Goldman v. Bankton Financial Corp., L.L.C. (In re Skyport Global Communications, Inc.)

Goldman v. Bankton Financial Corp., L.L.C. (In re Skyport Global Communications, Inc.), Case No. 15-20243 (5th Cir. Oct. 12, 2016) (unpublished)
Affirmed contempt order and sanctions award against attorney and financial advisor for contacting witnesses without permission in violation of the bankruptcy court's preliminary injunction.
Procedural context:
Appeal from district court order affirming order from the bankruptcy court for the Southern District of Texas awarding sanctions.
Attorney represented investor-plaintiffs who lost money in a company that went through a confirmed chapter 11 reorganization process (Skyport). Defendants removed the case to federal court and obtained a preliminary injunction to preserve the status quo pending a determination by the bankruptcy court regarding what claims were barred by the injunction contained in the confirmation order. The bankruptcy court granted a preliminary injunction that enjoined the plaintiffs and their counsel from contacting Skyport's current or former employees without permission from Skyport's counsel or the court. Plaintiffs' counsel communicated extensively with Skyport's former president through a financial advisor who knew of the injunction. When the plaintiffs moved to dissolve the preliminary injunction, Skyport moved for contempt and sanctions (for the third time) based on emails and other evidence of communication with the former president in violation of the injunction. The bankruptcy court held 17 days of evidentiary hearings over 11 months on the motion to dissolve the injunction, the contempt motion, and other pending motions before issuing a 187-page opinion finding the plaintiffs' attorney and financial advisor in contempt. The court awarded sanctions of 25% of the SkyPort parties' attorneys' fees and 95% of their expenses jointly and severally against the attorney and financial advisor.
Elrod, Graves, Costa

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