, Robert Sumpter (“Sumpter”), through counsel, filed a Motion for New Trial or to Alter or Amend Judgment (Rule 9023) on August 10, 2011. Sumpter filed a Brief in support of the above Motion on August 15, 2011. In response thereto, the Debtors and CrossHarbor Capital Partners LLC (“CrossHarbor”) filed on August 22, 2011, a “Joint Procedural Objection for Failure to Comply With Local Bankruptcy Rules, or in the alternative, Motion for Extension of Time Within Which to File Response to Robert Sumpter’s Untimely Brief in Support of a New Trial or to Alter or Amend Judgment (Rule 9023).” On August 23, 2011, Marc S. Kirschner, as Trustee of the Yellowstone Club Liquidating Trust joined the Debtors and CrossHarbor’s combined Joint Procedural Objection or Motion for Extension of Time. After review of record, the Court denies Sumpter’s Motion for New Trial or to Alter or Amend Judgment (Rule 9023).

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