UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

WEST PALM BEACH DIVISION

www.flsb.uscourts.gov

In re: CASE NO. 19-18094-EPK

MICHELLE BERMAN and RICHARD CHAPTER 7

ERIC BERMAN,

Debtors.

___________________________________/

TRUSTEE’S AMENDED MOTION FOR APPROVAL OF SETTLEMENT 

WITH DEBTORS MICHELLE BERMAN AND RICHARD BERMAN, AND FOR

AUTHORITY TO ABANDON ESTATE PROPERTY AS PART OF SETTLEMENT

 NOTICE

Any interested party who fails to file and serve a written response

to this motion within 21 days after the date of service stated in this 

motion shall, pursuant to Local Rule 9013-(D), be deemed to have 

consented to the entry of an order in the form attached to this 

motion. Any scheduled hearing may then be canceled. Pursuant to 

Bankruptcy Rule 6007, the proposed abandonment will be deemed 

approved.

Deborah C. Menotte, as Chapter 7 Trustee (the “Trustee”) for the estate of Michelle 

Berman and Richard E. Berman, by and through undersigned counsel and pursuant to Section 554 

of the Bankruptcy Code, Local Rule 6007, and Fed. R. Bankr. P. 9019, requests the Court to 

approve the attached settlement Agreement (Exhibit “A”) by and between the Trustee and the 

Debtors Michelle Berman and Richard Berman (the “Bermans” or “Debtors”), and to approve the 

Trustee’s abandonment of certain assets as part of such settlement. In support of the foregoing, the 

Trustee would state as follows:

 

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BACKGROUND

1. This Chapter 7 case was commenced on June 18, 2019, by the filing of a Voluntary 

Petition under Chapter 7 of the Bankruptcy Code by the Debtors, Michelle Berman and Richard 

Berman.

2. Deborah C. Menotte is the duly appointed and acting Chapter 7 Trustee.

3. The Bermans have scheduled a multitude of claimed exempt assets in Schedule C, 

including certain household furnishings and specifically two IRS’s in each of their names, into 

which the Bermans made contributions of $6,500 in February, 2019. They have also scheduled on 

Schedule B household furnishings, jewelry, certain firearms, and Richard Berman’s stock 

ownership in an inactive former law firm Berman, Kean & Riguera, P.A., whose remaining asset 

is a collection action against a former client. The Bermans have also disclosed in their SOFA that 

in 2018, The Bermans “sold” a 1964 Corvette automobile to Richard Berman’s son, Jeremy 

Berman, which the Trustee believes is subject to further scrutiny.

4. The Trustee wishes and believes it is in the estate’s interest to avoid incurring 

attorneys’ fees and costs in contested matters and adversary proceedings which would need to be 

filed if the Trustee contested exemptions or the transfer of the Corvette, and to avoid the expense 

of administering non-exempt assets whose value would be subject to debate. Accordingly, subject 

to Court approval, the Trustee has entered into the attached settlement Agreement with the 

Bermans which provides as follows:

i. The Trustee will receive $40,000 from the Bermans, such payment to be 

made within two business days from entry of a court Order which has 

become final, approving the Agreement.

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ii. The Trustee will not file an objection to the Bermans’ claimed exemptions 

on Schedule C.

iii. The Trustee will not pursue any claim (against the Bermans or Jeremy 

Berman) arising from the transfer of a 1964 Corvette automobile by the 

Bermans to Richard Berman’s son, Jeremy Berman.

iv. The Trustee will abandon her interest in certain non-exempt tangible 

Personal Property identified in Items 6, 7, 8, 9, 10, 11, 12, 13, 14 and 39 of

Schedule B.

v. The Trustee will abandon her interest in Richard Berman’s 55% ownership 

interest in his former law firm, Berman, Kean & Riguera, P.A.

The Trustee would refer creditors to the attached Agreement for the full terms thereof.

 SETTLEMENT SHOULD BE APPROVED

5. Fed.R. Bankr. P. 9019(a) provides, in relevant part that “on motion by the trustee 

and after noticing a hearing, the court may approve a compromise or settlement.” To approve a 

compromise and settlement under such rule, a bankruptcy court should find that the compromise 

and settlement is fair and equitable, reasonable and in the best interest of the debtor’s estate. See, 

e.g., TMT Trailer Ferry, 390 U.S. 413, 424 (1969); Air Line Pilot’s Assoc., Int’l. v. America Nat’l 

Bank and Trustee Co. of Chicago (In re Ionosphere Clubs, Inc.), 156 B.R. 413, 426 (S. D. N. Y. 

1993), aff’d. 17 F. 3d 600 (2d Cir. 1994).

6. The Court should consider the following factors in determining whether to approve 

a settlement: (i) the probability of success in the litigation; (ii) the difficulties, if any, to be 

encountered in collection; (iii) complexity of the litigation and the expense, inconvenience and 

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delay necessarily attending it; and (iv) the paramount interest of creditors. In re Justice Oaks, II, 

Ltd., 898 F. 2d 1544, 1549 (11 Cir. 1990).

7. The Trustee has considered the value of the assets claimed as exempt by the 

Berman, as to which the Trustee believes there is a colorable basis to contest. These assets are

certain household furniture owned by the Bermans as well as their interest in certain IRA’s into 

which the Bermans made contributions of $6,500 each within five months of the petition date. The 

household furniture claimed as exempt on Schedule C has been valued by Auction America at only 

a few thousand dollars more than the claimed exemption. Moreover, while the Trustee believes 

that there exists a colorable basis to claim that the IRA contributions in 2019 violated Florida 

Statutes § 222.30 (which deems as a fraudulent transfer converting non-exempt assets to exempt 

assets with the intent to hinder, delay and defraud creditors), the requirement of demonstrating 

fraudulent intent increases the risk of not prevailing as well as the fees and costs that would be 

incurred in having to prove such intent.

8. As for the balance of tangible non-exempt assets listed on Exhibit B, including 

other household furniture, collectibles (Bacarat pieces, art prints and lithographs), Firearms (Glock

30, Ruger 380 and W. Tokarev handgun), and Jewelry, Auction America has valued such property 

at approximately $24,000. The Trustee submits that the settlement takes this value into account. 

As opposed to a sale of such assets, however, the Trustee proposes to abandon her interest in such 

assets effective upon payment.

9. The Trustee also proposes to abandon her interest in 55% of the stock owned by 

Richard Berman in his former law firm, Berman, Kean & Riguera, P.A., which firm ceased 

operations more than three years ago. The only asset which the Trustee has determined remains 

with such firm is a litigation commenced by such firm against a former client to collect alleged 

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unpaid fees in the amount of $45,000. As such litigation is being defended and there exists 

uncertainly as to both success and the manner in which any recovery would be divided among the 

partners, the Trustee believes that recovery of the estate for such abandonment is in the best interest 

of creditors. 

10. Finally, the proposed settlement also entails the Trustee’s agreement not to pursue 

and release of a potential (but far from certain) claim arising from the Bermans’ transfer of a 1964 

Corvette automobile to Richard Berman’s son Jeremy Berman in 2018. The vehicle is presently 

located in Texas and the Bermans have produced an agreement addressing such transfer and the 

monetary consideration which they received. The Bermans have also testified under oath that the 

Corvette was in poor condition upon transfer and required substantial repair work. While the 

Trustee believes that such transaction conceivably could be attacked as a fraudulent transfer, the 

uncertainties as to lack of reasonably equivalent value, the value of the Corvette and insolvency 

made litigation success uncertain.

11. The Trustee submits that the expense and delay in pursuing recovery on claims 

arising from the 2019 contributions to the Bermans’ IRA’s and the transfer of the Corvette, as well 

as any sale of the personal property would be substantial and uneconomical. Indeed, attorneys’ 

fees and costs could well cover any recovery by the estate. Accordingly, the Trustee respectfully 

submits that the estate’s recovery of $40,000 is in the best interests of the estate, and that the 

proposed settlement, which includes the abandonment of certain property should be approved.

ABANDONMENT SHOULD BE AUTHORIZED

12. As part of the proposed settlement, the Trustee will be abandoning the estate’s 

interest in certain non-exempt assets listed in Schedule B, including Richard Berman’s stock 

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ownership in his former law firm. Such abandonment is in the best interests of the Bermans’ 

estate.

13. Attached as Exhibit “B” is a proposed Order which will be submitted if no timely 

objection to the proposed settlement and abandonment is filed.

WHEREFORE, Deborah C. Menotte, respectfully requests that the Court: (i) approve the 

attached Agreement (ii) authorize the Trustee’s abandonment of certain property identified herein; 

and (ii) that the Court grant such other and further relief as is just and proper.

Dated this 30th day of December, 2019.

RICE PUGATCH ROBINSON STORFER & COHEN, PLLC

Attorneys for Trustee, Deborah C. Menotte

101 Northeast Third Avenue, Suite 1800

Fort Lauderdale, Florida 33301

Telephone: 954-462-8000

By: __/s/ Kenneth B. Robinson________

KENNETH B. ROBINSON

Florida Bar No. 559474

krobinson@rprslaw.com

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