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Enforce Automatic Stay

Enforce Automatic Stay

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UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF FLORIDA FORT LAUDERDALE DIVISION www.flsb.uscourts.gov IN RE: ROTHSTEIN ROSENFELDT ADLER, P.A.,1 Alleged Debtor. ____________________________________/ EMERGENCY MOTION TO ENFORCE THE AUTOMATIC STAY [Hearing Requested on November 20, 2009 at 9:30 a.m.] Basis for Emergency Relief: The Movants request that this Court stay any attempt to conduct third party discovery against the Debtor or the Chief Restructuring Officer. Currently, one party is attempting to take the deposition of Stettin on November 19, 2009. It is impossible for Stettin to continue his review of the Alleged Debtor’s books and records and prepare this case for stabilization if he is subject to onerous third party discovery. The Movants request a hearing on November 20, 2009.2 The Hon. Herbert Stettin (“Stettin”), the State Court appointed3 receiver (“Receiver”) and Rothstein Rosenfeldt Alder, P.A. (“Alleged Debtor” or “RRA”), by and through Stettin as the Chief Restructuring Officer (“CRO”) of RRA (collectively the “Movants”), hereby move this Court for an Order, pursuant to 11 U.S.C. §§ 105(a), 362(a), enforcing the automatic stay and staying any and all future depositions until further order of this Court (the “Motion”). In support of the Motion, Stettin states as follows: BACKGROUND 1. This case was commenced as an involuntary chapter 11 proceeding on November CASE NO.: 09-34791-RBR INVOLUNTARY CHAPTER 11

10, 2009, by four petitioning creditors [D.E. 1]. No Order for Relief has been entered.
The address and last four digits of the taxpayer identification number of the Debtor, Rothstein Rosenfeldt Adler, P.A., is Las Olas City Centre, 401 E. Las Olas Blvd, Suite 1650, Fort Lauderdale, Florida 33301 (TIN 7961). 2 This Motion shall also serve as a motion for a protective order staying any deposition pursuant to Local Rule 70261 and 9014-1. 3 On November 4, 2009, the Honorable Jeffrey E. Streitfeldt, Judge, Broward County Circuit Court, appointed Stettin as the Receiver of RRA. Broward County Case No. 09-059301.
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2.

Prior to the commencement of this case, Stuart A. Rosenfeldt (“Rosenfeldt”), on

behalf of himself and RRA, filed a lawsuit against his partner Scott W. Rothstein (“Rothstein”) alleging multiple wrongful acts on the part of Rothstein, RRA’s former Chief Executive Officer. Exhibit A attached to D.E.2 (the “Receivership Action”). 3. On November 4, 2009 the state court presiding over the Receivership Action (a)

removed Rothstein as the Chief Executive Officer, and (b) appointed Stettin as the Receiver for RRA. Exhibit B attached to D.E.2. 4. On November 11, 2009, Rosenfeldt, as the sole officer and director of RRA,

executed a resolution (the “Resolution”) appointing Stettin as the CRO of RRA and delegated to Stettin all operational and managerial control over RRA. The Resolution, inter alia, authorizes

Stettin, exclusively, to contest or consent to the involuntary petition. 5. Lawyers from RRA represent the plaintiff in the case Jane Doe #2 v. Epstein, 08-

cv-80119 Marra/Johnson (S.D.Fla)(“District Court Action”).4 On November 12, 2009, the Defendant filed his “Emergency Motion for Order For the Preservation of Evidence & Incorporated Memorandum of Law.” (“Emergency Motion”) in the District Court Action [D.E. 405], attached hereto as Exhibit A. 6. The motion seeks an “Order to preserve all evidence relevant to the investment

scheme, as described [therein] and to further prohibit the persons and RRA from tampering, destroying or altering any such evidence.” Emergency Motion at 6. 7. On November 13, 2009, the District Court entered an order granting the

Emergency Motion on a temporary basis. District Court Action [D.E. 408] attached hereto as Exhibit B.

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This case has twelve (12) related cases and some related state court litgation. The Movants request that this relief apply to all related cases and parties, including, but not limited to, Broward County Case No. 09-059301.

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8.

Notwithstanding the shortness of time, Stettin on behalf of RRA filed a brief

response (“Response”). District Court Action [D.E. 409], attached hereto as Exhibit C. In his Response Stettin agreed that he would comply with the duties imposed upon him by the Receivership Action and by the Bankruptcy Code, including any obligation to preserve the books and records of RRA. Stettin recognizes that he has fiduciary responsibilities and that “security of the firm’s computer system and its documents is one his foremost present concerns and tasks.” Response at 2. Furthermore, Stettin requested that any deposition of him be postponed for at least 45 days so that he may continue to address the pressing needs of stabilizing the debtor. 9. The Defendant filed a reply (“Reply”). District Court Action [D.E. 411], attached

hereto as Exhibit D. The Reply seeks to have the originally scheduled depositions proceed on November 19, 2009, on the basis that certain trial deadlines are going to expire. RELIEF REQUESTED 10. “The automatic stay is the most important protection afforded a debtor; it is

intended to give a debtor the chance to catch his breath, collect all of the proceedings against him in one place and proceed to reorganize his affairs.” In re Weinraub, 361 B.R. 586, 591 (Bankr. S.D. Fla. 2007)(J. Ray); See ACandS, Inc. v. Travelers Cas. & Sur. Co., 435 F.3d 252, 258 (3d Cir. 2006) (holding “that the automatic stay provision of the Bankruptcy Code promotes a public policy sufficient to preclude enforcement of an award that violates its terms or interferes with its purposes”); See also, Cavanaugh v. Conseco Fin. Servicing Corp. (In re Cavanaugh), 271 B.R. 414, 424 (Bankr. D. Mass 2001)(noting that “the automatic stay is the single most important protection afforded to debtors by the Bankruptcy Code”). 11. Stettin, through his Response, has attempted to accommodate the concerns that

parties may have about the security of RRA documents. However, to permit a non—bankruptcy court deposition to proceed on the day before this Court has hearings on substantive motions 3
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including the motion to appoint a trustee, would undermine the very reason for the automatic stay. Stettin’s efforts are best utilized in moving this bankruptcy case forward. 12. Moreover, 11 U.S.C. §362(a)(1) stays “the commencement or continuation,

including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title[.]” The allegations in the Emergency Motion rise to a level to suggests that the Defendant may be bringing claims against RRA for any alleged malfeasance on the part of RRA that may have occurred prior to Stettin’s appointment. See Emergency Motion at page 6 (the purposes of the Emergency Motion is to

prevent the Defendants to analyze and evaluate whether the Plaintiffs and their lawyers have been operating in good faith). This type of discovery is clearly stayed by the operation of 11 U.S.C. §362(a). 13. Section §105(a) is a grant of equitable powers. In re Franzese, 2007 Bankr.

LEXIS 2490, at *5 (Bankr. S.D. Fla. 2007)(J. Ray). In Franzese, this Court re-imposed an already expired stay pursuant to §105(a). In doing so, the Court noted that it “cannot resurrect an expired stay. However, the Court will impose a stay identical to § 362(a) pursuant to § 105(a).” 14. This Court also noted, in In re Weinraub, “that re-imposition of the stay is

precisely the type of equitable activity that promotes the purpose of the automatic stay. As such, the Court is acting within its § 105 mandate to issue any order, process or judgment that is necessary or appropriate to carry out the provisions of this title.” In re Weinraub, 361 B.R. 586,591 (Bankr. S.D. Fla. 2007)(J. Ray); §105(a); see also In re: Momentum Mfg. Co., 25 F.3d at 1136 (explaining "that § 105(a) should be construed liberally to enjoin [actions] that might impede the reorganization process.")(brackets in original; internal quotations and citations 4
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omitted). Accordingly, it is well within this Court’s ability to stay any further discovery against Stettin and RRA, as any continued discovery undermines the very provisions of this title. 15. Accordingly, the Movants seek an order that any attempt to set or carryout the

deposition of Stettin by the Defendants violates the automatic stay of 11 U.S.C. §362(a) or alternatively undermines the purposes of the bankruptcy code and impedes the operation of the bankruptcy process. WHEREFORE, the Movants respectfully request the entry of an order: (1) staying, pending further order of this Court, any deposition of, or further discovery from, Stettin or RRA, because such deposition or discovery violates the automatic stay, or alternatively, because such deposition or discovery is contrary to the purposes of the bankruptcy code; and (2) granting such other relief as the Court deems just and proper. I HEREBY CERTIFY that a true and correct copy of the foregoing was served via Regular U.S. Mail, postage prepaid, fax, email and/or overnight delivery upon all parties on the attached Service List this 17th day of November, 2009. Dated: November 17, 2009 Respectfully submitted, BERGER SINGERMAN, P.A. Attorneys for Alleged Debtor 200 S. Biscayne Blvd., Ste. 1000 Miami, FL 33131 Telephone: (305) 755-9500 Facsimile: (305) 714-4340 By: /s/ Jordi Guso Paul Steven Singerman singerman@bergersingerman.com Florida Bar No. 378860 Jordi Guso jguso@bergersingerman.com Florida Bar No. 0863580 Isaac Marcushamer imarcushamer@bergersingerman.com Florida Bar No. 0060373

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EXHIBIT “A”

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EXHIBIT “B”

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Case 9:08-cv-80119-KAM Document 408 14 Filedon FLSD Docket 11/16/2009 Page 1 of 2 Case 09-34791-RBR Doc Entered 11/17/09 Page 41 of 56

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO. 08-CIV-80119-MARRA/JOHNSON JANE DOE NO. 2, Plaintiff, vs. JEFFREY EPSTEIN, Defendant. ____________________________________/ Related cases: 08-80232, 08-80380, 08-80381, 08-80994, 08-80993, 08-80811, 08-80893, 09-80469, 09-80591, 09-80656, 09-80802, 09-81092 ____________________________________/

ORDER THIS CAUSE is before the Court on Defendant Epstein’s Emergency Motion for Order of the Preservation of Evidence (D.E. #405). The Court has reviewed the above-referenced Motion, which has been styled an “Emergency” by counsel for Epstein, and agrees that based upon the substance of the pleading and the nature of the relief sought, the Motion has been properly filed on an emergency basis. By the Motion, Epstein moves for an order requiring the preservation of all evidence relevant to the investment scheme referenced in the Motion and further prohibiting the individuals at the RRA Law Firm from tampering, destroying or altering any such evidence. Of the three attorneys contacted with respect to their position on the motion and as to whether they agree to the relief sought or intend to file a response in opposition, only one attorney, Mr. Bradley Edwards, could definitively state that he had no

Case 9:08-cv-80119-KAM Document 408 14 Filedon FLSD Docket 11/16/2009 Page 2 of 2 Case 09-34791-RBR Doc Entered 11/17/09 Page 42 of 56

opposition to the relief sought in the Motion. The other two attorneys involved, Mr. Paul Singerman and Mr. Kendall Coffee, have requested until Monday, November 16, 2009, in which to state either their non-objection to the relief sought, or to file a response in opposition to the Motion. Mr. Kendall Coffee has stated that he will agree to whatever position ultimately taken by Mr. Singerman on the issue. Accordingly, and in an effort to maintain the status quo until such time as the Court rules on the Motion, it is hereby, ORDERED AND ADJUDGED that said Motion for the Preservation of Evidence (D.E. # 405) is GRANTED ON A TEMPORARY BASIS until Tuesday, November 17, 2009, at which point the Court shall issue a final order on the Motion. DONE AND ORDERED this November 13, 2009, in Chambers, at West Palm Beach, Florida.

LINNEA R. JOHNSON UNITED STATES MAGISTRATE JUDGE

CC:

The Honorable Kenneth A. Marra All Counsel of Record

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EXHIBIT “C”

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EXHIBIT “D”

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SERVICE LIST CASE NO.: 09-34791-BKC-RBR
Marianella Morales, Esquire Authorized Agent For Joining Creditors Avenida Francisco de Miranda Torre Provincial “A” Piso 8 Caracas, Venezuela John H. Genovese, Esquire Robert F. Elgidely, Esquire Theresa M.B. Van Vliet, Esquire Genovese Joblove & Battista, PA Bank Of America Tower at International Place 100 S.E. 2nd Street Suite 4400 Miami, Florida 33131 Phone: (305) 349-2300 Fax (305) 349-2310 Kendall Coffey, Esquire Coffey Burlington, Office in the Grove Penthouse 2699 South Bayshore Drive Miami, Florida 33133 The Honorable Herbert M. Stettin One Biscayne Tower Suite 3700 Two South Biscayne Boulevard Miami, Florida 33131 John G. Bianco, Esquire John M. Mulli, Esquire Tripp Scott 110 Southeast Sixth Street Fifteenth Floor Fort Lauderdale, Fl. 33301 Alison W. Leht Assistant United States Attorney 99 N.E. 4th Street 7th Floor Miami, Florida 33132 Phone: (305) 961-9176 Fax: (305) 536-7599 Alison.Lehr@usdoj.gov Stuart A. Rosenfeldt, Esquire Rothstein Rosenfeldt Adler, PA 401 East Las Olas Boulevard Suite 1650 Fort Lauderdale, Florida 33301 Jeffrey R. Sonn, Esquire Sonn & Erez, PLC Broward Financial Center 500 E. Broward Boulevard Suite 1600 Fort Lauderdale, Florida 33394 Phone: (954) 763-4700 Fax (954) 763-1866 Office of the US Trustee 51 Southwest First Avenue Suite 1204 Miami, Florida 33130 Thomas Tew, Esquire Tew-Cardenas, LLP Four Seasons Tower 15th Floor 1441 Brickell Avenue Miami, Florida 33131-3407

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Conrad & Scherer, LLP 633 South Federal Highway Fort Lauderdale, FL 33301 Tel: 954-462-5500 Michael D. Seese, Esq. Hinshaw & Culbertson, LLP 1 E Broward Blvd Ste 1010 Ft Lauderdale, Florida 33301 Tel: 954.4677900 Fax: 954.4671024 Internal Revenue Service Centralized Insolvency Operations P.O. Box 21126 Philadelphia, PA 19114 Internal Revenue Service Special Procedures - Insolvency 7850 SW 6th Court Plantation, FL 33324 Tel.: (954) 423-7300 Fax.: (305) 982-5406 Special Asst. U.S. Attorney P.O. Box 9, Stop 8000 51 SW 1st Avenue, #1114 Miami, Fl 33130 Fax: (305) 530-7139 Grant J. Smith, Esq. Rothstein Rosenfeldt Adler, P.A. 401 East Las Olas Blvd Suite 1650 Fort Lauderdale, FL 33301 United Healthcare Dept. CH 10151 Palatine, IL 60055 Mark Bloom, Esq. Greenberg Traurig, LLP 1221 Brickell Avenue Miami, FL 33131 T 305.579.0500 F 305.579.0717

Special Asst. U.S. Attorney IRS District Counsel 1000 S. Pine Island Rd., Ste 340 Plantation, FL 33324-3906 The Honorable Eric H. Holder, Jr. Attorney General of the U.S. 950 Pennsylvania Avenue, NW Room 4400 Washington, DC 20530-0001 Honorable Jeffrey H. Sloman, Acting U.S. Attorney 99 NE 4th Street Miami, Fl 33132 Daniel Mink Ovadia Levy c/o Renato Watches, Inc 14051 NW 14th Street Sunrise, Florida 33323 William George Salim, Jr. Moskowitz Mandell & Salim 800 Corporate Dr Ste 510 Fort Lauderdale, Florida 33334 Tel: 954.4912000 Fax: 954.4912051 USI Attn: Anthony Gruppo 200 West Cypress Creek Road Suite 500 Fort Lauderdale, FL 33309 Tel: 954-607-4000 Marc Nurik, Esq. Rothstein Rosenfeldt Adler, P.A. 401 East Las Olas Blvd Suite 1650 Fort Lauderdale, FL 33301 Robert D. Critton, Esq. Burman, Critton, Luttier & Coleman 303 Banyan Blvd., Suite 400 West Palm Beach, FL 33401 rcrit@bclclaw.com

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