{00170966}

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

WEST PALM BEACH DIVISION

www.fisb.uscourts.gov

IN RE: CASE NO: 20-14372-MAM

 Chapter 11

ROBERT J. MOCKOVIAK and 

SANDRA H. MOCKOVIAK, 

Debtor.

_________________________/

LQD BUSINESS FINANCE, LLC, Adv. Proc. No. 

Plaintiffs, 

v. 

ROBERT J. MOCKOVIAK and 

SANDRA H. MOCKOVIAK,, 

 

Defendant. 

_______________________/

COMPLAINT TO DETERMINE NON-DISCHARGEABILITY OF DEBT AND TO DENY 

DISCHARGE UNDER 11 U.S.C. SECTIONS 523 AND 727

COMES NOW the Plaintiff, LQD BUSINESS FINANCE, LLC (hereinafter referred 

to as “LQD” or as “Plaintiff”), by and through its undersigned counsel, and files the instant 

Complaint to Determine Non-Dischargeability of Debt and to Deny Discharge under 11 

U.S.C. Sections 523 and 727 against Defendants, ROBERT J. MOCKOVIAK and 

SANDRA H. MOCKOVIAK (hereinafter referred to as the “Debtors” or as “Defendants”), 

and in support thereof, Plaintiff alleges and shows unto the Court the following:

Nature of Claims

1. This is an adversary proceeding brought pursuant to Fed. R. Bank. P. 7001 

seeking judgments that the debts Defendants owe to Plaintiff are non-dischargeable 

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pursuant to 11 U.S.C. §§ 523(2)(A) and (B), (4) and (6) and that Defendants are not 

entitled to a discharge pursuant to §727(a)(2),(4) and (5). 

2. This action specifically arises out of Defendants’ false representations and 

actual fraud in their dealings with Plaintiff; the Defendants’ involvement in the making and 

submission of materially false statements and documents to Plaintiff with respect to their 

financial condition and that of their company with the intent to deceive Plaintiff; the 

Defendants’ fraud and defalcation while acting in a fiduciary capacity, embezzlement and 

larceny; the Defendants’ infliction of willful and malicious injury upon Plaintiff; the

Defendants’ failure to keep or preserve recorded information from which their financial 

condition can be ascertained; the Defendants’ numerous false oaths in the context of the 

underlying bankruptcy and the Defendants’ failure to adequately explain their loss of 

assets or a deficiency of assets to meet their liabilities. 

Jurisdiction and Venue

3. This Court has jurisdiction over the subject matter of the instant proceeding 

arising under Title 11 of the United States Code pursuant to 28 U.S.C. §§ 157(a) and 

1334.

4. The instant action is a “core” proceeding pursuant to the provisions of 28 

U.S.C. §§ 157(b)(2)(I).

5. Venue for this action is proper in the United States Bankruptcy Court for the 

Southern District of Florida pursuant to 28 U.S.C. § 1409(a).

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The Parties

6. Defendants are husband and wife and reside in Florida. Defendants filed a 

joint petition for relief under Chapter 11 of Title 11 of the United States Code on or about 

April 10, 2020. The case is presently pending before the United States Bankruptcy Court 

for the Southern District of Florida under Case Number: 20-14372-MAM. 

7. Defendants filed their schedules of assets and liabilities and their statement 

of financial affairs in May of 2020. These documents reflect that as of the Petition Date, 

(i) Defendants owned 4 luxury residences, including 2 in Florida, 1 in New Jersey and 1 

in Pennsylvania, and (ii) that Defendants owned automobiles worth close to $1 million, 

jewelry of $851,700.00, collectibles of $8,932,000.00, household goods of $1,145,250 

and clothing of $263,500.00.

8. Defendants have reported in their bankruptcy schedules that their primary 

residence in Florida is worth $1,500,000.00 and their remaining real properties are worth 

$5,750,000.00, for a total value of $7,250,000.00. These values differ substantially from 

the financial statement Defendants presented to Plaintiff in July of 2019 in connection 

with the original underwriting of the loans that Plaintiff made to Defendants. A copy of 

Defendants’ July 2019 financial statement is attached hereto as Exhibit “A.” According to 

Defendants’ financial statement of July 15, 2019, Defendants owned real estate worth 

$17,100,000. 

9. Defendants also owned and operated an equestrian business in 

Pennsylvania that reported substantial losses. Defendants’ 2017 tax return reported 

wages of approximately $1.9 million and active losses from their equestrian business of 

<$2,788,956>. Defendants did not have sufficient income from CPI to sustain their 

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equestrian business alone and when debt service on their four residences is considered 

they were bleeding cash. Defendants’ cash bleed continued into 2019, when their wages 

from CPI were reduced by approximately $1 million. 

10. Defendants’ schedules do not explain why the reported value of their real 

estate holdings dropped by $9,850,000 from July of 2019 to April 10, 2020. Defendants’

schedules also do not explain why the value of their primary residence in Florida dropped 

from $3,600,000.00 in July of 2019 to $1,500,000.00 in April of 2020. 

11. Defendants’ bankruptcy schedules also do not reflect the disposition of the 

millions of dollars that Defendants fraudulently and willfully diverted in late 2019 and early 

2020 from their closely held business, Clinical Professionals Inc. (“CPI”). Defendants 

have acknowledged that $3,416,000.00 of proceeds from the collection of Plaintiff’s 

accounts receivable have not been accounted for. Defendants were able to divert these 

funds by submitting fraudulent borrowing base certificates to Plaintiff reflecting that 

receivables were still outstanding when, in fact, those receivables had been paid and the 

proceeds embezzled by Defendants instead of paid to Plaintiff.

12. CPI is a New Jersey Corporation. CPI is an insider of each of the Debtors. 

13. At all times relevant to the allegations contained herein, Sandra Mockoviak 

was an officer and a person in control of CPI. 

14. At all times relevant to the allegations contained herein, Defendants 

represented that Robert Mockoviak owned 100% of CPI. Defendants repeated this 

representation as late as February of 2020. This was a material representation regarding 

CPI. In the middle of February 2020, Plaintiff learned for the first time that many months 

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prior to the LQD Loans (as defined below), Robert Mockoviak sold 15% of the stock of 

CPI to an entity known as Palm Beach Capital and in exchange received several million 

dollars. The disposition of the funds received from Palm Beach Capital is unknown at 

present. 

15. Plaintiff is a commercial lender organized under the laws of Delaware and 

conducting business in Chicago, Illinois.

Background

16. On August 23, 2019, Defendants and CPI, jointly and severally entered into 

a revolving loan agreement wherein LQD agreed to loan to the Defendants and CPI on a 

revolving basis up to $5,250,000.00 (the “Revolving Loan”). A true and correct copy of 

the LQD Secured Loan Agreement Number 5000403 is attached hereto and incorporated 

herein by reference as Exhibit “B.” (the “Revolving Loan Agreement”).

17. On August 23, 2019, the Defendants and CPI, jointly and severally, entered 

into a term loan agreement wherein LQD loaned to Defendants and CPI $1,500,000.00 

(the “Term Loan” and, along with the Revolving Loan, the “Loans”). A true and correct 

copy of the LQD Secured Loan Agreement Number 5000404 is attached hereto and 

incorporated herein by reference as Exhibit “C” (the “Term Loan Agreement” and the 

Revolving Loan Agreement are the “Loan Agreements”) 

18. At the time they entered into the Loan Agreements, the Defendants implicitly 

and explicitly represented that they would comply with and that they would cause CPI to 

comply with the terms of the Loans. These were false representations because, in fact, 

Defendants had no present intention to comply with the terms of the Loan Agreements, 

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including the provisions requiring Defendants and CPI to deposit receivable collections 

into a lockbox. Defendants engaged in false pretenses, false representations, and actual 

fraud to secure the proceeds of the Loan Agreements including, without limitation, by 

submitting knowingly false financial statements and accounts receivable reports. 

19. Pursuant to Section 9 of the Loan Agreements, CPI and Defendants granted 

to LQD a security interest in all of their assets and all products and proceeds thereof 

(collectively, the “Collateral”) to secure the obligations under the Loan Agreements (the 

“Security Interest”).

20. Pursuant to its Security Interest, LQD holds a lien, among other Collateral,

on all “Accounts Receivable” owed by the account debtors of CPI and all products and 

proceeds thereof. 

21. On August 21, 2019, LQD filed its UCC-1 Financing Statement with the 

State of New Jersey, Department of Treasury, Division of Revenue & Enterprise Services, 

perfecting its Security Interest” in the Collateral, including the Accounts Receivable. A 

true and correct copy of the New Jersey UCC-1 is attached hereto and incorporated 

herein by reference as Exhibit “D.” 

22. On January 27, 2020, LQD filed UCC-1’s with the Pennsylvania Department 

of State and the Florida Secured Transaction Registry. True and correct copies of the 

Pennsylvania UCC-1 and the Florida UCC-1 are attached hereto as Exhibit “E” and 

Exhibit “F”, respectively. 

23. The Revolving Loan Agreement defines an “Eligible Receivable” as “[a] 

Receivable (i) for which there is a bona fide invoice for an amount that is fully earned and 

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owing to either Borrower by an unrelated third party, (ii) that is 90 days or less outstanding 

from the date of the invoice, (iii) for which there is no delinquency or uncertainty as to 

collection, and (iv) which is subject to the “Additional Eligibility Criteria” listed on Schedule 

E of the Revolving Loan Agreement. 

24. Under the Revolving Loan Agreement, the maximum amount CPI and the 

Defendants could borrow was $5,250,000.00. 

25. The Revolving Loan Agreement further provided in Section 6 that:

Payment made by any Borrower’s obligors on the Receivables shall be 

remitted only to the Agent’s lockbox account (the “Lockbox Account”), as 

directed below. Borrowers shall direct, in a form and manner acceptable to 

Lender in Lender’s sole discretion, all of each Borrower’s obligors to direct 

payments of Receivables to the Lockbox Account. 

26. Section 6 of the Revolving Loan Agreement also provided that:

In the event any payment with respect to a Receivable is remitted directly 

to the Borrowers (or either of them) and not directly to the Lockbox Account 

as required under this Agreement, the Borrowers shall send, by wire 

transfer, the amount of such payment to the Lockbox Account on or prior to 

the business day following the date of such receipt (in immediately available 

funds). 

27. Between September 3, 2019 and January 10, 2020, CPI and the 

Defendants received not less than $3,416,000.00 in proceeds from the collection of 

accounts receivable on which LQD had a perfected security interest but did not forward 

any of these funds to the Lockbox Account or to LQD. A true and correct ledger of bank 

activity is attached hereto and incorporated herein by reference as Exhibit “G.” 

28. The fact of Plaintiff’s Security Interest and the diversion and 

misappropriation of the collateral funds referenced above was well known to the 

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Defendants, who knowingly and actively participated in a plan or scheme with CPI to 

misappropriate, steal and divert Plaintiff’s property.

29. At all times, the Defendants had sole and exclusive control of the CPI bank 

accounts. 

30. Defendants conceded in the Forbearance Agreement (defined below) that 

they received not less than $3,416,000.00 from account debtors and failed to forward 

such funds to the Lockbox Account. 

31. Defendants also conceded in the Forbearance Agreement that they 

submitted to Plaintiff accounts receivable information and maximum advance certificates

that contain inaccuracies regarding the amounts of Eligible Receivables. 

32. Further investigation by Plaintiff establishes that the MAC Certificates 

Defendants submitted or approved were rife with fraud. Among other things, several of 

the account debtors reported that they did not owe any money to CPI even though CPI 

and the Defendants reported that funds were owing. 

33. In addition, the Defendants used the business account of CPI

as their personal “piggy-bank”, regularly making cash withdrawals in violation of the Loan 

Agreements, in contravention of Plaintiff’s Security Interest, and in breach of their duties 

as fiduciaries, shareholders and officers. Over a span of several months, Sandra 

Mockoviak used approximately $171,192.76 of CPI’s property to make payments on her 

personal credit cards. Defendants also made substantial cash withdrawals from the CPI 

bank account and in early January transferred $266,042.96 out of CPI to an as yet 

unidentified account. This transfer was made within days after CPI obtained a 

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$500,000.00 loan under false pretenses. Plausibly these funds were used by Defendants 

to sustain their 4 residences and their money-losing equestrian business. 

34. That Defendants pilfered the property and cash of CPI is evident from the 

ultra-extravagant lifestyle Defendants enjoyed to the detriment of Plaintiff. At a time when 

CPI was in default of its obligations to Plaintiff and CPI’s employees had not been paid

wages for approximately six weeks, Robert Mockoviak purchased a rare Ferrari 

automobile for almost $1,000,000.00. Mr. Mockoviak purchased this asset at or about 

the time that he was demanding compensation from CPI and less than two months before 

he filed for bankruptcy relief. Likewise, on or about September 14, 2019, or seven months 

prior to filing bankruptcy, Robert Mockoviak and a corporation in which he has or had an 

interest, Infinite Holdings Corporation (“IHC”), purchased another Ferrari automobile for 

$238,953.67. 

35. The Defendants knowing and active participation in the plan or scheme to 

misappropriate, steal and divert the collateral funds by making false statements and 

submitting false documents constitutes actual fraud, fraud or defalcation in a fiduciary 

capacity, embezzlement, larceny as well as the infliction of a willful or intentional injury 

upon LQD. 

36. Section 13(c) of Loan 5000403 requires the following:

All information heretofore or contemporaneously herewith furnished by any 

Borrower to the Agent or any Lender for purposes of or in connection with 

this Agreement and the Loan is, and all information hereafter furnished by or 

on behalf of any Borrower to the Agent or any Lender pursuant hereto or in 

connection herewith will be, true and accurate in every material respect on 

the date as of which such information is dated or certified, and none of such 

information is or will be incomplete by omitting to state any material fact 

necessary to make such information not misleading in light of the 

circumstances under which it was made. Without limiting the generality of 

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the foregoing, each Receivable represented on any Maximum Advance 

Certificate or other report delivered to the Agent as an “Eligible Receivable” 

meets all of the eligibility criteria set forth herein. 

37. On or about January 14, 2020, the Defendants, with the assistance of the 

Chief Operating Officer and accountant of Clinical Professionals, Inc., submitted a 

Maximum Advance Certificate for the month ending December 31, 2019, wherein they 

fraudulently misrepresented the Eligible Receivables of CPI to be $6,117,687.39 (the 

“December MAC”). A true and correct copy of the Maximum Advance Certificate is 

attached hereto and incorporated herein by reference as Exhibit “H.” 

38. The December MAC was materially fraudulent and false in multiple 

respects, including:

a. In order to hide their misappropriation of collateral funds, to inflate the 

Eligible Receivables, and to fraudulently induce Plaintiff to advance more funds, the 

Defendants, along with the other persons involved in preparing the December MAC, 

knowingly and fraudulently failed to apply the diverted payments in the amount of 

$3,416,000.00 referenced above to outstanding Receivables when they submitted the 

December MAC. In fact, Defendant’s actual Eligible Receivable balance was millions of 

dollars less than the $6,117,687.39 that was represented to Plaintiff in the December 

MAC.

b. The Defendants, along with other persons involved in preparing the 

December MAC and related documents, fraudulently represented to Plaintiff that certain 

customers, including Pfizer and Reflexion owed receivables to CPI that were due, owing 

and eligible receivables within the definition of the Revolving Loan Agreement when, in 

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fact, such customers did not owe the respective receivables to CPI, Plaintiff reasonably 

relied upon such false representations by advancing funds to CPI. 

39. The Defendants’ knowing and fraudulent failure to credit the diverted 

payments to outstanding Receivables in the December MAC constitutes false pretenses, 

a false representation and/or actual fraud, written fraud as to their financial condition, 

fraud in furtherance of defalcation in a fiduciary capacity, embezzlement, larceny as well 

as the infliction of a willful or intentional injury upon LQD. 

40. The Defendants’ knowing and fraudulent misrepresentation in the 

December MAC that eligible receivables were owed by certain customers, including Pfizer 

and Reflexion constitutes false pretenses, a false representation and/or actual fraud, 

written fraud as to their financial condition, fraud in furtherance of defalcation in a fiduciary 

capacity, embezzlement, larceny as well as the infliction of a willful and malicious injury 

upon Plaintiff with an intent to harm Plaintiff. 

41. Section 13(h) in both Loan Agreements provide as follows: 

WITH THE EXCEPTION OF ORDINARY COURSE TRADE DEBT, THE 

COMPANY BORROWERS SHALL NOT INCUR ANY ADDITIONAL 

INDEBTEDNESS WITHOUT THE PRIOR WRITTEN CONSENT OF THE 

AGENT, INCLUDING WITHOUT LIMITATION, ANY MERCHANT CASH 

ADVANCES, BANK LOANS, FACTORING LINES, LINES OF CREDIT, OR 

EQUIPMENT FINANCING. EACH BORROWER ACKNOWLEDGES AND 

AGREES THAT LENDER HAS ACTED IN RELIANCE OF THIS 

REPRESENTATION AND WOULD BE MATERIALLY HARMED BY THE 

BREACH OF THIS REPRESENTATION BY ANY BORROWER. 

42. On January 6, 2020, the Defendants caused CPI to enter into an Agreement 

for the Purchase and Sale of Future Receipts with Global Merchant Cash, Inc. (the “Global 

MCA”) without Plaintiff’s prior approval and without notifying Plaintiff as required by the 

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Loan Agreements. A true and correct copy of the Global MCA is attached hereto and 

incorporated herein by reference as Exhibit “I”. The net effect of The Global MCA was 

that the Defendants knowingly and fraudulent caused CPI to sell, assign and transfer to

another creditor a specified percentage of receipts that had already been pledged to 

Plaintiff.

43. By entering into the Global MCA, Defendants obtained the ability to extract 

an additional $500,000 from CPI at a time when CPI was not paying its employees and

shortly before Robert Mockoviak purchased a $1,000,000.00 Ferrari automobile. 

Defendants have not accounted for the disposition of the $500,000.00 received from the 

Global MCA. 

44. The Defendants’ knowing and fraudulent participation in CPI’s entry into 

Global MCA constitutes false pretenses, a false representation and/or actual fraud, fraud 

in furtherance of defalcation in a fiduciary capacity, embezzlement, larceny as well as the 

infliction of a willful and malicious injury upon Plaintiff with an intent to injure Plaintiff. 

45. Without knowledge of the full scope of the Defendants fraudulent activities, 

on or about February 7, 2020, LQD prepared a Forbearance Agreement, (the 

“Forbearance Agreement”) with the Defendants and CPI. A true and correct copy of the 

Forbearance is attached hereto and incorporated by reference as Exhibit “J.” 

46. The Forbearance Agreement was actively negotiated over the course of 

several weeks and Defendants and CPI were represented and advised by Greenberg 

Traurig, LLP, a large nationally recognized law firm.

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47. At the time of their entry into the Forbearance Agreement, the Defendants 

implicitly and explicitly represented that they would comply with same and that they would 

cause CPI to comply with same; however, in fact, they had no present intention to do so 

and essentially engaged in false pretenses, false representation and actual fraud in order 

to buy time and to secure a delay in collections activities on the part of Plaintiff. 

48. Under Section 7 the Forbearance Agreement, Defendants and CPI 

(collectively, the “Borrowers”) reaffirmed the following:

Borrowers, jointly and severally, (i) consent to this Agreement; (ii) ratify and 

reaffirm all of their Obligations, including the amount of the Indebtedness, their 

respective payments and performance obligations, contingent or otherwise, under 

the Loan Documents and any subordination agreements and intercreditor 

agreements relating to the Indebtedness; (iii) ratify and reaffirm all security 

interests, mortgages, and liens granted for the benefit of Lender and confirm and 

agree that such security interests, mortgages, and liens hereafter secure all of the 

Obligations and the full amount of the Indebtedness, (iv) acknowledge and agree 

that each of the Loan Documents remains in full force and effect and is hereby 

ratified and reaffirmed, (v) reaffirm, remake as true as of the date hereof and ratify 

each of the Representations, Warranties and Covenants in the Loan Documents 

and (vi) acknowledge and agree that they have no setoff, defenses, crossclaim, 

demand, counterclaims or rights that can be asserted to or, if asserted would, 

impair or otherwise limit or reduce Lender’s rights under the Loan Documents or 

to seek affirmative relief or damages against Lender, (vii) acknowledge and agree 

that in entering into this Agreement they are not relying upon any statement, 

representation or action of Lender or its agents, and (viii) acknowledge and agree 

that Lender has a duly perfected first priority security interest in and lien upon all 

of the Collateral, except for Real Property. 

49. Plaintiff’s obligation to forbear from exercising its rights under the 

Forbearance Agreement was conditioned upon, among other things, Defendants and 

CPI: (i) executing a Management Services Agreement with a financial Advisory Firm, (ii) 

delivering to Plaintiff mortgages or deeds of trust upon each parcel of Real Property the 

Defendants owned other than their Florida residence, (iii) providing an asset and liability 

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report to Plaintiff, (iv) Robert Mockoviak executing a Stock Pledge Agreement in favor of 

Plaintiff, and (v) providing copies of all insurance policies held by any Borrower. 

50. On February 12, 2020, the Defendants and CPI feigned an intent to comply 

with the Forbearance Agreement by executing a Management Services Agreement with 

the Advisory Firm and by hiring a Chief Restructuring Officer. A true and correct copy of 

the Management Services Agreement is attached hereto and incorporated herein by 

reference as Exhibit “K”.

51. After executing the Forbearance Agreement, the true intent of the 

Defendants and CPI was revealed in that they failed to deliver the required Stock Pledge 

Agreement, the required mortgages, or any of the required financial or other documents 

requested by Plaintiff. Defendants also intentionally prevented the Chief Restructuring 

Officer assigned pursuant to the Forbearance Agreement, to perform its duties under the 

Forbearance Agreement. 

52. After entering into the Forbearance Agreement, the Defendants and CPI 

further evidenced their true intent by continuing to neglect their basic obligations to their 

creditors and other stakeholders. This neglect included:

a. Failing to pay employees for three (3) consecutive payrolls (approximately 

6 weeks), even though they had the opportunity to obtain funds from LQD to pay 

employees, but deliberately rejected that opportunity; 

b. Refusing to communicate with LQD about the status of LQD’s collateral and 

the business operations. In fact, they failed to respond or communicate in any meaningful 

way with LQD or the Chief Restructuring Officer despite the urgent issues facing the 

business; 

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c. Continuing to unilaterally mismanage CPI on an ongoing and daily basis; 

d. Refusing to meaningfully utilize the services and expertise of an 

experienced Chief Restructuring Officer hired to assist Defendants’ business which 

ultimately led to the resignation of the Chief Restructuring Officer. A true and correct copy 

of the Resignation Email of Chief Restructuring Officer attached hereto and incorporated 

herein by reference as Exhibit “L”.

e. Failing to assure fulfillment of CPI’s financial obligations as and when due, 

including its obligations to LQD and its obligations to its employees.

53. Defendants and the company they controlled, CPI, never intended to 

comply with the Forbearance Agreement and, true to plan, they intentionally and without 

justification defaulted under the Forbearance Agreement in numerous respects, as 

described above, and failed to comply with many of the requirements in the Forbearance 

Agreement and the Management Services Agreement even though they had the ability 

to comply. 

54. The conduct and facts described above, together with Defendants’ ongoing 

refusal to perform even basic accounting functions or honor their contractual obligations 

evidences not only intentional acts, but also false pretenses, a false representation and/or 

actual fraud, fraud in furtherance of defalcation in a fiduciary capacity, embezzlement, 

larceny as well as the infliction of a willful or intentional injury upon Plaintiff. 

55. As of the filing of its Proof of Claim in the underlying Bankruptcy 

Proceedings, LQD held and, to date, it continues to hold fixed and liquidated claims of 

$6,381,063.79 and $1,276,840.09, respectively.

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56. The Defendants’ actions as hereinabove alleged, including their false 

pretenses, a false representation and/or actual fraud, written fraud as to their financial 

condition, fraud in furtherance of defalcation in a fiduciary capacity, embezzlement, 

larceny as well as the infliction of a willful or malicious injury, has and continues to cause 

harm to LQD. 

57. All conditions precedent to the bringing of this action have been performed, 

have occurred or have been waived. 

Count I – Objection to Discharge of Debt under §523(a)(2)

58. The preceding paragraphs are re-adopted and re-alleged as if fully set forth 

herein at length. 

59. Pursuant to section 523(a)(2) of the Bankruptcy Code, a debt for money, 

property, services, or an extension, renewal, or refinancing of credit, is not dischargeable 

to the extent obtained by—

(A) false pretenses, a false representation, or actual fraud, other than a 

statement respecting the debtor’s or an insider’s financial condition; [or] 

(B) use of a statement in writing—

(i) that is materially false; 

(ii) respecting the debtor’s or an insider’s financial condition; 

(iii) on which the creditor to whom the debtor is liable for such money, 

property, services, or credit reasonably relied; and 

(iv) that the debtor caused to be made or published with intent to 

deceive.

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60. The obligations owed to Plaintiff are non-dischargeable debts arising out of 

false pretenses, false representations and actual fraud. 

61. The obligations owed to Plaintiff are also non-dischargeable debts arising 

out of materially false statements in writing regarding the Defendants’ and CPI’s financial 

condition, on which Plaintiff reasonably relied and with respect to which Defendants 

intended to deceive Plaintiff. 

62. Accordingly, Defendants’ debts to Plaintiff are non-dischargeable and 

cannot legally be disputed in this adversary proceeding.

63. Pursuant to applicable law, Plaintiff is entitled to reimbursement from 

Defendants for Plaintiff’s attorneys' fees and costs in pursuing this matter.

WHEREFORE Plaintiff, LQD BUSINESS FINANCE, INC. respectfully requests the 

entry of a judgment in its favor and against Defendants, ROBERT J. MOCKOVIAK and 

SANDRA H. MOCKOVIAK finding that the debt owed by them to LQD BUSINESS 

FINANCE, INC., along with accrued interest incurred and continuing to be incurred, costs 

and attorneys’ fees incurred in the instant proceeding and the underlying state court 

proceedings are non-dischargeable under Section 523(a)(2)(A) and (B) as well as such 

other and further relief this Court deems just and proper under the circumstances. 

Count II – Objection to Discharge of Debt under §523(a)(4)

64. The preceding paragraphs are re-adopted and re-alleged as if fully set forth 

herein at length. 

65. Pursuant to section 523(a)(4) of the Bankruptcy Code, a debt arising from 

fraud or defalcation while acting in a fiduciary capacity is non dischargeable. 

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66. Pursuant to section 523(a)(4) of the Bankruptcy Code, a debt arising from 

embezzlement, or larceny is a non-dischargeable debt.

67. As a result of CPI’s insolvency and Defendants’ positions as persons in 

control of CPI, the Defendants held the assets of CPI in trust for the benefit of its creditors 

and were cloaked with the duties of trustees for the benefit of creditors, including Plaintiff. 

68. Defendants’ debt to Plaintiff arose from fraud or defalcation while acting in 

a fiduciary capacity, embezzlement, or larceny. 

69. Accordingly, Defendants’ debt to Plaintiff is non-dischargeable and cannot 

legally be disputed in this adversary proceeding.

70. Pursuant to applicable law, Plaintiff is entitled to reimbursement from 

Defendant for Plaintiff’s attorneys' fees and costs in pursuing this matter.

WHEREFORE Plaintiff, LQD BUSINESS FINANCE, INC. respectfully requests the 

entry of a judgment in its favor and against Defendants, ROBERT J. MOCKOVIAK and 

SANDRA H. MOCKOVIAK finding that the debt owed by them to LQD BUSINESS 

FINANCE, INC., along with accrued interest incurred and continuing to be incurred, costs 

and attorneys’ fees incurred in the instant proceeding and the underlying state court 

proceedings are non-dischargeable under Section 523(a)(4) as well as such other and 

further relief this Court deems just and proper under the circumstances. 

Count III– Objection to Discharge of Debt under §523(a)(6)

71. The preceding paragraphs are re-adopted and re-alleged as if set forth 

herein at length.

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72. Pursuant to section 523(a)(6) of the Bankruptcy Code, a debt for "for willful 

and malicious injury" by a debtor to another or to the property of another is a nondischargeable debt.

73. The obligations owed to Plaintiff are the result off the willful and malicious 

actions of Defendants against Plaintiff which were intended to cause, and did cause, the 

harm, damages and injury sustained. 

74. Not only did Defendants’ debt to Plaintiff arise as a result of their willful and 

malicious injury to Plaintiff such that not only their actions were willful and malicious, but 

the damages sustained by Plaintiff were also willfully and maliciously inflicted. 

75. Accordingly, Defendants’ debt to Plaintiff is non-dischargeable and cannot 

legally be disputed in this adversary proceeding.

WHEREFORE Plaintiff, LQD BUSINESS FINANCE, INC. respectfully requests the 

entry of a judgment in its favor and against Defendants, ROBERT J. MOCKOVIAK and

SANDRA H. MOCKOVIAK finding that the debt owed by them to LQD BUSINESS 

FINANCE, INC., along with accrued interest incurred and continuing to be incurred, costs 

and attorneys’ fees incurred in the instant proceeding and the underlying state court 

proceedings are non-dischargeable under Section 523(a)(6) as well as such other such 

other and further relief this Court deems just and proper under the circumstances. 

Count IV– Objection to Discharge under §727(a)(2)(A) and (B)

76. The preceding paragraphs are re-adopted and re-alleged as if set forth 

herein at length.

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77. Pursuant to section 727(a)(2) of the Bankruptcy Code, the “court shall grant 

the debtor a discharge unless—

(2) the debtor, with intent to hinder, delay, or defraud a creditor or an officer 

of the estate charged with custody of property under this title, has 

transferred, removed, destroyed, mutilated, or concealed, or has permitted 

to be transferred, removed, destroyed, mutilated, or concealed—

(A) property of the debtor, within one year before the date of the filing of 

the petition; or

(B) property of the estate, after the date of the filing of the petition.

78. The Defendants, with the intent to hinder, delay or defraud LQD within one 

year before filing bankruptcy, transferred, removed or concealed, or permitted to be 

transferred removed or concealed funds in the amount of $3,416,000.00, in CPI as to 

which they held an eighty five percent (85%) shareholder interest. 

79. Accordingly, the Defendants’ discharge should be denied pursuant to 

section 727(a)(2). 

WHEREFORE the Plaintiff, LQD BUSINESS FINANCE, INC. respectfully requests 

the entry of a judgment in its favor and against Defendants, ROBERT J. MOCKOVIAK 

and SANDRA H. MOCKOVIAK denying their discharge pursuant to 11 U.S.C. Section 

727(a)(2) as well as such other such other and further relief this Court deems just and 

proper under the circumstances. 

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Count V– Objection to Discharge under §727(a)((4) 

80. The preceding paragraphs are re-adopted and re-alleged as if set forth 

herein at length.

81. Pursuant to section 727(a)(4) of the Bankruptcy Code, the “court shall grant 

the debtor a discharge unless—

(4) the debtor knowingly and fraudulently, in or in connection with the case—

....(A) made a false oath or account; [or] (B) presented or used a false claim

82. The Defendants, in conjunction with their Bankruptcy Case, have filed a 

Complaint against LQD Business Finance, LLC, LQD Loans Two, LLC, and George Souri 

under Case Number 20-14372-MAM in which they have made numerous false claims as 

to the intentions and actions of LQD in relationship to their loans. The claims alleged 

therein are without factual basis and Plaintiff believes and alleges that Defendants know 

that such claims are without factual basis. 

83. The claims alleged by Defendants against LQD are false claims within the 

meaning of section 727(a)(4)(B) and, therefore, the Defendants’ discharge should be 

denied. 

84. The Defendants, in conjunction with their bankruptcy case, have also made 

false oaths consisting of their failure to list all of their assets and liabilities and the 

information required for such assets and liabilities, including but not limited to:

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a. Defendants have materially misrepresented the values of their real estate 

holdings by almost $10 million, as explained above.

b. Defendants have materially misrepresented the value of their business 

interests, as noted above.

c. Defendants have failed to disclose their obligations to Palm Beach Capital, 

Ice Miller, and Greenberg Traurig for legal services 

d. Defendants’ have failed to list in their schedules the substantial amounts 

they owe to CPI for funds received, for mismanagement and for other misconduct, 

including breach of fiduciary duty;

e. Defendants have failed to disclose in their schedules CPI’s liabilities, which 

may be Defendants’ liabilities under various theories; 

f. Defendants have failed to list the 2018 Ferrari in their schedules, or the facts 

surrounding any pre-bankruptcy disposition of the vehicle or the entity that jointly owned 

the vehicle;

g. Defendants have failed to list in their schedules their interest in Legacy 

Stables or their disposition of such interest;

h. Defendants have failed to disclose in their bankruptcy schedules the sums 

they owe to CPI’s employees under New Jersey law on account of their failure to pay 

wages to such employees;

i. Defendants have misrepresented their income from 2018, 2019 and 2020 

because they did not disclose the property they received from CPI that was not included 

on a W2 form;

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j. Defendants have also made multiple false oaths at their meeting of creditors 

under 11 U.S.C. § 341. Such false oaths include but are not limited to:

a. Defendants stated that the information set forth in their bankruptcy 

schedules is true and correct, notwithstanding the foregoing misrepresentations;

b. Defendants mischaracterized Plaintiff and misrepresented the actions of 

Plaintiff and its representatives in their dealings with Defendants and their company;

c. Defendants misrepresented the circumstances under which they secured 

the loan with the stock pledge;

d. Defendants misrepresented their performance under the loan documents; 

e. Defendants misrepresented the reasons why they needed the loan from 

Plaintiff;

f. Defendants misrepresented the condition of their company leading up to its 

business dealings with Plaintiff;

g. Defendants misrepresented the circumstances underlying and reasons for 

their execution of various documents;

h. Defendants misrepresented the cause and circumstances giving rise to 

their financial problems; and

i. Defendants misrepresented the condition and value of their company. 

WHEREFORE the Plaintiff, LQD BUSINESS FINANCE, INC. respectfully requests 

the entry of a judgment in its favor and against Defendants, ROBERT J. MOCKOVIAK 

and SANDRA H. MOCKOVIAK denying their discharge pursuant to 11 U.S.C. Section 

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727(a)(4) as well as such other such other and further relief this Court deems just and 

proper under the circumstances. 

Count VI– Objection to Discharge under §727(a)(5)

85. The preceding paragraphs are re-adopted and re-alleged as if set forth 

herein at length.

86. Pursuant to section 727(a)(5) of the Bankruptcy Code, the “court shall grant 

the debtor a discharge unless—

(5) the debtor has failed to explain satisfactorily, before determination of denial of 

discharge under this paragraph, any loss of assets or deficiency of assets to meet 

the debtor's liabilities;

87. The Defendants, in conjunction with their Bankruptcy Case, have failed to 

explain satisfactorily the deficiency of their assets to meet their debts. Examples of such 

failures to explain include the following:

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a. Defendants reported to Plaintiff in July of 2019, that they owned real 

property worth $17,100,000, whereas Defendants’ bankruptcy schedules 

report real estate worth $7,250,000 

b. Defendants reported in their 2017 tax return that they owned an entity 

known as Legacy Stables, LLC but that entity does not appear in their 

bankruptcy schedules;

c. Defendants reported in their July 2019 financial statement that they had 

corporate interests worth $45,000,000, but such corporate interests do not 

appear in their bankruptcy schedules.

88. Accordingly, the Defendants’ discharge should be denied pursuant to 

section 727(a)(5). 

WHEREFORE the Plaintiff, LQD BUSINESS FINANCE, INC. respectfully requests 

the entry of a judgment in its favor and against Defendants, ROBERT J. MOCKOVIAK 

and SANDRA H. MOCKOVIAK denying their discharge pursuant to 11 U.S.C. Section 

727(a)(5) as well as such other such other and further relief this Court deems just and 

proper under the circumstances. 

I HEREBY CERTIFY that I am admitted to the Bar of the United States District 

Court for the Southern District of Florida and I am in compliance with the additional 

qualifications to practice in this court set forth in Local Rule 2090-1(A).

Dated this 10th day of July, 2020.

KELLEY, FULTON & KAPLAN, P.L.

Attorneys for Plaintiffs

1665 Palm Beach Lakes Blvd.

The Forum - Suite 1000

West Palm Beach, Florida 33401

Telephone No.: (561) 491-1200

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Facsimile No.: (561) 684-3773

By: /s/ Andrew Fulton, IV 

 Andrew Fulton, IV, Esquire

 Florida Bar No.: 833487

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