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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE In re: ) ) VII HOLDINGS COMPANY ) ) Debtor. ) ____________________________________ ) ) JOHN WILSON, ) Appellant ) v. ) ) CAMBRIDGE PROPERTIES LLC, and ) SOUTHBRIDGE SAVINGS BANK ) ) Appellees ) ) Involuntary Chapter 7 Bankr. Case No. 06-10935 (BLS)
Civil Action No. 07-73 (JJF)
APPELLEES' CROSS-DESIGNATION OF RECORD ON APPEAL Pursuant to Fed. R. Bankr. P. 8006, Appellees Cambridge Properties, LLC and Southbridge Savings Bank, by and through their undersigned counsel, designate the record on appeal to include the following items, in addition to each of the items listed in the Appellant's Designation of the Record on Appeal: USBC Docket No. 12 13 29
Item 8 9 10
Date 12/28/06 12/28/06 02/07/07
Description of Item Designated Re-Notice of Hearing, with Certificate of Service Re-Notice of Hearing, with Certificate of Service Transcript of Hearing held on January 12, 2007 before the Honorable Brendan L. Shannon Respectfully submitted, PEPPER HAMILTON LLP /s/ Evelyn J. Meltzer David M. Fournier (DE No. 2812) Evelyn J. Meltzer (DE No. 4581) Hercules Plaza, Suite 5100 1313 N. Market Street Wilmington, DE 19801 Telephone: (302) 777-6500
Dated: March 6, 2007 Wilmington, DE
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- and James T. Hargrove, Esq. (BBO # 550975) Peter D. Bilowz, Esq. (BBO # 651383) GOULSTON & STORRS, P.C. 400 Atlantic Avenue Boston, Massachusetts 02110-3333 Telephone: (617) 482-1776 Facsimile: (617) 574-7621 Attorneys for Cambridge Properties, LLC and Southbridge Savings Bank
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EXHIBIT A
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EXHIBIT B
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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE
In re: VII HOLDINGS COMPANY, Debtor.
Chapter 7 Case No. 06-10935 (BLS)
Hearing Date: January 12, 2007 at 11:00 a.m. (Eastern) Objection Deadline: January 5, 2007 at 4:00 p.m. (Eastern) Related Docket No. 10
RE-NOTICE OF HEARING To: All parties on the Attached Service List PLEASE TAKE NOTICE that on December 22, 2006, Counsel for Southbridge Savings Bank ("Southbridge") in the above-captioned matter filed and served the Motion of Southbridge Savings Bank for Entry of an Order Granting Relief from the Automatic Stay Nunc Pro Tunc or Alternatively, Dismissing the Case Nunc Pro Tunc (the "Motion", docket number 10). The Notice originally indicated a hearing date of January 9, 2007. PLEASE TAKE NOTICE THAT THE DATE AND TIME OF THE HEARING ON THE MOTION HAS BEEN CHANGED. A hearing on the Motion now will take place before the Honorable Brendan L. Shannon, United States Bankruptcy Court, 6
th
Floor, 824 Market Street, Wilmington, Delaware on January 12, 2007 at 11:00 a.m. EST. PLEASE TAKE FURTHER NOTICE that in connection with the Motion, Southbridge submits the proposed form of Order attached hereto as Exhibit A. PLEASE TAKE FURTHER NOTICE that objections, if any, to the Motion must be made in writing, filed with the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"), 824 Market Street, Wilmington, Delaware 19801, and served so as to be received no later than January 5, 2007 at 4:00 p.m. (Eastern Time) upon: (i) Counsel for Cambridge Properties, LLC: David M. Fournier, Esquire, Pepper Hamilton LLP,
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EXHIBIT C
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UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE
. . . VII HOLDINGS COMPANY, . . . Involuntary Debtor. . . . . . . . . . . . . . . . . . .
IN RE:
Case No. 06-10935(BLS) Chapter 7 824 Market Street Wilmington, Delaware January 12, 2007 11:02 a.m. 19801
TRANSCRIPT OF MOTION HEARING BEFORE HONORABLE BRENDAN L. SHANNON UNITED STATES BANKRUPTCY COURT JUDGE APPEARANCES: For the U.S. Trustee: Office of the U.S. Trustee By: DAVID BUCHBINDER, ESQ. J. Caleb Boggs Federal Building 844 King Street Suite 2313 Lockbox 35 Wilmington, DE 19801 Pepper Hamilton, LLP By: DAVID M. FOURNIER, ESQ. Suite 5100 1313 Market Street Wilmington, DE 19899 Brandon McCarthy
For Cambridge Properties, LLC and Southbridge Savings Bank:
Audio Operator:
Proceedings recorded by electronic sound recording, transcript produced by transcription service. ______________________________________________________________ J&J COURT TRANSCRIBERS, INC. 268 Evergreen Avenue Hamilton, New Jersey 08619 E-mail: [email protected] (609) 586-2311 Fax No. (609) 587-3599
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APPEARANCES (Cont'd.): For Cambridge Properties, LLC and Southbridge Savings Bank: Goulston & Storrs By: JAMES T. HARGROVE, ESQ. 400 Atlantic Avenue Boston, MA 02110 (Telephonic Appearance) JOHN WILSON, PRO SE (Telephonic Appearance)
For John Wilson:
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1 2 3 morning. 4
THE CLERK: THE COURT:
All rise. Please be seated. Mr. Fournier, good
MR. FOURNIER:
Good morning, Your Honor.
David
5 Fournier on behalf of the moving creditors, Southbridge Savings 6 Bank and Cambridge Properties. Your Honor, I do have
7 co-counsel on the line as well, James Hargrove of the Goulston 8 & Storrs firm -9 10 THE COURT: Very good. -- but I'll be presenting the motions.
MR. FOURNIER:
11 Your Honor, just as an initial matter, we did submit an agenda 12 in connection with this hearing identifying the motions going 13 forward and that there was no opposition. This morning I I
14 received by Federal Express an opposition from Mr. Wilson. 15 apologize for not having had an opportunity to submit an 16 amended agenda, but I just received it. 17 18 it. 19 20 21 MR. FOURNIER: THE COURT: Yes, there is. THE COURT: Is there another copy?
I have not seen
I made a copy for you.
Thank you. And, Your Honor, I understand from
MR. FOURNIER:
22 Your Honor's clerk that Mr. Wilson is participating by 23 telephone. 24 25 THE COURT: Very good. Your Honor, I don't know if the Court
MR. FOURNIER:
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THE COURT:
I have read --- the pleadings --
MR. FOURNIER: THE COURT:
I have read both of the motions and
4 carefully reviewed them and the attachments, as well as 5 reviewing the docket and the filings in the case itself. 6 I'd like to do is proceed -- first, your agenda reflects 7 proceeding first with Cambridge Properties' motion to dismiss 8 the petition, and then second is the motion of Southbridge. 9 would like to take them in reverse order. 10 11 MR. FOURNIER: THE COURT: That's fine, Your Honor. I What
And we'll consider the Southbridge motion
12 for relief from the stay and alternatively for dismissal of the 13 case before we turn to the Cambridge Properties motion. 14 They're obviously consistent. 15 correct? 16 17 18 MR. FOURNIER: THE COURT: That is correct, Your Honor. You're counsel for both of them,
Very good. Your Honor, one threshold matter here.
MR. FOURNIER:
19 In light of the fact that Mr. Wilson has filed these papers 20 late -- the objection deadline was last week in connection with 21 this matter, so we do not have a witness in court as a result 22 of that, because this had been listed as an uncontested matter. 23 So, to the extent that when we conclude the Court determines 24 that evidence is required, we would request that the Court 25 adjourn to a subsequent hearing date to give us an opportunity J&J COURT TRANSCRIBERS, INC.
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1 both to bring a witness to court as well as to take a 2004 2 examination. 3 THE COURT: I understand and I have reviewed -- and I
4 will review the opposition of the petitioning creditor, John 5 Wilson, that I've just received, but -- and I will not strike 6 it even though it is untimely. I think it's appropriate to
7 provide accommodations to pro se litigants wherever possible, 8 so I will consider the response today. 9 MR. FOURNIER: Proceed. Your Honor,
Thank you, Your Honor.
10 taking first the motion of Southbridge Savings Bank for relief 11 from the automatic stay, Your Honor, Southbridge, as the papers 12 reflect, holds a mortgage lien on a parcel of real property 13 located in Massachusetts. It has been in the process now for
14 approximately five to six years of foreclosing on that parcel 15 of property. 16 The property and the lien interests in the property The property originally, Your
17 have an interesting history.
18 Honor, was owned by the parents of a Mr. Peel and Ms. Walker, 19 brothers and sisters, who are the owners of the property. 20 inherited the property as tenants in common. The papers They
21 identify the bankruptcy process for the 50 -- for Mr. Peel, who 22 had a 50 percent interest in the property. That process
23 dragged on for a period of years as the Court can see from the 24 papers, and Southbridge succeeded in 2006 in securing relief 25 from the automatic stay to proceed with the foreclosure action. J&J COURT TRANSCRIBERS, INC.
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1 2
THE COURT:
I did see Judge Boroff's order. Your Honor, the other 50 percent
MR. FOURNIER:
3 interest in the property is what brings us before the Court 4 today. The other 50 percent interest in the property was owned
5 by Ms. Walker who, in August of 2001, conveyed her one-half 6 undivided interest in the property to a trust, ZuZu Realty 7 Trust, of which Mr. Irizian (phonetic) is the trustee. When
8 Mr. Irizian failed to enjoin the foreclosure sale of that 9 property in Massachusetts -10 THE COURT: He had -- as I understand it from the
11 papers, Mr. Irizian had actually filed papers in Massachusetts 12 State Court seeking to enjoin the sale. 13 14 15 16 -- okay. MR. FOURNIER: THE COURT: That's correct. Is that correct?
Okay. Your Honor -- let me just back up here
MR. FOURNIER:
Staring in 2006, during the Peel bankruptcy
17 proceeding, Mr. Irizian, as trustee of the ZuZu Realty Trust, 18 apparently granted a mortgage on the property to an entity 19 related to him, Hobbs Abstract Company. We don't have the
20 details with respect to that transfer, but suffice it to say 21 that he transferred a mortgage interest in that property, 22 again, a one-half interest in the property. Shortly prior to
23 the actual foreclosure sale on the property, the entity to 24 which he had assigned his interest, his mortgage lien, Hobbs 25 Abstract Company, itself assigned to the debtor in this J&J COURT TRANSCRIBERS, INC.
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1 proceeding, VII Holdings Company, a 50 percent interest in 2 Hobbs's putative junior mortgage. 3 don't have any -4 5 THE COURT: Documentation. -- details to determine it's a I say putative because we
MR. FOURNIER:
6 legitimate mortgage lien. 7 8 THE COURT: I understand. So, Your Honor, what this debtor
MR. FOURNIER:
9 purportedly holds is a one-half interest in a mortgage on a 10 one-half interest in a piece of real property. Your Honor,
11 that occurred, as the papers indicate, two days prior to the 12 foreclosure sale. One day prior to the foreclosure sale, Mr.
13 Wilson filed this involuntary Chapter 7 petition against the 14 debtor. Your Honor, the Court has no detail with respect to
15 what interest Mr. Wilson has in this debtor. 16 In the -- Your Honor will see -- I know the Court
17 hasn't had an opportunity to read through the papers, but Your 18 Honor will see that when Mr. Wilson filed his response to these 19 papers, he doesn't identify what interest he has in this case, 20 the origins of any purported debt owed by VII Holdings. 21 is no detail as to what VII Holdings is. There
Is it a corporation
22 that is set up for the sole purpose of staying foreclosure 23 sales in various jurisdictions? We know that the petition here
24 was filed one day prior to the foreclosure sale in 25 Massachusetts. We've given the Court information in the J&J COURT TRANSCRIBERS, INC.
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1 pleadings about a similar involuntary petition filed by Mr. 2 Wilson in Alabama to stay a foreclosure sale. 3 We don't know, Your Honor, what assets VII Holdings We do know that VII Holdings hasn't
4 has, what other creditors.
5 appeared in response to the involuntary petition that was 6 filed. We don't know who the officers or directors of VII
7 Holdings are, what relationship they have to Mr. Wilson or Mr. 8 Irizian, but what we do know is that this appears to be a 9 fairly considered scheme to stay a foreclosure sale and to 10 stave the process off long enough for this Court to get to the 11 point where we're at today, which is the motion to dismiss the 12 case. 13 Your Honor -THE COURT: We reviewed the docket, and there doesn't
14 seem to have been any activity in the case. 15 MR. FOURNIER: There has been no activity in this There has been in
16 case since the filing of the involuntary.
17 Massachusetts an action by my client, Cambridge Properties. 18 19 Court. 20 MR. FOURNIER: The eviction proceedings, exactly, in THE COURT: The eviction proceeding in Hamilton
21 which proceedings the tenants in the property, Mr. Peel, has 22 raised the pendency of this action and the purported existence 23 of the automatic stay as it relates to that real property as a 24 basis for denying relief in the eviction proceedings, or 25 maintaining that the foreclosure sale under Third Circuit law J&J COURT TRANSCRIBERS, INC.
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1 was void by virtue of the automatic stay. 2 So, Your Honor, what we're requesting of the Court
3 today is twofold relief -- relief from the automatic stay nunc 4 pro tunc to the date of the filing of the case, as well as a 5 dismissal of the case nunc pro tunc. We're also seeking, Your Your
6 Honor, sanctions for bad faith filing of the petition.
7 Honor, our clients both have incurred fees in the eviction 8 proceeding, as well as before this Court, in seeking relief for 9 what appears to be a filing intended solely for the purpose of 10 staying that foreclosure sale and not for the purpose of 11 advancing any legitimate right under Chapter 11. 12 13 14 15 THE COURT: MR. WILSON: THE COURT: MR. WILSON: Okay. Yes. Do you have a response, sir? Yes, well, I'd just like to first state Mr. Wilson, are you there?
16 with regard to the filing, my opposition, or the oppositions 17 that I filed, that I'd like the Court to note on the first page 18 that on December 22nd, 2006, supposedly these papers were 19 mailed, but I did not receive them until January 6th of this 20 year. So that's why I didn't respond before that. Prior to
21 receiving the papers on January 6th, I received on January 3rd, 22 a copy of the orders that counsel was seeking to have the Court 23 rule upon, and also was attached notice of the hearing that has 24 now since been rescheduled. 25 the postmark was 27th. I received that on the 3rd, and
So I actually received the orders, or
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1 the proposed orders, and the notice of the hearing prior to 2 actually receiving the papers and the motions. 3 Now, I was on the phone with the Court on January
4 4th, which was a scheduled status conference, and I waited on 5 the phone for Your Honor to come on the phone for 45 minutes, 6 and then I was informed that the status conference was 7 canceled. And I just want to tell the Court that at that time
8 I was going to raise this particular problem so that there 9 would be no question, you know, with regard to my filing an 10 opposition. So, I just want to make the Court aware of that.
11 I didn't receive the actual papers until January 6th, and I put 12 together my opposition, or oppositions, as quickly as I could. 13 That being said, I'm a little bit at a loss here on
14 this matter because as matters stand right now, it's my 15 understanding that there is no trustee assigned to the case, 16 and I don't know exactly -- you know, I think it's important 17 that a Chapter trustee -- seven trustee look into this and see 18 what the interest of the debtor is in the property. 19 20 say. You know, beyond that, I don't know very much what to All of these papers that are attached are, you know,
21 things that I was somewhat unfamiliar with, and, therefore, you 22 know, like I said, I'm at a loss. 23 say. I don't know Mr. Peel. I really don't know what to I don't know
I never met him.
24 this Ms. Walker.
I've never met her.
I did contact Mr. Peel
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1 what had happened and so that he wouldn't pay any monies, if he 2 intended to, over to the VII Holdings Company. 3 So, I didn't know about the sale. I see in the
4 papers that there is an Attorney Cotton involved, who 5 represented the -- I guess it's the Southbridge Savings Bank. 6 And if I had known that there was a foreclosure that was going 7 to be held the next day, I would have attempted to contact him 8 directly. So, you know, the allegation in the papers that I I just contacted Mr.
9 knew about this sale is simply untrue.
10 Peel to let him know that I -- you know, that I filed this and 11 that, you know, he shouldn't pay VII Holdings. I see that he
12 wrote a letter to Mr. Cotton about the -- apparently about the 13 foreclosure, but, you know, I didn't have any knowledge of 14 that. So, if the basis for relief of the stay here is that --
15 you know, that somehow this is some sort of scheme cooked 16 between Mr. Peel and myself and Mr. Irizian, the answer is 17 absolutely not, because I didn't know about -- I didn't know 18 about the sale. 19 20 21 petition. 22 THE COURT: I understand. What's the nature of your THE COURT: MR. WILSON: Are you a creditor of VII Holdings? Yes. Yes, I am. That's on my Chapter 7
23 claim against VII Holdings? 24 25 MR. WILSON: THE COURT: It was for money -- for money loaned. Who runs VII Holdings?
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1 2 3 4
MR. WILSON: THE COURT: MR. WILSON: THE COURT:
I don't know who -Who did you loan the money to? To VII Holdings. Was there someone at VII Holdings? When
5 did you loan the money? 6 MR. WILSON: You know, I don't have the petition. I don't have it in front of me. I
7 think it's on the petition. 8 9 Holdings? 10 11 MR. WILSON: THE COURT: THE COURT:
How much money did you loan to VII
Nineteen thousand five hundred dollars. And how much -- and with whom did you
12 deal at VII Holdings? 13 MR. WILSON: There was a Mr. DiMari and there was a
14 Mr. Conklin. 15 16 THE COURT: MR. WILSON: What was the money loaned for? They wanted, you know, to borrow some
17 money and I lent it to them. 18 19 20 company. 21 22 MR. WILSON: (Pause) I would like to point out also that the THE COURT: MR. WILSON: What is VII Holdings' business? As far as I know, it's a real estate
23 sale, from what I understand, apparently went through. 24 25 THE COURT: MR. WILSON: It did. And what I don't -- what I can't quite
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1 understand is -- because, you see, I've called Hobbs Abstract 2 Company, who has the other part of the interest in the 3 mortgage, and I spoke to a -- her name is Mrs. Aharoonian 4 (phonetic) -- Aharonian (phonetic), and she, who I guess is the 5 principal, one of the principals of Hobbs, and she told me that 6 she understands that approximately $100,000 is being held in 7 the sale by this Attorney Cotton, and she had (indiscernible) 8 to be paid and nothing has happened. So, I -- as far as, I
9 guess, the issue of adequate security, they've got all the 10 money, so I don't know, you know, why this is happening. 11 THE COURT: Isn't the question of whether or not
12 money should be paid out to you or to anybody else who may have 13 an interest in this property more properly a question for the 14 Massachusetts Bankruptcy Court handling Mr. Peel's bankruptcy? 15 MR. WILSON: I understand Mr. Peel is not in
16 bankruptcy anymore. 17 ended. 18 19 THE COURT:
I think his case was closed -- I mean, it
He's obtained his discharge? Yes, as far as I know, he did. One
MR. WILSON:
20 other thing that I think is important, Judge, is that, you 21 know, obviously in the papers that have been filed by counsel, 22 you have three interested parties that have not been served 23 with this particular motion, being -- obviously Hobbs Abstract 24 Company being one, and Mr. Peel and Mr. Irizian. So, I just
25 don't, you know, know how the Court feels about that. J&J COURT TRANSCRIBERS, INC.
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1 Obviously they have either a stake or a potential stake in 2 either the property or the funds, and -3 4 THE COURT: MR. WILSON: Do they have claims against VII Holdings? I don't know that. I have no idea, and
5 I would think that it would be important, however -- I read the 6 local rule, I can't think of the number of it, but it said that 7 all interested parties should be notified. 8 entity, Cambridge. You have this And
I don't know -- I don't know them.
9 then you have the bank.
And Cambridge may or may not be a
10 party in interest, whereas, you know, obviously Hobbs and Mr. 11 Peel and Mr. Irizian, you know, are. 12 THE COURT: So, I just --
Well, as I understand it, Cambridge
13 purchased the property at the foreclosure sale, correct? 14 15 papers. 16 17 18 THE COURT: MR. WILSON: THE COURT: And it is your -I wasn't there. And it is your purpose and intention by MR. WILSON: Well, that's what they claim in the
19 filing the involuntary against VII Holdings to preclude them 20 from taking possession of it by operation of the automatic 21 stay. 22 Is that correct? MR. WILSON: No. No, that's not correct. I don't --
23 I don't have any interest in the possession of the property. 24 I'm not a party to this eviction case. 25 the eviction case. I have no interest in
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1 if for -- if Mr. Peel is evicted, then I would worry that -2 and this is a single-family house -- I would worry that the 3 property would be, you know, abandoned, or -- it's not in very 4 good shape as it is. I have driven by it, and I would just
5 think that the possibility of some type of -6 7 8 property. 9 THE COURT: What does any of this have to do with This is an asset of VII THE COURT: MR. WILSON: What does --- you know, harm could come to the
10 your claim against VII Holdings? 11 Holdings. 12 paid you? 13 MR. WILSON: Yes.
Why don't you just sue VII Holdings if they haven't
I -- I don't -- I'm sorry, I don't
14 understand. 15 16 THE COURT: Mr. Fournier? Your Honor, a couple things. One, Mr.
MR. FOURNIER:
17 Wilson says that he had no knowledge of the foreclosure 18 proceeding. I find it a remarkable coincidence not only that
19 the involuntary petition was filed on the eve of foreclosure in 20 this case, but it's the second time it happened. 21 once down in Alabama as well. It happened
It's strains credulity, Your
22 Honor, to suggest that that's true. 23 24 right one. Your Honor, the point Your Honor made I think is the What Mr. Wilson is describing, if what he is
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1 VII Holdings, and he has not indicated that he has brought 2 suit. He has not indicated that he has a judgment. There is
3 no indicating that they're insolvent.
So, Your Honor, it seems
4 to me that relief from -- or that a dismissal of the case at 5 the very least is warranted based on the facts before the 6 Court. Beyond that, Your Honor, though, I think that the Court
7 has more than adequate information before it to make the 8 determination that this is, in fact, a bad faith filing and to 9 award sanctions as a result of that. If the Court deems a
10 further evidentiary hearing on that point to be necessary, 11 certainly we could do that, but I think the Court already has 12 adequate information before it to make that determination. 13 14 break. THE COURT: Okay. We are going to take a ten minute
As I said, Mr. Wilson, I will consider your
15 representations and your statements on the record this morning, 16 but I do want to have the opportunity to review your opposition 17 while it was just received this morning. As I said, it's been
18 the practice in this court, and I'm sure in other Federal 19 Courts, that we do what we can to accommodate the needs and 20 interests of pro se litigants. 21 opposition. 22 reconvene. 23 gentlemen. 24 25 THE CLERK: (Recess) All rise. So, I will consider your
We will take a ten minute break, and then we will Stand in recess. Please stay on the line,
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1
THE COURT:
Please be seated.
Mr. Wilson, I've had Are the parties still
2 an opportunity to review your response. 3 on the phone? 4 5 MR. WILSON: THE COURT: Yes, I'm here. Very good.
Mr. Wilson, what is your
6 relationship with Mr. Irizian? 7 familiar with Mr. Peel. 8 9 10 him? 11 12 him. 13 14 15 THE COURT: MR. WILSON: THE COURT: MR. WILSON: MR. WILSON: THE COURT:
You stated that you were not
Are you familiar with Mr. Irizian? Yes, I am.
Okay.
And what is your relationship with
Well, I have had a couple of cases with
A couple of cases? Yes. What do you mean by cases? Bankruptcy
16 cases, legal cases? 17 MR. WILSON: No -- well, one of them -- two of them
18 were civil cases, and one of them was a bankruptcy case. 19 THE COURT: Okay. Mr. Buchbinder, does the Office of
20 the United States Trustee have anything to add? 21 Mr. BUCHBINDER: Your Honor, Dave Buchbinder for the
22 United States Trustee. 23 this morning.
I'm here appearing just as an observer
I have reviewed the dockets of the Alabama case
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1 nothing to add this morning, Your Honor. 2 THE COURT: I have no questions for the Office of the All right. As I said, Mr. Wilson, I've
3 United States Trustee.
4 had an opportunity to review your response, and likewise I have 5 heard and considered your comments on the record today to the 6 Court. Let me note as a threshold matter that Mr. Wilson
7 raised concerns with regard to the sufficiency and adequacy of 8 service of the documents. We have during the break gone back
9 and reviewed -- there are affidavits of service on file signed 10 by counsel for the moving party, Mr. Fournier, reflecting 11 timely service. Case law is clear in this jurisdiction and
12 others that that is -- timely filed certificates of service 13 create a presumption of receipt that must be rebutted by more 14 than a simple allegation of non-receipt. Nevertheless, I find
15 that any concern with regard to the sufficiency of service has 16 been cured first by the Court's willingness to allow Mr. Wilson 17 to appear even in the absence of a timely filed response and 18 then by the Court's willingness to review and consider the 19 response that Mr. Wilson made. 20 leading up. 21 Based on the record before me, I do conclude that the So, I am satisfied with service
22 commencement of these proceedings were for no other purpose 23 than to improperly frustrate the efforts of Southbridge and 24 Cambridge to follow through on the purchase of the Charlton 25 property. Mr. Wilson's comments and representations to the J&J COURT TRANSCRIBERS, INC.
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1 Court that he filed this case without notice of the 2 Massachusetts foreclosure is simply not credible. I further
3 note that the sale occurred pursuant to a valid and final order 4 of the Massachusetts Bankruptcy Court, and the record does 5 reflect that there were substantial proceedings in that court 6 in order to obtain that relief. 7 So, given that, I find that cause does exist for
8 relief from the stay, and given that this case has been filed 9 in bad faith and for an improper purpose, I will annul the 10 automatic stay effective back to August 30, 2006, which I 11 believe is the date of filing of the involuntary petition, and 12 I will do so pursuant to 11 U.S.C. Section 362(d). 13 Accordingly, I do conclude that based on that annulment the 14 sale of the Charlton property did not occur in violation of the 15 automatic stay and is, therefore, neither void nor voidable 16 under Title 11 of the United States Code. 17 Now, the parties have asked that I dismiss this case
18 nunc pro tunc to August 30, or actually Cambridge has requested 19 nunc pro tunc dismissal. I will dismiss the case, but that Given annulment of
20 dismissal will be effective as of today.
21 the stay, I think that dismissal nunc pro tunc is not necessary 22 for the purposes of the parties, even if it is procedurally 23 proper, which is a question that I don't address today. So,
24 the dismissal of the case would be as of today, not nunc pro 25 tunc to August 30. J&J COURT TRANSCRIBERS, INC.
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1
Consequently, I will dismiss the case and I will Under each of Section 303(i),
2 dismiss the petition as well.
3 305(a)(1) and Section 707(a) of the Bankruptcy Code, and I find 4 that there is cause and grounds for dismissal of the petition 5 and the case under each of those statutory predicates. At
6 bottom, I find that cause exists for dismissal in the interest 7 of justice and the interests of creditors and the debtor will 8 be best served by dismissal of a case that has been commenced 9 for an improper purpose. 10 In addition, I note that Section 707(a) requires that
11 the Court find cause for dismissal, and the case law supports 12 the proposition that bad faith is cause for dismissal and a bad 13 faith filing is determined from the totality of the 14 circumstances. I have considered Mr. Wilson's response. I
15 have considered his submission to the Court as well and his 16 representations today to the Court on the record in evaluating 17 whether or not dismissal is appropriate, and I do find based 18 upon that record that dismissal of the case is appropriate. 19 I find also that the allegations and the paper record
20 submitted by Cambridge Properties and by Southbridge alleging 21 that this is part of an effort to improperly frustrate a 22 process commenced by a sister court, the Massachusetts 23 Bankruptcy Court, and now presently proceeding in Massachusetts 24 State Court is -- that that is what is occurring here. 25 will find that dismissal of the case is appropriate. J&J COURT TRANSCRIBERS, INC. So I
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1
As to Mr. Wilson, I find that dismissal of the case He has alleged without
2 will not significantly prejudice him.
3 backup or meaningful proof that he has a claim of at least 4 $19,500 against VII Holdings, and there is nothing in the 5 record that would suggest that he is precluded or otherwise 6 stopped from suing VII Holdings for recovery on his note 7 outside of an involuntary bankruptcy proceeding. 8 The movants have requested fees and expenses assessed
9 against the petitioning creditor, and I will consider that 10 request. I am not granting such a request today, but I will
11 consider that request following submission under certification 12 of such fees and expenses of moving counsel, and I will direct 13 that that certification and the documentation of those fees and 14 expenses be submitted also to Mr. Wilson. 15 consider it. The Court will
If Mr. Wilson has a response, I will consider
16 that response and either rule or would schedule a further 17 hearing. 18 Mr. Fournier, looking at the form of order that you As I
19 have submitted, I think we need to modify it slightly. 20 said, the dismissal of the case is pursuant to 303(i),
21 305(a)(1) and 707(a), each of those as independent statutory 22 grounds for dismissal. Likewise, I want it clear that the
23 motion provides for dismissal as of today, with the stay being 24 annulled effective as of the filing of the petition. 25 MR. FOURNIER: Very well, Your Honor.
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1
THE COURT:
And so to the extent that we need to
2 modify the order to reflect that that request for relief is 3 granted, I'll trust that you'll be able to revise that and 4 submit it to the Court under certification. And finally, it
5 will require some modification to the provisions relating to 6 fees and expenses in order to provide for the procedure that I 7 just laid out. 8 MR. FOURNIER: Thank you, Your Honor. We'll revise
9 the order and submit it under certification of counsel. 10 11 12 13 THE COURT: MR. WILSON: THE COURT: MR. WILSON: Very good. Judge? Yes, Mr. Wilson. Am I going to receive a copy of this Are there any questions?
14 order as revised? 15 16 17 THE COURT: MR. WILSON: THE COURT: You will, yes, sir. Okay. And I will direct that Mr. Fournier
18 provide it to you. 19 MR. WILSON: Okay. Now, I have one other question.
20 Does this -- does it mean now that any appeal I want to take 21 commences as of today? 22 THE COURT: Mr. Wilson, to the extent that you have
23 rights to appeal or to seek relief from this -- from my order 24 today, I cannot give you guidance. The order itself will be My ruling -- I
25 entered promptly upon submission by the Court. J&J COURT TRANSCRIBERS, INC.
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1 have submitted my ruling today.
The order will not be -- will
2 not be on the docket until it's submitted by Mr. Fournier, but 3 I can't give you guidance on how to prosecute an appeal or 4 otherwise give you legal advice. 5 MR. WILSON: That's -I'm not asking for that. I
Oh, no, no.
6 just know that in my review of the local rules it says that 7 there's a ten-day period to -- where everything stays in place, 8 and I'm asking the Court is that ten-day period not in effect 9 or is it? 10 MR. FOURNIER: Your Honor, I believe that he's
11 referring to the ten-day stay under Rule 4001 for orders 12 granting relief from the automatic stay. 13 14 MR. WILSON: THE COURT: Yes. Mr. Fournier, have you requested relief
15 from Rule 4001? 16 MR. FOURNIER: Your Honor, I believe that our motion
17 requested the relief be effective immediately. 18 19 MR. FOURNIER: (Pause) Your Honor, I don't believe the papers
20 contain an express request for relief from that -- from Rule 21 4001. In light of the basis on which the Court has made its
22 ruling, however, I would make an oral request for that relief 23 and we request that the order be effective immediately. 24 25 THE COURT: MR. WILSON: Mr. Wilson? Well, I -- I leave that up to you. I
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1 just wanted to know where I stood. 2 THE COURT: Okay. I will grant the debtor's -- the
3 movant's request for relief from the ten-day stay under the 4 Bankruptcy Rules, and I will direct that the order be effective 5 immediately, and I will look for the order from counsel. 6 MR. FOURNIER: Very well, Your Honor. Your Honor,
7 just to be clear, we'll be submitting the order to the Court. 8 We'll make -- we'll submit it to Mr. Wilson at the same time we 9 submit it to the Court. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 J&J COURT TRANSCRIBERS, INC. THE COURT: Correct. Thank you, Your Honor. Anything further?
MR. FOURNIER: THE COURT:
Very well.
MR. FOURNIER: THE COURT:
Nothing further, Your Honor. Stand in recess.
Thank you, counsel. * * * * *
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C E R T I F I C A T I O N I, DENISE M. O'DONNELL, court approved transcriber, certify that the foregoing is a correct transcript from the official electronic sound recording of the proceedings in the above-entitled matter, to the best of my ability.
/s/ Denise M. O'Donnell DENISE M. O'DONNELL J&J COURT TRANSCRIBERS, INC. Date: February 6, 2007
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CERTIFICATE OF SERVICE I, Evelyn J. Meltzer, hereby certify that on the 6th day of March, 2007, I caused the foregoing Appellees' Cross-Designation of Record on Appeal to be served upon the following parties by U.S. Mail, first class, postage pre-paid:
VII Holdings Company 2711 Centerville Road, Suite 400 Wilmington, DE 19805 John Wilson 196 West River Street Orange, MA 01364 David Buchbinder, Esquire Office of the United States Trustee 844 King Street Room 2207 Wilmington, DE 19899-0035
/s/ Evelyn J. Meltzer Evelyn J. Meltzer
#8381154 v1