Richard M. Pachulski, Esq.

Andrew W. Caine, Esq.

(admitted pro hac vice)

PACHULSKI STANG ZIEHL & JONES LLP

10100 Santa Monica Boulevard, 13th Floor

Los Angeles, California 90067-4100

Telephone: (310) 277-6910

Telecopy: (310) 201-0760

Lynn L. Tavenner, Esq. (VA Bar No. 30083)

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

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

TAVENNER & BERAN, PLC

20 North Eighth Street, 2nd Floor

Richmond, Virginia 23219

Telephone: (804) 783-8300

Telecopy: (804) 783-0178

Counsel to Alfred H. Siegel, as Trustee of the Circuit City Stores, Inc. Liquidating Trust

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

RICHMOND DIVISION

In re:

CIRCUIT CITY STORES, INC., et al.,

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Case No. 08-35653 (KRH)

Chapter 11

(Jointly Administered)

ALFRED H. SIEGEL, TRUSTEE OF THE 

CIRCUIT CITY STORES, INC. LIQUIDATING 

TRUST

Plaintiff Adversary Number 19-____

v.

UNITED STATES TRUSTEE PROGRAM,

CLIFFORD J. WHITE, III, DIRECTOR,

JOHN P. FITZGERALD, III, ACTING UNITED 

STATES TRUSTEE FOR REGION 4,

Defendants

COMPLAINT FOR DECLARATORY JUDGEMENT AND RECOVERY

OF AMOUNTS OWED PURSUANT TO 11 U.S.C. § 542

1 The Debtors in these chapter 11 cases (collectively, the “Case”), along with the last four digits of their respective 

federal tax identifications numbers, are as follows: Circuit City Stores, Inc. (3875), Circuit City Stores West Coast, 

Inc. (0785), InterTAN, Inc. (0875), Ventoux International, Inc. (1838), Circuit City Purchasing Company, LLC 

(5170), CC Aviation, LLC (0841), CC Distribution Company of Virginia, Inc. (2821), Circuit City Properties, LLC 

(3353), Kinzer Technology, LLC (2157), Abbott Advertising Agency, Inc. (4659), Patapsco Designs, Inc. (6796), Sky 

Venture Corp. (0311), Prahs, Inc. (n/a), XSStuff, LLC (9263), Mayland MN, LLC (6116), Courchevel, LLC (n/a), 

Orbyx Electronics, LLC (3360), and Circuit City Stores PR, LLC (5512).

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Alfred H. Siegel, as Trustee (the “Trustee”) of the Circuit City Stores, Inc. Liquidating 

Trust (the “Trust”) created under the Modified Second Amended Joint Plan of Liquidation of 

Circuit City Stores, Inc. and its Affiliated Debtors and Debtors in Possession and its Official 

Committee of Unsecured Creditors Holding General Unsecured Claims, In re Circuit City Stores, 

Inc., Case No. 08-35653 (Bankr. E.D. Va. Aug. 9, 2010), ECF No. 8252, Exhibit A [hereinafter 

the “Plan”], solely in his capacity as Trustee, and not in any individual or other capacity, files this 

complaint against the United States Trustee Program (the “Program”), Clifford J. White, III 

Director of the Program (the “Director”), and John P. Fitzgerald, Acting United States Trustee for 

Region 4 (the “UST,” and together with the Program and the Director, the “Defendants” and each 

individually a “Defendant”), and alleges as follows:

NATURE OF THE ACTION

1. The Trustee brings this against the Defendants to recover amounts 

unconstitutionally assessed by Defendants and subsequently paid to the Program pursuant to 28 

U.S.C. § 1930(a)(6) (“§ 1930”) by the Trust, which amounts are now indisputably property of the 

Trust as a result of this Court’s holding in Siegel v. Fitzgerald (In re Circuit City Stores, Inc.), 

Adv. Pro. 19-03060, Case No. 08-35653 (Bankr. E.D. Va. July 15, 2019), ECF No. 2; In re Circuit 

City Stores, Inc., 2019 Bankr. LEXIS 2121, Case No. 08-35653 (Bankr. E.D. Va. July 15, 2019)

(together, the “Memorandum Opinion”).

THE PARTIES

2. The Trustee is the duly appointed trustee of the Trust, successor in interest to the 

Debtors. Pursuant to Articles II and III of the Trust, the Trustee has the sole authority to pursue 

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claims transferred to the Trust by the Debtors through the Plan and to seek any and all related 

relief.

3. The Program is the component of the United States Department of Justice 

responsible for overseeing the administration of bankruptcy cases and private trustees under 28 

U.S.C. § 586 and 11 U.S.C. §§ 101-1532 (the “Bankruptcy Code”). As part of those 

administrative duties, the Program collects fees pursuant to § 1930, which fees are deposited into 

the United States Trustee System Fund (the “Fund”).

4. The Director is the Director of the Program.

5. The UST is the acting United States Trustee for Region 4.

JURISDICTION AND VENUE

6. 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. The Trustee confirms his consent, pursuant to Rule 7008 of the Federal Rules of 

Bankruptcy Procedure (the “Bankruptcy Rules”), to the entry of a final order or judgment by the 

Court in connection with this Complaint to the extent that it is later determined that the Court, 

absent consent of the parties, cannot enter final orders or judgments in connection herewith 

consistent with Article III of the United States Constitution.

7. This is a core proceeding under 28 U.S.C. § 157(b).

8. Venue of these Chapter 11 cases and this adversary proceeding in this District and 

before this Court is proper under 28 U.S.C. §§ 1408 and 1409.

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9. The statutory and legal predicates for the relief requested by the Complaint are 11 

U.S.C. §§ 105, 541, 542, 549, and 558, and Bankruptcy Rule 7001.

RELEVANT FACTS

10. On November 10, 2008, Circuit City Stores, Inc., and its related entities 

(collectively, the “Debtors”) filed voluntary petitions under Chapter 11 of the Bankruptcy Code 

in this Court.

11. On September 14, 2010, this Court confirmed the Plan, pursuant to the Findings of 

Fact, Conclusions of Law and Order Confirming Modified Second Amended Joint Plan of 

Liquidation of Circuit City Stores, Inc. and Its Affiliated Debtors and Debtors in Possession and 

Its Official Committee of Creditors Holding General Unsecured Claims. In re Circuit City Stores, 

Inc., Case No. 08-35653 (Bankr. E.D. Va. Sept. 14, 2010), ECF No. 8555 [hereinafter the 

“Confirmation Order”]. 

12. As provided and in furtherance of Article V of the Plan and Paragraph 11 of the 

Confirmation Order, the Court approved the formation of the Trust and the Circuit City Stores Inc. 

Liquidating Trust Agreement, the executed copy of which was filed on the docket on November 

1, 2010. Notice of Filing of Executed Liquidating Trust Agreement and Executed Bylaws of 

Liquidating Trust Oversight Committee, In re Circuit City Stores, Inc., Case No. 08-35653 (Bankr. 

E.D. Va. Nov. 1, 2010), ECF No. 8864 [hereinafter the “Liquidating Trust Agreement”]. 

Pursuant to the Liquidating Trust Agreement, the Trust received the Debtors’ assets, including but 

not limited to any and all recovery actions, for the purpose of allowing the Trustee to administer 

the assets in accordance with the Plan. 

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13. As provided in Paragraph 41 of the Confirmation Order and Article XI of the Plan, 

this Court has retained exclusive jurisdiction to hear and determine any matters arising out of, 

under or related to the Case, the Plan or the Liquidating Trust Agreement to the fullest extent 

permitted by law.

14. In accordance with the Plan and the Liquidating Trust Agreement, the Trustee has 

performed, and continues to perform, his duties with fervor and, in furtherance thereof, already 

has distributed a 54 percent recovery to holders of allowed general unsecured claims. 

15. The Trustee, his staff, and professionals continue their efforts to recover additional 

sums through litigation and otherwise in order to make additional distributions to the holders of 

allowed claims.

16. Further, in accordance with Article XII.D. of the Plan, the Trustee is required to 

continue to remit to the Office of the United States Trustee statutory quarterly fees (“UST Fees”) 

until Case closure (or entry of a final decree). The relevant portion of Article XII.D. of the Plan 

provides:

All fees then due and payable pursuant to 28 U.S.C. § 1930, as determined by the 

Court at the Confirmation Hearing, shall be paid on or before the Effective Date by 

the Debtors. All such fees that become due and payable thereafter by a Debtor shall 

be paid by the Liquidating Trustee. The Liquidating Trustee shall pay quarterly fees 

to the U.S. Trustee until the Chapter 11 Cases are closed or converted and/or the 

entry of final decrees. The Debtors, through the Liquidating Trust, shall file postconfirmation quarterly reports or any pre-confirmation monthly operating reports 

not filed as of the Confirmation Hearing in conformance with the U.S. Trustee 

Guidelines. 

17. In accordance with Article XII.D. of the Plan and in furtherance of his duties under 

the Liquidation Trust Agreement, the Trustee has continued to timely file requisite quarterly 

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operating reports, and through the entry of the Order (as defined herein), has continued to timely 

remit the UST Fees as calculated and invoiced by the UST pursuant to § 1930.

18. As a result of structural statutory changes delineating a new fee structure under 

Section 1930 and based upon the timely filed Quarterly Operating Reports for the first three 

quarters of the 2018 calendar year, the Program invoiced the Trust, and the Trust paid the UST,

$632,542. See Trustee Quarterly for Quarter Ending September 30, 2018, In re Circuit City Stores, 

Inc., Case No. 08-35653 (Bankr. E.D. Va. Dec. 5, 2018), ECF No. 14190; Trustee Quarterly for 

Quarter Ending June 30, 2018, In re Circuit City Stores, Inc., Case No. 08-35653 (Bankr. E.D. Va. 

Sept. 12, 2018), ECF No. 14181; Trustee Quarterly for Quarter Ending March 31, 2018, In re 

Circuit City Stores, Inc., Case No. 08-35653 (Bankr. E.D. Va. May 30, 2018), ECF No. 14166. As 

the exponential statutory fee increase was imposed many years after confirmation of the Plan, none 

of the relevant parties or the Court was (or could have been) aware of such a material future fee 

change during the Plan confirmation process. Absent the increase, the UST fee that would have 

otherwise been due and paid would have been $56,400, a $576,142 difference (the “Initial

Unconstitutional Difference”).

19. On March 28, 2019, the Trustee brought his Motion of the Liquidating Trustee to 

Determine Extent of Liability for Post-Confirmation Quarterly Fees Payable to the United States 

Trustee Pursuant to 28 U.S.C. § 1930(a)(6) and Memorandum in Support. In re Circuit City Stores, 

Inc., Case No. 08-35653 (Bankr. E.D. Va. March 28, 2019), ECF No. 14197; Siegel v. Fitzgerald 

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(In re Circuit City Stores, Inc.), Adv. Pro. 19-03060 (Bankr. E.D. Va. March 28, 2019), ECF No. 

(together, the “UST Fee Motion”).

2

20. On July 15, 2019, this Court entered the Opinion and Order. See Memorandum 

Opinion; Order Directing that Motion to Determine is Converted to a Complaint, In re Circuit City 

Stores, Inc., Case No. 08-35653 (Bankr. E.D. Va. July 15, 2019), ECF No. 14224; Order Directing 

that Motion to Determine is Converted to a Complaint, Siegel v. Fitzgerald (In re Circuit City 

Stores, Inc.), Adv. Pro. 19-03060 (Bankr. E.D. Va. July 15, 2019), ECF No. 3 (together, the 

“Order”). Pursuant to the Order, the Court directed:

The quarterly fees due and payable by the Liquidating Trust since January 1, 2018 

shall be determined based on the fee schedule set forth in the prior version of 28 

U.S.C. § 1930(a)(6) effective on September 30, 2017. As to payments previously 

made by the Liquidating Trustee to the U.S. Trustee, the rights and defenses of both 

Parties are reserved.

Order.

21. Since the filing of the UST Fee Motion, additional quarterly reports for the fourth 

quarter 2018, first quarter 2019, and second quarter 2019 have been filed. The Trustee intends to 

continue filing quarterly reports as required by the Plan. Based upon subsequent invoices received 

from the Program since entry of the Order, the Trustee is unable to determine the fee calculation 

methodology as reflected in Exhibits A-B. But, to the extent any fee amounts due after entry of 

the Order are calculated based upon the current version of 28 U.S.C. § 1930(a)(6), such calculation 

2 Pursuant to this Court’s Order Directing that Motion to Determine is Converted to a Complaint, entered July 15, 

2019, In re Circuit City Stores, Inc., Case No. 08-35653 (Bankr. E.D. Va. July 15, 2019), ECF No. 14224, the Court 

converted the matter to an Adversary Proceeding, and the Motion of the Liquidating Trustee to Determine Extent of 

Liability for Post-Confirmation Quarterly Fees Payable to the United States Trustee Pursuant to 28 U.S.C. § 

1930(a)(6) and Memorandum in Support was redocketed as a complaint in Adversary Proceeding 19-03060.

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will also be contrary to the Court’s ruling and unconstitutional (the “Subsequent 

Unconstitutional Fee Calculations”).

22. Further, in its Memorandum Opinion, the Court noted “The Court makes no finding 

as to the Liquidating Trustee’s ability to recover any overpayments based upon the Courts ruling 

but acknowledges that rights and defenses of both Parties are reserved.” Opinion at *14. As such, 

the Unconstitutional Difference amounts to an overpayment of UST Fees paid by the Trust into 

the Fund. Further, any Subsequent Unconstitutional Fee Calculations may also be in violation of 

the Order.

23. Where payment to the UST may have initially divested the Trust of its interest in 

the Initial Unconstitutional Difference, once this Court entered the Order and determined that the 

amendment to § 1930 was unconstitutional, the Initial Unconstitutional Difference can be clearly 

seen as a vested property interest of the Trust Estate. There is no legitimate dispute over the fact 

that the Initial Unconstitutional Difference is now owed to the Trust. The Initial Unconstitutional 

Difference is clearly property of the Trust, but is not in the Trust’s possession and thus, must be 

turned over to the Trust. 

24. In addition, any Subsequent Unconstitutional Fee Calculation is in violation of this 

Court’s prior ruling, and further contributes to overstated UST Fees due in contravention of the 

Order.

3

25. On September 26, 2019, the Trustee made formal demand upon the United States 

Trustee Program, Clifford J. White, III Director of the United States Trustee Program, and John P. 

3 The Memorandum Opinion and Order are currently the subject of an appeal and cross appeal; however, no stay 

prohibiting this proceeding has been requested or ordered.

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Fitzgerald, Acting United States Trustee for Region 4 for: (1) turnover of the Initial 

Unconstitutional Difference and (2) an accounting regarding the Initial Unconstitutional 

Difference and the Subsequent Unconstitutional Difference. On October 9, 2019, the Defendants 

declined to turnover the Unconstitutional Difference and provided an incomplete accounting.

COUNT I

DECLARATORY JUDGMENT PURSUANT TO 28 U.S.C. § 2201

26. The Trustee repeats and realleges each of the allegations set forth above as if fully 

set forth herein.

27. There is an actual controversy between the Trust and the Program, Director, and 

UST, in that the funds constituting the Unconstitutional Difference are being retained without 

cause and have not been returned to the Trust despite the Court’s ruling that the funds were not 

constitutionally sanctionable remittances.

28. This dispute is definite and concrete, touching the legal relations of the parties 

which have adverse legal interests in that the Program, Director, and UST have not returned the 

Unconstitutional Difference to the Trust, which demands the funds so that they can be utilized for 

the benefit of the Trust beneficiaries.

29. Given the relation of the parties and this Court’s prior Opinion and Order, it is not 

an abuse of this Court’s discretion to hear the present matter.

30. Furthermore, judgment in favor of the Trust will (1) clarify the legal relation at 

issue; (2) afford relief from the uncertainly, insecurity and controversy that gave rise to the 

proceeding; (3) be an efficient exercise of judicial oversight for this Court to render judgment in 

this instance; and (4) reinforce that the Trust is not engaging in procedural fencing. 

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31. Pursuant to 28 U.S.C. § 2201, the Trust is entitled to a declaratory judgment that 

the Unconstitutional Difference is an asset of the Trust estate.

COUNT II

DECLARATORY JUDGMENT PURSUANT TO 28 U.S.C. § 2201

32. The Trustee repeats and realleges each of the allegations set forth above as if fully 

set forth herein.

33. There is an actual controversy between the Trust and the Program, Director, and 

UST, in that the Program, Director, and UST have failed to appropriately invoice and/or otherwise 

account to the Trust in accordance with the Opinion and Order for the appropriate amount of UST 

Fees due since January 1, 2018.

34. This dispute is definite and concrete, touching the legal relations of the parties 

which have adverse legal interests in that the Program, Director, and UST have not appropriately 

invoiced and/or otherwise accounted to the Trust in accordance with the Opinion and Order for 

the appropriate amount of UST Fees due since January 1, 2018.

35. Given the relation of the parties and this Court’s prior Opinion and Order, it is not 

an abuse of this Court’s discretion to hear the present matter.

36. Furthermore, judgment in favor of the Trust will (1) clarify the legal relation at 

issue; (2) afford relief from the uncertainly, insecurity and controversy that gave rise to the 

proceeding; (3) be an efficient exercise of judicial oversight for this Court to render judgment in 

this instance; and (4) reinforce that the Trust is not engaging in procedural fencing. 

37. Pursuant to 28 U.S.C. § 2201, the Trust is entitled to a declaratory judgment 

establishing the amount of UST Fees due to the Trust as a result of the over payments made to 

date.

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COUNT III

TURNOVER AND ACCOUNTING OF PROPERTY OF 

THE ESTATE PURSUANT TO 11 U.S.C. § 542

38. The Trustee repeats and realleges each of the allegations set forth above as if fully 

set forth herein.

39. The Initial Unconstitutional Difference is an obligation owed to the Trust, which 

constitutes property of the estate under § 541 of the Bankruptcy Code.

40. The Initial Unconstitutional Difference has matured and is payable on demand.

41. Notwithstanding the entry of the Opinion and Order, Defendants have failed to 

return the Initial Unconstitutional Difference to the Trustee despite specific demand for the same.

42. Defendants are aware of the Opinion, and, as a result, Defendants knew or should 

have known that the Initial Unconstitutional Difference was property belonging to the Trust, and 

that they have failed to turn over such amounts as required by § 542 of the Bankruptcy Code

despite specific demand for the same.

43. The Trustee is entitled to recover the full amount of the Initial Unconstitutional 

Difference pursuant to § 542(b) of the Bankruptcy Code.

44. The Trustee is entitled to an accounting of fees paid, overpaid, and/or due since 

January 1, 2018.

[remainder of page left intentionally blank]

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PRAYER FOR RELIEF

WHEREFORE, the Trustee respectfully requests and prays that the Court:

A. Pursuant to Count I and 28 U.S.C. § 2201, enter a declaratory judgment that the 

Initial Unconstitutional Difference is property of the Trust Estate;

B. Pursuant to Count II and 28 U.S.C. § 2201, enter a declaratory judgment as to the 

amount of the amount of UST Fees due to the Trust as a result of the over payments made to date;

C. Pursuant to Count II and § 542 of the Bankruptcy Code, enter a judgment against 

Defendants and require the Director and/or the UST to direct the Fund to immediately cause to be 

paid to the Trustee not less than $576,142;

D. Award the Trustee costs and expenses incurred in connection with this adversary 

proceeding; and

E. Grant such other and further relief as this Court deems just and appropriate.

October 9, 2019

TAVENNER & BERAN, P.L.C.

/s/ Lynn L. Tavenner

Lynn L. Tavenner (VA Bar No. 30083)

Paula S. Beran (VA Bar No. 34679)

David N. Tabakin (VA Bar No. 82709)

20 North Eighth Street, 2nd Floor

Richmond, Virginia 23219

Telephone: 804-783-8300

Facsimile: 804-783-0178

Email: ltavenner@tb-lawfirm.com

pberan@tb-lawfirm.com

dtabakin@tb-lawfirm.com

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Richard M. Pachulski

Andrew W. Caine (admitted pro hac vice)

PACHULSKI STANG ZIEHL & JONES LLP

10100 Santa Monica Blvd., 11th Floor

Los Angeles, California 90067-4100

Telephone: 310-277-6910

Facsimile: 310-201-0760

E-mail:rpachulski@pszjlaw.com

acaine@pszjlaw.com

Counsel to Alfred H. Siegel, as Trustee of the Circuit City 

Stores, Inc. Liquidating Trust

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EXHIBIT A

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EXHIBIT B

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