In re Gianopolous

584 B.R. 598
CourtUnited States Bankruptcy Court, S.D. New York
DecidedMarch 15, 2018
DocketCase No. 10–14817–JLG
StatusPublished
Cited by3 cases

This text of 584 B.R. 598 (In re Gianopolous) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Gianopolous, 584 B.R. 598 (N.Y. 2018).

Opinion

HONORABLE JAMES L. GARRITY, JR., UNITED STATES BANKRUPTCY JUDGE

Introduction

Nikolaus Gianopoulos ("Niko "), the debtor in this closed no asset chapter 7 bankruptcy case, received his discharge in bankruptcy by order of this Court (Peck, J.)1 dated February 9, 2011 (the "Discharge Order "). Round Table 1 LLC ("Round Table ") was among the general unsecured creditors whose debts Niko scheduled in his case. Its scheduled indebtedness is related to a Loan (as defined below) that Round Table made to entities affiliated with members of Niko's extended family. Niko executed a Loan guaranty (the "Guaranty ") on behalf of himself and on behalf of his brother Constantine ("Gus ") Gianopoulos, as Gus's attorney-in-fact, pursuant to a general power of attorney. Round Table received notice of Niko's *600bankruptcy case and the deadlines applicable therein. It did not object to Niko's bankruptcy discharge, or to the dischargeability of its scheduled claim.

The Loan is in default. In 2014, Round Table sued Gus in New York State Supreme Court, New York County (the "State Court ") to enforce the Guaranty. In that litigation, which is pending, Gus denies that he is liable under the Guaranty, and maintains that he did not authorize Niko to execute it on his behalf. Round Table contends that it would not have made the Loan without Gus's guaranty, and that if what Gus says in that litigation is true, then Niko fraudulently induced Round Table to make the Loan. In 2016, Round Table sued Niko in State Court (the "State Court Action ") to recover approximately $3.5 million in damages caused by Niko's alleged fraud. Niko denies liability and also asserts that his indebtedness to Round Table-including that arising from the alleged fraud-was discharged in his chapter 7 case. He made that and other arguments in the State Court in support of his unsuccessful motion to dismiss the complaint in the State Court Action. Niko is appealing that ruling.

The matter before the Court is Niko's motion (the "Motion ") pursuant to section 350(b) of the Bankruptcy Code, 11 U.S.C. § 350(b), for an order reopening his chapter 7 case, so that he can obtain an order of this Court staying Round Table from prosecuting the State Court Action and sanctioning Round Table and its counsel for violating the Discharge Order.2 Round Table opposes the Motion.3

For the reasons set forth below, the Motion is DENIED.

Jurisdiction

This Court has jurisdiction over the Motion pursuant to 28 U.S.C. §§ 1334(a) and 157(a) and the Amended Standing Order of Referral of Cases to Bankruptcy Judges of the United States District Court for the Southern District of New York (M-431), dated January 31, 2102 (Preska, C.J.). This is a core proceeding under 28 U.S.C. § 157(b)(2)(A).

Facts 4

On or about November 30, 2007, Round Table made loans aggregating $3,487,000 (collectively, the "Loan ") to three limited liability companies owned or controlled by members of the Gianopoulos family (the "Borrowers "). The Loan is evidenced by an agreement dated November 13, 2007 (the "Loan Agreement ") and four promissory notes (the "Promissory Notes "). Niko executed the Guaranty both on his own account and on behalf of Gus, as Gus' attorney-in-fact. See Guaranty (R31-65).5

*601As support for the Guaranty, Niko submitted an affidavit to Round Table dated November 7, 2007 (the "Niko Affidavit "), in which he represented that pursuant to a Durable General Power of Attorney dated April 12, 2006 (the "Power of Attorney "), a copy of which he provided to Round Table, Gus designated Niko as his attorney-in-fact, and that the Power of Attorney had not been revoked or repudiated, and was still in full force and effect. See Affidavit That Power of Attorney Is In Full Force (R29), ¶¶ 1, 2;6 see also Power of Attorney (R25-27). In doing so, Niko confirmed the following representation and warranty contained in the Guaranty:

Niko, as attorney in fact for Gus pursuant to the certain power of attorney dated April 12, 2006, has all requisite power and authority to execute the Loan Documents and this Guaranty on behalf of Gus.

Guaranty, ¶ (C)(3)(d)(iv). Finally, in the Niko Affidavit, Niko stated, as follows:

I make this affidavit for the purpose of inducing [Round Table] to make the loan set forth in that certain Loan Agreement dated as of November 13, 2007 to accept delivery of the following Instrument(s), as executed by me in my capacity as the ATTORNEY-IN-FACT, with full knowledge that this affidavit will be relied upon in accepting the execution and delivery of the Instrument(s) and in paying good and valuable consideration therefor.

Niko Affidavit, ¶ 3. The Instruments referenced in the affidavit were the Loan Agreement and Promissory Notes underlying the Guaranty.

On September 13, 2010, Niko filed his voluntary chapter 7 petition herein. In amended Schedule F to his petition, Niko listed Round Table as a creditor holding an unsecured debt (the "Round Table Debt ") that arose in 2007 on account of a "Personal/Business Loan" in an "unknown" amount. [ECF No. 16]. Judge Peck fixed December 6, 2010 (the "Objection Deadline ") as the last day of the period (the "Objection Period ") in which creditors could file objections to Niko's bankruptcy discharge, and for filing complaints objecting to the dischargeability of debts of the sort designated in 11 U.S.C. § 523(c). [ECF No. 7]. The Clerk of this Court provided all scheduled creditors, including Round Table, with notice of Niko's bankruptcy and the Objection Deadline. On January 31, 2011, the chapter 7 trustee in Niko's case filed a no-asset report of distribution. Neither Round Table nor any other party in interest objected to Niko's discharge in bankruptcy or to the dischargeability of any particular debt. On February 9, 2011, Judge Peck entered the Discharge Order and final decree [ECF No. 25], and thereafter, closed Niko's no asset chapter 7 case.

*602The Borrowers defaulted under the Loan Agreement.

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Bluebook (online)
584 B.R. 598, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-gianopolous-nysb-2018.