US Bankruptcy Court SDOH Docket Feed

In re Elms - Chapter 13 Trustee Must Return Funds to Debtors

This opinion resolved a previously unsettled procedural question in the S.D. Ohio bankruptcy court: what must a Chapter 13 Trustee do with funds held at the time a post-confirmation case is dismissed. The court rejected the Trustee's position that funds should be distributed to creditors pursuant to the confirmed plan, and instead ordered the return of funds to debtors in six cases (totaling $6,893.26 across Elms, Mitchell, Clang, Rose, Miller, and Brock). The court held that absent circumstances authorizing it to order otherwise under 11 U.S.C. § 349(b), the Trustee is legally required to distribute remaining debtor payments to the debtors themselves, not to creditors. Trustees and debtors' counsel in this district must now adjust their post-dismissal procedures accordingly.

In re Montgomery: Camper Residence Qualifies for Ohio Homestead Exemption

The United States Bankruptcy Court for the Southern District of Ohio overruled Chapter 7 Trustee Susan L. Rhiel's objection to debtor Edward R. Montgomery's homestead exemption claim. The court held that Montgomery's two-bedroom travel camper, parked on his property at 1954 Laurel Ridge Road, Piketon, Ohio, qualified as a residence under Ohio Revised Code § 2329.66(A)(1)(b). The property was valued at $83,330.00 with $70,805.77 in creditor claims filed. The court rejected the Trustee's argument that only the house—occupied by Montgomery's non-dependent grandson—could qualify, finding the statute requires only that property be used as a residence without specifying type, size, or quality.

In re ASPC Corp. — Denies S&W Distribution Agreement Assumption in Chapter 11

The US Bankruptcy Court for the Southern District of Ohio denied approval of the assumption and assignment of a firearms distribution agreement (Distributor Agreement) between debtor ASPC Corp. and Smith & Wesson Corp., ruling in favor of the debtor and the Official Committee of Unsecured Creditors. The court found that Ellett Brothers, LLC failed to designate the Distributor Agreement for assumption and assignment before the two-day pre-closing deadline set by the asset purchase agreement. Additionally, the Sale Order contained negotiated language permitting parties to object to the assumption and assignment 'for any reason,' which unambiguously covered the estate's objection that the assignment would eliminate ASPC Corp.'s $4.2 million preference claim against Smith & Wesson.