In re Johnson

Guy R. Humphrey United Stares Bankruptcy Judge

Chapter 13

ORDER GRANTING UNITED STATES' MOTION TO FREEZE ACCOUNTS, SETTING PRELIMINARY HEARING ON MOTION FOR RELIEF FROM STAY, AND ORDERING OTHER MATTERS (DOC. 26)

Guy R. Humphrey United Stares Bankruptcy Judge

The United States of America, on behalf of the Internal Revenue Service (the "IRS"), has moved ex parte, pursuant to 11 U.S.C. §§ 105(a) and 362(d) and (f) and Bankruptcy Rule 4001(a)(2), for an order freezing the Debtor's exempt retirement accounts subject to federal tax liens until the court can determine its motion to lift stay to permit the accounts to be levied (along with insurance proceeds that the United States has not asked to be included in this freeze order). Upon review of the motion, the attached exhibits of similar orders granted in such circumstances, the Declarations of counsel for the Internal Revenue Service's counsel and the Revenue Officer, the proposed amended Chapter 13 plan (Doc. 24), and the entire record of this case, the Court FINDS

1) The relief authorized in this order is necessary and appropriate to prevent irreversible harm and potential dissipation of the account(s) at issue pending an opportunity to determine relief from stay on its merits. Fed.R.Bankr.P. 4001(a)(2).

2) Prior notice of the ex parte motion and an opportunity for hearing in advance of entry of this freeze order would enhance the risk sought to be obviated and the Declarations demonstrate why notice is not required prior to the entering of this order. Id.

3) The relief in this order authorizing Internal Revenue Service to take immediate steps to implement through the account holder a freeze of the specified account(s) constitutes a modification of the automatic stay as permitted by 11 U.S.C. §§ 362(a) and (f). It is limited, carefully tailored and necessary to preserve the status quo and Debtor's and Internal Revenue Service's respective claimed interests in the account(s) at issue.

Finally, this order is without prejudice to any motion filed by the Debtor or any other adverse party seeking reconsideration of this order or reinstatement of the automatic stay in accordance with the procedures in Federal Rule of Bankruptcy Procedure 4001(a)(2).

For good cause shown, the Court GRANTS the following relief and orders other matters:

IT IS ORDERED that until the conclusion of the hearing set below, unless otherwise ordered by the Court, the debtor, Gayle A. Johnson ("Debtor"), is prohibited from withdrawing any money from any retirement accounts, including but not limited to the retirement accounts identified on Schedule C at (1) Bridge Credit Union, Inc., (2) Universal 1 Credit Union, (3) Key Bank, (4) Universal 1 Financial Advisors, and (5) Voya Retirement Insurance & Annuity Co., as well any retirement account(s) at (6) Pershing LLC, /or any other retirement accounts containing funds traceable to any of the foregoing retirement accounts, or borrowing against these accounts, and, to the extent any funds or assets have been withdrawn or transferred since the petition, Debtor is prohibited from further transferring, spending, or dissipating any funds or assets traceable to said retirement accounts, unless the Court subsequently vacates this order prior to the conclusion of the hearing. As used herein, "retirement accounts" includes individual retirement accounts - whether traditional or "Roth" IRAs - as well as any accounts administered under section 401(k) of the Internal Revenue Code.

IT IS FURTHER ORDERED that the financial institutions or their affiliates that are administering the aforementioned accounts shall freeze the same so that it is not possible for any withdrawals to be made unless or until ordered otherwise by this Court, except that they may comply with any IRS notice of levy if such levy is permitted by an order of this Court modifying the stay. This order may be served on counsel for the financial institutions by counsel for the United States by telefaxing or sending by U.S. Mail to any component of the companies that normally receives and processes subpoenas, levies, or garnishment orders.

IT IS FURTHER ORDERED that a preliminary hearing shall be held on May 18, 2023 at 1:30 p.m. (Eastern Time) before United States Bankruptcy Judge Guy R. Humphrey (the "Preliminary Hearing") to address the IRS' motion for relief from stay and any response. The Preliminary Hearing will be conducted by telephone. Participation by counsel for the Debtor, counsel for the IRS and counsel for the Chapter 13 Trustee in the Preliminary Hearing is required. At the time of the Preliminary Hearing, the court intends to schedule the final hearing on the motion for relief from stay and any timely filed response. The court will not be taking evidence or ruling on the merits of this issue at the preliminary hearing.

IT IS FURTHER ORDERED that any response to the IRS's motion for relief from stay shall be filed not later than May 15, 2023 at 4:00 p.m. (Eastern Time) In the absence of a response, the court may grant all relief requested in the IRS's motion for relief from stay by a separate order without further notice or hearing.

IT IS FURTHER ORDERED, in order to determine the current status of this Chapter 13 case, the court is sua sponte setting a status conference. The status conference will also be held on May 18, 2023 at 1:30 p.m. (Eastern Time) by phone. Counsel for the IRS, counsel for the Debtor, and the Trustee (or counsel for the Trustee) shall participate in the conference. All other creditors and interested parties are invited, but not required, to participate in the scheduled status conference. Any creditor or other interested party wishing to participate in the status conference shall send an email to the court's Courtroom Deputy (Joni_Behnken@ohsb.uscourts.gov) advising the court of such participation not later than May 16, 2023. The teleconferencing information will be provided to any counsel or party who email the Courtroom Deputy advising of their desire to participate in the call one day prior to the scheduled conference. The hearing on confirmation of the Debtor's Amended Plan previously scheduled for May 18, 2023 at 10:30 a.m. (Eastern Time) is hereby continued and shall be rescheduled as appropriate as determined at the status conference.

IT IS FURTHER ORDERED that counsel for the IRS shall, immediately upon entry of this order, give oral notice thereof to counsel for the Debtor and the Chapter 13 Trustee and mail a copy of this order to the Debtor and Dyer, Garofalo, Mann & Schultz. Counsel for the IRS shall promptly file a certificate of service.

IT IS SO ORDERED.

Copies to: All Creditors and Parties in Interest and:

Dean Hines, 5335 Far Hills Avenue, Suite 313, Dayton, Ohio 45429