Grossman v. The Belridge Group (In re Lothian Oil, Inc.)

Citation:
5th Cir. Court of Appeal - Case No 1151073 (May 8, 2013)
Tag(s):
Ruling:
AFFIRMED in part and reverse in part the district court's decision. Further, a remand with instruction to clarify whether an isolated claim in the earlier state-court action can proceed. Additionally, the court found that the bankruptcy court did not err in enjoining both state-court actions and imposing sanctions.
Procedural context:
Appellants and cross-appelles challenge a bankruptcy court's order enjoining their prosecutions of two state-court actions. The bankruptcy court reasoned that the state-court actions violated the plan injunction in the bankruptcy proceeding of the debtor and its entities. The bankruptcy court later entered a contempt judgment against the appellants after they failed to comply with the court's judgment order. On appeal, the district court affirmed the injunction relating to the earlier matter and reversed the contempt judgment. Appellants and cross-appellees appeal the district court's affirmance of the injunction of the later state-court action.
Facts:
In 2007, Lothian Oil, Inc and its corporate entities filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. On the day of the filing, the debtor filed motions to approve settlement agreements resulting from various lawsuits which was approved by the bankruptcy court. On June 27, 2008, the bankruptcy court entered an order confirmed debtor's Second Modified Amended Joint Plan of Liquidation of the Debtors. On October 30, 2008, various appellants, including Israel Grossman, entered in to a settlement agreement with the debtor. From that settlement and confirmed plan, comes a dispute regarding transfers of properties by the debtor to various entities. Various parties commenced state court actions in 2009 and 2010 against the debtor regarding the transfers and disputes, and the debtor filed a motion to enforce the Plan Injunction against the parties. From those actions, comes this appeal.
Judge(s):
King, Higginbotham, and Clement.

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