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In re Albicocco

August 16, 2006

IN RE: JOHN ANTHONY ALBICOCCO, DEBTOR.
JOHN ANTHONY ALIBICOCCO, APPELLANT,
v.
ORESTE ALBICOCCO, MARY ROSSINI, ROCCO ROSSINI, PORT DOCK & STONE CORPORATION, APPELLEES.



The opinion of the court was delivered by: Joseph F. Bianco, District Judge

MEMORANDUM AND ORDER

The instant case is an appeal from the involuntary bankruptcy proceeding of Debtor John Anthony Albicocco, under Chapter 7 of the Bankruptcy Code. Debtor appeals from an Order of the Honorable Stan Bernstein, United States Bankruptcy Judge, approving a stipulation of settlement between the Trustee and several creditors of Debtor's estate. Creditor Port Dock & Stone Corporation ("PDSC") moves to dismiss the instant appeal, asserting that dismissal is appropriate because: (1) Debtor has failed to timely comply with filing requirements under Rule 8006 of the Federal Rules of Bankruptcy Procedure; and (2) Debtor lacks standing to prosecute the instant appeal. For the reasons set forth below, the Court agrees on both grounds, and dismisses the instant appeal.

I. BACKGROUND

A. Debtor's Former Assets

Debtor John Anthony Albicocco claims that he and his brother, Steven Albicocco, created and owned, at least at one point, a number of business entities which in turned owned and operated various restaurants and catering businesses. (See Affidavit of John Anthony Albicocco ("Albicocco Aff.") at ¶¶ 7, 9.)*fn1 These entities included AJ&S Enterprises, which owned John Anthony's Water Caf, Inc., Coco's Caf, Inc. which owned Coco's Caf, Tee T's Landing, which held the Harbor Club, 95 New York Avenue, Inc., which held the Babylon Cove Marina, and Rick's Caf Inc., which did business under the name "The Vanderbilt." (See id.) Debtor also claims that he and his brother, through AJ&S Enterprises, purchased an investment property, 9 Post Place, Babylon, New York, and that he personally owned his residence at 84 Preston Street, Huntington, New York. (See id. ¶ 8.) Debtor claims that at one point he held 26 percent of the ownership of PDSC, a family-run, closelyheld corporation.*fn2 (See id. at ¶¶ 4,10.)

B. The Trotta Loan

In connection with the Vanderbilt operation, Debtor and his brother Steven obtained an unsecured loan in excess of $2 million from Trotta Tire and Rubber Co., Inc. ("Trotta"). (Affidavit of Robert L. Pryor ("Pryor Aff.") ¶ 14.) The Vanderbilt venture failed, and the entity declared bankruptcy. (See Albicocco Aff., ¶ 9.) Debtor claims that the pressures involved in the failed enterprise and health complications related to his "morbid obesity" forced him to leave New York for Florida for a number of years, during which he entrusted his business interests to his brother Steven. (See Pryor Aff., Ex. N at ¶ 73.) Debtor claims that he returned in 1999. (See id. at ¶ 74.)

In 1999, Trotta commenced an action in New York State Supreme Court, Nassau County, against Debtor and Steven, regarding the debt owed under the loan. (See Pryor Aff. ¶ 14; Ex. E.) Debtor and his brother Steven defaulted and, on December 21, 1999, Trotta obtained a judgment of $2,591,021.60 against Debtor and his brother. (See id.)

C. Debtor's Adversary Proceeding in PDSC Bankruptcy

By 2004, PDSC had filed its own voluntary bankruptcy proceeding under Chapter 11 of the Bankruptcy Code. Within that bankruptcy case, Debtor commenced an adversary proceeding which alleged that his assets, including his home and stock in PDSC, and his ownership in many of the business entities he owned with Steven had been unlawfully converted by PDSC. (See Pryor Aff., Ex. C.) The proceeding was commenced in the form of an Order to Show Cause seeking, inter alia, the imposition of a constructive trust on the assets in question. (See id.) In connection with that proceeding, Debtor submitted an affidavit, in which he noted that he and Steven transferred the assets in question to PDSC to protect them from bankruptcy creditors:

Based on the bankruptcy of the Vanderbilt and the debt of $2.5 million, my Father CEO of Port Dock and Stone Corp. of which Steven Albicocco and I owned 26% each at that time, James Albicocco 24% and Oreste Albicocco 24%, recommended that Steven and I move our assets into Port Dock and Stone Corp. to protect the assets from the creditor and the bankruptcy. The expectation was to recover the assets after we dealt with the debt and the bankruptcy.

(Id. ¶ 10.) The affidavit also noted that "as of 1998 I moved my shares of Port Dock and Stone Corporation into the care of Port Dock and Stone Corporation." (Id. ¶ 12.) Debtor alleged that the assets transfer documents were executed without his signature and without consideration, and were thus fraudulent. (See id. ¶ 16.) He further alleged that Port Dock Holdings, Inc., was an entity established by his sister, Mary Rossini, and his brother-in-law, A. Rocco Rossini, for the purpose of unlawfully converting his assets. (See id. ¶ 19.)

On January 8, 2004, the Bankruptcy Court held oral argument regarding Debtor's Order to Show Cause. The court immediately expressed its concern with Debtor's statement that assets were moved to frustrate creditors of the Vanderbilt, noting that it warranted investigation by the U.S. Trustee's Office:

THE COURT: . . . I am not going to try this on the merits at this point. I am just telling you that your affidavit raises a substantial issue.

It appears to me and to everyone else who has read it, and your clients have made a party admission that they actively participated with other members of the Albacocco [sic] family to transfer assets or to act as if assets were transferred so that creditors, particularly of Vanderbilt, would not be able to realize on some of those assets.

All of those are interested in the issues, but on the face of the affidavit, I have to refer this, Mr. McPharland, to investigation by the United States Trustees Office. I can't ignore these kinds of affidavits when they are presented in the Court.

. . . I am going to charge the U.S. Trustee with making an investigation and reporting to this Court whether or not Vanderbilt ought to be re-opened, which then gives rise to whether any of these assets are assets of the Vanderbilt estate.

(Affirmation of Robert J. Del Col ("Del Col Aff.") Ex. 4 at 15-16.) The Bankruptcy Court then proceeded to dismiss Debtor's claims because his unclean hands barred him from obtaining equitable relief:

THE COURT: Now, I can't give you the relief you seek because you don't come into Court with clean hands. That's a ...


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