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COURT FINDS RECEIVER VIOLATED AUTOMATIC STAY.

NOV. 21, 2001

Indian Motocycle Co., et al., (In Re)

DATED NOV. 21, 2001
DOCUMENT ATTRIBUTES
  • Case Name
    In Re: INDIAN MOTOCYCLE COMPANY, INC. Debtor, In Re: INDIAN MOTOCYCLE APPAREL AND ACCESSORIES CO., INC., Debtor In Re: INDIAN MOTOCYCLE MANUFACTURING COMPANY, INC., Debtor
  • Court
    United States Bankruptcy Court for the District of Massachusetts
  • Docket
    No. 93-41954-HJB
    No. 93-41955-HJB
    No. 94-4288-HJB
  • Judge
    Boroff, Henry J.
  • Cross-Reference
    United States v. Sterling Consulting Corp., et al. (In re Indian

    Motocycle Co., et al.), No. MW 00-005 (1st Cir. BAP Mar. 13, 2001)

    (For a summary, see Tax Notes, Apr. 16, 2001, p. 430; for the full

    text, see Doc 2001-10168 (23 original pages) or 2001 TNT 68-62.)
  • Parallel Citation
    88 A.F.T.R.2d (RIA) 2001-7201
    2001 WL 1673643
  • Code Sections
  • Subject Area/Tax Topics
  • Index Terms
    bankruptcy, tax claims
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2001-30917 (4 original pages)
  • Tax Analysts Electronic Citation
    2001 TNT 243-10

Indian Motocycle Co., et al., (In Re)

                 JOINTLY ADMINISTERED

 

 

                              Chapter 7

 

                             Chapter 11

 

 

                         ORDER

 

 

[1] Upon the "U.S. Motion . . . To Enforce the Automatic Stay in Respect to Certain Acts by the Receiver" filed on September 19, 2001; and having considered (i) the objection thereto filed by Sterling Consulting Corporation, as Receiver (the "Receiver"), on September 21, 2001, (ii) the United States' reply filed on September 28, 2001, (iii) the United States' request for judicial notice filed on October 31, 2001, (iv) the documents of which this Court granted judicial notice by order of November 1, 2001, and (v) the arguments presented at the hearing held on November 5, 2001 by the United States, the Receiver, Stephan Rodolakis as trustee in bankruptcy (the ("Trustee") of these bankruptcy estates (the "Bankruptcy Estates") and the United States trustee: and for and consistent with the various findings and rulings made by this Court in its order of August 3, 2001 and specifically those made identifying the property of these Bankruptcy Estates and the exclusive jurisdiction of this Court to determine claims against such property1, this Court:

     1. FINDS AND RULES that:

 

 

        a. this Court has exclusive jurisdiction over (i) the

 

           determination of the administrative taxes of the

 

           Bankruptcy Estates, (ii) the determination of any claims

 

           (secured or unsecured) by the Receiver against the

 

           Bankruptcy Estates; and (iii) the funds allocated to the

 

           Bankruptcy Estates by virtue of the settlement approved by

 

           this Court on September 21, 1999 (the "1999 Settlement");

 

 

        b. the Receiver has violated the provisions of 11 U.S.C.

 

           § 362(a)(1) (staying a judicial proceeding to recover

 

           a prepetition claim), § 362(a)(6) (staying acts to

 

           collect a prepetition claim), and 11 U.S.C. §

 

           362(a)(3) (staying acts to perfect or enforce liens

 

           against property of the estate) in seeking to enhance its

 

           ability to receive a distribution on its prepetition claim

 

           against the debtors by asking the United States District

 

           Court for the District of Colorado (the "Colorado Court")

 

           to bind the United States to the 1999 Settlement between

 

           the Trustee and the Receiver, or to perfect, as against

 

           the United States, its alleged superpriority lien claim

 

           against the Bankruptcy Estates, approved in the 1999

 

           Settlement;2 and

 

 

        c. the Receiver has violated 11 U.S.C. § 362(a)(3) by

 

           seeking to use the process of the Colorado Court to

 

           collaterally attack this Court's determination, as part of

 

           its August 3, 2001 Memorandum of Decision and Order, that

 

           the $1.2 million escrowed pursuant to this Court's

 

           December 30, 1999 Order and certain interest earned

 

           thereon was and continues to be property of the Bankruptcy

 

           Estates;3

 

 

     2. ENJOINS AND RESTRAINS the Receiver, its principals, agents

 

        and attorneys from prosecuting any motions or complaints

 

        filed with the Colorado Court (including any request for

 

        relief contained in any paper, whether or not denominated as

 

        a "motion" or "complaint") and from filing any further papers

 

        with any court other than this Court (unless in a direct

 

        appeal from an order of this Court) for the purpose of

 

        obtaining a judgment, decree, or other order that directly or

 

        indirectly (a) determines any administrative claim for taxes

 

        due from the Bankruptcy Estates or otherwise impedes the

 

        ability of the United States to assert any such claim; (b)

 

        determines the validity or priority of the Receiver's claims

 

        against the Bankruptcy Estates, or (c) seeks to quiet title

 

        or otherwise determine the distribution of any funds now in

 

        possession of the Trustee or the interest which may have

 

        accrued on any funds distributed by the Trustee to the

 

        Receiver by virtue of this Court's order of December 30, 1999

 

        or requires the Trustee to turn over any portion of such

 

        funds to the Receiver, EXCEPT THAT nothing herein shall be

 

        deemed to preclude or prohibit:

 

 

       a. the parties from attending and participating in such

 

          settlement conferences as the Colorado Court shall schedule

 

          in its discretion, with the understanding that the Trustee

 

          has no authority to enter into any binding settlement of

 

          disputes which impact the property of the Bankruptcy

 

          Estates absent approval of this Court, pursuant to Fed. R,

 

          Bankr. P. 9019; or

 

 

       b. the Receiver from seeking:

 

 

          1. authorization from the Colorado Court to request any

 

             relief from this Court (or from any appellate court in

 

             direct appeal from an order of this Court) including,

 

             without limitation, a request that this Court or any

 

             such appellate court review, reconsider or stay any

 

             order of this Court or any such appellate court; or

 

 

          2. any other orders or instructions from the Colorado

 

             Court, except to the extent that such orders or

 

             instructions would constitute a judgment, order or other

 

             relief that would violate the injunction set forth in

 

             Paragraph 2 above;

 

 

     3. DENIES, WITHOUT PREJUDICE, the request of the United States

 

        that the Court declare void, in advance, any future

 

        determination which the Colorado Court might make as a result

 

        of the aforesaid violations of the automatic stay by the

 

        Receiver, Such a request is, at best, premature.4

 

 

[2] The Clerk of this Court is directed to telefax copies of this Order to counsel for the parties hereto, in addition to such other service as the Federal Rules of Bankruptcy Procedure may require.

     DATED: November 21, 2001

 

 

                                   Henry J. Boroff

 

                                   United States Bankruptcy Judge

 

 

cc: John M. Tanner, Esq., Colorado Counsel to the Receiver

 

    Fax No. (30:3) 830-1033

 

 

    Paul W. Carey, Esq., Massachusetts Counsel to the Receiver

 

FOOTNOTES

 

 

1 See In re Indian Motocycle, Co., 266 B.R. 243, 251, 254 n.6 (Bankr. D. Mass. 2001).

2 Nothing herein shall be construed to reflect a finding or ruling by this Court that the United States is not so bound or that the said lien is not so perfected against the United States.

3 This includes both the Receiver's arguments that the interest earned on the escrowed funds, as well as approximately $450,000 of the $1.2 million of principal is property of the receivership estate (as asserted in the "Verified Motion to Quiet Title Under 28 U.S.C. §2410 to (A) $451,834.68 and (B) Interest on $1,200,000"), as well as the Receiver's request in that motion that the Colorado Court order the Trustee to turn over to the Receiver any portion of $1.2 million or interest attributable thereto.

4 But see Soares v. Brockton Credit Union (in re Soares), 107 F.3d 969, 975-6 (1st Cir. 1997)(acts in violation of the automatic stay are void); Ellis v. Consolidated Diesel Electric Corporation, 894 F.2d 371, 372 (10th Cir. 1990)(same).

In addition, the Court notes that the United States has not requested the Court to award damages or other sanctions on account of the stay violations set forth above.

 

END OF FOOTNOTES
DOCUMENT ATTRIBUTES
  • Case Name
    In Re: INDIAN MOTOCYCLE COMPANY, INC. Debtor, In Re: INDIAN MOTOCYCLE APPAREL AND ACCESSORIES CO., INC., Debtor In Re: INDIAN MOTOCYCLE MANUFACTURING COMPANY, INC., Debtor
  • Court
    United States Bankruptcy Court for the District of Massachusetts
  • Docket
    No. 93-41954-HJB
    No. 93-41955-HJB
    No. 94-4288-HJB
  • Judge
    Boroff, Henry J.
  • Cross-Reference
    United States v. Sterling Consulting Corp., et al. (In re Indian

    Motocycle Co., et al.), No. MW 00-005 (1st Cir. BAP Mar. 13, 2001)

    (For a summary, see Tax Notes, Apr. 16, 2001, p. 430; for the full

    text, see Doc 2001-10168 (23 original pages) or 2001 TNT 68-62.)
  • Parallel Citation
    88 A.F.T.R.2d (RIA) 2001-7201
    2001 WL 1673643
  • Code Sections
  • Subject Area/Tax Topics
  • Index Terms
    bankruptcy, tax claims
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2001-30917 (4 original pages)
  • Tax Analysts Electronic Citation
    2001 TNT 243-10
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