ASSIGNMENT
1. Freelin Conn filed a voluntary petition under Chapter 7 of the Bankruptcy Code on September 30, 2017. Conn listed BancOhio National Bank as having a claim incurred in October 2016 in the amount of $4,000 secured by an eight-year-old automobile. The car is listed as having a market value of $3,500. During the period from June 30, 2017, to September 30, 2017, Conn made three payments totaling $439.17 to BancOhio. May the trustee in bankruptcy set aside those three payments as voidable preferences? Explain.
2. David files a bankruptcy petition under Chapter 13. After the claims of secured and priority creditors have been satisfied, David’s remaining bankruptcy estate has a value of $100,000. David’s creditors with allowed unsecured claims are owed $250,000 in total. Chris, an unsecured creditor, is owed $13,500. David’s Chapter 13 plan proposes to pay Chris $150 per month for three years. Should the bankruptcy court confirm David’s plan? Explain.
3. Yolanda Christophe filed a bankruptcy petition under Chapter 13. Her scheduled debts consist of $11,100 of secured debt, $9,300 owed on an unsecured student loan, and $6,960 of other unsecured debt. Christophe asserts that the student loan is non-dischargeable, and that assertion has not been questioned. Christophe’s proposed amended Chapter 13 Plan calls for fifty-six monthly payments of $440 a month. The questioned provision in that Plan is the division of the unsecured creditors into two classes. The general unsecured creditors would receive 32 percent, while the separately classified student loan creditor would receive 100 percent. Should this plan be confirmed? Why or why not?
4. On December 17, ZZZZ Best Co., Inc. (the debtor), borrowed $7 million from Union Bank (the bank). On July 8 of the following year, the debtor filed a voluntary petition for bankruptcy under Chapter 7. During the preceding ninety days, the debtor had made interest payments of $100,000 to the bank on the loan. The trustee of the debtor’s estate files a complaint against the bank to recover those payments as a voidable preference. The bank argues that the payments were not voidable because they came within the ordinary course of business exception. The trustee maintains that the exception applies only to short-term, not long term, debt. Who is correct? Explain.
5. A landlord owned several residential properties, one of which was subject to a local rent control ordinance. The local rent control administrator determined that the landlord had been charging rents above the levels permitted by the ordinance and ordered him to refund the wrongfully collected rents to the affected tenants. The landlord did not comply with the order. The landlord subsequently filed for relief under Chapter 7 of the Bankruptcy Code, seeking to discharge his debts. The tenants filed an adversary proceeding against the landlord in the bankruptcy court, arguing that the debt owed to them arose from rent payments obtained by “actual fraud” and that the debt was therefore non-dischargeable under §523(a)(2)(A) of the Bankruptcy Code. They also sought treble damages and attorneys’ fees and costs pursuant to the State Consumer Fraud Act. The bankruptcy court ruled in favor of the tenants, finding that the landlord had committed “actual fraud” within the meaning of §523(a)(2)(A) and that his conduct violated State law. The court therefore awarded the tenants treble damages totaling $94,147.50.
Does the Bankruptcy Code bar the discharge of treble damages awarded on account of the debtor’s fraud? Explain.
