In re Interpictures, Inc.

• Decision Date: 17 March 1994
• Docket Number: 886-62079-260 and 886-62117-260.,Bankruptcy No. 886-61827-260
• Citation: 168 BR 526
• Parties: In re INTERPICTURES, INC.,[1] Interpictures Releasing Corp., Interpictures Licensing Corp., Debtors.
• Court: U.S. Bankruptcy Court — Eastern District of New York

168 B.R. 526 (1994)

In re INTERPICTURES, INC.,¹ Interpictures Releasing Corp., Interpictures Licensing Corp., Debtors.

Bankruptcy Nos. 886-61827-260, 886-62079-260 and 886-62117-260.

United States Bankruptcy Court, E.D. New York.

March 17, 1994.

B. Amini, Stoch Amini & Munves, P.C., New York City, for Eliezer Miller, putative president of Interpictures, Inc. (Miller).

A. Massis, pro se.

R. Rosen, Loeb & Loeb, New York City, for Creditor Credit Lyonnais Bank Nederland, N.V.

J. Sapir, White Plains, NY, the Chapter 7 Trustee (trustee).

K. Stefflre, Patterson, Belknap, Webb & Tyler, New York City, for E. Frey, the former Chapter 11 operating trustee.

MEMORANDUM OF DECISION ON REMAND AND CLARIFICATION

FRANCIS G. CONRAD, Bankruptcy Judge.^*

This matter² is before me on remand for clarification of my March 31, 1993 order that denied a motion³ to have certain assets of the estate, which had been administered, abandoned to the debtor.

I will deny the motion again for the reasons that not to do so would violate §§ 554 and 105, and would be otherwise inequitable, immoral, unethical, and a mockery of the law I have sworn to uphold as a United States Bankruptcy Judge.

This soft-core pornography case has a long and anguished history that has tormented several bankruptcy judges and creditors involved in the case. A review of the many abuses perpetrated by Miller and his minions⁴ is necessary to an understanding of my decision today.

The debtor was petitioned involuntarily into Chapter 7 bankruptcy on November 6, 1986, along with several related entities. Thus, it has passed its seventh anniversary, and what has been accomplished? It has seen four bankruptcy judges⁵, three trustees⁶, and one examiner. There have been over 18 appeals docketed, almost all denied or dismissed; several motions to withdraw the reference, all denied; and opposition, in the form of motions to reconsider, objections to orders, orders to show cause, recusal and withdrawal motions, to every adverse ruling against Miller and his minions.

In the initial stages of these cases, instead of appearing and testifying before Judge Parente, the first bankruptcy judge assigned to these cases, and providing evidence as to his claims, and instead of appealing Judge Parente's decisions, Miller commenced numerous proceedings, including judicial complaints,⁷ in the Second Circuit, the District Court, and the Bankruptcy Court in which he attacked Judge Parente, sought his recusal, and alleged that Judge Parente was involved in a cover-up. Later, when an evidentiary hearing was held by Judge Parente on Miller's charges, Miller failed to present any evidence other than invective and venom that Judge Parente was covering-up fraud. Symptomatic of Miller's conduct, when asked to present his evidence, Miller showed his nonspecific mentalpathy with the following colloquy:

Miller: In the procedure of law when I bring forth allegations it is the burden of proof that those upon who it has been alleged, they should come forth and have discovery Court: You are saying you bring the allegations and the other side has the burden of proving the allegations are false . . .

Court: Since you are not getting your way, you feel you are not being treated fairly.

Miller: No. It is the intention of the real creditors of this case to do so . . .

Court: Do you know what an order of the Court is, Mr. Miller?

Miller: I am saying to the Court again and again —

Court: Do you know what an Order of the Court is? Do you honor an Order of the Court?

Miller: I honor all orders of judicial authority, and I feel Your Honor has no judicial authority in directing me. . . . That is my contention. If you rule to the contrary I would please ask for stay and I will ask District Judge.

(and on to another matter about an alleged tape.)

Court: . . . Mr. Miller, you were directed, you were ordered to produce a tape.

Miller: That tape I have furthered to the United States Attorney\'s office.

Court: Was that my order that you send it to the United States Attorney?

Miller: Your order was that the tape be presented here . . . my understanding was that you ordered me to bring forth that tape. . . . I decided that since this tape has in its proof, which I feel is proof against the Trustee, and showing exactly what has been going on, that tape shouldn\'t be in the possession of this Court, but rather in the possession of the United States Attorney who has jurisdiction over this case.

Court: You disregard the orders of this Court and you do what you think is correct, is that what you are saying? You are admitting —

Miller: I am not admitting anything.

(October 28, 1987 transcript of hearing before the Honorable C. Albert Parente, United States Bankruptcy Judge).

Judge Parente continued the evidentiary hearing. It was never completed because Miller failed to appear on the last two scheduled hearing dates.

Similarly, after Judge Duberstein began to preside over these cases, he likewise gave Miller every opportunity to gather and present evidence to support his claims. Judge Duberstein placed Miller in control of the debtors albeit with restrictions.⁸ When the Chapter 11 trustee resigned, Judge Duberstein permitted Miller to inspect the former trustee's books and records. Judge Duberstein also appointed Jack Weisbaum, a partner of the accounting firm BDO Seidman, to act as the Examiner in these cases to investigate Miller's claims. When Miller claimed that bankruptcy crimes had been committed, Judge Duberstein referred Miller's complaint to the United States Attorney's Office. See, Judge Duberstein's letter docket entry at # 408. We know of no action taken by the U.S. Attorney.

Despite Judge Duberstein's extraordinary efforts to give Miller the opportunity to substantiate his claims, Miller still did not seek to prove his claims through documentary evidence or testimony under affirmation, but instead was bent on pursuing his own personal agenda rather than that of the debtors. As an example, Miller, as putative President of Interpictures made an application to have a $300,000,000 counterclaim that the debtors had brought against him and his company, Royal Class Securities, withdrawn.⁹See, Docket Entry for October 27, 1988 (Exhibit 5). Thereafter, Miller besieged Judge Duberstein with judicial complaints, and stay, recusal, and withdrawal of reference motions, alleging that Judge Duberstein had joined Judge Parente (and Judge Holland)¹⁰ in a criminal conspiracy. Although Judge Duberstein had attempted to remain impartial towards Miller, who brought two complaints against him "filed with unfounded, calumnious attacks on his character," Judge Duberstein was eventually forced to recuse himself. Rather than rewrite history, I include Judge Duberstein's well-written words in his memorandum order on recusal.

If I were merely to recuse myself as the Bankruptcy Judge in charge of these cases without stating anything further, I would do myself an undeserved injustice. For that reason, I set forth the following condensed saga of these cases which contains the major factors that lead me to my decision to recuse myself in these cases. After patiently enduring more than one and a half years of Eliezer Miller\'s unrelenting, unfounded attacks on me as a Judge, I am left with no alternative.

On November 6, 1986 an involuntary petition in bankruptcy under Chapter 7 was filed against Interpictures, Inc., one of the debtors herein. On December 23, 1986 it converted its case by filing a petition for relief under Chapter 11. On December 16, 1986 one of its subsidiaries, Interpictures Releasing Corp. filed a petition for relief under Chapter 11, as did another subsidiary, Interpictures Licensing Corp. which filed its petition on December 23, 1986. All of these cases were procedurally consolidated and assigned to Honorable C. Albert Parente, Bankruptcy Judge.

Mr. Eliezer Miller appeared before Judge Parente claiming to be a shareholder and creditor. Although his status as such was disputed, he participated early in the cases in the request by creditors for the appointment of an operating trustee for all of the debtors under § 1104 of the Bankruptcy Code. Judge Parente appointed Edward P. Frey, Esq. as trustee inasmuch as at that time the United States Trustee who presently appoints such trustees was not yet in effect. Commencing shortly thereafter, Mr. Miller appeared constantly before Judge Parente, criticized the trustee\'s performance of his duties, opposed relief sought by the trustee, made numerous motions which Judge Parente denied, and eventually appealed to the District Court on many occasions. This brought him before several of the District Court Judges of this District, namely Honorable Jack B. Weinstein, Honorable Mark A. Costantino, Honorable John R. Bartels, and Honorable Edward R. Korman.

Upon Judge Parente\'s retirement these cases were reassigned to Honorable Marvin A. Holland, one of the bankruptcy judges of this court. Subsequently they were re-assigned to me on May 13, 1988. The first task which I undertook was to determine whether Mr. Miller is a party-in-interest since his status was the subject of great concern and had been attacked by others in these cases. At a hearing called by me for that purpose, I conducted an examination and found him to be a party-in-interest as a shareholder and creditor of the principal debtor.

Shortly thereafter, in examining the files to familiarize myself with the proceedings, I learned that special meetings of the Boards of Directors of the debtor corporations had been called in March of 1987 by one of the directors who claimed to be the sole surviving director, for the purpose of electing new directors and officers in place of those who allegedly had resigned early in the cases. I also learned that new Boards were elected at the special meetings which included Mr. Miller as director and which thereupon elected him president of all three of the debtor corporations. I

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