Benshot, LLC v. 2 Monkey Trading, LLC, et al
- Case Type:
- Business
- Case Status:
- Reversed and Remanded
- Citation:
- 23-12342 (11th Circuit, Jul 09,2025) Published
- Tag(s):
-
- Ruling:
- Aligning with Fourth and Fifth Circuits, the Eleventh Circuit held that corporate debtors in Subchapter V proceedings who seek to confirm non-consensual plans under section 1191(b) cannot discharge debts listed under section 523(a) based on the plain and unambiguous language of section 1192. The Eleventh Circuit acknowledged the complexity of the interplay between the applicable provisions of the Bankruptcy Code and the split among bankruptcy courts across the nation, but focused on the plain text of section 1192, including its reference to a "kind of debt" rather than a "kind of debtor."
- Procedural context:
- The bankruptcy court, adopting the ruling of several bankruptcy courts around the country, granted the debtors' motion to dismiss the creditor's complaint objecting to the dischargeability of debt under section 523(a). The creditor timely appealed the order dismissing the adversary proceeding.
- Facts:
- In pre-bankruptcy litigation pending in the Eastern District of Wisconsin, BenShot, LLC prevailed against 2 Monkey Trading, LLC and Lucky Shot USA, LLC on all claims, including claims for violations under the Lanham Act and Wisconsin common law, and were awarded punitive damages by the jury. The jury verdict form inquired as to whether the debtors acted "maliciously toward" Benshot or "in an intentional disregard of" BenShot's rights, and the jury answered affirmatively. The debtors sought relief under Subchapter V of Chapter 11 and to confirm a plan non-consensually under section 1191(b). Benshot filed a complaint objecting to the dischargeability of its debt, alleging that the debt was a non-dischargeable debt under section 523(a)(6) for a willful and malicious injury.
- Judge(s):
- Branch, Luck, and Lagoa, Circuit Judges.
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