Kenneth S. Eiler v. Derek Farrington

Summary

The United States Bankruptcy Court for the District of Oregon grants default judgment in favor of Chapter 7 trustee Kenneth S. Eiler on claims for a mandatory injunction and specific performance concerning the sale of real property. The court declines to appoint a receiver, holding that 11 U.S.C. § 105(b) prohibits a bankruptcy court from appointing a receiver in an adversary proceeding arising under the Bankruptcy Code. The court permits the trustee to submit a revised judgment consistent with the opinion and Federal Rule of Civil Procedure 54(c).

Holdings

1. Default judgment was appropriate on the trustee's claims for a mandatory injunction and specific performance because the claims enforced an existing state-court judgment establishing the parties' rights and the requested relief was reasonably necessary for the trustee to collect and reduce estate property to money.
2. A bankruptcy court lacks authority under 11 U.S.C. § 105(b) to appoint a receiver in an adversary proceeding arising under the Bankruptcy Code, including where the proposed receiver is the chapter 7 trustee.

Questions Presented

1. Whether default judgment should be entered for a mandatory injunction and specific performance requiring the defendant to facilitate liquidation of the debtor's rights in the property.
2. Whether a bankruptcy court may appoint a receiver in an adversary proceeding under 11 U.S.C. § 105(b), particularly where the proposed receiver is the chapter 7 trustee.

Disposition

other