ABC ASSIGNEE BANNED
over the books and records required
to close the transaction, and otherwise
refused to close the contemplated
sale.”
17. In Case 11-35646 CA 20, Welt
sued his ABC law firm for professional
negligence or malpractice breach of
fiduciary duty, negligent retention and
supervision, negligent or fraudulent
representation,
and
respondent
superior.
18. As part of the settlement with Welt,
the Bankruptcy Court’s approval order
barred any claims that were or could
have been asserted arising out of or
related to the ABC Case, the Nica
Assignment Estate, and the Welt
State Court Action.
19. Many appeals ensued. One
was as to the settlements’ approvals
(“Appeal 1”). The other was as to the
mediation’s settlement (“Appeal 2).
Appeal 1 was affirmed by Judge Marra.
Ullrich v. Welt, (S.D. Fla September
16, 2014) Case 13-cv-62111-KAM [DE
28] Appeal 2 was dismissed under the
concept of equitable mootness as,
“this appeal is equitably moot based
on the substantial (if not complete)
consummation of the Compromise.
The payment to the bankruptcy estate
has been made, the SPB Adversary
Proceeding and SPB State Court
Proceeding have been dismissed with
prejudice, an Welt’s legal claims against
SPB [law firm] have been irretrievably
lost. See In re TPS of Florida, Inc., No.
02-10126, at 5-6. (11th Cir. June 24,
2002). The Court cannot easily unwind
the settlement, and effective relief is
no longer available. See In re Club
Assocs., 956 F.2d at 1069.” Ullrich v.
Welt, (S.D. Fla September 25, 2015)
Case 14-cv-62758-JAL [DE 21] Appeal
2 has been appealed to the Eleventh
Circuit. This appeal may also be won
by appellant as the Eleventh speciically
rejected the equitable mootness
argument in Appeal 1 when it wrote,
“We reject the equitable mootness
argument because we find that relief is
still possible.” Ullrich v. Welt (In re Nica
Holdings, Inc.), 2015 U.S. App. LEXIS
21991 *10 (11th Cir. Fla. Dec. 17,
2015). And, “Our equitable mootness
analysis, as applied to the facts and
circumstances of this case, leads us
to conclude that effective relief is not
precluded here.” Ullrich v. Welt (In re
Nica Holdings, Inc.), 2015 U.S. App.
LEXIS 21991 *17 (11th Cir. Fla. Dec.
17, 2015)
20. In re N2N Commerce, Inc., 405
B.R. 34, 41 (Bankr. D. Mass. 2009)
21.
National Association of Consumer Bankruptcy Attorneys
[H]istorically it has always
been true, even before
the Bankruptcy Reform
Act of 1978, that a valid
resolution of the Board of
Directors of a corporation
was a prerequisite to
the filing of a voluntary
petition in bankruptcy by a
corporation.”); In re Giggles
Restaurant, Inc., 103 B.R.
549 (Bankr.D.N.J.1989) (‘[I]
t is clear that any corporate
resolution which authorizes
the filing of a voluntary
bankruptcy petition must
originate at a validly held
meeting of directors and
must be approved by the
proper number of such
directors.’); In re MoniStat, Inc., 84 B.R. 756,
757
(Bankr.D.Kan.1988);
Spring 2016
(‘[T]he law is clear that the
decision of whether or not
a corporation should file
bankruptcy is a business
decision to be made only
by the board of directors.’)
(emphasis added); see
In re M & M Commercial
Services, Inc., 115 B.R. 212
(Bankr.E.D.Mo.1990).
In re N2N Commerce, Inc., 405
B.R. 34, 41-42 (Bankr. D. Mass. 2009)
22. Ullrich v. Welt (In re Nica Holdings,
Inc.), [*21] 2015 U.S. App. LEXIS
21991 (11th Cir. Fla. Dec. 17, 2015)
23. Ullrich v. Welt (In re Nica Holdings,
Inc.), 2015 U.S. App. LEXIS 21991
(11th Cir. Fla. Dec. 17, 2015)
24. The records show that the state
action was dismissed with prejudice
in reliance of the Bankruptcy-Courtapproved
mediation
settlement.
Because the settlement is a nullity, the
question remains whether the dismissal
with prejudice by the Assignee with the
true party of interest – the Bankruptcy
Trustee – is a nullity? Or is there judicial
estoppel as the Assignee agreed to the
same? The above-described double
appeal process (footnote 19) has
made this a procedural nightmare.
25. Exception to this would be the filing
of an involuntary petition by creditors.
CONSUMER BANKRUPTCY JOURNAL
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