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RSL Funding, LLC v. Date
15-03185
Bankr. S.D. Tex.
Aug 17, 2017
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Background

  • The June 7, 1996 injunction permanently enjoined Feldman, Mats and related entities from filing any voluntary or involuntary bankruptcy petitions, notices of removal, or adversary proceedings without leave.
  • The injunction arose from prior bad-faith, vexatious litigation tied to Intermarque, MBM, Mats Real Estate Services, and related entities in state and federal proceedings.
  • Feldman repeatedly filed adversary proceedings and related actions after June 7, 1996, including attempts that led to sanctions and contempt findings.
  • In 1996–1997, the court imposed civil contempt sanctions on Feldman and Mats, including monetary sanctions and daily coercive sanctions, with appellate history extending to sanctions appeals.
  • Debtor Date filed Chapter 7 in 2015; RSL Funding, LLC filed a Section 523 adversary in 2015; trial occurred in 2017 with Feldman testifying as RSL’s witness.
  • Debtor moved to dismiss the adversary proceeding, arguing the injunction was no longer effective due to sanctions payment; the court disagreed and held the injunction remained in force.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Is the 1996 injunction still effective? RSL argues the injunction lapsed after sanctions were paid. Feldman argues the injunction expired or became moot. Injunction remains in effect; not discharged by sanctions or related orders.
Did Feldman violate the injunction by filing the adversary proceeding? Feldman filed after June 7, 1996, violating the injunction. Feldman contends lack of ongoing injunction relaxation. Feldman repeatedly violated the injunction by filing the adversary.
Do district court minute orders or withdrawal of reference alter the injunction's effect? Withdrawn reference or minute orders ended the injunction. Those actions do not nullify the bankruptcy court's final injunction. Neither the minute order nor withdrawal nullified the injunction; it remains enforceable.
Should the case be dismissed with prejudice for contempt? Contempt sanctions support dismissal as a remedial measure. Dismissal with prejudice would be excessive given circumstances. Court grants dismissal consistent with ongoing contempt and injunction violations.

Key Cases Cited

  • Firefighters v. Stotts, 467 U.S. 561 (Sup. Ct. 1984) (injunctions must be obeyed until vacated or withdrawn)
  • WR Grace & Co. v. Local Union 759, 461 U.S. 757 (Sup. Ct. 1983) (an injunction's terms govern until set aside)
  • Walker v. City of Birmingham, 388 U.S. 307 (Sup. Ct. 1967) (court orders must be complied with pending modification)
  • United States v. United Mine Workers, 330 U.S. 258 (Sup. Ct. 1947) (injunctions and restraints can be issued by courts within their jurisdiction)
  • Howat v. Kansas, 258 U.S. 181 (Sup. Ct. 1922) (injunctions and court authority principles)
  • Tory v. Cochran, 125 S. Ct. 2108 (Sup. Ct. 2005) (policy considerations in injunction-related interlocutory matters)
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Case Details

Case Name: RSL Funding, LLC v. Date
Court Name: United States Bankruptcy Court, S.D. Texas
Date Published: Aug 17, 2017
Docket Number: 15-03185
Court Abbreviation: Bankr. S.D. Tex.