Creditor’s Contested Proof of Claim Allowed in Full

Gentry Locke for the Creditor.

United States Bankruptcy Court for the Western District of Virginia

Gentry Locke attorneys represented an unsecured creditor in a Chapter 13 bankruptcy case. Our client was the liquidating agent for a former credit union. Our client filed a proof of claim for unjust enrichment based on an undocumented loan to the bankrupt debtor. The liquidated credit union failed as a result of fraud committed by two former executives, who have since pled guilty to federal criminal charges.  One executive was the debtor’s mother-in-law.

Debtor objected to the claim stating he never received the proceeds of the loan and never benefitted from it.  He claimed he was a victim of his mother-in-law’s fraud.

Following an evidentiary hearing, the Court denied the debtor’s objection to the claim and allowed the claim in full.