Gregory B Frank

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
at Greenbelt
In Re: 	Case No. 08-18263PM
Chapter 13
Gregory B. Frank,
Debtor.
MEMORANDUM OF DECISION
This case came before the court on February 17, 2009, on several matters. The
Debtor's Chapter 13 Plan ("the Plan") filed on August 5, 2008, proposes to pay a total
of $121,860.00 over 60 months. The Plan is underfunded in that the sums to be paid
to holders of secured claims and priority claims aggregate $117,873.59, which added to
the Chapter 13 Trustee's commission, exceeds the amount paid into the Plan. Were
the Plan to be confirmed, nothing would be paid on the unsecured general claim of the
Internal Revenue Service nor would anything be paid to the holders of two otherwise
non-dischargeable claims – Educational Credit Management Corp., the holder of a
student loan claim in the sum of $14,928.38, Imperial Valet Services, Inc. ("Imperial"),
the holder of a $65,250.00 claim plus interest. Imperial's claim is non-dischargeable
by virtue of a consent judgment entered on March 11, 2008, in an action filed pursuant
to 11 U.S. C. § 523(c) Adversary Proceeding No. 08-0086. The Debtor acknowledged
through counsel at the hearing that this debt, as well as all other existing claims
against him, were not dischargeable by virtue of 11 U.S.C. § 1328(f)(1) that provides
that the court shall not grant a discharge upon consummation of a Chapter 13 plan if
the debtor had received a discharge under Chapter 7 in a case filed within the 4-year
period prior to the order for relief.
Notwithstanding the absence of the discharge, by filing this bankruptcy case
under Chapter 13, the Debtor obtained a continuation of the automatic stay that bars
the continuation of a garnishment by Imperial, foreclosure by Litton Loan Servicing,
Date signed February 23, 2009
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LP and repossession of his automobile by Toyota Motor Services Corporation. In
addition, the Debtor made a mockery of the judgment that he entered into by consent
with Imperial. A judgment had been entered against him by the Circuit Court for
Montgomery County, Maryland, that included compensatory damages of $235,568.68,
punitive damages of $150,000.00 and attorney's fees of $15,609.00. As a result of the
agreement reached in settlement of the adversary proceeding, it was reduced to
$50,000.00 plus attorney's fees of $15,000.00 to be paid out at a monthly amount of
$500.00 to $1,000.00 per month. It appears that the Debtor stopped making payments
under this judgment at about the same time that the judgment was entered.
After the entry of an order granting the mortgage holder relief from the
automatic stay on May 8, 2007, in the Debtor's prior bankruptcy case under Chapter 7,
the mortgage holder was barred from going further with foreclosure by the filing of a
bankruptcy case under Chapter 13 by the co-debtor of the loan, Debtor's spouse, Aimee
M. Frank, Case No. 07-16764. Following the filing of a motion for relief from the
automatic stay in that case, the mortgage holder and the Debtor's spouse entered into
an agreement for the cure of post-filing arrearages of $32,326.60 and entered into a
consent order for the curing of the arrearages entered on December 19, 2007.
Following the filing of an affidavit of default of her performance under the consent
order, the mortgage holder issued a notice of intent to commence foreclosure that was
followed by the Debtor's spouse's motion to dismiss the Chapter 13 case.
In support of their motions to dismiss this case for failure to propose a plan in
good faith, both Imperial and the Chapter 13 Trustee demonstrated that the Debtor
had a lifestyle that was inconsistent with honest and unfortunate debtors seeking a
good-faith rehabilitation of their financial condition.
See Marrama v. Citizens Bank of
Mass., 549 U.S. 365 (2007). The Debtor and his spouse availed themselves of an
expensive gym membership, frequent eating out, travel, shopping at a gourmet food
market and generally excessive spending. In addition, the Debtor handled his
financial services through a wholly-owned business known as Ryjac Services, Inc.
What was particularly distressing about the business records was that the Debtor
constantly made large cash withdrawals, and his explanations for the need for dealing
in cash were thoroughly unconvincing.
The Debtor's explanation for his financial woes are ascribed to his involvement
in the campaign waged by then-Senator Hillary Clinton for the Democratic
nomination. The Debtor's finances appear to be in the same condition as the Senator's
campaign. In any event, the Debtor appears to have gotten his financial affairs in
order as evidenced by the fact that neither the mortgagee nor the car lender has filed
motions for relief from the automatic stay, unlike the prior case filed by him and the
case filed by his spouse. Rather than dismiss the case at this time, the court will deny
Case 08-18263 Doc 63 Filed 02/24/09 Page 2 of 3

confirmation with leave to amend. The Debtor is advised that any amended plan must
result in a substantial payment to holders of unsecured claims. This undoubtedly will
result in some modification in the Debtor's high-living lifestyle. Failing such a
modification, the court's presently held serious concerns about the Debtor's good-faith
would be nourished resulting in dismissal. Debtor is advised that this ruling may be
understood only that the court will not dismiss this case at this stage of the
proceedings. The "jury" is still out as to the question as to whether or not this case
was filed and is being prosecuted in good faith. The resolution of that issue is
dependent upon the Debtor's efforts in presenting and funding a meaningful Plan.
cc: 	Gregory B. Frank
11137 Cedarwood Drive
North Bethesda, MD 20852
Jonathan P. Morgan
Morgan Rose, LLC
414 Hungerford Drive
Suite 252
Rockville, MD 20850
Trustee
Nancy L Spencer Grigsby
4201 Mitchellville Rd. Ste 401
Bowie, MD 20716
Litton Loan Servicing, LP
P.O. Box 829009
Dallas, TX 75382-9009
Imperial Valet Services, Inc.
David G. Winer, Esq.
6701 Democracy Blvd.
Ste 203
Bethesda, MD 20817
End of Memorandum
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