OpinionsSeveral months after the Chapter 13 debtor received his discharge, his ex-wife commenced an adversary proceeding to revoke the discharge under 11 U.S.C. § 1328(e), alleging that the debtor falsely certified on Local Form 2831 that he was current on all domestic support obligations and that he was self-employed (when he was employed at Milwaukee Public Schools). The parties filed cross-motions for summary judgment. While both parties debated whether the debtor was current on his DSO obligations at the time (and thus obtained his discharge through fraud), neither addressed the statutory requirement that “the requesting party did not know of such fraud until after such discharge was granted.” Under applicable caselaw, the latter requirement is stringent. Actual lack of knowledge is insufficient; instead, the plaintiff must prove not only that she did not know, but could not have known, about the fraud. Because the record established that the plaintiff should have known that the debtor had certified (allegedly fraudulently) that he was current on all domestic support obligations, she failed to plead a required element of her case, and the Court dismissed the complaint with prejudice. In re Cytophil, Inc., Case No. 25-20576 (June 2026) -- Judge G.M. Halfenger Several years before filing a chapter 11 bankruptcy petition, the debtor hired the Jansson Munger & McKinley Ltd. law firm to represent it in defending against patent claims and to press counterclaims against its adversary. The firm represented the debtor in the litigation through dismissal of all claims, but the debtor didn't timely pay the firm's bills. The parties' engagement agreement required immediate payment of monthly invoices, but, although the debtor made partial payments through April 2018, it owed the firm more than $1.3 million when the litigation ended in June 2019. The debtor filed its bankruptcy petition on February 4, 2025, listing the firm as an unsecured creditor with a claim of about $1.3 million that was liquidated and undisputed. The firm filed a proof of claim for the same amount to which another creditor objected. The objecting creditor contended that the claim was barred in substantial part by Wisconsin's six-year statute of limitations, Wis. Stat. §893.43(1), because the monthly invoices were due on receipt and most of them were more than six years old when the debtor filed its bankruptcy case. The court overruled the claim objection. It opined that under governing Wisconsin law the firm's breach of contract claim for the total amount of unpaid legal services did not accrue until the firm's duty to continue representing the debtor in the litigation ended with the dismissal of all claims in June 2019, less than six years before the debtor filed its bankruptcy petition. In re Wisconsin & Milwaukee Hotel, LLC, Case No. 24-21743 (May 2026) -- Judge G.M. Halfenger The chapter 11 debtor filed a motion under Federal Rule of Civil Procedure 60(b)(5) to modify the court's May 2024 order that required the debtor to make monthly payments to its principal secured creditor as a condition for the debtor’s use of the secured creditor's cash collateral. The creditor objected, contending that the motion was untimely under Rule 60(c) and failed to make the showing required for modification under Rule 60(b)(5). The court concluded that, while the debtor filed its motion within a reasonable time as required by Rule 60(c), the debtor was not entitled to relief under Rule 60(b)(5) because the court concluded that the debtor had not experienced a significant change in circumstances warranting relief under that rule. Although the court denied the debtor's motion, it modified the May 2024 order to discontinue all monthly payments after the May 2026 payment because "continuation of the Order's monthly payment term has no ongoing equitable purpose or function beyond the commencement of the May 26 confirmation hearing." Id. at 15. In re Wisconsin & Milwaukee Hotel, LLC, Case No. 24-21743 (May 2026) -- Judge G.M. Halfenger The court entered an opinion and order approving the debtor's request to conduct an auction sale of equity in the reorganized debtor and to approve related auction procedures. The court determined, among other matters, that, under the circumstances presented, a creditor holding a claim secured by property not including equity interests was not entitled to credit bid at the auction sale of interests in the reorganized debtor. In re ACE Dairy Farms, LLC, No. 25-22944-kmp (Bankr. E.D. Wis. May 1, 2026) (May 2026) -- Chief Judge K.M. Perhach The Chapter 12 debtors’ principal secured creditor sought relief from stay as to the farm assets securing its loans, including real estate, livestock, and equipment. The Court denied the motion for relief from stay, finding that the creditor’s interest was adequately protected by a 26.13% equity cushion, based on the value of the aggregate collateral pool, including assets owned by parties other than the debtors, pursuant to cross-collateralization provisions in the loan documents. One debtor also sought authorization to (1) use cash collateral generated from livestock and equipment sales, (2) surcharge the creditor’s collateral under 11 U.S.C. § 506(c), and (3) transfer certain equipment to the other debtor. The Court authorized the use of cash collateral to pay approved attorneys’ fees and budgeted operating expenses, finding that the creditor’s interest would remain adequately protected. The Court denied the § 506(c) surcharge motion because the debtor failed to establish that the claimed expenses were necessary, reasonable, and primarily beneficial to the creditor. Finally, the Court denied the proposed equipment transfers, emphasizing that affiliated debtors in separate, unconsolidated bankruptcy cases must demonstrate a sound business justification that benefits the transferring debtor’s own estate and creditors, rather than merely the overall farming operation or its principals. In re Wisconsin & Milwaukee Hotel LLC, Case No. 24-21743 (April 2026) (April 2026) -- Judge G.M. Halfenger Lenders, secured creditors who seek to enforce their security interests in the chapter 11 debtor’s hotel, appealed to the District Court the court’s denial of immediate relief under section 362(d)(2) from the automatic stay imposed by section 362(a). Lenders moved the bankruptcy court under Federal Rule of Bankruptcy Procedure 8007(e) to suspend further proceedings in that court and contended that their appeal divests the court of jurisdiction to conduct further proceedings until their appeal is concluded. The court ruled that (1) it retains jurisdiction to conduct further proceedings, including on confirmation and related matters, and (2) a suspension of those proceedings is not warranted. Lee v. Hang (In re Hang), Case No. 24-23470, Adv. No. 24-2130 (March 2026) -- Judge R.M. Blise The plaintiffs filed an adversary complaint against the debtor-defendants seeking to have a debt declared nondischargeable under 11 U.S.C. § 523(a)(2)(A). The plaintiffs unwittingly invested money in a non-debtor third-party's fraudulent investment scheme, and those funds were subsequently given to the debtor-defendants in the form of a below-market mortgage loan on property purchased by the debtor-defendants. The parties filed cross motions for summary judgment. The Court determined that there were material questions of fact as to the intent element and the amount of money allegedly obtained by fraud, so neither party sustained their burden on summary judgment on the nondischargeability claim. The plaintiffs also filed a motion to amend their complaint to add claims for a declaration related to the mortgaged property and for a declaration that the debtor-defendants could not invoke a homestead exemption. The Court denied the plaintiffs' motion because the debtor-defendants would be prejudiced by a late amendment to the complaint. The Court also determined that the amendment would be futile because any objection to the claimed homestead exemption was untimely, the plaintiffs did not sufficiently plead that they owned the property at issue, and ownership of the property was irrelevant to a determination of nondischargeability. Lee v. Vang (In re Vang), Case No. 24-24067, Adv. No. 24-2153 (March 2026) -- Judge R.M. Blise The plaintiffs filed an adversary complaint against the debtor-defendants seeking to have a debt declared nondischargeable under 11 U.S.C. § 523(a)(2)(A) and to have the Court declare that the debtor-defendants could not invoke a homestead exemption. The plaintiffs unwittingly invested money in a non-debtor third-party's fraudulent investment scheme, and those funds were subsequently given to the debtor-defendants in the form of a below-market mortgage loan on property purchased by the debtor-defendants. The parties filed cross motions for summary judgment. The Court determined that there were material questions of fact as to the intent element and the amount of money allegedly obtained by fraud, so neither party sustained their burden on summary judgment on the nondischargeability claim. The Court granted the debtor-defendants’ motion with respect to their homestead exemption because the plaintiffs’ claim was not timely filed under 4003(b) and an objection to an exemption should be filed in the main case, not an adversary proceeding. The plaintiffs also filed a motion to amend their complaint to add another claim for a declaration related to the mortgaged property. The Court denied the plaintiffs' motion because the debtor-defendants would be prejudiced by a late amendment to the complaint, and the amendment sought relief the Court could not grant. Ahmed v. Pathan (In re Pathan), Case No. 24-23022, Adv. No. 24-2116 (March 2026) -- Judge R.M. Blise The plaintiff sought a determination that a $100,000 loan the plaintiff gave the debtor-defendant to use solely for business expenses related to the debtor-defendant's gas stations was nondischargeable. After trial, the Court concluded that the plaintiff met his burden of proof under 11 U.S.C. § 523(a)(2)(A). The plaintiff presented sufficient evidence to prove that he loaned money to the debtor-defendant under false pretenses because the debtor-defendant falsely suggested that he would use all the loan proceeds for business purposes. Of the $100,000 loan, the debtor-defendant used $47,112.57 for personal expenses, and the Court granted the plaintiff's request for a declaration of nondischargeability as to that portion of the debt. In re Frick, Case No. 25-25157 (March 2026) -- Judge G.M. Halfenger After the chapter 13 trustee objected to confirmation of the amended unconfirmed plan, the debtor's counsel purportedly withdrew the preconfirmation plan amendment. The trustee then submitted and the court mistakenly entered an order with respect to the debtor's payments to the trustee, superseding a previous order, requiring the debtor to make those payments in the amounts proposed in the plan as originally filed, rather than in the amounts specified in the plan amendment. A preconfirmation amendment to a chapter 13 plan cannot be withdrawn because the plan as amended "becomes the plan", 11 U.S.C. §1323(b), and this court's rules require that all parties be given notice of any changes to the plan, which is typically not required when a party withdraws a filed document. See In re Reed, No. 18-26531, 2018 WL 6975202 (Bankr. E.D. Wis. Nov. 8, 2018). Moreover, reverting to the unconfirmed plan as originally filed would not meaningfully address the trustee's objection to plan confirmation, which is that the debtor lost her job, leaving the trustee to doubt whether she "will be able to make all payments under the plan", 11 U.S.C. §1325(a)(6). The court deemed the attempted withdrawal of the plan amendment ineffective, vacated the mistakenly entered order with respect to the debtor's payments to the trustee, ordered the debtor to show cause why the court should not sustain the trustee's objection to plan confirmation and dismiss this case for cause under 11 U.S.C. §1307(c), and advised the trustee to not submit a proposed payment order in the future if a chapter 13 debtor tries to withdraw a preconfirmation plan amendment. |