In Re One Main Development, LLC

CourtUnited States Bankruptcy Court, C.D. Illinois
DecidedJanuary 16, 2026
Docket23-90402
StatusUnknown

This text of In Re One Main Development, LLC (In Re One Main Development, LLC) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, C.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re One Main Development, LLC, (Ill. 2026).

Opinion

SIGNED THIS: January 16, 2026

Mary P. Gorman United States Bankruptcy Judge

UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF ILLINOIS In Re ) ) Case No. 23-90402 ONE MAIN DEVELOPMENT, LLC, ) ) Chapter 7 Debtor. )

Before the Court is creditor Clayton Jefferson Development, LLC’s Motion to Alter or Amend Order on Motion to Modify Protective Order, asking the Court to alter or amend its order entered November 4, 2025, denying the creditor’s motion to modify protective order, pursuant to Bankruptcy Rule 9023 and Federal Rule of Civil Procedure 59(e). For the reasons set forth herein, the Motion to Alter or Amend Order will be denied.

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I. Factual and Procedural Background The Debtor, One Main Development, LLC, filed its voluntary petition under Chapter 7 on September 11, 2023. The Debtor filed the required schedules,

statements, and other documents shortly thereafter. The case trustee, Jeffrey D. Richardson, conducted two creditors meetings, and, at the Trustee’s request, a deadline for filing claims was set for February 16, 2024. The progression of the case was largely uneventful until April 2024, when Clayton Jefferson Development, LLC (“CJD”) entered the picture. At that time, CJD filed a motion seeking authorization to issue subpoenas pursuant to Bankruptcy Rules 2004 and 9016 to four individuals, four corporate affiliates of the Debtor, and eight financial institutions. A hearing on the motion

was held May 8, 2024. Attorneys Mark Carter and Jack Shadid appeared on behalf of CJD. Attorney Laura Cohen appeared on behalf of 502 N. Neil, LLC, One Main Holdings, LLC, One Main Construction, LLC, and M2 on Neil, LLC— the four affiliates of the Debtor to which subpoenas were to be directed. No one appeared on behalf of the Debtor. After hearing the arguments of counsel, the motion was granted without prejudice to the right of any individual or entity subpoenaed to raise specific objections to their subpoena. The order granting the motion was entered on May 9, 2024.

Less than a week later, Attorney Kevin Sterling entered his appearance for the four affiliates previously represented by Attorney Cohen. Attorney Sterling filed a motion for protective order on behalf of the affiliates seeking to have certain requests for information from financial institutions stricken. The motion asserted that discovery had been completed in related state-court proceedings, and that the requests were burdensome and invasive as to nondebtors. CJD responded asserting that the requests were not burdensome, that the financial

institutions had not objected, and that the information was needed to fully understand the financial affairs of the Debtor. A hearing on the motion for protective order was held on June 13, 2024. Attorney Carter appeared for CJD, and Attorney Sterling appeared for the four affiliates. Again, no one appeared for the Debtor. After hearing the somewhat contentious arguments of counsel, the Court declined to strike any of the subpoenas. Based on discussion at the hearing of terms that would be acceptable to both sides, a protective order was entered limiting the use of any

information received pursuant to the subpoenas to bankruptcy-related proceedings and limiting dissemination of the information to the Trustee and his attorneys and to CJD’s attorneys. In the order entered June 14, 2024, this Court suggested that it would consider modification of the protective order to allow for review of the information by experts and other witnesses, but any such modification would be on a document-by-document basis. Nothing further was filed in the case until more than 13 months later when Trustee Richardson filed his report of no distribution on July 21, 2025. The

Trustee represented that he had discovered no assets to be administered and requested that he be discharged. On August 20, 2025, CJD filed an objection to the Trustee’s report, asserting that it had identified causes of action that should be prosecuted by the Trustee for the benefit of the estate. A hearing on the Trustee’s report was then set for September 10, 2025. On September 3, 2025, CJD filed two motions: one seeking authority to

proceed derivatively to prosecute claims on behalf of the estate and the other seeking to modify the previously-entered protective order. A copy of a proposed complaint was attached to the motion for derivative standing; the complaint asserted causes of action against the Debtor, several of its affiliates, and three individuals. An expedited hearing was requested because CJD claimed that the deadline for the filing of the complaint—or at least some of the counts in the complaint—was September 11, 2025. 11 U.S.C. §546(a). As for its motion to modify the protective order, CJD asserted that, to be able to fully understand the

documents received through the previously-authorized discovery and to be able to prosecute the claims it identified on behalf of the estate, it needed to be able to disclose the information to an expert witness and to CJD’s president. Both motions were set for hearing on September 10, 2025, with the Trustee’s report of no distribution. The discussion at the September 10 hearing centered on CJD’s motion for derivative standing. Mr. Carter for CJD acknowledged that the standard for granting derivative standing requires findings that there exists a colorable claim

or cause of action and that the Trustee unjustifiably refused a demand to pursue the action. But he said that the focus should be on whether there is a colorable claim, and, if demand was made and the Trustee declined to pursue such claim, that should be enough. The Court explained that a standard for derivative standing requiring a demand and refusal without more is no standard at all, and it declined to accept CJD’s position that simply making a demand on the Trustee was sufficient. Rather, some presentation of evidence was necessary for the

Court to find that the Trustee unjustifiably refused to pursue a colorable claim or cause of action likely to benefit the bankruptcy estate. In the absence of such evidence, the Court ultimately denied CJD’s motion for derivative standing and its objection to the Trustee’s report of no distribution. In doing so, the Court noted the unresolved factual issues surrounding the demands made on the Trustee, the Trustee’s offer to sell the claims under terms CJD deemed unacceptable, and the timeline of events leading up to the motion. The Court also noted statute of limitation issues as impediments to establishing a colorable

claim, which CJD did not meaningfully address other than arguing that there might be some, unspecified basis for tolling the applicable statute. The denial of the motion for derivative standing was without prejudice. As for the motion to modify protective order, CJD expressed its intention to proceed with its request notwithstanding the denial of derivative standing. A further hearing on the matter was set for October 8, 2025, and a deadline was set for interested parties to file written responses prior to the continued setting. The four affiliates represented by Attorney Sterling filed a joint response

objecting to the motion to modify protective order. At the October 8 hearing, the Court heard arguments for and against modification of the protective order. The Court then took the matter under advisement, and, after reviewing the record and the arguments of all interested parties, the Court entered a written order denying the motion to modify protective order with the reasons for the denial set forth therein. The Order entered November 4, 2025, recited the history of activity in the

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