Vital Pharmaceuticals, Inc.

United States Bankruptcy Court, S.D. Florida.·Decided June 6, 2025·No. 22-17842·Unknown

Opinion

Sr Ma, RY * AO OS aR’ if * A iL Ss eA □□□ Rays Oi om Sg

ORDERED in the Southern District of Florida on June 6, 2025.

Peter D. Russin, Judge United States Bankruptcy Court

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF FLORIDA FORT LAUDERDALE DIVISION

In re: Vital Pharmaceuticals, Inc., et al., Case No. 22-17842-PDR Debtors. Chapter 11 (Jointly Administered) ee

ORDER DENYING RECUSAL MOTIONS When a litigant asks a judge to disqualify themselves from presiding over a case, the request implicates two fundamental and competing imperatives. On one hand, the judiciary must remain above reproach. A judge’s continued participation must never be permitted to undermine public confidence in the fairness of the proceedings. On the other hand, the law does not—and cannot—permit litigants to convert dissatisfaction with judicial rulings into a license to disqualify judges at will.

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These tensions are especially pronounced when the request for recusal comes from a pro se litigant who believes the system has failed them. Federal judges must approach such claims with rigor and humility. That includes a willingness to engage

in meaningful self-examination: to consider whether, in the press of an emotionally charged case, unconscious bias may have crept in; whether courtroom management veered into undue impatience; whether a litigant’s complaints, though exaggerated, reflect a deeper concern that merits acknowledgment. The integrity of the system depends not just on decisional correctness, but on the reality and perception of impartial adjudication.

Yet integrity cuts both ways. It also requires the judiciary to draw a clear line between genuine bias and baseless attack. Judges must be willing to do the hard work of distinguishing the two—listening without defensiveness, reflecting without retreat, and, when warranted, denying relief firmly and transparently. Recusal is not a remedy for unfavorable outcomes. It is a safeguard against actual partiality. When the record reveals none, the judge must remain in place and continue the work. I. Introduction and Procedural History

Vital Pharmaceuticals, Inc. and its affiliated debtors (the “Debtors”) filed for Chapter 11 relief in October 2022. Since then, this case has become one of the most procedurally active and administratively complex bankruptcy proceedings in recent memory in this District, encompassing more than 2,900 docket entries and over ten adversary proceedings. John H. Owoc, the Debtors’ founder and former Chief Executive Officer and Chairman of the Board, was removed from those roles in March 2023. His wife, Megan E. Owoc, a former employee of the Debtors, has participated in numerous

filings throughout the case. Since Mr. Owoc’s removal, the Court has presided over an array of contested matters. At nearly every stage, the Movants have participated— at times through counsel, at other times pro se—and have made their views known through a stream of motions, objections, and pleadings. Increasingly, those pleadings have turned accusatory. The Movants have leveled allegations against nearly every fiduciary and professional in the case: the

Debtors and their professionals, the creditors’ committee and its professionals, the United States Trustee, the post-confirmation liquidating trust and its professionals and ultimately, this Court. The allegations range from claims of constitutional deprivation to conspiracies involving a broad cast of parties—none supported by evidence. On May 23 and May 30, 2025, the Movants filed three overlapping motions now before the Court: Emergency Motion Request for Disqualification of Bankruptcy

Judge Peter D. Russin,1 Emergency Motion to Disqualify Bankruptcy Judge Peter D. Russin,2 and Emergency Motion to Recuse Judge Peter D. Russin for Cause3 (together,

1 Doc. No. 2905.

2 Doc. No. 2907.

3 Doc. No. 2910. the “Recusal Motions”).4 These filings demand the undersigned’s disqualification under 28 U.S.C. §§ 144 and 455. The trajectory of the Debtors and Mr. Owoc serves as a poignant example of

dramatic ascent followed by precipitous decline. Mr. Owoc founded Vital in 1993, serving as its sole officer and shareholder. Under his leadership Vital experienced significant growth and success with its Bang Energy drink brand. However, the company faced substantial legal challenges that contributed to its financial difficulties. In one prominent case, Monster Energy Company (“Monster”) sued Vital for false advertising related to the marketing of “Super Creatine” in the company’s

flagship product.5 The jury determined that the claims were misleading since the drinks contained no actual creatine, resulting in a $293 million damages award in 2022.6 This verdict was later upheld by the Ninth Circuit Court of Appeals in April 2025.7

4 Although the Movants addressed their disqualification motion to Chief Bankruptcy Judge Erik P. Kimball, both 28 U.S.C. § 144 and § 455 place the responsibility for ruling on a motion to disqualify squarely with the judge whose impartiality is being questioned. Section 455(a) provides that “[a]ny justice, judge, or magistrate judge of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.” While the statute does not expressly reference bankruptcy judges, courts have uniformly applied it to them. See, e.g., In re Kensington Int’l Ltd., 368 F.3d 289, 301–02 (3d Cir. 2004). Likewise, under § 144, although the statute says the judge ’shall proceed no further’ upon the filing of a sufficient affidavit, courts have consistently permitted the assigned judge to first assess the affidavit’s legal sufficiency. See, e.g., United States v. Balistrieri, 779 F.2d 1191, 1199 (7th Cir. 1985). Accordingly, it is this Court’s duty to determine in the first instance whether disqualification is warranted.

5 Monster Energy Co. v. Vital Pharms., Inc. et al., Case No. 5:18-cv-1882-JGB_SHK (C.D. Cal. September 29, 2022).

6 Id. at Doc. 890.

7 Id. at Doc. 1083. In a separate arbitration case, Monster and Orange Bang, Inc. sued Vital for trademark infringement, resulting in a $175 million arbitration award and a 5% royalty on future Bang Energy sales.8 These significant financial obligations placed

immense strain on the company. The Bang Energy drink, central to Vital’s success, was the product at the heart of these legal issues. Its misleading marketing claims and trademark disputes called into question the long-term viability of the brand. The company, once a powerhouse generating billions in revenue, presumably allowed Mr. Owoc and his wife, Megan Owoc, to amass considerable wealth and influence. However, the judgments in such

staggering amounts precipitated the company’s bankruptcy and subsequent downfall. The Court is mindful that the Movants are facing extraordinary personal and financial consequences from the downfall of Vital, and that such circumstances can produce deep frustration and a desire to externalize blame. But even acknowledging the emotional toll of these proceedings, there is no excuse for the baseless and inflammatory accusations they have chosen to level—against professionals,

fiduciaries, and this Court.

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Vital Pharmaceuticals, Inc., (Fla. 2025).

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