Jeffrey N. Rothleder, Esq. (VSB No. 91468)

Squire Patton Boggs (US) LLP

2550 M Street NW

Washington, DC 20037

Telephone: (202) 457.6462

Telecopy: (202) 457.6315

Email: jeffrey.rothleder@squirepb.com

Paula S. Beran, Esq. (Va. Bar No. 34679)

David N. Tabakin, Esq. (Va. Bar No. 82709)

Tavenner & Beran, PLC

20 North Eighth Street, Second Floor

Richmond, Virginia 23219

Telephone: (804) 783-8300

Telecopy: (804) 783-0178

Email: pberan@tb-lawfirm.com

dtabakin@tb-lawfirm.com

Counsel to Lynn L. Tavenner, Liquidating Trustee of the MSW Liquidating Trust

UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF VIRGINIA

Richmond Division

In re: Case No.

LeClairRyan PLLC,119-34574-KRH

Debtor Chapter

7

TRUSTEE’S OBJECTION TO CLAIM 2

OF BANKDIRECT CAPITAL FINANCE, LLC

Lynn L. Tavenner, Trustee, and not individually but solely in her capacity as the Chapter 

7 trustee (in such capacity, the “Chapter 7 Trustee” and/or the “Trustee”) of the bankruptcy 

estate (the “Estate”) of LeClairRyan PLLC (“LeClairRyan” and/or the “Debtor”), in the abovereferenced Chapter 7 case (the “Case”), through counsel, hereby files this objection (the 

“Objection”) seeking to disallow claim 2 (“Claim 2”) of BankDirect Capital Finance, LLC ( 

“BD”) on the basis that the claim is overstated, and asserts a secured claim when in essence it is, 

at best, a partially secured claim and a general unsecured claim. Accordingly, the Trustee moves 

this Court, pursuant to §§ 105, 502, and 503 of title 11 of the United States Code (as amended, the 

“Bankruptcy Code”), Rule 3007 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy 

1 The principal address of the Debtor as of the petition date was 4405 Cox Road, Glen Allen, Virginia 23060, and 

the last four digits of the Debtor’s federal tax identification number are 2451.

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Rules”), and Local Bankruptcy Rule 3007-1, for an order, granting the relief sought by this 

Objection, and in support thereof states as follows:

Jurisdiction and Venue

1. The United States Bankruptcy Court for the Eastern District of Virginia (the 

“Court”) has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the Standing 

Order of Reference from the United States District Court for the Eastern District of Virginia, dated 

August 15, 1984.

2. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2).

3. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409.

Procedural Background

4. On September 3, 2019 (the “Petition Date”), the Debtor filed for relief under 

Chapter 11 of Title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the “Bankruptcy 

Code”). Pursuant to §§ 1007 and 1108 of the Bankruptcy Code, the Debtor operated as a debtorin-possession.

5. On September 12, 2019, the United States Trustee filed its Motion to Convert Case 

to Chapter 7 (the “Motion to Convert”) and notice thereof. ECF No. 61. At a hearing on 

September 26, 2019 (the “September 26 Hearing”), the Court denied the Motion to Convert. 

However, per agreement between the Debtor, the United States Trustee, and ABL Alliance, LLLP 

(the “Lender”), the Debtor’s bankruptcy case was converted to a case under Chapter 7 of the 

Bankruptcy Code on October 4, 2019 (the “Conversion Date”).

6. Upon conversion, Lynn L. Tavenner was appointed interim trustee, and she 

continues to serve in that capacity.

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7. On the Conversion Date, the Trustee filed the Trustee’s Motion for Use of Cash 

Collateral and Grant of Adequate Protection Related Thereto and Memorandum in Support 

Thereof (the “Cash Collateral Motion”). ECF No. 143.

8. The Trustee also filed her Motion for Immediate Authority to Operate Certain 

Aspects of Debtor’s Business for a Limited Period and to Shorten Notice Thereof, and 

Memorandum in Support Thereof (the “Operation Motion”) on the Conversion Date. ECF No. 

144.

9. On the Conversion Date, the Court entered the Chapter 7 Trustee’s First Interim 

Order (I) Authorizing Use of Prepetition Secured Lenders’ Cash Collateral Pursuant to 11 U.S.C. 

§§ 361 and 363, and (II) Granting Adequate Protection and Related Relief to Prepetition Senior 

Secured Lenders, ECF No. 151, granting the relief sought in the Cash Collateral Motion, as well 

as the Interim Order Authorizing Trustee to Operate Certain Aspects of Debtor’s Business for a 

Limited Period (the “Immediate Authority Order”), ECF No. 155, grating the Trustee the 

authority to continue the Wind-Down Operations (as defined in the Operation Motion).

OBJECTION TO CLAIM

10. By this Objection, the Trustee seeks entry of an order, pursuant to Bankruptcy Code 

§§ 105(a), 502, and 503, Bankruptcy Rule 3007, and Local Bankruptcy Rule 3007-1, disallowing 

Claim 2. The basis for this Objection is that the claim is overstated, and that BD has failed to 

provide sufficient documentation to substantiate its claim. Claim 2 also asserted as a secured claim 

when in essence it is, at best, a partially secured claim and a general unsecured claim. The Trustee, 

therefore, requests that Claim 2 be disallowed until such time as BD has provided the requisite 

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documentation to allow this Court to determine (a) the value of BD’s collateral and (b) the amount 

of BD’s deficiency claim.

RESERVATION OF RIGHTS

11. The Trustee reserves the right to further object to any and all claims, whether or not 

the subject of this Objection, for allowance and/or distribution purposes, and on any other grounds. 

Furthermore, the Trustee reserves the right to modify, supplement, and/or amend this Objection as 

it pertains to any Claim or Claimant herein.

NOTICE AND PROCEDURE

12. Notice of this Objection has been provided to BD, the Core Parties, the 2002 List 

as defined in the Order Establishing Certain Notice, Case Management and Administrative 

Procedures, ECF. No. 38, and to parties-in-interest. The Trustee submits that the following 

methods of service upon the Claimant should be deemed by the Court to constitute due and 

sufficient service of this Objection: (a) by first class mail, postage prepaid and/or electronic 

delivery, on the signatory of the Claimant’s proof of claim form or other representative identified 

in the proof of claim form or any attachment thereto; and, (b) by electronic delivery to any counsel 

that has appeared on the Claimant’s behalf in the Debtor’s bankruptcy Case and receives ECF 

notices from this Court.

COMPLIANCE WITH BANKRUPTCY RULE 3007

13. This Objection complies with Bankruptcy Rule 3007(e).

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WAIVER OF MEMORANDUM OF LAW

14. Pursuant to Local Bankruptcy Rule 9013-1(G), and because there are no novel 

issues of law presented in the Objection, the Trustee requests that the requirement that all motions 

be accompanied by a written memorandum of law be waived.

NO PRIOR RELIEF

15. No previous request for the relief sought herein has been made to this Court or any 

other court.

WHEREFORE, the Trustee respectfully requests that the Court enter an Order sustaining 

this Objection and granting such other and further relief as the Court deems appropriate.

Respectfully submitted,

LYNN L. TAVENNER, CHAPTER 7 TRUSTEE

Dated: November 21, 2019

Richmond, Virginia

By: /s/Paula S. Beran

Paula S. Beran, Esquire (VSB No. 34679)

PBeran@TB-LawFirm.com

David N. Tabakin, Esquire (VSB No. 82709)

DTabakin@TB-LawFirm.com

Tavenner & Beran, PLC

20 North 8th Street

Richmond, Virginia 23219

Telephone: (804) 783-8300

Telecopier: (804) 783-0178

Counsel for Lynn L. Tavenner, Chapter 7 Trustee

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CERTIFICATE OF SERVICE

I hereby certify that on this 21st day of November 2019, a true copy of the foregoing 

Response was sent by electronic delivery to BD, the Core Parties, the 2002 List as defined in the 

Order Establishing Certain Notice, Case Management and Administrative Procedures, ECF. No. 

38, and to parties-in-interest:

Robert B. Van Arsdale, Esquire

Office of the United States Trustee

701 East Broad Street, Room 4304

Richmond, Virginia 23219

Kevin J. Funk, Esquire

Durrette Arkema Gerson & Gill PC

1111 East Main Street, 16th Floor

Richmond, Virginia 23219

Email: kfunk@dagglaw.com

BankDirect Capital Finance

150 North Field Drive, Suite 190

Lake Forest, IL 60045

Email: rtwardowski@bankdirectcapital.com

BankDirect Capital Finance

c/o Richard Twardowski, VP, Portfolio Mgmt.

150 North Field Drive, Suite 190

Lake Forest, IL 60045

Email: rtwardowski@bankdirectcapital.com

/s/ Paula S. Beran ____

Counsel for Lynn L. Tavenner, Chapter 7 Trustee

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