Goldberg v. Weichert (In re Timberline Energy Inc.)

70 B.R. 450, 1987 Bankr. LEXIS 214
CourtDistrict Court, N.D. New York
DecidedFebruary 24, 1987
DocketBankruptcy No. 81-00522; Adv. No. 86-0036
StatusPublished
Cited by4 cases

This text of 70 B.R. 450 (Goldberg v. Weichert (In re Timberline Energy Inc.)) is published on Counsel Stack Legal Research, covering District Court, N.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Goldberg v. Weichert (In re Timberline Energy Inc.), 70 B.R. 450, 1987 Bankr. LEXIS 214 (N.D.N.Y. 1987).

Opinion

MEMORANDUM-DECISION, PROPOSED FINDINGS OF FACT, PROPOSED CONCLUSIONS OF LAW AND PROPOSED ORDER

STEPHEN D. GERLING, Bankruptcy Judge.

On February 24, 1986, the Trustee commenced this adversary proceeding pursuant to Fed.R.Bankr.P. 7003 (Fed.R.Civ.P. 3) against Robert M. Weichert (“Weichert”). On August 25,1986, the Trustee moved for summary judgment pursuant to Fed.R. Bankr.P. 7056 (Fed.R.Civ.P. 56), and additionally sought to dismiss the affirmative defenses and counterclaim asserted by Weichert. In response, on September 11, 1986, Weichert moved for summary judgment on his counterclaim, and sought to dismiss the adversary complaint and underlying claim on various grounds.

Pursuant to 28 U.S.C. § 157(b)(3), the Court has determined on its own motion that the present adversary proceeding is not a core proceeding, but rather is one otherwise related to a case under Title 11 of the United States Code.1 Consequently, pursuant to 28 U.S.C. § 157(c)(1), the Court submits the following proposed findings of fact and conclusions of law to the United States District Court for the Northern District of New York for entry of an appropriate final order or judgment.

PROPOSED FINDINGS OF FACT

1. Timberline Energy, Inc. (“Debtor”) filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code, 11 U.S.C. §§ 101-151326, (“Code”) on April 4, 1981. On September 10, 1982, an Order was entered converting the case to Chapter 7.

2. The Trustee was appointed interim trustee of the Debtor’s estate by Order of the Court dated September 10, 1982.

3. The Trustee was ordered to • file a replacement bond to cover only funds and assets of the Debtor’s estate by Order of the Court dated September 10, 1982.

4. On September 15, 1982, an Order was entered appointing Harold P. Goldberg as attorney for the Trustee.

5. On October 19,1984, a Federal grand jury returned a seven count indictment against Weichert, Ivan T. Preslar, II, a/k/a [452]*452Ivan T. Preslar (“Preslar”), Timberline Stoves Northeast, Inc., Adirondack Wood Stove Works, Inc., and Timberline East, charging them variously with bankruptcy fraud and related offenses in violation of 18 U.S.C. § 152 and § 871. See United States v. Preslar, 608 F.Supp. 986, 987 (N.D.N.Y.1985) (Munson, C.J.).

6. Weichert was alleged to have “engaged in a criminal conspiracy to conceal the assets of a bankrupt corporation [Debt- or] by transferring its inventory, cash and other property to a separate and distinct solvent corporation.” Id.

7. All acts contained in the indictment were alleged to have occurred between August 1, 1981 and October 1, 1981.

8. On May 31, 1985, Weichert, Adirondack Wood Stove Works, Inc., and Timberline East were convicted on all counts charged in the indictment. Memorandum and Order, United States v. Weichert, 84-CR-139, p. 1 (N.D.N.Y. Oct. 10. 1985) (MacMahon, J.). (“Memorandum”) [Available on WESTLAW, DCTU database],

9. On August 15, 1985, Weichert was sentenced to a three-year jail term and five years probation to be served consecutively with the jail sentence. He was also fined $5,000.00, and ordered to pay $200,000.00 as restitution, “or such other amount as may be determined by the Probation Department.” Id., at 1-2.

10. Weichert surrendered to the United States Marshal on October 18, 1985 and was removed by the United States Bureau of Prisons from Syracuse, New York at that time. At all times material hereto, he has been incarcerated in a federal facility in Duluth, Minnesota.

11. The Trustee seeks judgment against Weichert in the amount of $200,000.00. The Trustee relies upon the Judgment and Probation/Commitment Order of the United States District Court for the Northern District of New York, United States v. Weichert, 84-CR-139 (N.D.N.Y. Aug. 5, 1985) (MacMahon, J.) and 18 U.S.C. § 3579 as grounds for such relief.

12. Weichert, in an Amended Answer filed March 27, 1986, denies all of the Trustee’s allegations. For affirmative defenses to the Trustee’s adversary complaint, Weichert alleges 1) that the Court lacks jurisdiction to hear and determine the action; 2) improper venue; 3) insufficient process; 4) insufficient service of process; 5) that the action is barred by laches and/or a statute of limitations; 6) that another action is pending for the same relief; and 7) that Preslar is an indispensable party who must be joined to this proceeding pursuant to Fed.R.Bankr.P. 7019 (Fed.R.Civ.P. 19). As a counterclaim, it is alleged the adversary proceeding has been commenced by the Trustee in his individual capacity in furtherance of a malicious scheme to harm Weichert.

13. The Trustee alleges summary judgment is appropriate as the adversary complaint is based solely upon the Memorandum, as well as the provisions of 18 U.S.C. § 3579.

14. Weichert contends 18 U.S.C. § 3579 and § 3580 are not applicable. He questions the Trustee’s capacity to bring the action as most of the actions underlying the criminal conviction preceded the Trustee’s appointment.

PROPOSED CONCLUSIONS OF LAW

1. JURISDICTION

The Bankruptcy Court has jurisdiction pursuant to 28 U.S.C. § 157(a) and (c)(1). The United States District Court for the Northern District of New York has jurisdiction pursuant to 28 U.S.C. § 1334. Weichert’s assertion that the Court lacks subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(h)(3) is without merit.

2. TRUSTEE’S CAPACITY TO COMMENCE ACTION

Code § 704(1) provides that a Trustee is required to “collect and reduce to money the property of the estate for which such trustee serves.” Code § 541 broadly defines property of the estate, with every interest of the debtor becoming part of estate assets. H.R.Rep. No. 595, 95th Cong., 1st Sess. 368-67, reprinted in 1978 [453]*453U.S.Code Cong.

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70 B.R. 450, 1987 Bankr. LEXIS 214, Counsel Stack Legal Research, https://law.counselstack.com/opinion/goldberg-v-weichert-in-re-timberline-energy-inc-nynd-1987.