Carter, Jr., et al. v. First National Bank of Crosset

Debtor appealed from the bankruptcy court's order denying sanctions against the Bank. Although the evidence suggested that the Bank could have been aware of debtor's personal bankruptcy filing, there was no evidence that the Bank had knowledge of the Assignment and the purported transfer of the LLC's assets to him. The replevin action filed by the Bank did not name debtor, individually, and sought only to repossess equipment owned by the LLC in which the Bank had a properly perfected security interest. Consequently, there could be no knowing or deliberate conduct attributed to the Bank in its conduct to enforce its lien against the collateral it believed was owned by the LLC. Absent a showing that the Bank was aware of the Assignment, a willful stay violation could not be found. Because a finding that there has been a willful violation of the automatic stay was a prerequisite to an award of sanctions, the court affirmed the bankruptcy court's denial of sanctions. View "Carter, Jr., et al. v. First National Bank of Crosset" on Justia Law