Now Updating
In re Carol Engen

Summarizing by Bradley Pearce

Fustolo v. 50 Thomas Patton Dr., LLC, et al.

No 15340
The Court ruled that Creditor 50 Thomas Patton Drive ("Patton Drive")'s claim was not contingent as to liability or the subject of a bona fide dispute as to liability or amount and Patton Drive could join an involuntary bankruptcy petition filed against Steven Fustolo ("Fustolo"). The Court reached this conclusion because Fustolo was indisputably liable on a component claim of a multi-part judgment held by Patton Drive, the amount of the component claim was severable from the total amount of the judgment and Fustolo has notice of that reliance and was not prejudiced by that reliance.
Procedural context:
The opinion is an appeal from the district court decision affirming the Bankruptcy Court's granting of summary judgment and putting Fustolo into an involuntary proceeding.
Patton Drive was the beneficiary of four promissory notes made by companies associated with Fustolo. Fustolo had guaranteed some of the promissory notes but not others. A Massachusetts state court entered a judgment finding Fustolo liable on all of the promissory notes, even though he had not guaranteed all of the notes. Fustolo appealed the judgment. Well after the judgment was entered, Patton Drive joined an involuntary petition against Fustolo. Fustolo argued that Patton Drive could not join the involuntary petition because its judgment was on appeal and there was a bona fide dispute as to Fustolo's liability on some of the promissory notes and the amount that Fustolo owed.
Torruela & Kayatta

ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!

About us in numbers

3101 in the system

2987 Summarized

2 Being Processed