On June 9, 2011, in In re McGinnis, 453 B.R. 770 (Bankr. D. Or. 2011), the U.S. Bankruptcy Court for the District of Oregon addressed certain issues arising from a Chapter 13 debtor’s proposed debt adjustment plan.
The court declined to confirm the debtor’s proposed plan as it violated both state and federal law, and because it failed to meet the "feasibility" requirement of 11 U.S.C. § 1325(a)(6). Specifically, the court addressed the validity of a plan that relied largely on income from the debtor’s medical marijuana operations. In making his case for feasibility, the debtor urged the court to consider the Obama administration’s recent pronouncements that the federal government would not interfere with such operations that comply with state law. Important to the court’s reasoning was the fact that these operations were nonetheless still illegal under federal law.
