EMERGENCY VERFIED MOTION FOR CONTEMPT AS TO YA GLOBAL INVESTMENTS F/K/ACORNELL CAPITAL PARTNERS, LP; BRESSLER, AMERY & ROSS, PC; AND NIKOLAS S. KOMYATI, ESQ. AND COMPLAINT FOR MONEY DAMAGES
COMES NOW Roy Thomas Kidd (the "Debtor"), by and through his undersigned attorney, and moves this Court for the entry of an order holding YA Global Investments F/K/A Cornell Capital Partners, LP; Bressler, Amery & Ross, PC; and Nikolas S. Komyati, Esq. in contempt for willful violation of the automatic stay issued in this cause, and as grounds therefore we show:
1. On August 27, 2010, the Debtor, a married man, individually filed a Voluntary Petition under Chapter 7 [Doc. No. 1] in this cause.
2. YA Global Investments f/k/a Cornell Capital Partners, LP ("Cornell") is a creditor in this cause. Cornell holds an unsatisfied judgment against the Debtor, individually. Cornell has no judgment against the Debtor's wife.
3. On August 20, 2010, Cornell made application for injunctive relief, both temporary and permanent, to the Superior Court of New Jersey, Hudson County, to enjoin and restrain the Debtor from any activity that would allow the debtor to sell any assets in a certain Maxim Group brokerage account, including but not limited to JBI Inc. shares held in that account. Although Debtor has never received a copy of the application, a copy of Cornell's "letter brief' in support thereof has been furnished, and a copy is attached hereto and incorporated by reference herein as Exhibit "A".
4. In response to the aforesaid application to the New Jersey Superior Court, a temporary restraining order as to any and all assets held in the Maxim account was entered and a show cause hearing regarding the final disposition of the restraining order was scheduled for September 1, 2010. A copy of said Order is attached hereto and incorporated by reference herein as Exhibit "B".
5. On August 30, 2010, the New Jersey Superior Court was provided with an Amended Suggestion of Bankruptcy by the undersigned's office via facsimile. A copy of said Amended Suggestion of Bankruptcy, with the cover letter to the presiding New Jersey Superior Court Judge is attached hereto and incorporated by reference herein as Exhibit "C".
6. On August 30, 2010, the undersigned also provided to Cornell's counsel, Nikolas S. Komyati, Esq., via facsimile, an Amended Suggestion of Bankruptcy. In the same facsimile, the undersigned further notified Cornell's counsel regarding entry of the automatic stay pursuant to 11 U.S.C. §362, and specifically advised that the "failure to vacate the temporary injunction would itself be a violation of the automatic stay as it amounts to a continuing effort to collect a debt.". The cover letter and Amended Suggestion of Bankruptcy are attached hereto and incorporated by reference herein as Exhibit "D".
7. Despite having actual knowledge of the Debtor's bankruptcy filing and the application of the automatic stay, Cornell, by and through its counsel, Nikolas S. Komyati, Esq., failed and refused to seek to vacate the temporary injunction and further proceeded to the September 1 show cause hearing before the New Jersey Superior Court, and obtained a rescheduling of that hearing for October 1, 2010, with a continuance of the temporary injunction until that time. Although Debtor has not been provided with any acknowledgment of the foregoing, he has been advised by Maxim Group that they have received notification of these facts directly from the New Jersey Superior Court.
8. The Maxim brokerage account, including the JBI, Inc. stock held therein, that constitutes the subject of the restraining order is owned by the Debtor and his wife as tenancy by the entirety property. These assets, being issued to and owned by the Debtor and his wife as tenants by the entirety while residing in Florida, are exempt from the claims of Debtor's creditors, including Cornell. Cornell's counsel, having offices in Florida, knew or should have known that the Maxim brokerage account and JBI stock, both being held in tenancy by entirety, would be exempt in this bankruptcy proceeding. In re Kirshner, 2007 WL 3232258 (Bankr. S.D. Fla. 2007). True and correct copies of the Maxim brokerage accounts statement and JBI, Inc. stock certificates are attached hereto and incorporated by reference herein as Exhibit "E".
9. Cornell and its legal counsel had an affirmative duty to vacate the temporary injunction and to dismiss its application for permanent injunctive relief once it received notice of Debtor's bankruptcy filing and automatic stay. In re Mims, 209 B.R. 746 (Bankr. M.D. Fla. 1997)(garnishment proceeding was "judicial action" within meaning of automatic stay provision directly prohibiting the continuation of any judicial action against debtor; provision imposed on garnishing creditor and its attorney not just a duty to refrain from taking any additional action to collect Although specifically advised of this duty (see Exhibit "D"), Cornell and its legal counsel intentionally and willfully violated the automatic stay by procuring a continuation of the temporary injunction until October 1, 2010, for further proceedings before the New Jersey Superior Court, which further proceedings would also be in direct violation of the automatic stay.
10. YA Global Investments F/K/A Cornell Capital Partners, LP; Bressler, Amery & Ross; and Nikolas S. Komyati, Esq. have failed and refused to take any action to correct their violation of the automatic stay. It appears that the foregoing parties have every intention of attempting to proceed with effectuating the restraining order and ultimate writ of possession and complete disregard of the automatic stay and the authority of this Court.
11. Debtor and his spouse were in the final stage of hypothecating the JBI stock at the time that the temporary injunction was imposed by the New Jersey Superior Court. As a direct and proximate result of the refusal of Cornell and its legal counsel to comply with the automatic stay, the Debtor and his spouse have already suffered losses in excess of $300,000, and will permanently and irreparably lose the benefits to be derived from said hypothecation if immediate action is not taken to vacate the temporary injunction.
12. 11 U.S.C. §362(k) establishes a specific cause of action against a creditor , and its legal counsel, causing injury to an individual by a willful violation of the §362 stay. Pettitt v. Baker, 876 F.2d 456 (5th Cir. 1989). A willful violation is one committed knowingly; no malice need be shown. Fleet Mortgage Group, Inc. v. Kaneb, 196 F.3d265 (1st Cir. 1999). In such cases, §362 provides for actual damages', costs and attorneys fees2, and punitive damages3. Emotional distress damages are also available.
WHEREFORE, Debtor respectfully request that YA Global Investments F/K/A Cornell Capital Partners, LP; Bressler, Amery & Ross, PC; and Nikolas S. Komyati, Esq. be held in contempt for their violation of the automatic stay; the temporary injunction, entitled Order to Show Cause with Temporary Restraints, issued by the New Jersey Superior Court be vacated and set aside; and that compensatory and punitive damages being awarded in favor of the Debtor and against the aforesaid parties for said violation, including but not limited to attorneys fees and costs incurred in bringing this motion; and such other relief as this Court believes just and proper under the circumstances.
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