Johnson v. Edwards Family P'ship, LP (In re Cmty. Home Fin. Servs., Inc.), CASE NO. 12–01703–NPO
| Decision Date | 27 February 2018 |
| Docket Number | ADV. PROC. NO. 13–00104–NPO,ADV. PROC. NO. 12–00091–NPO, ADV. PROC. NO. 15–00080–NPO,CASE NO. 12–01703–NPO |
| Citation | 583 B.R. 1 |
| Parties | IN RE: COMMUNITY HOME FINANCIAL SERVICES, INC., Debtor. Kristina M. Johnson, as Trustee for the Estate of Community Home Financial Services, Inc., Plaintiff v. Edwards Family Partnership, LP and Beher Holdings Trust, Defendants Kristina M. Johnson, as Trustee for the Estate of Community Home Financial Services, Inc., Plaintiff v. Charles Edwards, Edwards Family Partnership, LP, Edwards Family Partnership, LLP, and Beher Holdings Trust, Defendants Kristina M. Johnson, Chapter 11 Trustee of the Estate of Community Home Financial Services, Inc., Plaintiff v. Edwards Family Partnership, LP, Beher Holdings Trust, and Charles C. Edwards, individually and as Managing Partner of Edwards Family Partnership, LP and Beher Holdings Trust, Defendants |
| Court | U.S. Bankruptcy Court — Southern District of Mississippi |
Jonathan Bissette, Wells Marble & Hurst, PLLC, Derek A. Henderson, Jackson, MS, Roy H. Liddell, Wells Marble & Hurst, PLLC, Ridgeland, MS, for Plaintiff.
Kristina M. Johnson, Jones Walker, Jackson, MS, pro se.
Louis B. Lanoux, Stephanie Rippee, Jim F. Spencer, Jr., Watkins & Eager PLLC, Jackson, MS, for Defendants.
Stephanie Bentley McLarty, Jones Walker LLP, Jackson, MS, for Trustee.
Jeffrey Ryan Barber, Jackson, MS, Mark Alan Mintz, Jones Walker LLP, New Orleans, LA
From October 30, 2017, through November 2, 2017, and on November 27, 2017, the Court conducted a consolidated trial (the "Trial") consisting of three (3) adversary proceedings and five (5) related contested matters.
At Trial, the Court heard evidence in: (1) adversary proceeding 12–00091–NPO (the "Home Improvement Loans Adversary"); (2) adversary proceeding 13–00104–NPO (the "Mortgage Portfolios Adversary"); and (3) adversary proceeding 15–00080–NPO (). The following pleadings were before the Court: (1) in the Home Improvement Loans Adversary, the Third Amended Complaint (the "HIL Third Amended Complaint") (HIL Adv. Dkt. 237)2 filed by Kristina M. Johnson ("Johnson"), chapter 11 trustee (the "Trustee") of the estate of Community Home Financial Services, Inc. ("CHFS"); the Answer, Defenses and Counterclaim of Edwards Family Partnership, LP and Beher Holdings Trust to Third Amended Complaint (Ct Dkt. # 237) (the "HIL Answer & Counterclaim") (HIL Adv. Dkt. 289) filed by Edwards Family Partnership, LP ("EFP") and Beher Holdings Trust ("BHT" or, together with EFP, "EFP/BHT"); and the Reply and Affirmative Defenses to Counterclaim of Edwards Family Partnership, LP and Beher Holdings Trust (the "HIL Reply to Counterclaim") (HIL Adv. Dkt. 294) filed by the Trustee; (2) in the Mortgage Portfolios Adversary, the Consolidated Amended Complaint (the "MPF Complaint") (MPF Adv. Dkt. 61) filed by the Trustee; the Amended Joint Answer of Edwards Family Partnership, L.P., Edwards Family Partnership, LLP, Beher Holdings Trust, Charles C. Edwards, James R. Edwards, The Atkinson Trust, L.L.C. to the Consolidated Amended Complaint (Dkt. # 61) (the "MPF Answer & Counterclaim") (MPF Adv. Dkt. 70) filed by EFP, BHT, Charles C. Edwards, M.D. ("Dr. Edwards"), James Edwards, and the Atkinson Trust, L.L.C. (the "Atkinson Trust"); and the Reply and Affirmative Defenses to Counterclaim of Edwards Family Partnership, LP and Beher Holdings Trust, Acting by and Through its Trustee, Church Bay Trust (the "MPF Reply to Counterclaim") (MPF Adv. Dkt. 72) filed by the Trustee; and (3) in the Post–Petition Conduct Adversary, the Amended Complaint for Turnover, Recovery of Property Transferred Post–Petition, Damages, Declaratory Relief, Equitable Subordination, and Other Relief (the "PPC Amended Complaint") (PPC Adv. Dkt. 48) filed by the Trustee; and the Joint Answer and Defenses of Edwards Family Partnership, LP, Beher Holdings Trust and Charles C. Edwards, Individually and as Managing Partner of Edwards Family Partnership, LP and Beher Holdings Trust (PPC Adv. Dkt. 76) filed by EFP/BHT and Dr. Edwards.
Also before the Court at Trial were the following contested matters (collectively, the "Contested Matters") filed in the Bankruptcy Case, related to Proofs of Claim 4–1 through 9–1 and CHFS's use of alleged cash collateral:
The Court consolidated the Contested Matters in the Bankruptcy Case, the Home Improvement Loans Adversary, the Mortgage Portfolios Adversary, and the Post–Petition Conduct Adversary for purposes of the Trial, due to common questions of fact, law, witnesses, and exhibits. (HIL Adv. Dkt. 285; MPF Adv. Dkt. 57). On September 5, 2017, the Joint Pretrial Order was entered in the Home Improvement Loans Adversary (HIL Adv. Dkt. 322) and in the Mortgage Portfolios Adversary (MPF Adv. Dkt. 118). As agreed upon by the parties, the Addendum to Joint Pretrial Order was entered in the Home Improvement Loans Adversary (HIL Adv. Dkt. 324) and in the Mortgage Portfolios Adversary (MPF Adv. Dkt. 120) on September 18, 2017. On October 17, 2017, the Joint Pretrial Order (PPC Adv. Dkt. 108) was entered in the Post–Petition Conduct Adversary.
On October 24, 2017, the Court entered an order granting the parties permission to correct certain errors that appeared in the document lists and to incorporate the Addendum to Joint Pretrial Order into a single amended joint pretrial order in the Home Improvement Loans Adversary and the Mortgage Portfolios Adversary. (HIL Adv. Dkt. 330; MPF Adv. Dkt. 125). That same day, the Amended Joint Pretrial Order was entered in the Home Improvement Loans Adversary (the "HIL Amended Pretrial Order") (HIL Adv. Dkt. 331) and in the Mortgage Portfolios Adversary (the "MPF Amended Pretrial Order") (MPF Adv. Dkt. 126). On October 30, 2017, the Court entered an order in the Post–Petition Conduct Adversary likewise granting the parties permission to correct certain errors that appeared in the documents lists into a single amended joint pretrial order in the Post–Petition Conduct Adversary (PPC Adv. Dkt. 114), and on that say day, the Amended Joint Pretrial Order was entered in the Post–Petition Conduct Adversary (the "PPC Amended Pretrial Order") (PPC Adv. Dkt. 118).
At Trial,3 Jeffrey R. Barber ("Barber"), Kristina M. Johnson, Mark A. Mintz, and Stephanie B. McLarty represented the Trustee, and Jim R. Spencer, Jr. and Stephanie M. Rippee represented EFP/BHT and Dr....
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