Colorado Bankruptcy Options - Loans and Mortgages
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Recent Notable Opinions from Colorado Bankruptcy Courts
Weinman v. Miscio & Stroud, et al., Adversary Proceeding No. 03-1109-SBB decided January 30, 2004 by the
Colorado Bankruptcy Court. The trustee in this Chapter 11 case filed an adversary complaint under 11 USC.547 &
550 to avoid preferential transfers against a corporation and two individuals. The trustee contended the debtor
tendered 2 prohibited payments totaling $29,000 to the corporation within 90 ninety days before the petition was
filed. The complaint further alleged that the corporation subsequently transferred these payments to the
individual defendants in separate installments. While the adversary complaint was pending before the Colorado
Bankruptcy Court, the corporation agreed to accept a default judgment. The trustee's complaint asserted two
claims for relief: 1) the transfers to the corporation were voidable as preferences according to 11 USC
547(b), and 2) "In the alternative, the [corporation] upon receipt of the funds was obligated to immediately
disburse the funds to the [two individuals]. Therefore, the corporation was merely a conduit, and [the two
individuals] are initial transferees." The corporation failed to answer the complaint yet indicated to the
trustee's office it did not object to a default judgment entered by the Colorado Bankruptcy Court. After entry
of the default judgment, the 2 individuals sought dismissal of the complaint upon the pleadings based upon the
doctrine of election of remedies. The Colorado Bankruptcy Court held: Because the corporation was insolvent,
controlled by the individuals, and retained questionable authority to accept a default judgment, the Colorado
Bankruptcy Court was not prohibited to allow the trustee to seek reimbursement from the individuals.
Recent Notable Opinions of the Supreme Court of The United States:
Archer v. Warner, Docket Number: 01-1418 IN THE SUPREME COURT OF THE UNITED STATES ON PETITION FOR WRIT OF
CERTIORARI, Argued January 13, 2003, Decided March 31, 2003. Leonard and Arlene Warner sold the Warner Manufacturing
Company to Elliott and Carol Archer. Later, the Archers sued the Warners for fraud related to the sale. This suit
was settled. According to the settlement agreement, the Archers released the Warners of all liability except for a
$100,000 promissory note. After the suit was voluntarily dismissed, the Warners defaulted on the first payment
due on the note. The Archers then sued the Warners for collection in state court, and in turn, the Warners filed
Chapter 7. The Archers objected to the discharge of their note. The Code states a debt shall not be dischargeable
"to the extent it is for money obtained by false pretenses, a false representation, or actual fraud."
This motion was denied and discharge of liability for payment of the note was granted. The District Court and Court
of Appeals affirmed. Held: In a 7-2 opinion, the Court concluded "the Archers' settlement agreement and release
of liability may have worked a kind of novation, but that fact does not bar the Archers from showing that the
settlement debt arose out of 'false pretences, a false representation, or actual fraud,' and consequently is
nondischargeable." If a release of liability is obtained by fraud, the release within the agreement is voidable.
The resources we include on link pages pertain in some way to Colorado Bankruptcy cases, whether laws, rules of
evidence, rules of procedure, confirmation, discharge, reorganization, or one of many other topics . Large bodies
of law pertain to Colorado Bankruptcy proceedings must be honored by the courts. As new Colorado Bankruptcy laws are
established each year, the scope of this website will continue to expand.
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