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Pal Family Credit Co., Inc. v. County of Albany

February 25, 2010

PAL FAMILY CREDIT CO., INC., APPELLANT,
v.
COUNTY OF ALBANY, RESPONDENT
PAL FAMILY CREDIT CO., INC., APPELLANT, V. TICOR TITLE INSURANCE CO., RESPONDENT
PAL FAMILY CREDIT CO., INC., APPELLANT,
v.
COUNTY OF ALBANY AND DIANA G. ADAMS, ACTING UNITED STATES TRUSTEE, RESPONDENTS
THREE REAL ESTATE HOLDING CO., APPELLANT,
v.
COUNTY OF ALBANY AND DIANA G. ADAMS, ACTING UNITED STATES TRUSTEE, RESPONDENTS
PAL FAMILY CREDIT CO., INC., APPELLANT,
v.
COUNTY OF ALBANY, RESPONDENT
PAL FAMILY CREDIT CO., INC., APPELLANT,
v.
RICHARD H. WEISKOPF, RESPONDENT



The opinion of the court was delivered by: Hon. Norman A. Mordue, Chief U.S. District Judge

MEMORANDUM-DECISION AND ORDER

INTRODUCTION

Presently before the Court are appeals from orders by Hon. Robert E. Littlefield, Jr., United States Bankruptcy Judge, in three jointly administered chapter 11 bankruptcy proceedings, In re Pal Family Credit Co., Inc. ("Pal Family Credit"), Case No. 06-12647; In re Rachel Pal Family Trust ("Rachel Pal"), Case No. 06-12839; and In re Universal Gardens, Inc. ("Universal Gardens"), Case No. 06-12648 (collectively, "Pal bankruptcy cases" involving the "Pal debtors"); as well as in a chapter 11 proceeding involving a related debtor, In re Three Real Estate Holding Co. ("Three Real Estate"), Case No. 08-10825.

The appeals presently before the Court are as follows:

1. 1:08-CV-656, Pal Family Credit Co., Inc. v. County of Albany, is an appeal from Judge Littlefield's May 15, 2008 order denying a motion for a stay in all four bankruptcy proceedings and an adversary proceeding, In re Pal Family Credit Co., Inc. v. County of Albany, Adv. Proc. No. 06-90241.

2. 1:08-CV-657, Pal Family Credit Co., Inc. v. Ticor Title Ins. Co., seeks review of Judge Littlefield's order dated May 15, 2008, dismissing for failure to prosecute an adversary proceeding entitled, Pal Family Credit Co., Inc. and on behalf of Pal Family Trust 12/26/79 v. Ticor Title Insurance. Co., Ticor Title Guarantee Co., and the Estate of Errol Blank, Esq., Adv. Proc. No. 07-90110.

3. 1:08-CV-720, Pal Family Credit Co., Inc. v. County of Albany and Diana G. Adams, Acting United States Trustee, is an appeal by the three Pal debtors from Judge Littlefield's order of April 14, 2008, dismissing with prejudice for 180 days all four chapter 11 cases.

4. 1:08-CV-721, Three Real Estate Holding Co. v. County of Albany and Diana G. Adams, Acting United States Trustee, is an appeal by Three Real Estate from Judge Littlefield's April 14, 2008 order dismissing with prejudice for 180 days all four chapter 11 cases.

5. 1:08-CV-722, Pal Family Credit Co., Inc. v. County of Albany, is an appeal by the debtors in the Pal cases from the May 2, 2008 order of Judge Littlefield dismissing the adversary proceeding In re Pal Family Credit Co., Inc. v. County of Albany, Adv. Proc. No. 06-90241, based on the dismissal of the underlying bankruptcy cases.

6. 1:08-CV-825 is an appeal from an order dated June 24, 2008, by Judge Littlefield approving the final fee application of O'Connell & Aronowitz, P.C. for services performed for the debtors by Richard H. Weiskopf, Esq. in the three Pal bankruptcy cases and the adversary proceeding, In re Pal Family Credit Co., Inc. v. County of Albany, Adv. Proc. No. 06-90241.

As explained below, the Court affirms all orders on appeal.

STANDARD OF REVIEW

A reviewing court may set aside findings of fact made in a bankruptcy proceeding only if they are "clearly erroneous." Fed. R. Bankr. P. 8013. A bankruptcy court's conclusions of law are subject to de novo review. See In re Vebeliunas, 332 F.3d 85, 90 (2d Cir. 2003). Mixed questions of fact and law are subject to de novo review. See id. Finally, matters of discretion are reviewed for abuse of discretion. See Capital Communications Fed. Credit Union v. Boodrow, 126 F.3d 43, 47 (2d Cir. 1997).

DISCUSSION

Appeal Nos. 1:08-CV-720 and 1:08-CV-721

The Court first addresses the two appeals listed as Nos. 3 and 4 above, Pal Family Credit Co., Inc. v. County of Albany and Diana G. Adams, Acting U.S. Trustee, 1:08-CV-720, and Three Real Estate Holding Co. v. County of Albany and Diana G. Adams, Acting U.S. Trustee, 1:08-CV-721. These appeals challenge Judge Littlefield's April 14, 2008 order dismissing with prejudice for 180 days all three Pal cases and the related Three Real Estate case. For the reasons set forth below, the order is affirmed.

All three Pal debtors and the Three Real Estate debtor have principals in common.*fn1 As the Trustee points out, between 1994 and 2008, a total of 12 bankruptcy cases (six of them filed by Pal Family Credit) have been filed by the four present debtors and by related debtors. Eleven of the 12 cases involve the same parcel of real property, 348-350 Albany Hill Road, Rensselaerville, New York ("Albany Hill property"), in which the Pal debtors held fractional interests. As a result of a tax foreclosure proceeding by Albany County on April 1, 2005, they no longer hold title; thus, the Pal debtors' primary asset is the adversary proceeding, Pal Family Credit Co., Inc. v. County of Albany, Adv. Proc. No. 06-90241, in which they seek to set aside as fraudulent the conveyance to Albany County on the ground that the value of the property far exceeded the amount of taxes owed.*fn2 The Trustee characterizes these 11 bankruptcy cases as "all focus[ing] on avoiding the loss of 348-350 Albany ...


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