LawFuel.com – Bankruptcy Law News – Akin Gump litigation partner Marty L. Brimmage Jr. helped lead a team that achieved crucial decisions over the past two days before two federal appeals courts in a hotly contested bankruptcy case.
Unhappy with the results of a Texas bankruptcy plan of reorganization for Lothian Oil, Inc., a minority group of equity interest holders led by Israel G. Grossman filed two separate New York state court lawsuits alleging more than 15 causes of action against current and former officers, directors and others and sought to collect more than $100 million in damages, along with other claims. These claims violated the Texas bankruptcy’s plan injunction, and, when Grossman’s group refused to cease the lawsuits, resulted in a bankruptcy court sanction in excess of $600,000.
The monetary sanctions were reversed on appeal by the U.S. District Court for the Western District of Texas, which found that one of the New York lawsuits did not violate the plan injunction.
On Wednesday, May 8, in the case Anti-Lothian Bankruptcy Fraud Committee, et al. v. Lothian Oil Inc., the 5th Circuit Court of Appeals upheld the bankruptcy court’s contempt findings and sanctions against Mr. Grossman’s group “in all respects.”
Today, in the case Lothian Oil, et al. v. Israel G. Grossman, et al., the 2nd Circuit issued a related ruling and upheld a New York bankruptcy court’s sanctions and bench warrant to secure the post-contempt judgment deposition of Mr. Grossman.
Mr. Brimmage, the attorney for the debtors who presented the oral arguments to both the 5th and 2nd circuits, praised the courts’ ruling: “These latest rulings are outstanding results and will hopefully assist in putting an end to Mr. Grossman’s ongoing efforts to disrupt the plan of reorganization and harass the debtors and plan administrator.”
The plan administrator for debtors is Mark Lipscomb of Blackhill Partners, LLP. In addition to Mr. Brimmage, the Reorganized Lothian Debtors are represented by Charles A. Beckham Jr. of Haynes and Boone LLP.