UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

In re:

MOSHE ENBAR, Case No. 16-21262-BKC-AJC

Chapter 7

Debtor.

________________________________/

MOSHE ENBAR, LINDA ENBAR,

ADAM ENBAR, and MELISSA BENZEL,

Plaintiffs,

vs. Adv. No. 20-1028-BKC-AJC-A

FRED GOODSTEIN and

MICHELE GOODSTEIN,

Defendants.

________________________________/

ORDER GRANTING SUMMARY JUDGMENT IN FAVOR OF DEFENDANTS

THIS CAUSE came before the Court for hearing upon Plaintiffs’ Motion for Preliminary

Injunction (ECF 4) and Motion for Partial Summary Judgment on Complaint for Declaratory

A. Jay Cristol, Judge

United States Bankruptcy Court

_____________________________________________________________________________

ORDERED in the Southern District of Florida on May 26, 2020.

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Judgment, Injunctive Relief, and Damages (ECF 7). The Complaint commencing this adversary

case seeks to have this Court enjoin a state court action brought by Defendants against the nondebtor Plaintiffs herein. Defendants Fred and Michele Goodstein are suing the non-debtor Plaintiffs

in the Supreme Court of the State of New York, New York County, in a case titled Fred Goodstein

and Michele Goodstein v. Adam Enbar, Linda Enbar, Magnum Realty Holdings LLC and Magnum

Real Estate Services, Inc., Index No. 654114/2016 (“New York Action”). The Complaint alleges

various causes of action against the Plaintiffs.1

Plaintiffs assert that Defendants are pursuing a fraudulent transfer action that only the

bankruptcy trustee has the exclusive right to pursue; and, because the bankruptcy trustee settled all

claims that the estate potentially had against the Plaintiffs, the claims in the state court action are

barred. The Debtor contends the New York Action is an attempt to collect a discharged debt,

notwithstanding the fact the Debtor is not a named party in the New York Action. Plaintiffs initially

sought dismissal of the case against them in the New York Action, similarly alleging the fraudulent

transfer claims were settled by the trustee in Debtor’s bankruptcy case. However, the state court

disagreed.

Thereafter, Plaintiffs filed the Complaint in this case and promptly moved for an injunction

and for summary judgment. The Complaint seeks a declaratory judgment (Count I) (i) determining

only this Court has the exclusive jurisdiction to interpret and enforce the settlements in this case, and

that the settlement between the Trustee, the Debtor and the non-debtor Plaintiffs bars the New York

Action as it released the Plaintiffs from all causes of action “vested in the estate”, and (ii) declaring

The Debtor is not a named party to the state court action. The Debtor is joined as a 1

Plaintiff in this action to assert that the New York Action against the non-debtor Plaintiffs is an

act to collect a discharged debt against him in violation of the discharge injunction.

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Defendants’ judgment(s) against the Debtor to be void. The Complaint furtherseeksinjunctive relief

(Count II) prohibiting Defendants from prosecuting the New York Action because it is an attempt

to collect on their claim against Debtor in violation of the discharge injunction. Count III of the

Complaint seeks damages.

Defendants responded to the motions and have requested sanctions against the Plaintiffs. 

Defendants contend the settlement had no affect on their claims against the non-debtor third-party

Plaintiffs and that was made abundantly clear during the hearing to approve the settlement and in the

unambiguous language of the Order approving the settlement. Defendants also assert Plaintiffs are

requesting the same relief that the New York court already denied and therefore the relief sought in

this Complaint is barred by the doctrine of res judicata. The Defendants seek sanctions against the

Plaintiffs alleging their claims are frivolous and without legal foundation.

BACKGROUND FACTS

In December 2008, the Plaintiffs loaned $150,000 to 2457 8thLLC (“LLC”) in exchange for

5% interest in the LLC. The promissory note memorializing the loan was executed on December 10,

2008 and was signed for the LLC by Maurice Enbar (Debtor Moshe Enbar) and Steven Kamhi, who

were each identified as managing members of the LLC. Steven Kamhi personally guaranteed the

loan to the Plaintiffs.

The promissory note structured repayment of the Plaintiffs’s loan in eighteen payments of

seventeen interest only monthly installments of $1,500 and a balloon payment of $166,500

(representing the amount of principal and interest remaining on the Plaintiffs’ loan). The promissory

note also provided that, in the case of default, interest would accrue at the lower of 24% per annum

or the highest rate allowable by law.

The record indicates that on December 12, 2008, Defendant opened an account in the name

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of the LLC and deposited the $150,000. On December 12, 2008, the LLC transferred the sum of

$145,000 to Flatiron Equities, LLC. On December 22, 2008, Flatiron Equities, LLC transferred the

sum of $135,000 to 23-123rd Street, LLC, which transferred the same sum into the personal account

of the Defendant and his non-debtor spouse. Some time between December 23-24, 2008, $135,000

was transferred out of the Debtor’s joint personal account into the account of Magnum Real Estate

Services, Inc., a company owned and operated by Defendant. 

The LLC made the first fifteen payments, then defaulted by failing to make the last two

interest-only payments and the balloon payment.

The Plaintiffs thereafter brought two actions in New York to recover on their loan, one

against Kamhi and the LLC, and the other against the Debtor, Flatiron Equities, LLC and Magnum

Real Estate Services, Inc. In both actions, the Plaintiffs obtained default judgments against all the

defendants for the amount outstanding under the promissory note, as well as interest. In the Debtor’s

case, the state court found that Debtor and his co-defendants owed the Plaintiffs $212,637.75. 

On August 16, 2016, Debtor filed a voluntary petition under Chapter 7 of the Code, and a

Chapter 7 Trustee was appointed.

After an investigation of the financial condition and business transactions of the Debtor and

various related entities, and to avoid the costs and uncertainty of litigation, the trustee entered into

a settlement with the Plaintiffs. In the Motion and Stipulation to Compromise Controversy

(“Stipulation”) memorializing the agreement, the Plaintiffs agreed to pay the trustee $15,000.00 in

exchange for the trustee’s release of “any and all causes of action vested in the estate by operation

of State or Federal law” and the waiver of any objections to “Debtor’s exemptions, the value of nonexempt property, and the Debtor’s discharge.” 

At the hearing on the motion to approve the Stipulation, held September 19, 2017, the Court

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granted the motion, specifically stating that the Stipulation was a settlement between the Trustee and

the Debtor, and that it would have no affect on the rights of other creditors. The Court instructed

that the Order granting the motion contain language stating the Order would have no affect on

anyone other than the Trustee, the Debtor and the other settling parties. The Order entered by the

Court expressly states in paragraph 10 thereof, “The Stipulation shall be binding only upon and inure

to the benefit of the Parties hereto and their respective successors and assigns. However, the

Stipulation shall not be binding on any creditors, or otherwise affect the rights of any creditors, of

the Estate.” If the Debtor had any uncertainty about the foregoing language and the Court’s

comments at the hearing, he did not raise them.

CONCLUSIONS

The Court has reviewed the record in this case, including the Stipulation and the transcript

of the hearing to approve same, and has considered the parties’ post-hearing submissions. Based on

the foregoing, the Court concludes the New York Action is not barred by the Stipulation or Order

approving same, thus, summary judgment is entered in favor of Defendants and against Plaintiffs on

all Counts of the Complaint. The Court was clear in its statements and its Order approving the

Stipulation – the Stipulation had no affect on the rights of any creditors, which includes the

Goodsteins. The New York state court appropriately determined the exact same from the

unambiguous language in this Court’s Order.

At the hearing held September 19, 2017 on the motion to approve the Stipulation, it was

expressly stated on the record that the terms of the Stipulation, entered into by and between the

Trustee and the Debtor, Linda Enbar, Adam Enbar and Melissa Benzel, would have no affect on

creditors or other interested parties. Although Plaintiffs’ summary judgment motion asserts that the

non-binding language in the Order “was solely intended to avoid any issue-preclusive impact upon

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the pendingLegum Complaint, the pending Goodstein Complaint, as well as anypotential complaint

which might have been pursued by EAMA Capital, LLC”, the Court finds absolutely nothing in the

record, either from the Stipulation, the hearing to approve the Stipulation or the Order approving the

Stipulation, to support that position. The position that Plaintiffs take now was never before raised. 

If that was the intention of the Stipulation, it was not expressed in any way or made apparent to this

Court at any time throughout these proceedings. The Court will not find hidden meaning in its

straight-forward unambiguous Order resulting from a hearing where all parties were present and

could have made their positions known, but did not.

More importantly, the Stipulation does not, and cannot, extinguish the Defendants’ claims

against non-debtor Plaintiffs for the alleged fraudulent transfer of funds from the LLC. The LLC was

not a party to the bankruptcy proceeding, and the Court had no authority to release the Goodsteins’

or the LLC's claims against the non-debtor Plaintiffs concerning the transfer of funds from the LLC

to them. The trustee's authority extended only to property of the Debtor’s estate, not property

belonging to the LLC or the Goodsteins. See, In re Flagship Healthcare, Inc., 269 B.R. 721, 727

(Bankr. S.D.Fla. 2001).

This Court recently determined that the debt owed the Goodsteins by Debtor pursuant to that

certain default judgment entered in New York state court is discharged based in part on the fact the

non-dischargeability claim for embezzlement belonged to the LLC. If the Debtor misappropriated

funds from the LLC and then transferred the misappropriated funds to the non-debtor Plaintiffs, then

the Goodsteins, who are members of the LLC, may seek to recover the funds from the transferees. 

The allegedlymisappropriated funds would not be recoverable by the trustee in Debtor’s bankruptcy

case because funds that have been misappropriated by the Debtor are not property of the estate

because the funds were not legally or rightfully the Debtor’s property in the first place. Id. (citing

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Caplin v. Marine Midland Grace Trust Co., 406 U.S. 416, 428 (1972)) (“[T]here is no statutory

authority for a trustee ‘to assume the responsibility of suing third parties on behalf of [creditors],’

or that a trustee may ‘collect money not owed to the estate.’”). Therefore, the trustee would have

no right to pursue these transfers or settle claims regarding these transfers as these transfers were not

estate property but rather property of the aggrieved party. Contrary to Plaintiffs’ counsel’s

insistence, the New York Action does not pursue “550 claims” of the estate because the fraudulent

transfer claims the Goodsteins are pursuing [against non-debtor third parties in the New York

Action] were not fraudulent transfer claims that were ever property of the Debtor’s bankruptcy

estate. A claim under section 550 of the BankruptcyCode presumes the recovery of property of the

estate; however, if funds were misappropriated by the Debtor and did not rightfully belong to the

Debtor, legally or equitably, then they are not and were never property of the estate and the Trustee

would have no standing to pursue recovery of that property.

If the Goodsteins cannot prove the funds the Debtor transferred from the LLC were

misappropriated, then their claims against the transferees may well fail. However, that is an issue

for determination in the New York Action. Nevertheless, the Stipulation does not foreclose the

Goodstein’s fraudulent transfer claims to recover the funds they loaned to the LLC, which Debtor

allegedly fraudulently transferred to the non-debtor Plaintiffs. Accordingly, it is

ORDERED AND ADJUDGED that the Plaintiffs’ Motion for Preliminary Injunction (ECF

4) is DENIED; it is further 

ORDEREDANDADJUDGEDthat theMotion forPartial SummaryJudgment on Complaint

for Declaratory Judgment, Injunctive Relief, and Damages (ECF 7) is GRANTED; and, a final

summary judgment is entered in favor of the Defendants and against Plaintiffs on all Counts of the

Complaint, as follows:

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1. The Stipulation and Order approving same did not release the Goodsteins’ claims

against the non-debtor Plaintiffs and do not foreclose the Goodsteins’ actions to

recover the funds they loaned to the LLC from the non-debtor Plaintiffs in the New

York Action.

2. Because the Goodsteins’ claims against the non-debtor Plaintiffs seek to recover

fraudulently transferred property that was not Debtor’s property or property of the

estate to begin with, Defendants are not attempting to collect on their discharged

claim against the Debtor in violation of the discharge injunction. It is further 

ORDERED AND ADJUDGED that Defendants’ request for sanctions is DENIED, and the

Clerk of Court is directed to close this case.

###

Copies furnished to:

Kevin Gleason, Esq.

Joshua Mallin, Esq.

Jeffrey Berlowitz, Esq.

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