The Court notes that Trustee devotes surprisingly little discussion or analysis with respect to whether Defendant’s assertion of the existence of a pre-petition Security Interest in Debtor’s personal property, by itself and without taking any other action, constitutes a violation of § 362(a)(4) as an act to create and enforce a lien against property of the estate. Trustee asserts that:

Trustee’s entire argument is largely conclusory and devoid of any citation to relevant authority. First, the Court notes that assertion of the mere existence of a valid, perfected, pre-petition security interest in estate property is not, by itself, a violation of § 362(a)(4). Thus, the operative inquiry is whether a subsequent finding that the Security Interest is invalid, as the Court has done here, retroactively makes Defendant’s assertion of its Security Interest as an act to create and enforce a lien against estate property in contravention of § 362(a)(4).

The Court finds that absent evidence of bad faith and knowledge that Defendant’s Security Interest was invalid when it was asserted, that it does not. Normally, the only requisite mental state required to show a willful stay violation is that the defendant intended to commit the act, not that they intended to violate the stay. However, the issue here is that the act of merely asserting the existence of a pre-petition security interest, without taking any other action, does not violate the stay. Thus, the Court concludes that for this action to constitute a stay violation, additional evidence must be provided that the Security Interest was asserted in bad faith and with knowledge that the Security Interest was invalid. Otherwise, creditors who assert security interests in property of the estate in good faith might be subject to § 362(k) sanctions merely because of a subsequent judicial determination that the interest is invalid.

Thus, all the proposed intervening parties claim an interest in the property at issue under the contract and zoning disputes either through ownership rights or secured positions. Those interests may be impaired as a result of the pending litigation. As such, the intervenors have demonstrated the second and third elements for intervention.

However, proposed intervenors are required to show that Debtor, as the existing party to the litigation, would not adequately represent the intervenors’ rights and interests. The Court does not find the proposed intervenors have satisfied that burden. In reviewing the amended complaint and the motions to intervene, it appears the proposed intervenors interests align with Debtor’s interests. They share the same ultimate objectives: to facilitate the sale of the Green Cut Subdivision for the highest amount possible, to obtain damages from the County if appropriate to make Debtor and thus Debtor’s creditors whole, and to require the County to adjust its zoning rules to best accomplish those goals. The intervenors argue they will bring a “unique” perspective to these goals, but the Court does not find the perspective particularly unique or distinct from Debtor’s interests, arguments, and intentions in this litigation. In short, Debtor will make the intervenor’s arguments and appears capable and willing to do so. The proposed intervenors did not demonstrate otherwise. Moreover, the proposed intervenors do not appear to offer anything to the litigation that Debtor would neglect. As such, the Court finds the proposed intervenors cannot intervene as of right under Civil Rule 24(a)(2).

I agree with the Patriarch Stakeholders that the Trustee puts at issue the Holding Company Deal in the MBIA Adversary by challenging Ms. Tilton's good faith in complying with the Settlement Agreement's monetization obligations.

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Pursuant to the Strike Order, MBIA was required to amend its complaint consistent with that order to prevent the pursuit of claims relevant to the Holding Company Deal. It did not sufficiently do so. As a result, the Patriarch Stakeholders argue that fairness, among other things, dictates that the local rule's prohibition on disclosure, discovery, and evidence admission be lifted. The remedy for the problem presented, however, is not for me to sweep away the rule's protections and make public confidential mediation information for the Patriarch Stakeholders' defensive use. Rather, the appropriate remedy is for the Trustee to amend further the Second Amended Complaint to comply with the Strike Order so that the Holding Company Deal is not put at issue. This is a consistent enforcement of my prior ruling on this subject. It is also the proper result because claims of both MBIA and the Patriarch Stakeholders arising from the Holding Company Deal were long ago eliminated in an effort to maintain the confidentiality of the mediation. It would be unfair now to partially open the door into the mediation and as such, it must remain firmly shut.

Chapter 7 debtor Orchid Child Productions, LLC (“Orchid Child”) had an agreement with actor James E. Franco’s company Whose Dog R U Productions, Inc. (“Whose Dog”) to produce a documentary about Mr. Franco’s life. When disputes arose, Whose Dog demanded arbitration. Before the parties could come to any resolution, Orchid Child filed for bankruptcy protection. Whose Dog, concerned about what the chapter 7 trustee would do with the footage from the unfinished documentary, sought relief from the automatic stay to resume the arbitration. The bankruptcy court denied stay relief, and Whose Dog appealed.

We agree with the bankruptcy court that Whose Dog did not establish cause to lift the automatic stay.

The UST suggests that the Court should not use the foregoing factors because, in the UST’s view, they “will likely lead to the Court declining to appoint an ombudsman.” The UST contends that there are 15 reported decisions since 2007 in which the foregoing factors were applied, and that in each of those 15 cases the courts determined that an ombudsman was not needed. The UST concludes from these outcomes that the factors themselves must be improperly skewed.

I am not persuaded by the UST’s results-oriented analysis. For one thing, it is plain that in the vast majority of cases involving health care businesses an ombudsman is appointed without opposition and certainly without the issuance of a written opinion. In other words, the 15 reported decisions that the UST has cited are hardly the entire universe of cases in which courts have applied the relevant standards. It is not surprising that one only finds reported decisions in cases where serious grounds for opposition to the appointment of an ombudsman have been raised.

Nor does it trouble me, or strike me as a departure from the statutory language or intent, to hear that there are 15 other cases in which courts have found that ombudsmen are not needed. The definition of “health care business” is very broad. Section 333 recognizes that an ombudsman may not be required in every such case, and so by its terms it permits courts to dispense with the requirement. It is not surprising at all that over the past 16 years there are 15 reported decisions involving dentists’ practices and similar businesses that technically qualify as health care businesses but as to which courts have concluded that ombudsmen are not necessary.

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I do, however, have one caveat of my own as to the factors that prior decisions have identified. One of the listed factors is “the impact of the cost of an ombudsman on the likelihood of a successful reorganization.” It would make perfect sense to consider this factor if section 333 had directed us to weigh the costs and benefits of the appointment of an ombudsman, or to consider the impact of such an appointment on the debtor or on the case as a whole. However, that is not what section 333 provides. Section 333 directs the court to determine whether an ombudsman is “necessary for the protection of patients” – not whether it is “convenient,” or “cost-effective,” or whether it might interfere with a debtor’s financial reorganization. I therefore will not apply this particular factor in determining whether the appointment of a patient care ombudsman is needed in this case.

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I am convinced that a patient care ombudsman is not needed for the protection of patients under the specific facts of this case, given the limited nature of the outpatient services that Parkchester provides, the agreed fact that it has had no issues regarding patient care, and patients’ lack of dependence on the particular facilities of Parkchester. If I were to phrase this in terms of the simplified test advocated by the UST I would conclude that patient care is not a concern in this case, that adequate safeguards are in place to protect patients and that the appointment of an ombudsman would serve no legitimate purpose.

The Trustee timely filed the Objection under Federal Rule of Bankruptcy Procedure 4003(b)(1) asserting that the Debtor does not own the $22,677.31 distributive award nor any interest in the retirement plan that is to be the source of the payment. Alternatively, even if the Consent Order does grant the Debtor an ownership interest in the distributive award or Mr. Myatt’s 401(k) account, the Trustee argues that any such award is not effective without a QDRO. In either scenario, the Trustee maintains that the Debtor is left only with a claim against her ex-spouse, which is property of the bankruptcy estate and does not qualify for the asserted exemptions. Finally, even if the Court finds the Debtor has an effective ownership interest in the $22,677.31, the Trustee counters that the funds are nevertheless property of the estate and may not be exempted under 11 U.S.C. § 522(b)(3) or N.C. Gen. Stat. § 1C-1601(a)(9) because they are not “retirement funds.” The Trustee requests that the Court sustain the Objection and deny the Debtor’s claimed exemption as to the $22,677.31 distributive award.

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A final order resolving an equitable distribution proceeding, however, fixes the parties’ rights and transforms the more general right to equitable distribution into concrete interests in specific property.

The entirety of the allegations in the Amended Complaint regarding the relationship between Defendant and the Debtors are as follows:

• Over the past forty years, Defendant has done business with, was a shareholder of, and/or served as an officer or director of several companies owned or operated by Debtors’ CEO

• Defendant and/or Halimi LLC, an entity owned by Defendant, was a shareholder of one or more of the Debtors

• Defendant and/or his immediate family members are involved with and have made donations to the same charitable organizations and schools as the Debtors’ CEO

The only conclusion that can be drawn from these allegations is that the parties had (and possibly still have) a longstanding business relationship and are involved in the same charitable activities within their community. That is not enough to support the conclusion that the parties’ relationship was a close one.

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As the Trustee points out, Rule 15(a) provides that “the Court should freely give leave when justice so requires.” However, leave must be properly requested. As I have previously held, “[w]here a request for leave to file an amended complaint simply is imbedded within an opposition memorandum, the issue has not been raised properly.” As the Third Circuit has explained, “a ‘bare request in an opposition to a motion to dismiss — without any indication of the particular grounds on which amendment is sought . . . — does not constitute a motion within the contemplation of Rule 15(a).’” Additionally, the Trustee did not attach a draft amended complaint to her request for leave, “a failure that is fatal to a request for leave to amend.” Leave to further amend the Amended Complaint is therefore denied.

Before the court for ruling in this adversary proceeding are cross-motions for summary judgment on plaintiff Michael T. Spangler’s complaint against defendant Catherine M. Byrne. Byrne is Spangler’s former lawyer and a creditor in Spangler’s chapter 13 case. She maintains she is a secured creditor because of judgments she obtained against Spangler for unpaid fees, judgments she recorded in Cook County, Illinois. Spangler has sued to contest the secured status of Byrne’s claim. He argues that the judgments she recorded failed to meet Illinois statutory requirements for judgment liens, making her claim unsecured. Byrne disagrees.

Spangler has the better of the argument. For the reasons below, his motion for summary judgment will be granted and Byrne’s motion denied. Judgment will be entered for Spangler finding Byrne’s claim unsecured.

Not only was the Contempt Order final and appealable, but the subsequent Stay Order was as well, because the district court did not take any action that would “independently render[] th matter nonappealable,” such as remanding and directing “significant further proceedings” or 13 further factual inquiry in the bankruptcy court. Bowers, 847 F.2d at 1022, 1023. Instead, the district court outright denied Kossoff’s request to stay the Contempt Order. Rather than face the Contempt Order, and continue his appeal in the district court and eventually in the court of appeals, as he very well could have done, Kossoff elected to begin cooperating with discovery and, not two weeks later, to plead guilty to the state law offenses. In choosing to obey the Contempt Order following the denial of the stay, Kossoff himself made clear that the denial of the emergency stay was sufficient to finally resolve his appeal. Because the Contempt Order was final and fully disposed of a discrete claim of contempt against Kossoff, we conclude that the resulting Stay Order, issued on December 2, 2021, was also final and immediately appealable.

Accordingly, we find that we lack jurisdiction to review the Stay Order, which was final and immediately appealable upon entry on December 2, 2021, because Kossoff’s appeal of that ruling before this Court is untimely.