RECOMMENDED FOR FULL-TEXT PUBLICATION 

File Name: 18b0003p.06 

BANKRUPTCY APPELLATE PANEL 

OF THE SIXTH CIRCUIT 

In re: NICOLE GAS PRODUCTION, LTD., 

Debtor. 

_________________________________________ 

JAMES A. LOWE (15-8053); CURTLAND H. CAFFEY,

S. BREWSTER RANDALL II, and ROBERT C. SANDERS

(15-8055), 

Appellants, 

v. 

FREDERICK L. RANSIER, Trustee, 

Appellee. 

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Nos. 15-8053/8055 

On Appeal from the United States Bankruptcy Court 

for the Southern District of Ohio at Columbus. 

No. 09-52887—John E. Hoffman, Judge. 

Argued: May 9, 2017 

Decided and Filed: March 13, 2018 

Before: DELK, HARRISON, and OPPERMAN, Bankruptcy Appellate Panel Judges. 

_________________ 

COUNSEL 

ARGUED: Rick L. Ashton, ALLEN KUEHNLE STOVALL & NEUMAN, LLP, Columbus, 

Ohio, for Appellant James A. Lowe. Reginald W. Jackson, VORYS, SATER, SEYMOUR 

& PEASE, LLP, Columbus, Ohio, for Appellee. Robert C. Sanders, Upper Marlboro, Maryland, 

pro se. ON BRIEF: Rick L. Ashton, James A. Coutinho, ALLEN KUEHNLE STOVALL 

& NEUMAN, LLP, Columbus, Ohio, for Appellant James A. Lowe. Reginald W. Jackson, 

Brenda K. Bowers, VORYS, SATER, SEYMOUR & PEASE, LLP, Columbus, Ohio, for 

Appellee. Robert C. Sanders, Upper Marlboro, Maryland, S. Brewster Randall II, Columbus, 

Ohio, Curtland H. Caffey, Columbus, Ohio, pro se. 

>
Nos. 15-8053/8055 In re Nicole Gas Production Page 2

_________________ 

OPINION 

_________________ 

 DANIEL S. OPPERMAN, Chief Bankruptcy Appellate Panel Judge. The Bankruptcy 

Court in the underlying case held Appellants in contempt for conduct that it found constituted an 

impermissible exercise of control over property of the bankruptcy estate. A Fee Order followed 

the Contempt Order and awarded Appellee fees and expenses of $91,068.00 as a sanction for 

Appellants’ conduct. Appellants appealed the Contempt Order and the opinion regarding same 

and the Fee Order and opinion regarding same. For the reasons stated below, the Panel 

AFFIRMS those orders and opinions. 

ISSUES ON APPEAL

 1. Whether the Bankruptcy Court erred in entering the Contempt Order based on its 

determination that the claims Appellants pursued under the OCPA were property of Debtor’s 

estate. 

 2. Whether the Court erred when it awarded Appellee fees and expenses totaling 

$91,068.00 as a sanction for Appellants’ contempt. 

JURISDICTION AND STANDARD OF REVIEW

 Under 28 U.S.C. § 158(a)(1), this Panel has jurisdiction to hear appeals “from final 

judgments, orders, and decrees” issued by the bankruptcy court. For purposes of appeal, an 

order is final if it “ends the litigation on the merits and leaves nothing for the court to do but 

execute the judgment.” Midland Asphalt Corp. v. United States, 489 U.S. 794, 798, 109 S. Ct. 

1494, 1497 (1989) (quotation marks and citation omitted). The orders at issue in this appeal are 

final and none of the parties to this appeal challenge the Panel’s jurisdiction to hear it. 

 1. Standard and Method of Review Regarding the Contempt Order 

 Reviewing the Contempt Order and opinion accompanying it requires a three-step 

analysis. The first step is to determine whether Freddie Fulson, the indirect equity owner of the 

Debtor, had an individual claim under the OCPA. The Bankruptcy Court held that Fulson did 
Nos. 15-8053/8055 In re Nicole Gas Production Page 3

not have his own claim, under the OCPA, for damage to the value of his interest in Debtor. That 

decision involves interpretation of a statute and the Panel reviews it de novo. TranSouth Fin. 

Corp. v. Sharon (In re Sharon), 234 B.R. 676, 679 (B.A.P. 6th Cir. 1999). 

 The second step is to determine whether the claims against the Columbia Gas Entities 

belonged to Debtor’s estate. According to the Bankruptcy Court, Debtor had the exclusive right 

to prosecute those claims and those claims became estate property when Debtor filed bankruptcy. 

Thus, the Court held that Fulson violated the automatic stay by appropriating estate property 

when he pursued the claims in state court. The determination of whether property belongs to the 

estate is reviewed de novo. Kitchen v. Boyd (In re Newpower), 233 F.3d 922, 927 (6th Cir. 

2000). The determination of whether conduct violates the automatic stay also is reviewed de 

novo. Slabicki v. Gleason (In re Slabicki), 466 B.R. 572, 577 (B.A.P. 1st Cir. 2012). 

 The third step is to determine whether the Bankruptcy Court’s holding of contempt was 

appropriate. The Panel reviews that decision for abuse of discretion. Long Term Care Mgmt. 

Inc. v. VI/XII Collateral Trust (In re Nat’l Century Fin. Enters., Inc.), No. 05-8048, 2006 WL 

620643, *1 (B.A.P. 6th Cir. Mar. 14, 2006). 

 2. Standard and Method of Review Regarding the Fee Order 

 The Panel also must determine whether the Bankruptcy Court’s fee award was 

appropriate. An appellate court reviews a fee award for abuse of discretion. Adell v. John 

Richards Homes Bldg. Co., LLC (In re John Richards Homes Bldg. Co., LLC), 475 B.R. 585, 

592 (E.D. Mich. 2012). A trial court abuses its discretion when it commits a clear error of 

judgment; if reasonable people could differ on the issue, there is no abuse. Id. 

FACTS

 Nicole Gas Productions, Ltd. (“Debtor”) is the Chapter 7 debtor in the matter before the 

Panel. Freddie L. Fulson, now deceased1

, was the indirect equity owner of Debtor. Fulson’s 

equity interest in Debtor resulted from his owning a company known as Nicole Gas Marketing, 

 1

S. Brewster Randall III and Curtland H. Caffey, the Co-Administrators of Fulson’s probate estate, are 

Appellants in this matter, along with Fulson’s former counsel James A. Lowe. 
Nos. 15-8053/8055 In re Nicole Gas Production Page 4

which company was the sole owner of Debtor. Before filing bankruptcy, Debtor had business 

relationships with various branches of Columbia Gas. Those relationships soured, resulting in 

litigation between Debtor and numerous Columbia Gas entities. Eventually, Debtor filed 

bankruptcy and the bankruptcy estate obtained its causes of actions against the Columbia Gas 

entities. Appellee Frederick L. Ransier is the Chapter 7 Trustee of Debtor. 

 While Debtor’s bankruptcy was pending Fulson, represented by Appellant James A. 

Lowe, filed a state court complaint (and subsequently an amended complaint) against the 

Columbia Gas entities. Both complaints sought relief under the Ohio Corrupt Practices Act 

(“OCPA” or the “Act”). The relevant portion of that Act is Ohio Revised Code Section 

2923.34(E), which states: 

[A]ny person directly or indirectly injured by conduct in violation of section 

2923.32 of the Revised Code or a conspiracy to violate that section, other than a 

violator of that section or a conspirator to violate that section, in addition to relief 

under division (B) of this section, shall have a cause of action for triple the 

amount of actual damages the person sustained. 

O.R.C. § 2923.34(E). 

 Fulson’s state court complaints alleged that the Columbia Gas entities caused him 

indirect injury by harming Debtor, a company in which he owned an indirect equity interest. 

However, the only damages Fulson pled were those Debtor suffered—he did not claim any 

unique individual damages. Appellants conceded as much in their initial appellate brief, 

recognizing that Fulson only sought damages necessary “to make [Debtor] whole.” Joint Brief 

of Appellants, p. 20. Ransier, as Trustee, eventually settled the Columbia Gas claims on behalf 

of Debtor’s estate. The Appellants believed the settlement did not return full value for the claims 

and objected to it. The Bankruptcy Court denied their objections. 

 As a result of Fulson’s ongoing state court efforts, Ransier moved for contempt against 

Appellants in the Bankruptcy Court. Ransier argued that Fulson had merely a derivative claim 

based entirely on Debtor’s injury and for damages that duplicated Debtor’s damages. According 

to Ransier, then, the claims Fulson brought in state court were causes of action that Debtor 

owned originally and that became property of Debtor’s bankruptcy estate. Thus, Ransier argued, 

the bankruptcy estate had the exclusive right to prosecute those causes of action. Ransier 
Nos. 15-8053/8055 In re Nicole Gas Production Page 5

concluded that by filing a state court complaint, Appellants violated Debtor’s automatic stay by 

appropriating estate property without the Bankruptcy Court’s permission. 

 Fulson, through Lowe, responded that his state court action pled his own individual 

claims, not any causes of action that Debtor or Debtor’s bankruptcy estate owned. Fulson took 

the position that his claim was one for “indirect” injury that fell within the OCPA, although he 

recognized confusion regarding what the word “indirect” means for OCPA purposes. In an 

effort to clear up that confusion, Fulson requested the Bankruptcy Court seek the Ohio Supreme 

Court’s input regarding the meaning of the word “indirect” in the OCPA. 

 The Bankruptcy Court denied Fulson’s request. According to the Bankruptcy Court, the 

“directly or indirectly injured” language of the OCPA did not abrogate the common law principle 

that an injured shareholder has only a derivative claim deriving from the corporation and not an 

individual claim separate from the corporation. The Bankruptcy Court agreed with Ransier that 

the causes of action against the Columbia entities were the exclusive property of Debtor’s estate. 

It followed, then, that Fulson violated the automatic stay by wrongfully appropriating estate 

property when he pursued those claims in state court. As a result, the Bankruptcy Court held 

Appellants in contempt for violating 11 U.S.C. § 362(a)(3). 

 As part of the Contempt Order, the Bankruptcy Court established a procedure for 

determining the amount of damages Debtor’s estate sustained due to the contemptuous conduct. 

In compliance, Ransier prepared and filed a detailed fee statement, to which Appellants objected. 

The Bankruptcy Court held a hearing regarding the fee statement and objections, with Ransier 

testifying. At the conclusion of that hearing, the Bankruptcy Court directed Ransier to 

supplement his fee statement with additional fees and expenses incurred in complying with the 

Contempt Order and addressing Appellants’ ongoing contemptuous conduct. Ransier sought 

$95,386.25 and the Bankruptcy Court awarded him $91,068.00, which Appellants argue included 

fees and expenses connected with the fee hearing itself. The Appellants appealed the Contempt 

Order as well as the portion of the Bankruptcy Court’s Fee Order that Appellants claim awarded 

Ransier fees incurred defending his fee request. 
Nos. 15-8053/8055 In re Nicole Gas Production Page 6

 After filing this appeal, Appellants requested the Panel certify to the Ohio Supreme Court 

a question similar, though not identical, to the one they requested the Bankruptcy Court certify. 

The Panel agreed and certified the following question to the Ohio Supreme Court: 

Whether a shareholder of a corporation has standing to bring a claim individually 

(as opposed to merely derivatively) under the Ohio Corrupt Practices Act, R.C. 

2923 et seq., which provides standing to any person “directly or indirectly 

injured,” based on an injury to the value of the shareholder’s interest in the 

corporation? 

Opinion Re: Motions to Certify Question of State Law at 4, Aug. 19, 2016, BAP Nos. 15-8053 

& 15-8055 ECF No. 19. 

 The Ohio Supreme Court declined to answer the certified question, leaving the Panel to 

do so. The answer to that question remains dispositive. If a corporate shareholder has standing 

to bring an individual claim under the OCPA, that claim is his personal property and does not 

belong to the corporation. Thus, if Fulson had an individual claim, that claim was not Debtor’s 

property and did not become part of Debtor’s bankruptcy estate. However, if Fulson had merely 

a derivative claim based solely on Debtor’s injury and damages, his state court efforts 

appropriated estate property, subjecting him to contempt. 

DISCUSSION OF THE CONTEMPT ORDER 

 1. The OCPA Does Not Allow an Equity Owner of a Corporation to Pursue an 

 Individual Claim Based on Damage to the Value of His Interest in That 

 Corporation. 

 The first issue before the Panel is whether the OCPA gave Fulson an individual claim 

against the Columbia Gas entities that was separate and distinct from Debtor’s claims. The Panel 

finds the Act did not create such an individual claim. 

 The plain language of the OCPA grants standing to anyone injured “directly or 

indirectly” by conduct that violates that Act. O.R.C. § 2923.34(E). While the OCPA was 

modeled after federal RICO statutes, it broadens the standing of those federal statutes by 

allowing a party to recover when “indirectly” injured. CSAHA/UHHS-Canton, Inc. v. Aultman 

Health Found., No. 2010CA00303, 2012 WL 750972, at *18 (Ohio App. 5th Dist. Mar. 5, 2012). 
Nos. 15-8053/8055 In re Nicole Gas Production Page 7

Thus, Appellants correctly note that the Ohio Legislature intended the OCPA to offer standing to 

a broader class of plaintiffs than federal RICO statutes. See Iron Workers Local Union No. 17 

Ins. Fund v. Philip Morris, Inc., 23 F. Supp. 2d 771, 787 (N.D. Ohio 1998) (hereinafter Iron 

Workers I). 

 What is not clear from the statute’s plain language, however, is whether the Ohio 

Legislature intended the Act to create standing for individual shareholders when their company 

suffers damage. Doing so would have abrogated a century of common law regarding the legal 

relationship between shareholders and their corporations. Applying relevant canons of statutory 

interpretation leads the Panel to conclude the Legislature did not intend the overhaul of corporate 

jurisprudence that would result from Appellants’ reading of the OCPA. 

 Principles of statutory interpretation require a court construe a statute such that no clause, 

sentence, or word is rendered superfluous. Duncan v. Walker, 533 U.S. 167, 174, 121 S. Ct. 

2120 (2001) (citing Williams v. Taylor, 529 U.S. 362, 404, 120 S. Ct. 1495 (2000)). 

Additionally, a court must presume that a “legislature says what it means and means what it 

says.” Norfolk S. Ry. Co. v. Perez, 778 F.3d 507, 512 (6th Cir. 2015). Appellants note these 

principles while arguing that to preclude a shareholder or equity owner from bringing an 

individual claim under the OCPA would render the statute’s “indirectly injured” language 

superfluous. While the Panel recognized that theoretical risk in its Certification Opinion, after 

full review of this matter and oral argument of the parties, the Panel concludes that this 

theoretical risk was not realized in this case. 

 Disallowing individual shareholder claims under the OCPA does not render the Act’s 

language superfluous. Likewise, the Legislature can “mean what it said” when it granted 

standing to those who suffer indirect injury without intending to turn on its head a century of law 

governing shareholder litigation. Shareholder derivative suits involve one discreet corner of 

corporate jurisprudence. There remain plenty of other circumstances where the OCPA’s 

broadened standing provision opens the courthouse doors to new plaintiffs without overturning 

Ohio’s well-settled law governing shareholder litigation. 
Nos. 15-8053/8055 In re Nicole Gas Production Page 8

 Application of other relevant guidelines for statutory interpretation supports this 

conclusion. A court construing a statute should not presume that a legislature intended to repeal 

settled rules of common law unless the statutory language clearly expresses or imports such 

intention. Mann v. Northgate Investors, L.L.C., 5 N.E.3d 594, 598-99 (Ohio 2014) (citing State 

ex rel. Morris v. Sullivan, 90 N.E. 146 (Ohio 1909)). Instead, “statutes are presumed to embrace 

the common law extant at their enactment.” Mann, 5 N.E. 3d at 599. Under the longstanding 

Ohio law extant when the OCPA was enacted, a shareholder has no right to bring an individual 

claim based on injury to a corporation in which he owns an interest. Warren Tel. Co. v. Staton, 

189 N.E. 660, 663 (Ohio Ct. App. 1933); Bloom & Co. v. Ray, 1923 WL 1781, at *1 (Ohio Ct. 

App. Mar. 16, 1923). Instead, a shareholder may bring such a claim, if at all, only on behalf of 

the corporation through a shareholder derivative suit. Polikoff v. Adam, 616 N.E. 2d 213, 218 

(Ohio 1993). 

 The seminal Ohio case on this issue is Adair v. Wozniak, 492 N.E.2d 426 (Ohio 1986). In 

Adair, the Ohio Supreme Court reiterated the common law principle that a corporation, not its 

shareholders, has a claim for injury sustained by or wrong done to the corporation. Id. at 428. 

The Ohio Supreme Court further noted that “wrongful action by third parties impairing the 

capital position of the corporation gives no right of action to the shareholders as individuals for 

damages[.]” Id. at 429. 

 On that issue, the Bankruptcy Court wrote in its opinion regarding the Contempt Order: 

One of those principles is the previously discussed “well-settled [rule] that only a 

corporation and not its shareholders can complain of injury sustained by, or 

wrong done to, the corporation.” Adair, 492 N.E.2d at 428. This principle is 

grounded not only on the fact that injuries shareholders incur as a result of harm 

to the company are indirect, but also on the fact that the claims on account of 

those injuries are “duplicative [of] the corporation’s right of action.” Id. at 429. 

There is no reason to believe that a plaintiff may bring an indirect claim under the 

OCPA if there is a bar to bringing the claim—such as its duplicative nature—

other than the claim’s indirectness. To the extent indirectness is a bar to recovery, 

the OCPA may remove it, but it does nothing to remove the bar erected by the 

principle that shareholders have no right of recovery on claims that are derivative 

and duplicative of claims held by the corporation. 

In re Nicole Gas Production, Ltd., 519 B.R. 723, 746 (Bankr. S.D. Ohio 2014). 
Nos. 15-8053/8055 In re Nicole Gas Production Page 9

Adair did not involve a claim under OCPA and, therefore, did not directly address the 

instant situation. But it does reflect the applicable common law that was in place when Ohio 

enacted the OCPA, and the Bankruptcy Court was correct to rely on it. Despite being free to do 

so, the Ohio Legislature did not express in the OCPA a clear intent to repeal that well-settled 

common law. Instead, the Bankruptcy Court and the Panel must presume that contrary to 

abrogating that common law, the OCPA actually embraces it. See Mann, supra. Embracing the 

relevant law requires the Panel to conclude the Bankruptcy Court was correct in its Contempt 

Order—the OCPA may have removed indirectness as a bar to recovery, but it did not remove the 

bar that exists due to Ohio common law applicable to this matter. Thus, the OCPA did not 

provide Fulson an individual claim against the Columbia Gas entities. 

 2. The Claims Against the Columbia Gas Entities Were Estate Property. 

 Fulson did not have an individual claim against the Columbia entities. He was positioned 

as any other shareholder or equity owner of an injured corporation, possessing only a right to 

pursue relief on the corporation’s behalf. A shareholder’s only injury is the loss in value of his 

share, which is nothing more than the corporation’s lost value reduced in proportion to the 

shareholder’s interest. Thus, when a shareholder’s injury consists merely of lost value to his 

corporate interest, that injury derives from and is the same as the corporation’s injury. Crosby v. 

Beam, 548 N.E.2d 217, 219 (Ohio 1989). Accordingly, it is the corporation that has suffered a 

distinct injury and the corporation’s recovery provides redress for the shareholder’s injury. 

 The Panel recognizes that there may be situations in which a shareholder suffers injury 

that is separate and distinct from the corporation’s injury. In Crosby, for example, the court 

allowed minority shareholders to bring claims for breach of fiduciary duty against the majority 

shareholders, as those claims were not derivative of any claims held by the corporation. But that 

is not what happened here. Appellants have conceded at least three times—in the state court 

complaint, before the Bankruptcy Court, and in their initial appellate brief—that Fulson sought 

recovery which would make Debtor whole. At all stages leading up to this appeal, Appellants 

were unable to identify any damages Fulson suffered separate and independent from Debtor’s 

damages. That is because Fulson’s only alleged damages are the result of harm the Debtor 
Nos. 15-8053/8055 In re Nicole Gas Production Page 10

suffered, and he had no unique, individual right to recover those damages. Instead, Fulson was 

merely asserting the recovery rights of a third party. 

 As the Panel previously noted, the OCPA may remove indirectness as a bar to recovery, 

but that does not remove the bar erected by the principle that shareholders have no right to 

recover on “claims that are derivative and duplicative of claims held by the corporation.” Nicole 

Gas, 519 B.R. at 746; See also Cleveland v. JP Morgan Chase Bank, N.A., No. 98656, 2013 WL 

1183332 (Ohio Ct. App. Mar. 21, 2013) in which an Ohio Appellate Court affirmed a trial 

court’s decision dismissing an OCPA claim because the complaining party’s cause of action was 

based on derivative injury. The language of the OCPA reinforces this conclusion. In the OCPA 

the word “indirectly” modifies “injury” and should be read in the context of proximate cause, not 

individual damages. The Panel does not read that language as abrogating the requirement that 

someone suffer individual damages before having a right to relief. For these reasons, the Panel 

finds that the Bankruptcy Court correctly determined that Debtor, not Fulson, had the right to 

seek recovery from the Columbia Gas entities. 

 If a debtor has the right to raise a state claim at the beginning of a bankruptcy case, that 

claim becomes the exclusive property of the bankruptcy estate. Honigman v. Comerica Bank (In 

re Van Dresser Corp.), 128 F.3d 945, 947 (6th Cir. 1997). Because Debtor owned the causes of 

action against the Columbia Gas entities, Debtor had the right to bring state court claims against 

those entities at the time its bankruptcy began. Accordingly, when Debtor’s bankruptcy began, 

those claims became exclusive property of Debtor’s bankruptcy estate. 

 Appellants argue that the duplicative nature of the claims did not preclude Fulson from 

pursuing his own individual claims against the Columbia entities. According to Appellants, 

duplication of the claims is not an issue because Fulson’s damages would be offset by the 

settlement Debtor’s estate received from the Columbia Gas entities. That argument misses the 

point. A duplicative claim, by definition, is identical to and derives from another claim. The 

duplicative nature of Fulson’s alleged injury stops the analysis before it becomes necessary to 

discuss offsetting damages. To the extent Fulson had any claims, they were derivative of the 

corporation’s claim, relied entirely on the corporation’s harm, and were redressed by the 

corporation’s recovery. 
Nos. 15-8053/8055 In re Nicole Gas Production Page 11

 Put more plainly, there is no need to ever discuss offsetting in a situation like this because 

it is impossible for someone in Fulson’s position to demonstrate separate and distinct damages in 

the first place. Once the corporation is made whole, there is no longer a need for a shareholder 

or other equity owner to advocate on its behalf. Thus, when a corporation recovers for its injury 

(as Debtor did via the settlement Ransier obtained) the equity owner’s derivative claim is 

extinguished. The consequence of the corporation settling its claims underscores the harsh 

reality that a shareholder simply has no individual claim through which he can recover damages 

that would need to be offset. 

 Appellants argued during this appeal that Fulson’s unique damages were the difference 

between the settlement value and what Appellants believed was full value for the Columbia Gas 

claims. However, neither Fulson nor the other Appellants made such a claim before this appeal. 

Appellants previously sought to recover the full value of Debtor’s damages, not Fulson’s 

damages, and only offered the “difference in value” argument after failing in the lower court. 

Barring extraordinary circumstances, a reviewing court does not consider new arguments first 

raised on appeal. Khan v. Bankowski (In re Khan), 375 B.R. 5, 13-14 (B.A.P. 1st Cir. 2007); 

Drewes v. Vote (In re Vote), 261 B.R. 439, 441 (B.A.P. 8th Cir. 2001). The Panel finds that no 

extraordinary circumstances exist here to justify considering Appellants’ new argument. 

 Finally, Fulson’s response to the proposed settlement, in the Bankruptcy Court, 

contradicts the position Appellants now take before the Panel. Appellants claim the settlement 

was the last “predicate act” giving rise to Fulson’s claim and that the settlement fixed the value 

of Fulson’s damages. But Fulson objected to the settlement in the Bankruptcy Court. Accepting 

Appellants’ current arguments would require the Panel to conclude that objecting to the 

settlement was, at best, counter-productive. Rather than objecting, they should have done 

everything possible to facilitate the settlement, without which Fulson could not seek the 

individual relief he claims he deserves. Their conduct regarding the settlement, combined with 

the reasoning above, lead the Panel to conclude that Appellants’ arguments are not persuasive. 

Fulson had no individual claim, either before or after the settlement. The claims against the 

Columbia Gas entities belonged to the Debtor. Once Debtor filed bankruptcy, those claims 

became the exclusive property of Debtor’s bankruptcy estate. 
Nos. 15-8053/8055 In re Nicole Gas Production Page 12

 3. Fulson Violated the Automatic Stay and Contempt was Appropriate. 

 According to 11 U.S.C. §362(a)(3), a party violates the automatic stay by obtaining 

possession of or exercising control over property of a bankruptcy estate. This broad prohibition 

extends to “virtually all formal and informal actions” against estate property. Smith v. First 

America Bank, N.A. (In re Smith), 876 F.2d 524, 525-26 (6th Cir. 1989). In this case, the claims 

against the Columbia Gas entities were the property of Debtor and, after Debtor filed bankruptcy, 

Debtor’s estate. Thus, Fulson’s efforts to recover for the damages Debtor suffered constituted an 

act to exercise control over estate property. 

 Additionally, the greater the impact a party’s actions will have on the estate, the greater 

likelihood that those actions constitute an impermissible exercise of control over estate property. 

Harchar v. United States (In re Harchar), 393 B.R. 160, 177 (Bankr. N.D. Ohio 2008). 

Appellants cannot avoid the detrimental impact Fulson recovering for his alleged individual 

claim would have worked on the bankruptcy estate. If Fulson had been successful in his state 

court litigation, his recovery would have substantially and negatively impacted the estate. Every 

dollar Fulson would have recovered would represent a dollar the estate could not recover. Any 

payment to Fulson would have reduced the resources available to the estate to pay Debtor’s 

creditors, resulting in an exercise of control over estate property. 

 Furthermore, allowing Fulson to pursue individual claims probably would have scuttled 

Ransier’s settlement efforts on the estate’s behalf. It is unlikely the Columbia Gas entities would 

have agreed to settle if they had to fear ongoing litigation from anyone with a tangential 

connection to the damages alleged. These practical implications of Fulson pursuing claims 

against or recovering from the Columbia Gas entities support the conclusion he was exercising 

control over estate property when he filed his state court claims. Exercising control over estate 

property without court permission violates Section 362(a). Therefore, the Bankruptcy Court did 

not abuse its discretion when it held Appellants in contempt for pursuing the state court actions 

at issue. 
Nos. 15-8053/8055 In re Nicole Gas Production Page 13

 4. The Case Law Appellants Cite Does Not Support Their Position. 

 Appellants rely extensively on a series of cases that are factually distinct from the instant 

situation. They cite a line of cases known as Iron Workers. This line includes Iron Workers I; 

Iron Workers Local Union No. 17 Ins. Fund v. Phillip Morris, Inc., 29 F. Supp. 2d 801 (N.D. 

Ohio 1998) (hereinafter Iron Workers II); and Iron Workers Local Union No. 17 Ins. Fund v. 

Phillip Morris, Inc., 29 F. Supp. 2d 825 (N.D. Ohio 1998) (hereinafter Iron Workers III). In 

those cases, union health insurance trusts brought OCPA claims for smoking-related medical 

expenses that the trust paid on behalf of insured members. The defendants moved to dismiss, 

arguing that the insurance trusts suffered no direct injury and could not bring a direct action. 

Iron Workers I, 23 F. Supp. 2d at 786. The district court denied the motion because 

compensating smokers for their personal injuries did not compensate the trusts for the medical 

bills they paid on the smokers’ behalf. Id. at 791. Because the trusts’ claims were not 

duplicative of the smokers’ claims, each set of plaintiffs could pursue their own relief. In this 

case, Fulson suffered no injury distinct from Debtor’s injury. His claim is entirely duplicative of 

Debtor’s claim. 

 Appellants also rely heavily on Bankers Trust Co. v. Rhoades, 859 F.2d 1096 (2d Cir. 

1988), which is another distinguishable case. Rhoades involved litigation between a bankrupt 

corporation and one of its general creditors; it did not involve an equity holder of the debtor 

company. Id. at 1097. And like Iron Workers, the plaintiff in Rhoades sought to recover for its 

own direct damages, not those the corporation suffered. Id. at 1101. In fact, Rhoades reiterated 

the common law principle that is fatal to Fulson’s claims, stating: 

This conclusion is not contrary to our decision in Rand v. Anaconda-Ericsson, 

Inc., 794 F.2d 843 (2d Cir.), cert. denied, 479 U.S. 987, 107 S.Ct. 579, 93 L.Ed.2d 

582 (1986), where we held that the shareholder of an injured corporation did not 

have individual standing to bring a claim under civil RICO. In so holding, we 

merely recognized a standing requirement applicable throughout corporate law: 

“An ‘action to redress injuries to a corporation cannot be maintained by a 

shareholder in his own name but must be brought in the name of the corporation’” 

through a derivative action. Id. at 849 (quoting Warren v. Manufacturers 

National Bank, 759 F.2d 542, 544 (6th Cir.1985)). 

Rhoades, 859 F.2d at 1101. 
Nos. 15-8053/8055 In re Nicole Gas Production Page 14

Thus, in addition to being factually distinct from this case, Bankers actually reinforces the legal 

reality that a shareholder in Fulson’s position has no individual claim for injury suffered by the 

corporation in which he owns an interest. For the reasons stated, the Panel finds Appellants’ 

arguments lack merit. 

DISCUSSION OF THE FEE ORDER 

 In addition to attacking the Contempt Order, Appellants also argue the Bankruptcy Court 

erred by awarding Ransier certain fees he incurred in defending his fee application. They 

support their argument, initially, by citing Baker Botts, L.L.P. v. ASARCO, L.L.C, 135 S. Ct. 

2158 (2015), which involved a fee application under 11 U.S.C. §330, which governs 

compensation for certain professionals in a bankruptcy case. However, the Bankruptcy Court in 

this case did not base its award on Section 330. In its opinion supporting the Fee Order, the 

Bankruptcy Court noted the basis for the award: 

A “[trial] court ha[s] broad discretion to fashion an appropriate remedy for 

. . . contempt,” and “[i]n a civil contempt proceeding, judicial sanctions can be 

used not only to coerce compliance, but also to compensate the complainant.” 

Williamson v. Recovery Ltd. P’ship, 467 F. App’x 382, 396 (6thCir. 2012) 

(internal quotation marks omitted). In order to recover fees and expenses as 

compensation for contemptuous conduct, a party must demonstrate that the fees 

and expenses were incurred as a result of the contempt. See Ross v. Meyers, 

883 F.2d 486, 491 (6th Cir. 1989) . . .; Liberis v. Craig, No. 87-5321, 1988 WL 

37450, at *8 (6th Cir. Apr. 25, 1988) . . . As the Court found above, fees in the 

amount of $89,011.25 and expenses in the amount of $2,056.75 were incurred by 

Ransier as a result of the Fulson Parties’ contempt. 

In re Nicole Gas Production, Ltd., 542 B.R. 204, 218 (Bankr. S.D. Ohio 2015). 

Thus, the Bankruptcy Court did not rely on Section 330 when awarding Ransier fees. Instead, 

the Court’s fee award fell squarely within both its authority under the Bankruptcy Code and its 

inherent authority as an Article III court. Under Section 105(a), a bankruptcy court may issue 

“any order, process, or judgment that is necessary or appropriate to carry out the provisions” of 

the Bankruptcy Code. The power granted in Section 105(a) carries with it the authority to 

“award attorney fees as a sanction for misconduct.” In re Mehlhose, 469 B.R. 694 711 (Bankr. 

E.D. Mich. 2012). Additionally, even apart from the Bankruptcy Code, bankruptcy courts enjoy 

the same inherent authority invested in all Article III courts to sanction parties for improper 
Nos. 15-8053/8055 In re Nicole Gas Production Page 15

conduct. Mapother & Mapother, P.S.C. v. Cooper (In re Downs), 103 F.3d 472, 477 (6th Cir. 

1996). In this case, the sanctions the Bankruptcy Court imposed find their basis in both Section 

105 and the Court’s inherent authority. Accordingly, neither Section 330 nor Baker Botts apply. 

 Appellants also reference the “American Rule” and argue that fees should not have been 

allowed because fee-shifting statutes generally provide that only a “prevailing party” or 

“successful litigant” can receive an award of fees. This is misguided as well. Initially, the 

American Rule does not apply to this situation. An exception to the American Rule exists when 

a court imposes sanctions by virtue of its inherent power. Liberis v. Craig, No. 87-5321, 1988 

WL 37450, at *5 (6th Cir. Apr. 25, 1988). That is what happened here. The Bankruptcy Court 

did not award Ransier fees and expenses because it deemed him a prevailing party. It made that 

award to sanction Appellants for their conduct. 

 Moreover, Appellants’ claim that Ransier was not a “prevailing party” with regard to his 

fee request is not persuasive. Even assuming, arguendo, some form of the American Rule 

applied requiring Ransier to “prevail” in this matter, the facts would compel the Panel to find 

that he did so. Ransier sought a total of $95,386.25 in fees. The Bankruptcy Court awarded him 

$91,068.00, which is more than 95% of what he requested. That does not reflect an unsuccessful 

effort by Ransier. Thus, the Panel is left to consider whether the Bankruptcy Court abused its 

discretion by awarding Ransier fees totaling $91,068.00. The Panel finds no such abuse. 

 Regarding the fees, the Bankruptcy Court conducted an initial hearing at which Ransier 

presented a detailed fee statement, an affidavit, and his own testimony. The Bankruptcy Court 

then directed Ransier to supplement his affidavit with additional detail regarding his firm’s 

billing policies and to provide an updated statement with the fees and expenses incurred since the 

first statement. Additionally, another attorney at Ransier’s firm submitted an affidavit in support 

of his efforts. 

 The Bankruptcy Court then entered the Fee Order, which is more than 50 pages long, to 

explain its decision. In that Order the Court discussed in painstaking detail the support for its 

award. The Court noted its duty to review the fee statements and reduce them if any fees sought 

did not result from the Appellants’ contemptible conduct. As a result, it denied Ransier’s request 
Nos. 15-8053/8055 In re Nicole Gas Production Page 16

for fees associated with objecting to proofs of claim and dealing with hearings unrelated to the 

contempt issue. It also denied fees for research Ransier did to determine if he could charge the 

Appellants for conducting other research. 

 After making these reductions, the Bankruptcy Court stated: 

[I]n sum, as a result of its independent review, the Court is reducing Ransier’s 

fees by $2,039.25. As explained in Section V.B below, the Court is reducing the 

fees by an additional $398 as a result of the objections. . . . Based on Ransier’s 

testimony and a line-by-line review of the Fee Statements, the Court concludes 

that the remainder of the fees sought by Ransier were reasonably and necessarily 

incurred as a result of the Fulson Parties’ persistent attempts to exercise control 

over property of NGP’s bankruptcy estate. 

In re Nicole Gas Production, Ltd., 542 B.R. 204, 213-14 (Bankr. S.D. Ohio 2015). 

The Court referred to Appellants’ “persistent attempts to exercise control,” connecting the fees it 

awarded to the behavior for which it held Appellants in contempt in the first place. The court 

then proceeded to spend more than 30 pages justifying its award, explaining in detail how the 

fees included were related to Appellants’ contempt. The fee award in this case finds solid 

footing both in law and the facts before the Panel, and the Bankruptcy Court did not abuse its 

discretion by ordering it. 

CONCLUSION 

 The Panel affirms the Bankruptcy Court’s Contempt Order and affirms the Bankruptcy 

Court’s Fee Order. Regarding the Contempt Order, Fulson did not have an individual claim 

under the OCPA. Instead, he and his counsel exercised control over estate property by pursuing 

claims that were the exclusive property of Debtor’s estate. Those actions violated the automatic 

stay and the Bankruptcy Court acted properly by holding Appellants in contempt as a result. 

 As to the Fee Order, the Bankruptcy Court properly exercised its inherent authority to 

impose sanctions for contempt. The Fee Order explains clearly and in detail how the fees 

awarded derived from Appellants’ contempt. The Order does not reflect an abuse of the 

Bankruptcy Court’s discretion.