Harrison v. Konfino (In re A.N. Frieda Diamonds, Inc.)
Decision Date | 29 April 2020 |
Docket Number | Adv. Pro. No. 17-01103 (MEW),Case No. 15-11862 (MEW) |
Citation | 616 B.R. 295 |
Parties | IN RE A.N. FRIEDA DIAMONDS, INC., Debtor. Matthew C. Harrison, Jr., Trustee-Plaintiff, v. Ronen Konfino, Frieda Konfino, Roni Rubinov, New Liberty Pawn Shop, Inc., New York Estate Buyers and Abner Rubinov a/k/a Avner Rubinov, Defendants. VNB New York, LLC, Defendant-Intervenor and Cross-Claimant |
Court | U.S. Bankruptcy Court — Southern District of New York |
LEO FOX, ESQ. New York, New York Attorney for the Trustee-Plaintiff
ZEICHNER ELLMAN & KRAUSE LLP New York, New York By: Peter Janovsky, Esq. Stephen F. Ellman, Esq. Attorneys for VNB New York, LLC
PAUL J. SOLDA, ESQ. New York, New York Attorney for Roni Rubinov and New Liberty Pawn Shop, Inc.
SHAFFERMAN & FELDMAN LLP New York, New York By: Joel M. Shafferman, Esq. Attorneys for Avner Rubinov
Plaintiff A.N. Frieda Diamonds, Inc. ("AN Frieda ") is the chapter 7 debtor in a case that has been pending since 2015. The chapter 7 trustee, Matthew C. Harrison, Jr., contends that the former principal of AN Frieda, Mr. Ronan Konfino, pawned diamonds and other items that were owned by AN Frieda in transactions with defendant New Liberty Pawn Shop, Inc. ("New Liberty "). The trustee further contends that New Liberty and its owner, Mr. Roni Rubinov, improperly disposed of those items in violation of section 549 of the Bankruptcy Code and in violation of various orders that I entered. The Trustee seeks damages in an amount to be assessed by the Court but that have been described in the parties' Joint Pretrial Order as ranging between $1,256,291 and $2,010,066.
In his complaint, the Trustee also asserted a claim under section 547 of the Bankruptcy Code to recover alleged preferences in the amount of $27,844. The complaint described the preference payments as having been made to an entity named Roni Rubinov, Inc. A question arose at trial as to whether that entity had ever properly been named as a defendant. I will discuss that issue below.
In addition to New Liberty and Mr. Rubinov, the Trustee has also sued an entity named New York Estate Buyers, which is the entity to which New Liberty purportedly sold the items that are the subject of this proceeding. Avner Rubinov, who is the owner of New York Estate Buyers and who is the father of Roni Rubinov, has also been named as a defendant. The Trustee contends, pursuant to section 550 of the Bankruptcy Code, that New York Estate Buyers and Avner Rubinov are subsequent transferees of property of the estate that was wrongfully transferred, and that as subsequent transferees they are obligated to compensate the Trustee for the values of the items that were transferred to them.
The Trustee also sued the former owners of AN Frieda, who are two individuals named Ronen Konfino and Frieda Konfino.
This Court has entered default judgments against Mr. and Mrs. Konfino and they did not participate in the trial.
VNB New York, LLC ("VNB ") has intervened in the proceeding and has asserted cross-claims against all of the named defendants. VNB contends that it is a secured creditor and that VNB had a valid and perfected security interest in the items that belonged to AN Frieda and that Mr. Konfino delivered to New Liberty. VNB has asserted claims to recover damages for the improper disposition of its collateral, including claims of negligence, conversion, aiding and abetting of conversion and constructive trust. VNB has also asked for a ruling that its recovery rights are superior to the rights of the Trustee or of other parties.
New Liberty and Roni Rubinov admit that Mr. Konfino delivered diamonds and some other jewelry and watches to New Liberty and that some of the items probably belonged to AN Frieda. However, they argue that it is likely that many of the pawned items were the personal property of Mr. Konfino and his wife, and they suggest that the Trustee has not offered sufficient proof of ownership of each item. New Liberty and Roni Rubinov further argue that New Liberty sold the pawned items to New York Estate Buyers after giving notices of default and after the relevant redemption periods had expired, in each case in accordance with New Liberty's rights under New York State law and under the Bankruptcy Code. Roni Rubinov has testified that he did so without knowledge of AN Frieda's bankruptcy case, or of VNB's security interests, or of court orders in which I had barred parties from transferring property that belonged to AN Frieda.
Avner Rubinov and New York Estate Buyers are also defendants, as noted above. I entered default judgments against Avner Rubinov and New York Estate Buyers, but Avner Rubinov later moved to vacate the defaults. The parties resolved that motion by stipulating that the default judgments would remain in place "pending a determination of the merits of this Action." See PX 35, at ¶ 1. Avner Rubinov contends that neither he nor New York Estate Buyers ever purchased or received the diamonds that are at issue in this proceeding, and he has flatly contradicted his son's testimony on those points.
I denied a motion for summary judgment that was filed by New Liberty in July 2019. See ECF No. 138. I explained my reasons for doing so on the record after oral argument of the summary judgment motion. See Transcript, July 30, 2019, ECF No. 139.
The parties agree I have subject matter jurisdiction over their claims and cross-claims, personal jurisdiction over the parties, and the statutory and constitutional power to render a final judgment. The parties reconfirmed those agreements at the outset of trial.
The following matters are not in dispute.
I held a four-day trial on October 25, 28, 29 and 30, 2019. Transcripts have recently been prepared and filed and can be found at ECF numbers 154, 155,...
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...proceeding concerning alleged post-petition transfers of property of the debtor in a bankruptcy case. In re A.N. Frieda Diamonds, Inc. , 616 B.R. 295 (Bankr. S.D.N.Y. 2020). In the adversary proceeding, Trustee-Plaintiff Matthew Harrison ("Trustee") asserted claims against Defendants Roni R......
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Rubinov v. Harrison (In re A.N. Frieda Diamonds)
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