Matter of Braen, Bankruptcy No. 86-06241.
| Decision Date | 11 March 1987 |
| Docket Number | Bankruptcy No. 86-06241. |
| Parties | In the Matter of Samuel BRAEN, Jr., Debtor. |
| Court | U.S. Bankruptcy Court — District of New Jersey |
Crummy, Del Deo, Dolan, Griffinger & Vecchione, Frank J. Vecchione, Newark, N.J., Podvey, Sachs, Meanor & Catenacci, H. Curtis Meanor, Newark, N.J., State Court Attys., for Samuel Braen, Jr., debtor.
Klein, Chapman, Greenburg, Henkoff & Siegel, Herbert C. Klein, Clifton, N.J., for Nicholas Laganella and P.T.L. Const. Co.
On February 18, 1987, two matters were brought before the Court in the above captioned matter. The first matter involves a notice of motion filed by the Debtor to authorize Samuel Braen, Jr., as sole shareholder of Sabra Industries, Inc. to transfer title to three motor vehicles. The second matter heard simultaneously is an application for relief from the automatic stay, or in the alternative, for dismissal of the pending Chapter 11 petition. Said application for relief from the automatic stay of the Bankruptcy Code is brought pursuant to 11 U.S.C. § 362. Said relief from the stay is sought by Nicholas Laganella and P.T.L. Construction Co., as judgment creditors of the debtor.
The following documents have been submitted to the Court and constitute the record in this matter:
As To Vacating The Stay
A. Application for relief from automatic stay filed on behalf of applicant Laganella November 21, 1986.
B. Memorandum of law in support of application filed by attorneys for Laganella.
C. Supplemental memorandum of law in support of application for relief from automatic stay filed January 20, 1987.
D. Affidavit of Leonard A. Paduto, Jr. with supporting documents filed with the Court December 15, 1986.
E. Supplemental affidavit of Leonard A. Paduto, Jr. filed with the Court January 20, 1987.
F. Answer filed by debtor to application for relief from automatic stay filed with the Court December 10, 1986.
G. Brief filed in opposition to application of Laganella for relief from automatic stay.
H. Reply brief filed in support of application for relief from automatic stay filed with the Court February 17, 1987.
I. Letter of Laganella's counsel dated February 19, 1987 addressed to the Court with attached exhibits.
(A) Notice of Motion and supporting documentation filed by the attorneys for the debtor-in-possession on November 21, 1986 seeking authorization to transfer title to three motor vehicles.
(B) Letter filed February 17, 1987 in opposition to debtor's motion concerning motor vehicles.
Having reviewed the above briefs, correspondence, affidavits and supporting documentation attached thereto, and further having listened to the argument of counsel on the return date hereof, the Court makes the following factual determinations:
1. On November 30, 1983, Nicholas Laganella and P.T.L. Construction Co., Inc., as plaintiffs, obtained a final judgment in their favor against the debtor Samuel Braen, Jr., as defendant, in the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-32674-79. In accordance with a unanimous verdict of the jury rendered in said case plaintiffs Laganella and P.T.L. were awarded compensatory damages of $10,175,000.00 and punitive damages of $150,000.00.
2. On November 30, 1983, the Clerk of the Superior Court of the State of New Jersey duly issued a civil action writ of execution directed to the Sheriff of Bergen County based upon the aforesaid Superior Court judgment.
3. On December 1, 1983, pursuant to the aforesaid writ of execution, the Bergen County Sheriff levied upon the right, title and interest of the debtor-in-possession Braen as to certain bank accounts in the United Jersey Bank located in Wyckoff, New Jersey.
4. On December 5, 1983, the Bergen County Sheriff, pursuant to the aforesaid writ of execution, levied upon the right, title and interest of the debtor-in-possession as to certain bank accounts located in Citizens First National Bank of New Jersey, Wyckoff, New Jersey.
5. On December 9, 1983 the debtor-in-possession (then defendant) Samuel Braen, Jr., through his attorneys, brought an action before the Honorable Benedict E. Lucchi, Superior Court Judge of the Sate of New Jersey, seeking an injunction of any further levying on said defendant's assets and interests pending disposition of certain motions before the trial judge. On December 9, 1983 State Court Judge Lucchi entered an order reading in part:
6. On March 19, 1984 a notice of appeal was filed by debtor Braen with the New Jersey Appellate Division.
7. On April 19, 1984 an order of Judge Lucchi of the Superior Court of New Jersey was duly entered keeping the December 9, 1983 stay of levy in place.
8. On May 23, 1984 plaintiff Laganella's motion to the Appellate Division of the State of New Jersey to dissolve the trial court stay entered December 9, 1983, or in the alternative, to require posting of supersedeas bond was denied by the New Jersey Appellate Division.
9. On October 9, 1985, the Appellate Division affirmed the jury verdict in favor of Laganella, et al.
10. On October 11, 1985, an order to show cause was executed by Judge Lucchi returnable October 28, 1985. Said order to show cause dealt with compelling debtor Braen to surrender certain assets.
12. On October 28, 1985, which was the return date of the aforesaid order to show cause, a hearing was held before Judge Lucchi. The Court does not have a transcript of said proceeding; however, the Court notes that an escrow agreement duly entered into on February 28, 1986 between debtor Samuel Braen, Jr. and Theodore Trautwein, as escrow agent, sets forth that at an oral argument held October 28, 1985 counsel for debtor agreed to place a certain Repurchase Agreement in the principal amount of $100,000.00 (Account No. 99999688) in escrow with the said Trautwein. Said fact is uncontroverted by the documents before the Court.
13. By letter dated October 31, 1985, state court counsel for debtor Braen, tendered to Judge Lucchi 13 shares of Fairfield National Bank stock, "to be held in escrow by the Court in the same manner and under the same terms as the stock certificates that I delivered to Your Honor on October 17, 1985."
14. On November 5, 1985 the Appellate Division of the State of New Jersey granted Braen's motion for stay pending appeal.
15. On November 18, 1985, pursuant to letter of said date, state counsel for debtor Braen tendered three original stock certificates representing 300 shares of United Jersey Bank stock owned by Sabra Industries, Inc. to Judge Lucchi.
16. On February 28, 1986, Samuel Braen, Jr. and Theodore W. Trautwein, Esq., as escrow agent, entered into written escrow agreement dealing with a $100,000.00 Repurchase Agreement from Citizens First National Bank. Said escrow agreement reads in part:
17. On February 28, 1986 Samuel Braen, Jr., as president of Sabra Industries, Inc. executed a Trust Mortgage to Theodore Trautwein as "Mortgagee/Trustee". Said mortgage encumbers 122.148 acres of land in Vernon Township, New Jersey, and was recorded June 25, 1986 in the Sussex County Clerk's office in Book 1050 at page 249.
18. On April 2, 1986 Judge Lucchi entered an order reading in part:
19. On September 8, 1986 a petition for certification filed by Debtor Braen was denied by the New Jersey Supreme Court, 105 N.J. 533, 523 A.2d 174.
20. On October 8, 1986 Samuel Braen, Jr., an individual, filed a voluntary Chapter 11 bankruptcy petition pursuant to Title 11 of the U.S. Bankruptcy Code.
The above facts are not in dispute. The question before the Court is given said facts what are the rights of the judgment holders Laganella and P.T.L. The parties conceded that if the Court finds a valid and perfected judicial lien that the...
To continue reading
Request your trial