Siple & Orrock v. Rechnitzer (In re M.B.K., Inc.)

Good Law

19 Collier Bankr. Cas. 2d 1243·1987 Bankr. LEXIS 2301·92 B.R. 429

United States Bankruptcy Court, Central District of CaliforniaOctober 9, 1987Bankruptcy No. LA 85-07714-NCA; Adv. Nos. LA 87-0277-NCA, LA 86-2342-NCA, LA 86-2349-NCA, LA 86-2371-NCA and LA 86-2372-NCACalifornia4,065 words

Opinion

Lead Opinion

AMENDED MEMORANDUM OF DECISION

BACKGROUND

This memorandum pertains to a complaint to enjoin the trustee from prosecuting complaints to recover preferential transfers and four complaints by the trustee to recover preferences. On April 29, 1987 I heard the complaints for preferences and granted the trustee’s motion to dismiss the complaint to enjoin. On the trustee’s complaints the parties filed post-trial briefs.

When dismissing the complaint to enjoin I denied the trustee’s motion for sanctions requested pursuant to Rule 9011. I said *431 that the attorney for the plaintiff relied in good faith on In re Newcomb, 744 F.2d 621 (8th Cir.1984) and Guy v. Abdulla, 57 F.R.D. 14 (N.D.Ohio, E.D.1972). I was wrong. I will discuss these cases later.

The trustee brought several complaints to recover preferences, including the four which are the subject of this memorandum. Necessarily, each transferee is a defendant in a separate complaint. Bankruptcy Rule 7004 requires an adversary proceeding to recover money or property. The facts of a transfer are unique to the transferee. Procedurally and administratively, as well, preference actions lend themselves to separate actions against…

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