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Summarizing by Amir Shachmurove

Williams v. Living Hope Southeast, LLC

Williams v. Living Hope Southeast, LLC, No. 14-6030 (BAP 8th Cir. Jan. 29, 2015)
The BAP for the 8th Circuit affirmed the order of the bankruptcy court (W.D. Ark - Texarkana) denying debtor's motion for reconsideration following the bankruptcy court's sanction order. The BAP concluded that the bankruptcy court did not err in first concluding that debtor violated Rule 9011, and then in awarding fees and costs to the movant as the prevailing party. Debtor failed to support with evidence his assertion that he was unable to pay, and BAP ruled that ability to pay was not a factor for consideration under Rule 9011(c)(1)(A).
Procedural context:
Bankruptcy court (W.D. Ark. - Texarkana) granted Chapter 7 trustee's motion for sanctions under Rule 9011 against debtor, and debtor moved for reconsideration, asserting he was unable to pay, trustee was not the proper party, and other arguments. The bankruptcy court denied the motion for reconsideration, and debtor appealed to the BAP for the 8th Circuit.
Chapter 7 debtor, an attorney, was the controlling principal of two entities that were also in bankruptcy. The trustee of debtor's case commenced an avoidance action seeking to recover property transferred by debtor. Debtor sought to intervene, and the bankruptcy court denied the motion. After the bankruptcy court entered various orders in favor of trustee, debtor appealed the orders. On the 364th day after entry of the orders, while the appeal was pending, debtor moved to vacate the orders pursuant to Rule 60(b) and (d). The trustee moved to impose sanctions against debtor under Rule 9011 for the Rule 60 motion. The bankruptcy court denied debtor's Rule 60 motion because debtor was not a party to the adversary proceeding, and granted trustee's Rule 9011 motion for sanctions, awarding the trustee over $19,000 in fees in responding to debtor's motion and in filing the Rule 9011 motion, plus an additional sanction of approximately $1,700 as a deterrent from future misconduct. Debtor moved for reconsideration, which the bankruptcy court denied. Debtor appealed to the BAP for the 8th Circuit.
Federman, Schermer, and Shodeen

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