In re Acor

510 B.R. 588, 2014 WL 2111195
CourtUnited States Bankruptcy Court, W.D. Tennessee
DecidedApril 10, 2014
DocketNo. 13-13067
StatusPublished
Cited by2 cases

This text of 510 B.R. 588 (In re Acor) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, W.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Acor, 510 B.R. 588, 2014 WL 2111195 (Tenn. 2014).

Opinion

MEMORANDUM OPINION RE: MOTION TO TRANSFER VENUE OR, IN THE ALTERNATIVE, TO DISMISS CASE FILED BY APPALACHIAN REALTY INVESTMENTS, LLC, AND TENNESSEE STATE BANK and the DEBTORS’ OBJECTION THERETO

JIMMY L. CROOM, Bankruptcy Judge.

This matter is before the Court on the Motion to Transfer Venue or, in the Alter[590]*590native, to Dismiss Case filed by Appalachian Realty Investments, LLC, and Tennessee State Bank (collectively “Movants”) and the Debtors’ objection thereto. The Movants assert that the proper venue for this Chapter 11 proceeding is the Eastern District of Tennessee. As such, they seek to have the Court transfer the proceeding to that district. The Court conducted a hearing in this matter on April 3, 2014. Fed. R. Bankr.P. 9014.

This proceeding arises in a case referred to this Court by the Standing Order of Reference, Misc. Order No. 84-80 in the United States District Court for the Western District of Tennessee, Western and Eastern Divisions, and is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A). This Court has jurisdiction over core proceedings pursuant to 28 U.S.C. §§ 157(b)(1) and 1334 and, thus, may enter a final order in this matter. This memorandum opinion shall serve as the Court’s findings of facts and conclusions of law. Fed. R. Bankr.P. 7052.

I. FACTS

The debtors in this case, David and Marcie Acor (“Acors”), filed a Chapter 11 petition for bankruptcy relief on November 13, 2013. They listed their address on page one of their petition as 42 Larkwood Drive, Jackson, Tennessee (“Jackson Property”). On Schedule C, however, they claimed a homestead exemption of $50,000 in real property at 409 Patterson, Gatlin-burg, TN (“Gatlinburg Property”). At their § 341 meeting of creditors, Marcie Acor testified that her principal residence and domicile is the Gatlinburg Property. David Acor testified that his primary residence and domicile is the Jackson Property and that he only spends 2 or 3 days a week at the Gatlinburg Property. David Acor spends the majority of his time at the Jackson Property because he operates one of the Acors’ companies, United Inventory Service, Inc. (“UIS”), out of Bells, Tennessee. David Acor earns the majority of his income from UIS.

On August 30, 2013, David Acor filed an involuntary Chapter 11 petition against Smokey Mountain Developers, LLC (“Smokey Mountain”), in the United States Bankruptcy Court for the Eastern District of Tennessee (Case Number 13-51532). Smokey Mountain owns several condominiums in the Gatlinburg area. Mountain Vista Luxury Rentals, LLC (“Mountain Vista”), manages the rentals of the condominium units owned by Smokey Mountain and cottages owned by Smoky Pines, LLC. David Acor and Marcie Acor each own a 50% interest in Mountain Vista and Marcie Acor manages the company. Marcie Acor earns the majority of her income from Mountain Vista.

According to Smokey Mountain’s Statement of Financial Affairs, David Acor owns a 2/3 interest in Smokey Mountain and is the managing member. Bobby Dickerson owns the remaining 1/3 interest in the company. Smokey Mountain’s Chapter 11 case is a Single Asset Real Estate case. See 11 U.S.C. § 101(51)(B). David Acor listed his address on Smokey Mountain’s involuntary petition as the Jackson Property. The Eastern District issued an order for relief in that case on September 30, 2013. The case is still pending before the Eastern District of Tennessee. According to David Acor’s testimony at the venue hearing, a sale of the equity interests in Smokey Mountain is scheduled for the end of April. Because Mr. Acor’s equity interest has no value, the sale will not net any proceeds to the Acors’ estate.

Prior to David Acor’s filing of the involuntary Chapter 11 case, a declaratory judgment action was brought against Smokey Mountain and Mountain Vista in the [591]*591Chancery Court for Sevier County, Tennessee. According to the parties’ statements at the venue hearing, the Chancery Court judgment is currently on appeal to the Tennessee Court of Appeals and resolution of the appeal could result in dissolution of Marcie Acor’s ownership interest in Mountain Vista.

In their response to the motion to transfer, the Acors stated that “[biased on Mr. Acor’s calendar and receipts, Mr. Acor resided at the Jackson [Property] for 113 days out of the 180 days prior to the petition date.” (Obj. to Mot. At 2, ECF No. 121.) According to the Acors’ schedules, their secured creditors are located in Phoenix, Arizona, Germantown, Tennessee, St. Louis, Missouri, Pigeon Forge, Tennessee and Jackson, Tennessee. Five of the Acors’ fifteen unsecured creditors are located in Sevierville or Gatlinburg, Tennessee. One is located in Alamo, Tennessee. One is located in Jackson, Tennessee. The remaining creditors are located outside of Tennessee. The Acors’ CPA is based in west Tennessee.

II. ANALYSIS

The venue statute for bankruptcy cases is 28 U.S.C. § 1408. This statute provides:

Except as provided in section 1410 of this title, a case under title 11 may be commenced in the district court for the district—
(1) in which the domicile, residence, principal place of business in the United States, or principal assets in the United States, of the person or entity that is the subject of such case have been located for the one hundred and eighty days immediately preceding such commencement, or for a longer portion of such one-hundred-and-eighty-day period than the domicile, residence, or principal place of business, in the United States, or principal assets in the United States, of such person were located in any other district; or
(2) in which there is pending a case under title 11 concerning such person’s affiliate, general partner, or partnership.

28 U.S.C. § 1408 (emphasis added). Pursuant to § 1408(1),

the debtor has four venue options: (1) domicile; (2) residence; (3) principal place of business in the United States; (4) principal assets in the United States, and “the court determines proper venue by reference to facts existing during the 180 days prior to the commencement of the case to determine the district of the debtor’s residence, domicile, principal place of business, or location of the person’s principal assets.”

In re Handel, 253 B.R. 308, 310 (1st Cir. BAP 2000) (citing Micci v. Bank of New Haven (In re Micci), 188 B.R. 697, 699 (S.D.Fla.1995)). Section 1408(2) provides a fifth alternative basis for venue: “the pendency of a bankruptcy case concerning the debtor’s affiliate, general partner or partnership.” In re FRG, Inc., 107 B.R. 461, 468 (Bankr.S.D.N.Y.1989).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

In re Felix
Sixth Circuit, 2018
In re Kern
576 B.R. 817 (W.D. Virginia, 2017)

Cite This Page — Counsel Stack

Bluebook (online)
510 B.R. 588, 2014 WL 2111195, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-acor-tnwb-2014.