Debtor, formerly a successful neurologist, filed chapter 7 bankruptcy after losing his medical license, being sued for wrongful death arising from prescription drug overdose deaths of two of his patients, and divorcing from his wife. Two wrongful death plaintiffs filed claims in the bankruptcy case. The UST filed this adversary proceeding objecting to Debtor’s discharge under various provisions of Section 727(a).  The chapter 7 trustee subsequently filed an adversary proceeding seeking to avoid alleged fraudulent transfers from Debtor to his wife and son. The chapter 7 trustee, the fraudulent transfer defendants, and the two claimants reached a settlement agreement resolving the chapter 7 trustee’s adversary proceeding, and leaving the estate with no unpaid creditors. Based on the settlement agreement, Debtor filed a motion for summary judgment asking the Court to grant his discharge as a matter of “discretion” and, in the alternative, seeking dismissal of the UST’s complaint as moot.  The Court held the UST’s complaint is not moot because discharge is a significant privilege reserved for honest debtors, and the UST is charged with protecting the integrity of the bankruptcy code. The Court also held that it does not have discretion to grant debtor a discharge if the UST can prove that Debtor’s conduct satisfies one of the enumerated exceptions to discharge stated in Section 707(a). Debtor’s motion for summary judgment is denied.

Debtor filed a complaint seeking to discharge her student loans based on a theory of undue hardship. Debtor, who is participating in an income based repayment plan, based her undue hardship complaint primarily on the potential tax consequences that may arise if the balance of her student loan debt is discharged at the end of her repayment term. Based on Debtor’s interrogatory responses, in which she appeared to concede that she could afford her monthly repayment obligation, Defendant sought summary judgment on the ground that Debtor cannot satisfy the Brunner test. Defendant is entitled to partial summary judgment that the potential tax consequences of student loan debt forgiveness, by themselves, are not enough to render the debt dischargeable. Because Debtor’s response to the summary judgment motion raised genuine issues of material fact about whether Debtor can afford her monthly repayment obligation, the balance of the motion is denied.

Parties filed cross-motions for summary judgment regarding whether an avoidance action was barred by the statutes of limitations imposed by 11 U.S.C. §§ 546(a)(2) and 550(f)(2). The Court found the statutes of limitations applicable and found for Defendant because neither the “properly and finally closed” exception nor equitable tolling applied and because the Plaintiff did not try to set aside the final decree under Federal Rule of Bankruptcy Procedure 9024.

Plaintiffs in this adversary proceeding against a national title insurer and a local title company brought a successor-liability claim against the entity that purchased the local title company years after the events underlying the lawsuit.  Following the general rule in New Mexico and throughout the country that buyers of business assets are not liable for the seller’s debts, the Court granted summary judgment in favor of the purchasing entity.