PAMELA K. CHEN, District Judge.
Appellant Lindsay Jenkins appeals the September 17, 2017 order of the United States Bankruptcy Court of the Eastern District of New York converting Appellant's Chapter 11 bankruptcy case to a Chapter 7 bankruptcy case. For the reasons stated herein, the Order of the Bankruptcy Court is affirmed.
The Court assumes the parties' familiarity with the facts in this case and thus recites them only to the extent relevant to the Court's analysis.
On December 7, 2010, Judge Nicholas G. Garaufis entered a filing injunction in this court (the "EDNY Injunction") against Appellant, enjoining her "from filing or intervening in any future action in the federal courts without first obtaining leave of court to do so", due to her "abusive" litigation practices. Jenkins v. Eaton, No. 08-CV-0713 (NGG)(LB), 2010 WL 5071995, at *2-3 (E.D.N.Y. Dec. 7, 2010). In entering the EDNY Injunction, Judge Garaufis considered Appellant's "extensive history of vexatious and baseless lawsuits", including, at the time, "over thirty federal court cases, in multiple states, . . . [and] nine cases filed in the Eastern District of New York." Id. at *1; see also Jenkins v. Eaton, No. 08-CV-713 (NGG)(LB), 2010 WL 3861050, at *5 (E.D.N.Y. Aug. 25, 2010) (collecting cases), report and recommendation adopted, No. 08-CV-0713 (NGG)(LB), 2010 WL 3842412 (E.D.N.Y. Sept. 28, 2010).
On February 23, 2017, Appellant filed a counseled voluntary petition for Chapter 11 bankruptcy (Bankruptcy Docket ("Bkr. Dkt."), 1-17-40816-nhl, Dkt. 1), "without first obtaining leave of [the] Court to do so" (September 14, 2017 Hearing ("Sept. Hrg."), Bkr. Dkt. 71, at 24:7-14). On June 2, 2017, Appellee field a motion to dismiss the case or, in the alternative, a motion to convert the case under Chapter 7. (Bkr. Dkt. 29.) The Bankruptcy Court held hearings on the motion on July 6, 2017 and September 14, 2017. (Bkr. Dkts. 46, 71.) On September 17, 2017, the Bankruptcy Court granted Appellee's motion to convert the case (Bkr. Dkt. 59) based on "the history [of the case], [Appellant's] failure to make proper disclosure in operating reports, the lack of any progress in this case towards sale in six months and any apparent progress on the record[,] [a]nd the fact that . . . this case violates an injunction that was issued in 2010" (Sept. Hrg., at 23:12-17). Appellant filed a timely notice of appeal on September 27, 2017. (Bkr. Dkt. 63.)
This Court reviews the Bankruptcy Court's legal conclusions de novo, and its factual findings for clear error. Giaimo v. DeTrano (In re DeTrano), 326 F.3d 319, 321 (2d Cir. 2003). A bankruptcy court's decision to convert or dismiss a chapter 11 case under 11 U.S.C. § 1112(b) is reviewed for abuse of discretion. C-TC 9th Ave. P'ship v. Norton Co. (In re C-TC 9th Ave. P'ship), 113 F.3d 1304, 1312 (2d Cir. 1997). A court abuses its discretion when its decision "rests on an error of law . . . or a clearly erroneous factual finding, or . . . cannot be located within the range of permissible decisions." Zervos v. Verizon New York, Inc., 252 F.3d 163, 169 (2d Cir. 2001).
A Chapter 11 bankruptcy case "may be converted to a Chapter 7 case
The Bankruptcy Court's finding that Appellant's filing of the bankruptcy petition was in bad faith, and a clear violation of the EDNY Injunction, was sufficient to constitute "cause" for conversion under Section 1112(b). (See Sept. Hrg., at 23:12-17.) A "debtor's filing history is always relevant to a determination of an abusive bankruptcy agenda." In re Mourouzidis, No. 14-21564 (ASD), 2014 WL 6963880 *2 (Bankr. D. Conn. Dec. 8, 2014); see also In re Blumenberg, 263 B.R. at 714 ("[C]hapter 11 cases filed in bad faith are usually dismissed immediately as bad faith filings under section 1112(b) or otherwise converted to chapter 7 cases[.]"); In re Adler, 329 B.R. 406, 410 (Bankr. S.D.N.Y. 2005) ("Under section 1112(b), the Court may find cause for dismissal if there has been a lack of good faith."); In re Coffee Cupboard, Inc., 119 B.R. 14, 17 (Bankr. E.D.N.Y. 1990). Appellant's blatant violation of the EDNY Injunction is underscored by the fact that, in the seven months between the filing of her Chapter 11 petition and the Court's conversion order, Appellant filed five pro se adversary proceedings in various courts without seeking or obtaining permission of the respective courts—including actions against the Attorney General of the State of New York, various New York Supreme Court officials, her mortgagees, the mortgagees' employees, and her and Martin's foreclosure and bankruptcy attorneys. (See Bkr. Dkts. 25, 31, 36, 48, 49; see also July 6, 2017 Hearing ("July Hrg."), Bkr. Dkt. 46, at 64:3-8, 104:14-19.) Finally, although Appellant argues that the EDNY Injunction should not apply to the underlying bankruptcy action because she was represented by counsel (Appellant's Reply Br., Dkt. 9, at 3-4), the Court rejects this argument as an inappropriately narrow reading of the broad injunction against her, Jenkins, 2010 WL 5071995, at *3 ("Plaintiff is hereby enjoined from filing or intervening in any future action in the federal courts without first obtaining leave of court to do so.") (emphasis added).
Additionally, Appellant, along with Martin, acted in bad faith during the bankruptcy proceeding by refusing to disclose information requested by the Trustee and the Bankruptcy Court. See 11 U.S.C. § 1112(b)(4)(H) (stating that cause exists where the debtor fails "timely to provide information . . . reasonably requested" by the United States Trustee); cf. In re Johnson, 228 B.R. 663, 667 (Bankr. N.D. Ill. 1999) (finding that "Debtor's failure to disclose . . . to the Chapter 13 Trustee, justif[ied] . . . conversion in light of Debtor's abuses."). As Judge Nancy H. Lord explained during the July 6, 2017 hearing, Appellant and Martin allegedly "made [legal] arrangements over, I don't know how many years" with each other, but refused to disclose them to the Bankruptcy Court, claiming, "it's not anybody's business. And that would be all well and good, but for the fact that they filed a Chapter 11. And when you file a Chapter 11 . . . it becomes everybody's business." (July Hrg, 29:19-22.) Later in the hearing, Judge Lord said to Martin, "[i]t's like this case is like a — I don't mean a façade in a negative way, a neutral way. This case is a façade for what really is going on. . . . [Y]ou can't swear to statements that are one way, and then say, `Well, it's really not that way.'" (Id. at 44:25-45:11; see also id. at 49:15-16, 50:10-15, 52:17-22; Sept. Hrg., 19:17-24, 26:6-11.) Appellant and Martin's only response to these arguments are ad hominem attacks against all of the parties involved. (See, e.g., Dkts. 5, 9; Sept. Hrg., 24:18-25:5.) Whether Appellant is "following Mr. Martin-Trigona's directions, or she is acting on her own" in this litigation, "her abuse of the judicial process cannot be tolerated." Jenkins, 2010 WL 3861050, at *7; (see also July Hrg., 126:17-21).
Having found "cause" for relief under Section 1112(b), the Bankruptcy Court had "broad discretion to either convert or dismiss the Chapter 11 case." In re AdBrite Corp., 290 B.R. at 216. Appellant has put forth no legal argument that the Bankruptcy Court abused its discretion in converting the case. Furthermore, this Court finds that the Bankruptcy Court sufficiently articulated its reasons for why conversion was in the "best interest of creditors and the estate." Id.; (see, e.g., Sept. Hrg. 27:5-7 ("[I]f sale is the objective, that can be accomplished by a Chapter 7 Trustee.").)
The Court has considered imposing sanctions on Appellant for violating the EDNY Injunction, but declines to do so at this time. Jenkins, 2010 WL 5071995, at *3 ("Failure to comply with the terms of [the EDNY Injunction] . . . may also be considered sufficient grounds upon which to levy additional sanctions on Plaintiff, including but not limited to fines, civil incarceration, and/or an award to opposing parties of their reasonable costs and attorneys fees.") Appellant is warned, however, that if she violates the EDNY Injunction again by filing or intervening in any future action before the undersigned without first obtaining leave of court to do so, she will be sanctioned.
For the reasons stated above, the September 17, 2017 order of the Bankruptcy Court is affirmed. The Clerk of Court is respectfully requested to enter judgment and close this case accordingly.
SO ORDERED.