United States District Court, D. Connecticut
In re RICHARD H. FRIEDBERG
RULING AND ORDER ON BANKRUPTCY APPEAL
A. BOLDEN, UNITED STATES DISTRICT JUDGE
H. Friedberg (“Appellant”), pro se,
appeals two orders of the United States Bankruptcy Court
(“Bankruptcy Court”), Notice of Appeal, ECF No.
Friedberg seeks reversal of the denial of his motions: (1) to
compel bankruptcy trustee Melissa Zelen Neier (“Trustee
Neier”) and the law firm at which she serves as
partner, Ivey, Barnum & O'Mara, LLC, to return fees
collected for the trusteeship of Mr. Friedberg's 2008
bankruptcy on account of the “financial genocide”
of Mr. Friedberg by Trustee Neier, her firm, and the
Bankruptcy Court, and (2) to compel bankruptcy Trustee Neier
to turn over all books, records, emails, telephone logs, and
tax returns associated with his 2008 bankruptcy, id.
at 10-11; Appellant Reply Brief, ECF No. 10, at 3.
reasons set forth below, the Court AFFIRMS
the Bankruptcy Court's orders.
FACTUAL AND PROCEDURAL BACKGROUND
late 1980s, Appellant was served with an involuntary petition
for Chapter 7 bankruptcy in the United States Bankruptcy
Court for the District of South Carolina. In re
Friedberg, 87 B.R. 3, 5 (S.D.N.Y. 1988); see also In
re Friedberg, 106 B.R. 50, 51 (Bankr. S.D.N.Y. 1989),
rev'd, 131 B.R. 6 (S.D.N.Y. 1991); In re
Friedberg, 119 B.R. 433 (S.D.N.Y. 1990); In re
Friedberg, No. 91 CIV. 7490 (JFK), 1991 WL 259038, at *1
(S.D.N.Y. Nov. 25, 1991); In re Friedberg, 131 B.R.
6 (S.D.N.Y. 1991). The case was transferred to the United
States Bankruptcy Court for the Southern District of New
York, with the Honorable Cornelius Blackshear presiding.
In re Friedberg, 87-bk-10819 (CB); In re
Friedberg, 106 B.R. 50, 52.
“responded to [the Chapter 7] petition by voluntarily
filing a Chapter 11 petition for reorganization.”
In re Friedberg, 87 B.R. 3, 4. This permitted
Appellant to remain as the debtor-in-possession. Id.
After “efforts to create a reorganization plan failed,
” In re Friedberg, No. 94 CIV. 1569 (JFK),
1995 WL 733636, at *1 (S.D.N.Y. Dec. 12, 1995), Judge
Blackshear appointed Joel Lewittes, a former United States
Bankruptcy Judge, as bankruptcy trustee. Id. Trustee
Lewittes negotiated a reorganization plan that largely met
with Appellant's approval. Id. Appellant
objected to the plan's standard of care provision,
however, and argued that Trustee Lewittes had “violated
his fiduciary duty as bankruptcy trustee . . . .” in
creating the provision. Id. at 2. Judge Blackshear
found no such violation, Id. at 1, and a district
court affirmed Judge Blackshear's ruling. Id. at
2008, Appellant filed for Chapter 11 bankruptcy. In re
Friedberg, 08-bk-51245 (JAM), Dkt. 1, 4; see
also, In re Friedberg, No. 08-51245AHWS, 2009
WL 1292273, at *1 (Bankr. D. Conn. May 8, 2009).
Appellant's Voluntary Petition for Bankruptcy listed
approximately $11, 000, 000 in unsecured claims owed to
various law firms, Georgia Capital, the State of New York
Department of Revenue Collection, and the Internal Revenue
Service. Id., Dkt. 1. Shortly after Appellant's
filing, Georgia Capital moved for an examination duces
tecum under Federal Rule of Bankruptcy Procedure 2004 of
Appellant's financial assets and income. Fed.R.Bankr.P.
2004. Mot. for Ex Parte Order Directing 2004 Examination
Duces Tecum, Id., Dkt. 53. Georgia Capital alleged
that Appellant owned or controlled nine limited liability
corporations, and received roughly $22, 000 in monthly social
security income and oil royalties, but nevertheless claimed
that he had “little or no personal funds with which to
pay living expenses.” Id., Dkt. 53 at 2.
Georgia Capital argued that “[i]t is unclear from
Debtor's schedules and statements whether Debtor can
demonstrate a reasonable likelihood of rehabilitation or
propose, confirm and fund a feasible plan of
reorganization.” Id., Dkt. 53 at 2. On
February 23, 2009, the Bankruptcy Court granted Georgia
Capital's motion. Id., Dkt. 59.
April 3, 2009, Georgia Capital moved the Bankruptcy Court to
convert the case from a Chapter 11 to a Chapter 7 liquidation
bankruptcy. Id., Dkt. 75. Georgia Capital alleged
that the Estate was suffering losses and diminishing, that
Appellant had failed to file required reports or explain
which of his LLCs were funding his monthly expenses, and that
Appellant was unlikely to confirm or effectively participate
in a plan of reorganization. Id., Dkt. 75 at
In the event that the Court did not convert the case to a
Chapter 7 bankruptcy, Georgia Capital moved the court to
appoint a Chapter 11 trustee. Id., Dkt. 75 at 10.
February 17, 2010, the Internal Revenue Service moved to
convert the case to a Chapter 7 liquidation bankruptcy.
Id., Dkt. 358. The Bankruptcy Court held a hearing
on the issue on March 23, 2010. Id., Dkt. On April
28, 2010, the Bankruptcy Court denied the motion to convert
the case to a Chapter 7 liquidation, but ordered the United
States Trustee to appoint a Chapter 11 trustee. Id.,
Dkt. 413. That day, Diana Adams,  United States Bankruptcy
Trustee for the region, appointed Trustee Neier as the
trustee for Mr. Friedberg's Chapter 11 bankruptcy case
and notified Trustee Neier that she “must obtain a bond
in the amount of $50, 000 pursuant to 11 U.S.C. §
322.” Notice of Appointment of Trustee, id.,
April 28, 2010 to November 8, 2016, Trustee Neier served as
the Chapter 11, and then Chapter 7,  bankruptcy trustee for the
case. See Chapter 7 Trustee's Final Account and
Distribution Report, id., Dkt. 1798. Her name
appears more than 1, 400 times on the docket. Id.
Ms. Neier alleges that she spent more than 1, 300 hours on
the case. Id., Dkt. 908, 1261. She waived her right
to collect an individual trustee fee. Id., Dkt. 1359
at 4, 20 (showing an alleged entitlement to $81, 838.38 under
11 U.S.C. §326(a) and a proposed distribution of $0.00);
Dkt. 1798 at 4 (showing an actual payment of $0.00). Trustee
Neier's firm, Ivey, Barnum & O'Mara, LLC, was
paid just over $600, 000 for costs associated with Trustee
Neier's work on the bankruptcy and for the firm's
representation of Trustee Neier in the nearly dozen district
court appeals filed by Appellant. Id., Dkt. 908,
126, 1798 at 5; see also, id. Dkt. 453, 616, 706,
1122, 1530, 1539, 1592, 1635, 1698, 1693, 1853
[Appellant's appeals of Bankruptcy Court orders during
Ms. Neier's tenure as trustee].
3, 2013, Trustee Neier filed a settlement agreement under
Federal Rule of Bankruptcy Procedure 9019. Trustee's Mot.
to Approve Settlement, id., Dkt. 1359;
Fed.R.Bankr.P. 9019. On November 11, 2013, following filings
and hearings, the Bankruptcy Court approved the settlement.
Mem. of Decision and Order Granting Mot. to Approve
Settlement Agreement, Id., Dkt. 1535. Appellant
appealed the settlement to the district court, In re
Friedberg, 3:13-cv-01856 (AVC), Dkt. 1, and then to
the Second Circuit. In re Friedberg, 634 Fed.Appx.
333 (2d Cir. 2016) (summ. order). On February 24, 2016, the
Second Circuit affirmed the Bankruptcy Court's order,
holding that “the bankruptcy court correctly held that
Friedberg lacked standing to oppose the approval of the
settlement agreement because he had no pecuniary interest
directly and adversely affected by the bankruptcy court's
order adopting the settlement.” Id. at 334.
The court explained:
[T]o have standing to appeal from a bankruptcy court ruling,
an appellant must be a person aggrieved-a person directly and
adversely affected pecuniarily by the challenged order of the
bankruptcy court. [A] Chapter 7 debtor is a ‘party in
interest' and has standing to object to a sale of the
assets, or otherwise participate in litigation surrounding
the assets of the estate, only if there could be a surplus
after all creditors' claims are paid.
Id. (internal citations and quotations omitted). The
court found that:
[a]fter accounting for administrative expenses, just over
$1.9 million remained for distribution to creditors pursuant
to the proposed settlement. This amount was far less than the
allowed creditor claims against the estate; the priority
claim of Marianne ...