Murrin v. Hanson, 477 B.R. 99

Murrin invested $600,000 in Avidigm Capital Group, Inc. and pursued related state court actions against multiple defendants including the Appellees here.
State court sanctions awarded defendants approximately $432,966.38 in fees and $32,484.86 in costs; LaNave settled; Murrins were later found in contempt.
Four petitioning creditors filed involuntary bankruptcy petitions under 11 U.S.C. § 303 against the Murrins, asserting distinct claims totaling unpaid judgments.
Bankruptcy court held: petitioners had standing under § 303(b)(1); Murrins were generally not paying debts under § 303(h)(1); venue was proper in Minnesota under 28 U.S.C. § 1408.
Murrin appealed the stay-denial orders and the Chapter 7 relief order; the district court affirmed some rulings and reversed/remanded others.
The district court ultimately affirmed the stay-denial order, reversed and remanded the Chapter 7 relief order, and dismissed as moot the appeal from a later related order.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Rooker-Feldman bars the federal review	Murrin asserts Rooker-Feldman applies	Petitioners contend it does not apply because the petition challenges enforcement of a state judgment, not the state ruling itself	Rooker-Feldman does not apply; jurisdiction exists
Whether the petitioning creditors proved involuntary bankruptcy criteria	Murrin argues debts are generally paid; insufficient statutory showings	Creditors contend three or more creditors and lack of payment as due are met	Court remands for findings on general nonpayment with comparative financial analysis
Whether the four Feinberg factors were properly applied	Murrin argues improper consideration of factors	Creditors rely on Feinberg but with appropriate application to totality of circumstances	Bankruptcy court must apply factors with proper emphasis on number/amount of unpaid debts; remand for proper analysis
Whether relief from stay was abused in denying state-forum access	Stay denial blocked state-court proceedings	Court balanced economies and merits; no abuse shown	No abuse of discretion; stay denial affirmed
Whether venue and related constitutional concerns existed	Murrin disputes venue as improper	Venue proper in Minnesota; no Stern issue present	Court need not reach; decision reversed on Chapter 7 issue, other issues unresolved

Friends of Lake View Sch. Dist. v. Beebe, 578 F.3d 753 (8th Cir. 2009) (Rooker-Feldman applicability and jurisdictional notes)
Dodson v. Univ. of Ark. for Med. Scis., 601 F.3d 750 (8th Cir. 2010) (Rooker-Feldman context and limits)
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (U.S. 2005) (limits of Rooker-Feldman and appellate jurisdiction)
In re Rimell, 946 F.2d 1363 (8th Cir. 1991) (burden to show debtor generally not paying debts under § 303(h))
In re Saunders, 379 B.R. 847 (Bankr. D. Minn. 2007) (notes about general nonpayment standard and purpose of involuntary bankruptcy)
In re Tichy Elec. Co., 332 B.R. 364 (Bankr. N.D. Iowa 2005) (illustrates totality-of-circumstances approach to § 303(h))
In re Feinberg, 238 B.R. 781 (B.A.P. 8th Cir. 1999) (factors for determining generally not paying debts; remand for proper application)
Vortex Fishing Sys., Inc., 277 F.3d 1057 (9th Cir. 2002) (totality approach to generally not paying debts)