Richard S. Kanowitz (admitted pro hac vice)

COOLEY LLP

1114 Avenue of the Americas

New York, New York 10036

Telephone: (212) 479-6000

Facsimile: (212) 479-6275

Email: rkanowitz@cooley.com

Counsel to Plaintiff Richard Arrowsmith, 

Liquidating Trustee of the HDL Liquidating Trust

Cullen D. Speckhart (VSB No. 79096)

WOLCOTT RIVERS GATES 

919 E. Main Street, Ste. 2010

Richmond, Virginia 23219 

200 Bendix Road, Ste. 300 

Virginia Beach, Virginia 23452 

Telephone: (757) 687-3644

Email: hdl@wolriv.com

Counsel to Plaintiff Richard Arrowsmith,

Liquidating Trustee of the HDL Liquidating Trust

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

Richmond Division

In re: Chapter 11

HEALTH DIAGNOSTIC LABORATORY, 

INC., et al.,

Case No.: 15-32919-KRH

Debtors.1

Jointly Administered

RICHARD ARROWSMITH AS 

LIQUIDATING TRUSTEE OF THE HDL 

LIQUIDATING TRUST,

Plaintiff,

v.

Adv. Proc. No. 17-03187-KRH

CAROLINA INTERNAL MEDICINE, P.A.,

Defendant.

MOTION FOR ENTRY OF DEFAULT AND DEFAULT JUDGMENT

Richard Arrowsmith, in his capacity as Liquidating Trustee of the HDL Liquidating Trust 

(the “Liquidating Trustee”), appointed pursuant to the confirmed Modified Second Amended 

 1 The Debtors in these cases, along with the last four digits of each Debtor’s federal tax identification number, are: 

Health Diagnostic Laboratory, Inc. (0119), Central Medical Laboratory, LLC (2728), and Integrated Health Leaders, 

LLC (2434).

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Plan of Liquidation (the “Plan”)2 of Health Diagnostic Laboratory, Inc., and its affiliated debtors 

and debtors in possession (the “Debtors” or “HDL”) in their jointly administered bankruptcy cases 

(the “Chapter 11 Cases”), submits this motion for the entry of default and default judgment (the 

“Motion”) against Carolina Internal Medicine, P.A. (the “Defendant”), pursuant to Rules 55(a)

and 55(b)(1) of the Federal Rules of Civil Procedure (the “Federal Rules”) and Rule 7055 of the 

Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”). In support of the Motion, the 

Liquidating Trustee states the following, and with reference to the Declaration of Cullen D. 

Speckhart submitted, incorporated herewith, and attached as Exhibit A.

Jurisdiction and Venue

1. This Court has jurisdiction pursuant to 28 U.S.C. § 1334. This matter is a core 

proceeding within the meaning of 28 U.S.C. § 157(b)(2).

2. Venue is proper in this district pursuant to 28 U.S.C. §§ 1408, 1409.

3. The basis for the relief requested herein is Rules 55(a) and 55(b)(1) of the Federal 

Rules and Rule 7055 of the Bankruptcy Rules. 

Background

4. On April 14, 2017, the Liquidating Trustee initiated this adversary proceeding (the 

“Adversary Proceeding”) by filing a Complaint to Avoid and Recover Avoidable Transfers and 

for Related Relief [Docket No. 1] against the Defendant (the “Complaint”).

5. On April 17, 2017, the Clerk’s Office issued a Summons and Notice in an Adversary 

Proceeding [Docket No. 3] (the “Summons”) in the Adversary Proceeding which required the 

 2

 Unless otherwise defined herein, capitalized terms shall have the meanings ascribed to them in the Plan, which is 

annexed to the Confirmation Order (as defined herein). 

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Defendant to serve an Answer or other responsive pleading within thirty days from the date of 

service of this Summons. 

6. On April 17, 2017, the Liquidating Trustee filed a Certificate of Service [Docket 

No. 4] (the “Certificate of Service”). As more fully detailed in the Certificate of Service, on April 

17, 2017, the Liquidating Trustee effectuated service of the Summons and the Complaint on the 

Defendant’s registered agent in accordance with Rule 7004(b)(1)-(3) of the Bankruptcy Rules.

7. On July 24, 2017, the Clerk’s Office issued an Alias Summons and Notice in an 

Adversary Proceeding [Docket No. 6] (the “Alias Summons”) in the Adversary Proceeding which 

required the Defendant to serve an Answer or other responsive pleading within thirty days from 

the date of service of this Summons. 

8. On August 18, 2017, the Liquidating Trustee filed a second Certificate of Service

[Docket No. 8] (the “Second Certificate of Service”). As more fully detailed in the Second 

Certificate of Service, on August 18, 2017, the Liquidating Trustee effectuated service of the Alias 

Summons and the Complaint on the Practice’s registered agent and officer in accordance with Rule 

7004(b)(1)-(3) of the Bankruptcy Rules.

9. As of the date of this Motion, the Defendant has not filed any responsive pleadings 

in this Adversary Proceeding within the time limit fixed by Rule 7012(a) of the Bankruptcy Rules

and the Order Approving Amended Procedures for Avoidance Action Adversary Proceedings

[Docket No. 2740 in Case No. 15-32919-KRH]. Accordingly, the Defendant is in default. 

10. In the Complaint, the Liquidating Trustee requested that the Bankruptcy Court to

enter an Order and Judgement as follows:

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(a) awarding judgment to the Liquidating Trustee, pursuant to Sections 548, 544(b) and 550 

of the Bankruptcy Code, Va. Code Sections 55-80 and 55-81, or pursuant to other 

applicable state fraudulent conveyance or fraudulent transfer law, and as applicable, 28 

U.S.C. § 3304, in an amount of the Avoidable Transfers, and directing the Defendant to 

pay to the Liquidating Trustee $64,420.00 pursuant to Section 550(a) of the Bankruptcy 

Code;

(b) disallowing any claim of the Defendant pursuant to section 502(d) of the Bankruptcy Code;

(c) awarding the Liquidating Trustee his costs and expenses incurred in connection with this 

Adversary Proceeding, including reasonable attorneys’ fees, in the amount of $1,000.00; 

(d) entering judgment in favor of the Liquidating Trustee and against the Defendant in the total 

amount of $65,420.00 (the “Judgment”); 

(e) awarding post-judgment interest at the maximum legal rate running from the date of the 

judgment until the date the Judgment is paid in full;

(f) directing the Defendant to pay forthwith all amounts awarded; and

(g) granting the Liquidating Trustee such other and further relief as the Bankruptcy Court 

deems just and proper.

11. The Liquidating Trustee’s claim is for a sum certain.

12. Upon information and belief, the Defendant is not in military service 

13. Upon information and belief, the Defendant is not a minor or incompetent person.

Relief Requested

14. By this Motion, the Liquidating Trustee respectfully requests (a) the Court to enter 

an Order substantially in the form of Exhibit B pursuant to Rules 55(a) and 55(b)(1) of the Federal 

Rules and Rule 7055 of the Bankruptcy Rules; and (b) granting related relief.

Basis for Relief

15. “Federal Rule of Bankruptcy Procedure 7055 incorporates into adversary 

proceedings Rule 55 of the Federal Rules of Civil Procedure.” Ruby v. Ryan (In re Ryan), 472 B.R. 

Case 17-03187-KRH Doc 9 Filed 09/07/18 Entered 09/07/18 11:30:50 Desc Main

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714, 723 (Bankr. E.D. Va. 2012).

16. Rule 55(a) of the Federal Rules provides in pertinent part, “When a party against 

whom a judgement for affirmative relief is sought has failed to plead or otherwise defend, and that 

failure is shown by affidavit or otherwise, the clerk must enter the party’s default.”

17. “[D]efault judgment is available ‘when the adversary process has been halted 

because of an essentially unresponsive party.’” Ruby, 472 B.R. at 723.

18. The Defendant has failed to plead or otherwise defend as of the filing of this 

Motion, and that failure is shown by affidavit. Accordingly, the Defendant is in default.

19. As a result of the Defendant’s default in this Adversary Proceeding, the Liquidating 

Trustee is entitled to a default Judgment by the Clerk in the amount of $65,420.00.

Memorandum of Law

20. Pursuant to Local Bankruptcy Rule 9013-1(G)(2)(c), a memorandum need not 

accompany a motion for default judgement.

WHEREFORE, the Plaintiff, by counsel, respectfully requests that the Court find the 

Defendant to be in default pursuant to Rule 55(a) and 55(b)(1) of the Federal Rules and Rule 7055

of the Bankruptcy Rules and grant further relief as the Court deems just and proper. 

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DATED: September 7, 2018 Respectfully submitted, 

Richard S. Kanowitz (admitted pro hac vice)

COOLEY LLP

1114 Avenue of the Americas

New York, New York 10036

Telephone: (212) 479-6000

Facsimile: (212) 479-6275

Email: rkanowitz@cooley.com

Counsel to Plaintiff Richard Arrowsmith, 

Liquidating Trustee of the HDL Liquidating Trust

/s/ Cullen D. Speckhart

Cullen D. Speckhart (VSB No. 79096)

WOLCOTT RIVERS GATES 

919 E. Main Street, Ste. 2010

Richmond, Virginia 23219 

200 Bendix Road, Ste. 300 

Virginia Beach, Virginia 23452 

Telephone: (757) 497-6633 

Direct: (757) 470-5566 

Email: cspeckhart@wolriv.com

Counsel to Plaintiff Richard Arrowsmith,

Liquidating Trustee of the HDL Liquidating 

Trust

Case 17-03187-KRH Doc 9 Filed 09/07/18 Entered 09/07/18 11:30:50 Desc Main

 Document Page 6 of 16
CERTIFICATE OF SERVICE

I certify that on September 7, 2018, a true copy of the foregoing Motion for Entry of Default

and Default Judgment, was sent by First Class, postage prepaid mail, to the following:

CAROLINA INTERNAL MEDICINE, P.A.

MARK R. CERVI, REG. AGENT

1039 DAVENPORT PL

WINTERVILLE, NC 28590

CAROLINA INTERNAL MEDICINE, P.A.

MARK R. CERVI, REG. AGENT

2317 EXECUTIVE PARK CIRCLE

GREENVILLE, NC 27834-3749

CAROLINA INTERNAL MEDICINE, P.A.

MARK R. CERVI, REG. AGENT

1900 BLOOMSBURY ROAD

GREENVILLE, NC 27858-9603

CAROLINA INTERNAL MEDICINE, P.A.

MARK R. CERVI, REG. AGENT

EMERALD PLACE PROFESSIONAL CENTER

2460-A EMERALD PLACE

GREENVILLE, NC 27834-3749

/s/ Cullen D. Speckhart

Cullen D. Speckhart, Esq.

Case 17-03187-KRH Doc 9 Filed 09/07/18 Entered 09/07/18 11:30:50 Desc Main

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Exhibit A

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 Document Page 8 of 16
Richard S. Kanowitz (admitted pro hac vice)

COOLEY LLP

1114 Avenue of the Americas

New York, New York 10036

Telephone: (212) 479-6000

Facsimile: (212) 479-6275

Email: rkanowitz@cooley.com

Counsel to Plaintiff Richard Arrowsmith, 

Liquidating Trustee of the HDL Liquidating Trust

Cullen D. Speckhart (VSB No. 79096)

WOLCOTT RIVERS GATES 

919 E. Main Street, Ste. 2010

Richmond, Virginia 23219 

200 Bendix Road, Ste. 300 

Virginia Beach, Virginia 23452 

Telephone: (757) 687-3644

Email: hdl@wolriv.com

Counsel to Plaintiff Richard Arrowsmith,

Liquidating Trustee of the HDL Liquidating Trust

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

Richmond Division

In re: Chapter 11

HEALTH DIAGNOSTIC LABORATORY, 

INC., et al.,

Case No.: 15-32919-KRH

Debtors.1

Jointly Administered

RICHARD ARROWSMITH AS 

LIQUIDATING TRUSTEE OF THE HDL 

LIQUIDATING TRUST,

Plaintiff,

v.

Adv. Proc. No. 17-03187-KRH

CAROLINA INTERNAL MEDICINE, P.A.,

Defendant.

DECLARATION OF CULLEN D. SPECKHART

I, Cullen D. Speckhart, Esquire, declare under penalty of perjury of the laws of the United 

States of America that the following are true and correct, and state: 

 1 The Debtors in these cases, along with the last four digits of each Debtor’s federal tax identification number, are: 

Health Diagnostic Laboratory, Inc. (0119), Central Medical Laboratory, LLC (2728), and Integrated Health Leaders, 

LLC (2434).

Case 17-03187-KRH Doc 9 Filed 09/07/18 Entered 09/07/18 11:30:50 Desc Main

 Document Page 9 of 16
1. I am counsel for Richard Arrowsmith, in his capacity as Liquidating Trustee of the 

HDL Liquidating Trust (the “Plaintiff” or the “Liquidating Trustee”), appointed pursuant to the 

confirmed Modified Second Amended Plan of Liquidation (the “Plan”) of Health Diagnostic 

Laboratory, Inc., et al. (the “Debtors”), the Plaintiff in the above-captioned adversary proceeding 

against Carolina Internal Medicine, P.A. (the “Defendant”). 

2. On April 14, 2017, Plaintiff filed this adversary proceeding (the “Adversary 

Proceeding”) by filing a Complaint to Avoid and Recover Avoidable Transfers and for Related 

Relief [Docket No. 1] against the Defendant (the “Complaint”). 

3. On April 17, 2017, the Clerk’s Office issued a Summons and Notice in an Adversary 

Proceeding [Docket No. 3] in the Adversary Proceeding (the “Summons”). 

4. On April 17, 2017, the Plaintiff filed a Certificate of Service (the “Certificate of 

Service”) [Docket No. 4]. As more fully detailed in the Certificate of Service, on April 17, 2017, 

the Plaintiff effectuated service of the Summons and the Complaint on the Defendant by mail 

service, in accordance with Bankruptcy Procedure Rule 7004.

5. On July 24, 2017, the Clerk’s Office issued an Alias Summons and Notice in an 

Adversary Proceeding [Docket No. 6] (the “Alias Summons”) in the Adversary Proceeding which 

required the Defendant to serve an Answer or other responsive pleading within thirty days from 

the date of service of this Summons. 

6. On August 18, 2017, the Liquidating Trustee filed a second Certificate of Service

[Docket No. 8] (the “Second Certificate of Service”). As more fully detailed in the Second 

Certificate of Service, on August 18, 2017, the Liquidating Trustee effectuated service of the Alias 

Summons and the Complaint on the Practice’s registered agent and officer in accordance with Rule 

Case 17-03187-KRH Doc 9 Filed 09/07/18 Entered 09/07/18 11:30:50 Desc Main

 Document Page 10 of 16
7004(b)(1) -(3) of the Bankruptcy Rules.

7. As of the date of this Motion, the Defendant has not filed any responsive pleadings 

in this Adversary Proceeding. Accordingly, the Defendant is in default. 

8. To date, attorneys’ fees have been incurred in this matter for an amount not less 

than $650.00, and costs have been incurred in an amount not less than $350.00.

9. The Liquidating Trustee’s claim is for a sum certain, $64,420.00 for avoidance and 

recovery of transfers, $650.00 for legal fees, and $350 in costs, for a total amount of 

$65,420.00.

10. To the best of my knowledge and belief, the Defendant is not in military service.

11. To the best of my knowledge and belief, the Defendant is not an infant or 

incompetent person. 

I declare under penalty of perjury under the laws of the United States that the foregoing is 

true and accurate.

Dated: September 7, 2018

/s/ Cullen D. Speckhart

Cullen D. Speckhart (VSB No. 79096)

WOLCOTT RIVERS GATES 

919 E. Main Street, Ste. 2010

Richmond, Virginia 23219 

200 Bendix Road, Ste. 300 

Virginia Beach, Virginia 23452 

Telephone: (757) 497-6633 

Direct: (757) 470-5566 

Email: cspeckhart@wolriv.com

Counsel to Plaintiff Richard Arrowsmith,

Liquidating Trustee of the HDL Liquidating 

Trust

Case 17-03187-KRH Doc 9 Filed 09/07/18 Entered 09/07/18 11:30:50 Desc Main

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Exhibit B

Case 17-03187-KRH Doc 9 Filed 09/07/18 Entered 09/07/18 11:30:50 Desc Main

 Document Page 12 of 16
Richard S. Kanowitz (admitted pro hac vice)

COOLEY LLP

1114 Avenue of the Americas

New York, New York 10036

Telephone: (212) 479-6000

Facsimile: (212) 479-6275

Email: rkanowitz@cooley.com

Counsel to Plaintiff Richard Arrowsmith, 

Liquidating Trustee of the HDL Liquidating Trust

Cullen D. Speckhart (VSB No. 79096)

WOLCOTT RIVERS GATES 

919 E. Main Street, Ste. 2010

Richmond, Virginia 23219 

200 Bendix Road, Ste. 300 

Virginia Beach, Virginia 23452 

Telephone: (757) 687-3644

Email: hdl@wolriv.com

Counsel to Plaintiff Richard Arrowsmith,

Liquidating Trustee of the HDL Liquidating Trust

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

Richmond Division

In re: Chapter 11

HEALTH DIAGNOSTIC LABORATORY, 

INC., et al.,

Case No.: 15-32919-KRH

Debtors.1

Jointly Administered

RICHARD ARROWSMITH AS 

LIQUIDATING TRUSTEE OF THE HDL 

LIQUIDATING TRUST,

Plaintiff,

v.

Adv. Proc. No. 17-03187-KRH

CAROLINA INTERNAL MEDICINE, P.A.,

Defendant.

ORDER GRANTING THE ENTRY OF DEFAULT AND DEFAULT JUDGMENT

On September 7, 2018, Richard Arrowsmith, in his capacity as Liquidating Trustee of the 

HDL Liquidating Trust (the “Liquidating Trustee”), appointed pursuant to the confirmed 

 1 The Debtors in these cases, along with the last four digits of each Debtor’s federal tax identification number, are: 

Health Diagnostic Laboratory, Inc. (0119), Central Medical Laboratory, LLC (2728), and Integrated Health Leaders, 

LLC (2434).

Case 17-03187-KRH Doc 9 Filed 09/07/18 Entered 09/07/18 11:30:50 Desc Main

 Document Page 13 of 16
Modified Second Amended Plan of Liquidation (the “Plan”) of Health Diagnostic Laboratory, 

Inc., and its affiliated debtors and debtors in possession (the “Debtors” or “HDL”) in their jointly 

administered bankruptcy cases (the “Chapter 11 Cases”), by and through his undersigned counsel, 

filed his Motion for Entry of Default and Default Judgment (the “Motion”) against Carolina 

Internal Medicine, P.A. (the “Defendant”), in the above-captioned Adversary Proceeding.2 The 

Court, having considered the Motion submitted by the Plaintiff, it appearing that due notice was 

given and that good cause exists to grant the relief sought in the Motion, it is hereby

ADJUDGED, ORDERED AND DECREED:

1. The Motion is GRANTED.

2. Default is hereby entered against the Defendant as authorized by Federal Rule of 

Bankruptcy Procedure 7055.

3. Default Judgment is hereby entered in favor of the Plaintiff and against the 

Defendant in the above captioned Adversary Proceeding and all relief sought by the Plaintiff 

therein is granted, including the following:

a. Plaintiff is hereby awarded the avoidable transfers in the amount of $64,420.00;

b. Plaintiff is hereby awarded his costs and expenses incurred in connection with 

this Adversary Proceeding, including attorney’s fees, in the total amount of 

$1,000.00; 

c. Judgment is entered in favor of the Plaintiff and against the Defendant in the 

amount of $65,420.00, which includes the amount of avoidable transfers, costs 

and expenses, including reasonable attorney’s fees; 

d. Post-judgment interest at the maximum legal rate running from the date of the 

Judgment until the date the Judgment is paid in full;

 2 Unless otherwise defined herein, capitalized terms shall have the meanings ascribed to them in the Motion.

Case 17-03187-KRH Doc 9 Filed 09/07/18 Entered 09/07/18 11:30:50 Desc Main

 Document Page 14 of 16
e. The Defendant is hereby ordered to pay forthwith the amount of the Judgment 

granted herein; and

f. Any Claim of the Defendant pursuant to section 502(d) of the Bankruptcy Code

is hereby disallowed.

4. The Defendant is hereby directed to pay forthwith the amount of the Judgment. 

Dated: ______________

Richmond, Virginia 

 

UNITED STATES BANKRUPTCY JUDGE

Entered on Docket: ____________________

I ask for this:

By: /s/ Draft

Cullen D. Speckhart (VSB No. 79096)

WOLCOTT RIVERS GATES

919 E. Main Street, Ste. 2010

Richmond, VA 23219

200 Bendix Road, Ste. 300

Virginia Beach, VA 23452

Telephone: (757) 497-6633

Direct: (757) 470-5566

Email: cspeckhart@wolriv.com

Counsel to Richard Arrowsmith,

Liquidating Trustee of the HDL Liquidating Trust

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CERTIFICATE OF ENDORSEMENT

PURSUANT TO LOCAL BANKRUPTCY RULE 9022-1

I hereby certify, under Local Rule 9022-1, that the foregoing proposed Order has been 

endorsed by and/or served upon all necessary parties. 

/s/ Draft

 Cullen D. Speckhart

Case 17-03187-KRH Doc 9 Filed 09/07/18 Entered 09/07/18 11:30:50 Desc Main

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