US Trustee moved to dismiss or convert a chapter 7 case under Sec. 707(b). The court granted the motion, finding: (1) debtor was limited to the IRS standard expenses for housing, not his actual expenses; (2) debtor could not claim a vehicle operation expense for a 5^th wheel trailer; (3) Debtor’s “special circumstances” arguments based on those two expense items were without merit; and (4) the totality of the circumstances demonstrated abuse.

Claimants and Debtor entered into a post-petition oral agreement for repair to claimants’ van. Claimants filed an application for administrative expense based on Debtor’s  alleged improper repair and damage to their van while in Debtor’s possession. The Court determined that damages arising from a breach of a post-petition contract made in the ordinary course of a chapter 11 debtor’s business operations can constitute an administrative expense claim under § 503. Claimants did not meet their burden of proving that Debtor breached the oral contract’s implied warranty to use reasonable skill to complete the repairs, but established that Debtor breached the implied warranty to complete repairs within a reasonable time, entitling claimants to an allowed administrative expense for loss of use damages equal to the cost of renting a vehicle for the unreasonable period of delay, less the amount to be charged for repairs under the oral agreement to repair the van. 

Debtor sought relief under Rule 59(e) from the Court’s order dismissing debtor’s chapter 11 case. The Court dismissed debtor’s case for “cause” under § 1111(b), concluding that debtor’s plan impermissibly modified the secured creditor’s claim, which was secured solely by debtor’s principle residence, in violation of § 1123(b)(5)’s anti-modification prohibition. Although some case law supports debtor’s position, the Court already considered those cases in ruling on the motion to dismiss or convert, and determined as a matter of law that debtor was required to pay all pre-confirmation arrears in full by the plan effective date in order to satisfy the anti-modification prohibition of § 1123(b)(5). Debtor’s alleged errors in the court’s findings of fact would not have changed the result; debtor’s arguments regarding “indubitable equivalent” are not relevant to whether debtor’s plan was facially unconfirmable under § 1123(b)(5); and debtor’s remaining arguments did not meet the standard for Rule 59(e) relief.

The issue before the Court was whether the New Mexico exemptions, apart from the $500 wildcard exemption, allow a debtor to exempt all or any part of the federal Earned Income Tax Credit (EITC), or its New Mexico counterpart, the New Mexico Working Families Tax Credit (WFTC). The Trustee objected to Debtor’s claim of exemption in her EITC and WFTC except for the wildcard exemption. The Court found that the EITC and WFTC are a form of public assistance for low income wage earners that is not dependent on whether the wage earner pays or has overpaid any taxes. Unlike several other states, New Mexico does not have an exemption specific to the EITC or WFTC or an exemption applicable to public assistance benefits generally. While New Mexico does have an exemption for public assistance benefits, the exemption is limited to benefits payable or paid under the N.M. Public Assistance Act, which does not include the EITC or WFTC. The Court therefore sustained the Trustee’s objection to Debtor’s claim of exemptions.