2015 Judge Papalia - Opinions

Judge Vincent F. Papalia -- Opinions signed in 2015




In re: Steinhardt Management v. Bohn, Case 13-35854, 14-1241, 5/19/2015

Defendant-debtor Theodore Bohn, an attorney, moved to dismiss plaintiff Steinhardt Management, Inc.’s adversary complaint seeking a determination that an award of attorney’s fees to Steinhardt by a New York Court for frivolous litigation by the Debtor is excepted from discharge pursuant to 11 U.S.C. § 523(a)(2) (debtor obtained money, property or services through false pretenses, a false representation or actual fraud) and § 523(a)(6) (willful and malicious injury to the property of another).  Because Steinhardt’s complaint failed to allege that the Debtor obtained or received any money, property or services by a fraud and failed to plead fraud with the requisite particularity, that count of Steinhardt’s complaint is dismissed.  However, Steinhardt’s complaint states a claim under 11 U.S.C. § 523(a)(6) since the New York Court found that the Debtor’s action against Steinhardt was “without merit and apparently undertaken to harass defendants” (which included Steinhardt), thus justifying an award of attorney’s fees to Steinhardt under New York’s “frivolous litigation” laws.  Further, the Debtor admitted that he filed the Complaint solely to obtain discovery from defendants, which is at least arguably an improper purpose.  Thus, Steinhardt states a plausible claim for relief under 11 U.S.C. § 523(a)(6).



In re: Meisel v. Natale, Case 10-11697, 11-1863, 8/31/2015

The Chapter 7 Trustee in this case moved to enforce the settlement of an adversary proceeding against Joseph D. Natale ("Natale"), various entities in which Natale has an interest (collectively, the "Natale Entities") and certain Natale employees and professionals.  In their writings and/or oral argument, the parties acknowledged that: (i) a settlement was reached on October 1, 2014 after a mediation session before Judge Kaplan; (ii) the settlement included a release of at least some claims; and (iii) there was agreement on all other material terms of the settlement as stated by the Trustee, including the amount of the settlement payment and the dismissal of the Adversary Proceeding with prejudice.  The only dispute remaining between the parties was the scope of the release to be exchanged among them.  Relying on New Jersey law and federal cases interpreting it, the Court found that: (i) there was a meeting of the minds as to all material terms of the settlement; and (ii) the correspondence and draft Settlement Agreements exchanged among the parties evidenced an intent to release all claims that were asserted by the parties in the Adversary Proceeding and Bankruptcy Case and to exclude from the release any claims that were not asserted in the subject Adversary Proceeding or Bankruptcy Case.  The subsequent efforts of certain of the parties to include language that would expand or limit the releases to refer to more specific claims were afterthoughts not expressed when the settlement was reached on October 1, 2014 and do not affect the enforceability of the settlement.




In re: Petersburg Regency, 15-17169 , 11/2/2015

Certain creditors of the Debtor moved to approve a settlement (the “Settlement”) that provided for the distribution of the Debtor’s sole asset -- a $10,230,626.64 insurance recovery, which was overencumbered by multiple liens -- among all the Debtor’s remaining secured, priority and unsecured creditors, except for the Debtor’s principals, and for the structured dismissal of the Debtor’s Chapter 11 case.  Relying on the Third Circuit’s recent decision in In re Jevic, 787 F.3d 173 (3rd Cir. 2015), the Bankruptcy Court approved the Settlement and granted the Structured Dismissal, finding that the Settlement was in the best interests of creditors and the estate, as no class of creditors was excluded (except for the insiders), and the Settlement ended over a decade of litigation that involved numerous parties and included multiple bankruptcy and state court proceedings in New Jersey and Virginia.




In re: Hyoja Akiko Moore, 15-10174 , 9/25/2015

Opinion on (1) Debtor’s Motion for Reconsideration of Bankruptcy Court 3/27/15 Order; (2) Debtor’s Objection to Trustee’s Notices of Abandonment; and (3) related relief.





In re: Ledgemont International v. Barksdale, 13-2024 , 11/10/2015

Memorandum Opinion on Debtor-Defendant's Motion for Reconsideration of Bankruptcy Court Order Granting Plaintiffs’ Motion for Relief from Stay under 11 U.S.C. § 362 to Continue a State Court Action and to Extend Discovery Deadline.










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