throbber
Case 15-21233 Doc 7 Filed 07/13/15 Entered 07/13/15 17:01:34 Desc Main
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`UNITED STATES BANKRUPTCY COURT
`DISTRICT OF CONNECTICUT
`HARTFORD DIVISION
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`Chapter 11
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`Case No. 15-21233 (AMN)
`
`x
`
`::
`
`:::X
`
`x::::::::::x
`
`In re:
`
`CURTIS JAMES JACKSON, III,
`
`Debtor
`
`LASTONIA LEVISTON,
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`Movant
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`v.
`
`CURTIS JAMES JACKSON, III,
`
`Respondent.
`
`MOTION FOR RELIEF FROM THE AUTOMATIC STAY
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`Lastonia Leviston, creditor and party-in-interest herein (“Movant”), by her
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`undersigned counsel, hereby moves for relief from the automatic stay to proceed with
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`the punitive damages phase of a state court action pending against the debtor, Curtis
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`James Jackson, III in the Supreme Court of the State of New York, County of New York,
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`and respectfully submits in support thereof the following:
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`FACTUAL BACKGROUND
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`1.
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`On July 13, 2015 (the “Petition Date”), Curtis James Jackson, III (the
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`“Debtor” or “Mr. Jackson”) filed a voluntary petition for relief under Chapter 11 of the
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`Bankruptcy Code. No official committee of unsecured creditors has yet been appointed
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`in the Chapter 11 case.
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`2.
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`Mr. Jackson, also known as “50 Cent,” is a world famous hip-hop artist
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`and business mogul.
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`In March 2009, Mr. Jackson intentionally released on his
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`commercial website a private intimate video depicting the Plaintiff, Lastonia Leviston,
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`having sex with her then boyfriend, Maurice Murray. The video was never intended to
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`be disclosed or made public in any way. Not only did Mr. Jackson release the tape, but
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`also he edited and narrated the video, superimposing himself (dressed in a purple fur
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`coat) into the picture and speaking crudely and derisively of Ms. Leviston’s nude body;
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`calling graphic attention to Ms. Leviston’s private parts; labeling Ms. Leviston a porn star
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`and a prostitute; and questioning the paternity of her children. The editing process also
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`included blurring out the face of the male in the video to protect his identity, while
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`intentionally leaving Ms. Leviston’s face fully visible for millions to see. This was done
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`during a “rap beef” with competing artist, Rick Ross, who is the father of Ms. Leviston’s
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`child. Mr. Jackson knew that the more he destroyed Ms. Leviston and caused her pain
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`and suffering, the better positioned he would be in the ongoing feud.
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`3.
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`On February 24, 2010, Ms. Leviston sued the Debtor in the Supreme
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`Court of the State of New York, County of New York (the “New York Supreme Court”)
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`asserting claims for intentional infliction of emotional distress and violation of the New
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`York Civil Rights Law (the “State Court Action”). After much wrangling and resistance
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`based on alleged inconvenience to the Debtor personally in going to trial, on March 12,
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`2015, the New York Supreme Court set a date for trial of May 26, 2015, which date was
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`compatible with the Debtor’s busy personal schedule.
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`4.
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`On May 26, 2015, Movant and her counsel appeared for trial with the full
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`expectation that the trial would proceed as scheduled, but the Debtor and his counsel
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`were no shows.
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`Instead, an email was sent to the New York Supreme Court and
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`2
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`

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`Movant’s counsel at exactly 11 am, which was the trial commencement time, advising
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`that the case had been removed to Federal Court because Mr. Jackson’s company,
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`SMS Productions (“SMS”), had filed for bankruptcy in this Court.1 One of Mr. Jackson’s
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`attempted justifications for the removal (through his counsel) was the great attention Mr.
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`Jackson needed to provide to the SMS case and that the trial would be a distraction
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`from his duties as sole shareholder.
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`5.
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`United States District Judge Failla, after probing carefully with the Debtor’s
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`bankruptcy counsel, suggested that the removal had been for purposes of delay and
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`remanded the case forthwith. The state court proceedings resumed on June 1, 2015.
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`Thereafter, Mr. Jackson filed a new motion to dismiss claiming an entirely new defense
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`which was also found to be without merit by the trial court. After four days of argument
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`and briefing, the trial court denied the motion to dismiss. Mr. Jackson then requested a
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`stay from the appellate court, which was also denied. Four days of jury selection then
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`ensued, and on June 11, 2015, a jury was sworn in. The following morning, minutes
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`before opening statements were to begin, Mr. Jackson filed his second removal of the
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`action to the Southern District of New York. Nine hours later, Judge Failla remanded the
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`matter and issued a stinging rebuke to Mr. Jackson and entered an Order to Show
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`Cause why he and his counsel should not be sanctioned for a pre-textual, egregious
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`abuse of the system.2
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`6.
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`After two removals to Federal District Court and several other delay tactics
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`employed by Mr. Jackson and his attorneys, the bifurcated jury trial on liability and
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`1 The weekend before the trial was to begin, counsel for the Movant and the Debtor worked together to
`prepare for
`the trial and although Debtor’s counsel knew the Debtor was planning the
`removal/bankruptcy, they failed to inform the Movant of anything.
`2 A true and correct copy of the Order to Show Cause is attached hereto as Exhibit “A.”
`
`3
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`

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`entitlement to punitive damages commenced on June 15, 2015 in the New York
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`Supreme Court. After nearly a month of trial, the jury returned a verdict in the amount of
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`$5 million in favor of Ms. Leviston (the “Verdict”), and found that punitive damages
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`should be assessed against Mr. Jackson.3
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`In doing so, the jury determined that Mr.
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`Jackson intentionally caused severe emotional distress to Ms. Leviston. It should be
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`noted that although Mr. Jackson had claimed his schedule was the issue initially and
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`that he needed to tend to SMS, there has been minimal activity in the SMS bankruptcy,
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`other than the creditor’s meeting, at which he did not appear. Nor did he attend even
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`one second of the trial.
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`7.
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`On the morning of July 13, 2015, when the punitive damages phase of the
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`trial was set to commence, and to which the Debtor was subpoenaed to appear to
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`testify, the Debtor filed the instant Chapter 11 bankruptcy petition to evade showing up
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`at trial.
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`8.
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`When the Honorable Paul Wooten, the State Court judge presiding over
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`the trial, was informed of the bankruptcy filing, he noted on the record his frustration
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`with the delays which he called “torturous. He also noted that “based on the time and
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`effort that has been put into this case, every effort should be made to have this matter
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`resolved before this particular jury that has rendered the special verdict”. See the
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`transcript in the Matter of Lastonia Leviston v. Curtis Jackson, July 13, 2015, page
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`1454, Lines 15-14.4
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`9.
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`Judge Wooten is holding the jury until Monday to give Movant an
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`opportunity to obtain stay relief, so that the if the relief is granted, the punitive damages
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`3 A true and correct copy of the jury Verdict is annexed hereto as Exhibit “B”.
`4 A true and correct copy of transcript is annexed hereto as Exhibit “C”.
`
`4
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`

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`phase of the trial can proceed before this jury.
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`RELIEF REQUESTED
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`10.
`
`The Movant requests relief from the automatic stay for “cause” pursuant to
`
`section 362(d)(1) of the Bankruptcy Code in order to proceed with the Federal Court
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`Hearing against the Debtor.
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`BASIS FOR
`RELIEF REQUESTED
`
`11.
`
`The Court must weigh the factors set forth in In re Sonnax Industries, Inc.,
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`907 F. 2d 1280, 1285 (2d. Cir. 1990) (the “Sonnax Factors”) in determining whether there
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`is “cause” “to modify the stay to permit the continuation of litigation in another forum….” In
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`re Ice Cream Liquidation, Inc., 281 B.R. 154, 165 (Bankr. D. Conn. 2002). The applicable
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`Sonnax Factors favor relief from the automatic stay.
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`In sum and as set forth in more detail
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`below, a Verdict already entered in the State Court Action, and the only matter left to
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`resolve in the State Court is whether there are punitive damages to be awarded; there is a
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`lack of connection or interference with the bankruptcy case if Movant is permitted to
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`proceed against the Debtor; the State Court Action does not involve the Debtor as a
`
`fiduciary; proceeding with the State Court Action against the Debtor will not prejudice the
`
`interests of other creditors; Movant’s success in the State Court Action against the Debtor
`
`will not result in a judicial lien avoidable by the Debtor; the interests of judicial economy
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`and the expeditious and economical resolution of litigation favors allowing Movant to
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`proceed against the Debtor; and the impact of the stay on the parties and balance of
`
`harms favors the Movant.
`
`5
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`12.
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`In In re Sonnax Industries, Inc., 907 F.2d at 1285, the Second Circuit
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`listed a number of factors to consider in determining whether the stay should be lifted in
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`order to permit litigation to continue in another forum:
`
`(1) whether relief would result in a partial or complete resolution
`of the issues; (2) lack of any connection with or interference
`with the bankruptcy case; (3) whether the other proceeding
`involves the debtor as a fiduciary; (4) whether a specialized
`tribunal with the necessary expertise has been established to
`hear the cause of action; (5) whether the debtor’s insurer has
`assumed full responsibility for defending it; (6) whether the
`action primarily involves third parties; (7) whether litigation in
`another forum would prejudice the interests of other creditors;
`(8) whether the judgment claim arising from the other action is
`subject
`to equitable subordination;
`(9) whether movant’s
`success in the other proceeding would result in a judicial lien
`avoidable by the debtor; (10) the interests of judicial economy
`and the expeditious and economical resolution of litigation; (11)
`whether the parties are ready for trial in the other proceeding;
`and (12) impact of the stay on the parties and the balance of
`harms.
`
`Sonnax, 907 F.2d at 1286.
`
`It is recognized that “[n]ot every one of these factors will be
`
`relevant in every case.” Schneiderman v. Bogdanovich (In re Bogdanovich), 292 F.3d
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`104, 110 (2d Cir. 2002).
`
`13.
`
`Here, a consideration of the relevant Sonnax factors militates in favor of
`
`granting relief from the stay. Specifically:
`
`(a)
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`A Verdict has already rendered against the Debtor and relief from
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`the stay would result in a complete resolution of
`
`the issues concerning the
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`amount of punitive damages associated with the Verdict; notably, the judge in the
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`State Court Action is holding the jury until Monday to ensure that the issue of the
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`amount of punitive damages is able to be addressed as soon as the stay is lifted;
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`6
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`(b)
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`There is a lack of any connection with or interference with the
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`bankruptcy case,
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`in the sense that
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`the State Court Action is a non-core
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`proceeding that does not depend upon the filing of a case under title 11 for its
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`existence, see Weiner's, Inc. v. T.G. & Y. Stores Co., 191 B.R. 30, 34 (S.D.N.Y.
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`1996) (citing In re Lipstein, 1995 WL 675486, at *1 (S.D.N.Y. Nov. 14, 1995),
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`(holding that tort claims that “could have been brought outside the bankruptcy
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`environment” are non-core);
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`(c)
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`(d)
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`The State Court Action does not involve the Debtor as a fiduciary;
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`The State Court Action would not prejudice the interests of
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`creditors; indeed, full resolution of the damages issue would only serve to dictate
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`whether the Debtor can propose and confirm a viable plan of reorganization.
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`Also, resolution of the State Court Action will not prejudice the interest of the
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`Debtor's other creditors because stay relief will be limited to the entry of a final
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`judgment and will not extend to the enforcement of a judgment.
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`(e)
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`Movant’s success in the State Court Action against the Debtor will not
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`result in a judicial lien avoidable by the Debtor;
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`(f)
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`Continuation of the State Court Action would further the interests of
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`judicial economy and the expeditious and economical resolution of the litigation.
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`The New York State Court
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`is the most appropriate and efficient
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`forum to
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`determine the amount of punitive damages because the New York Supreme
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`Court is already well-versed with the facts, issues and parties in that action after
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`years of litigation and a Verdict has already entered. Additionally, the New York
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`7
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`Supreme Court is prepared to continue with conducting a jury trial this upcoming
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`Monday and is holding the jury for that purpose; and
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`(g)
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`The balance of the harms favors continuation of the State Court
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`Action since the Debtor is a party to and will be able to assert his defenses to the
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`damages in that action.
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`14.
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`Based upon the foregoing factors, the Movant respectfully submits that
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`cause exists to lift the automatic stay in order to permit continuation of the State Court
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`Action against the Debtor.
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`15. When pending litigation is at an advanced stage, as it is here, courts
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`routinely grant stay relief to allow the action to proceed in the original forum. See, e.g.,
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`In re: KANGADIS FOOD INC. d/b/a The Gourmet Factory, Debtor, 2014 WL 4164627
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`(Bankr. E.D.N.Y. 2014) In re Consol. Distrib., Inc., 2013 WL 3929851 at *11 (Bankr.
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`E.D.N.Y. 2013) (granting relief from automatic stay where the “District Court Judge
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`[wa]s already well-versed with the facts, issues and parties in that action after two years
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`of litigation,” and the action “was trial-ready prior to the Debtor's bankruptcy filing”); In re
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`Laventhol & Horwath, 139 B.R. 109, 116-17 (S.D.N.Y. 1992) (district court had “intimate
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`knowledge” of
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`the case and to hold otherwise would be to condone “cynical
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`manipulation of the federal judicial system”); In re Project Orange Ass., LLC, 432 B.R.
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`89, 108 (Bankr. S.D.N.Y. 2010) (granting relief from automatic stay where state court
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`justice was “quite familiar with the litigation” because he “presided over discovery,
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`motion practice and conferences,” and petition was filed “on the eve of the hearing on
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`the summary judgment motion”).
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`8
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`WHEREFORE, the Movant respectfully requests an order granting relief from the
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`automatic stay and such other or further relief as is just, equitable and proper.
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`Dated: Bridgeport, Connecticut
`July 13, 2015
`
`MOVANT,
`LASTONIA LEVISTON
`
`By: /s/ Elizabeth J. Austin
`Elizabeth J. Austin (ct04384)
`Jessica Grossarth (ct23975)
`Pullman & Comley, LLC
`850 Main Street
`P.O. Box 7006
`Bridgeport, CT 06601-7006
`Telephone: (203) 330-2000
`Facsimile: (203) 576-8888
`E-Mail: eaustin@pullcom.com
`jgrossarth@pullcom.com
`Her Attorneys
`
`ACTIVE/1.1/JXG/5243328v1
`
`9

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