2011 Judge Steckroth - Opinions
Judge Donald H. Steckroth -- Opinions signed in 2011
The debtor sought sanctions for an alleged violation of the automatic stay provisions of 11 U.S.C. 362(a). Three days after the petition date, a judgment creditor received monies from the debtor's bank account pursuant to a levy and writ of execution. The Court determined, however, that a turnover order entered in state court terminated the debtor's legal and equitable interest in the subject monies seven days prior to the petition date. Therefore, the automatic stay did not extend to the account and the creditor was not in violation of section 362.
The Court granted the debtor-defendant's motion to dismiss the plaintiff's complaint pursuant to Fed. R. Civ. P. 12(b)(6). The complaint alleged that the debtor-defendant violated the New Jersey Law Against Discrimination ("NJLAD") when he terminated the plaintiff's employment. The NJLAD, however, does not provide for liability of an individual supervisor unless he aids or abets the discriminatory acts. In this case, the complaint pointed to the debtor-defendant as the principal and only violator of the NJLAD. Therefore, dismissal was proper because a principal wrongdoer cannot aid and abet his own wrongful conduct.
Chapter 11 Liquidating Plan Trustee's Motion to Compel Administrative Claimants to Disgorge Fees Previously Awarded
The Plan Trustee entered into a Consent Order with three administrative claimants for professional fees earned during a chapter 11 case. The Court approved the Consent Order under Rule 9019 and also confirmed a Joint Plan of Orderly Liquidation ("Plan"). More than two years later, the Plan Trustee sought to compel the claimants to disgorge portions of those fees, arguing that disgorgement was required under the Plan in order to achieve pro rata distribution among all administrative claimants. The Court denied the motion because: (1) the Consent Order awarded final fees not subject to disgorgement; (2) the Plan Trustee failed to satisfy the requirements for relief from a final order under Rule 60; and (3) the equities of the case and the interest of finality weighed against granting the relief sought.