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UNITED STATES BANKRUPTCY COURT

SOUTEHRN DISTRICT OF FLORIDA

FORT LAUDERDALE DIVISION

www.flsb.uscourts.gov

In re: Case No. 20-13363-PGH

Chapter 11

BULLSEYE COATING AND 

BLASTING CORP.,

Debtor.

________________________________/

CREDITOR’S, (ANTONIO BALESTENA), OMNIBUS EXPEDITED MOTION: 

1) TO DISMISS FOR BAD FAITH; AND/OR 2) ABSTENTION

Comes Now, the Creditor, ANTONIO BALESTENA (“Creditor”), by and 

through undersigned counsel, and files and serves the instant Omnibus

Expedited Motion: 1) To Dismiss For Bad Faith; And/Or 2) Abstention, and states 

the following in support thereof

I. BANKRUPTCY FACTS

1. Debtor filed the instant bankruptcy case (#20-13363-PGHI) via a 

barebones Petition (ECF No. 1)1 under Chapter 11 of Title 11 of the 

United States Code on March 12th, 2020, on the heels of a judgment and 

collection efforts by the instant Creditor relating to a several years’ long 

litigation which went to trial finally in December, 2019, and for which a 

separate final judgment was entered against Debtor, and others, in favor 

of the Creditor on January 30th, 2020. See Historical Facts infra.

2. The Debtor has listed and identified only two (2) unsecured creditors, of 

which the instant Creditor is the single largest, if not only, creditor of the 

Debtor. See ECF No. 2 (20 Largest Creditors listing).

3. The purported sole owner of the Debtor is Grisell Hernandez (see ECF 

No. 4) a co-judgment debtor of the Creditor, who also, contemporaneously 

 1 The Court has issued a Notice of Deficiency (ECF No. 6) as to the materially omitted filings.

Case 20-13363-PGH Doc 10 Filed 03/19/20 Page 1 of 15
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with the filing of the instant Bankruptcy Case, filed her own, second, 

Chapter 13 bankruptcy case in Case No. 20-13438-SMG on March 13, 

20202 – despite the misrepresentation of same in the Debtor’s Petition that 

an affiliate would not be filing bankruptcy as well (see ECF No. 1 at p.3, 

question 10) as Grisell Hernandez’s Certificate of Counseling (see Exhibit 

“B” hereto, a true and correct copy of ECF No. 3 in Case No. 20-13438-

SMG) indicates that she was indeed filing bankruptcy as the date of her 

Certificate of Counseling was March 11th, 2020.

4. This is a two-party dispute between the Debtor and the Creditor, for which 

a judgment was entered in favor of the Creditor against, among others, the 

Debtor and Grisell Hernandez as set forth further herein-below.

5. The issues, further described infra, in the State Litigation between Creditor 

and Debtor, as well as other third parties, evolved around the fact that 

Grisell Hernandez (“Hernandez”), the former co-owner (with Creditor and 

Creditor’s Father) of an entity known as Florida Powder Coating 

Solutions, Corp. d/b/a Bullseye Powder Coating (“Bullseye #1”) 

purposefully transferred assets, equipment, clients, operations, 

employees, etc. from Bullseye #1 ultimately to the Debtor and Hernandez.

6. The instant Debtor has already been determined to be the mere 

continuance of Bullseye #1, and the assets of Debtor were subject of a 

state court injunction (which has not been dissolved). See infra.

II. PRE-PETITION FACTS

7. Pre-petition, Debtor was embroiled in litigation in two (2) separate lawsuits 

with Creditor, and with Creditor’s father, as they related to ownership, 

operations and the fraudulent conduct of the Debtor and Hernandez.

8. Hernandez created Debtor to fraudulently transfer and abscond with the 

assets, equipment, location of operations and book of business of 

Bullseye #1.

 2 See Exhibit “A hereto, a true and correct copy of the Docket of Grisell Hernandez’s 

current bankruptcy case.

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9. Specifically, in State Lawsuit No. 1, the instant Creditor (as co-owner of 

Bullseye #1) sued Debtor, Hernandez and others as it related to the 

fraudulent transfer and disposition of the co-ownership interest of Creditor 

in Bullseye #1, the disposition and dissipation of the assets of Bullseye #1 

and the fraudulent transfer of the assets of Bullseye #1 by Debtor and 

Hernandez and others in Case No. 15-020163 (25) in the 17th Judicial 

Circuit Court of Florida (Broward County Circuit Court).

10.In the interim, Creditor, in said litigation (State Lawsuit No. 1), obtained an 

agreed injunction against, among others, the Debtor and Hernandez, to 

prevent them from “using, selling, disposing of, encumbering, conveying 

or transferring any of the assets, bank accounts, equipment or liabilities 

of” Bullseye #1, as well as “destroying, deleting, mutilating, concealing, 

altering or disposing of any of the assets and equipment of” Bullseye #1 

until further order of the State Court. See Exhibit “C” hereto (the 

“Injunction Order”).

11.Eventually, after several years of motion practice and intervening first 

bankruptcy case of Hernandez, as well as a mutli-day trial, Creditor 

prevailed against Hernandez and Debtor and obtained a Final Judgment 

(see Exhibit “D” hereto) on January 30th, 2020, wherein the State Court 

found:

a. the assets transferred from Bullseye #1 to Bullseye #2 were 

intentionally and willfully fraudulently transferred and remained 

and otherwise were in fact the assets of Bullseye #1 (see

Exhibit D at p.2);

b. Bullseye #2 was in fact a mere continuation of Bullseye #1 (see 

Exhibit D at p.3);

c. Directed the judicial dissolution of Bullseye #1 (see Exhibit D at 

pp. 3-4);

d. Hernandez incorporated a similarly named entity (Bullseye 

Powder Coat, Inc.), while operating Bullseye #1, at the same 

address as Bullseye #1 (see Exhibit D at p.4);

Case 20-13363-PGH Doc 10 Filed 03/19/20 Page 3 of 15
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e. Hernandez commingled the assets of Bullseye#1 with Debtor 

and other entities (see Exhibit D at pp.5-6);

f. Hernandez diverted income of Bullseye #1 to Debtor and other 

entities (see Exhibit D at pp.5-6);

g. Hernandez incorporated Debtor during the pendency of the 

ongoing State Lawsuit No. 1 (see Exhibit D at pp.5-6);

h. Debtor violated the Injunction by continuing to carry on business 

operations after judicial dissolution and merging operations of 

Bullseye #1 into Debtor post injunction (see Exhibit D at p.6);

i. The computers of Debtor were wiped clean just eight (8) days 

prior to the deposition of Hernandez in an effort to destroy 

evidence (see Exhibit D at pp.7-8);

j. Hernandez breached her fiduciary duty to Creditor (Count III of 

the Complaint) by commingling assets of Bullseye #1 with other 

entities, including Debtor; unlawfully removing Creditor as 

President of Bullseye #1; unlawfully removing Creditor as a 

signer on Bullseye #1’s bank accounts; denying Creditor access 

to Bullseye #1’s equipment and electronic data; and, 

Hernandez’s conspiracy to create a fraudulent loan for purposes 

of transferring Bullseye #1’s assets to Debtor (see Exhibit D at 

pp. 11-12);

k. Unlawful distributions were made to Hernandez and Debtor (see

Exhibit D at pp. 19-20);

l. Hernandez and others committed intentional and willful 

fraudulent transfers to herself, Debtor and related entities (see

Exhibit D at pp. 21-24), and in fact fraudulently transferred and 

conspired to transfer the assets of Bullesye #1 to Debtor on 

February 2, 2016 (see Exhibit D at pp.21-22);

m. Hernandez and others committed civil conspiracy to remove the 

assets of Bullseye #1 and deprive Creditor and Bullseye #1 of 

Case 20-13363-PGH Doc 10 Filed 03/19/20 Page 4 of 15
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the value of Bullseye #1 of its assets and Creditor’s business 

interests in same (see Exhibit D at pp. 24-27);

n. Hernandez breached her joint venture agreement (see Exhibit D

at pp. 28-29); and,

o. Hernandez committed violations of Florida’s RICO statute (see

Exhibit D at pp. 29-35); and,

12. In the interim, in State Lawsuit No. 2, Antonio Balestena Sr. 

(Creditor’s father) also sued, in proceedings supplementary, Hernandez

and Debtor in Case No. 15-20347(21) in the 17th Judicial Circuit Court of 

Florida (Broward County Circuit Court) and obtained a final judgment (see

Exhibit “E” hereto), jointly and severally against Debtor and Hernandez for 

fraudulently transferring the assets of Bullseye#1 to Debtor with the intent 

to hinder, delay or defraud said creditor; and, in fact retained possession 

of such fraudulently transferred assets of Bullseye #1, concealed the 

transfer, while being sued by said creditor (in the midst of the litigation 

between them) and that Hernandez had falsified a loan from herself 

(which was never actually funded) to disguise the transfer. The State 

Court went on to void the fraudulently recorded uniform commercial code 

financing statement relating to such fraudulent transfer and also found that 

Debtor was the “mere continuance” of Bullseye #1 (see Exhibit “E” 

hereto).3

13. Thereafter, in an effort to avoid payment of the Final 

Judgment(s) (Exhibits D and E hereto), to get around the State Court 

injunction and the State Court’s findings that the instant Debtor is the 

mere continuance of Bullseye #1, and keep fraudulently transferred assets 

and otherwise be rewarded for such willful and harmful acts, the Debtor, 

via Hernandez, filed this bankruptcy.

 3 While this state litigation was pending, Debtor filed a bankruptcy case as well to 

thwart the matter in Case No. 16-17566-LMI, which was a bankruptcy that was 

eventually dismissed as well.

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III. MEMOR ANDUM OF LAW

a. BAD FAITH BANKRUPTCY (DISMISSAL) AND/OR

ABSTENTION

i. Bad Faith Dismissal

It is the Creditor’s position that the instant Chapter 11 petition should be 

dismissed for cause. 11 U.S.C. §§ 1112(b) provides authority to dismiss a case 

for cause. 11 U.S.C. § 1112(b)(1) authorizes the Court to dismiss this Case upon 

finding that “cause” exists to do so and if dismissal is in the best interests of 

creditors and the bankruptcy estate. Although several examples of “cause” are 

listed under 11 U.S.C. § 1112(b)(4), such list is not exhaustive and “the [C]ourt is 

given judicial discretion to determine what factors shall constitute “cause” under 

the circumstances of each case.” Colonial Daytona Ltd. P’ship v. Am. Savings of 

Fla., 152 B.R. 996, 1001 (M.D. Fla. 1993). The absence of good faith in seeking 

Chapter 11 bankruptcy protection is, alone, sufficient “cause” to dismiss a 

bankruptcy case. Phoenix Piccadilly, Ltd. v. Life Ins. Co. Of Va. (In re Phoenix 

Piccadilly, Ltd.), 849 F.2d 1393, 1394 (11th Cir. 1988). This is true despite the 

potential for a successful reorganization. Id. at 1395. See also Pacific Rim Inv., 

LLP v. Oriam, LLC (In re Pacific Rim Inv., LLP), 243 B.R. 768, 772-73 (D. Colo. 

2000) (rejecting the debtor’s argument on appeal that its ability to reorganize 

should preclude dismissal of the bankruptcy case for bad faith). 

If a motion to dismiss a bankruptcy case is contested, the movant must 

demonstrate “cause” exists for dismissal by a preponderance of the evidence. 

See, Colonial Daytona Ltd. P’ship, supra at 1002. To determine whether bad faith 

exists under the circumstances of this Case, the Court should consider the 

following factors, which may be evidence of an intent by the Debtor to abuse the 

reorganization process: (a) the extent of the Debtor’s assets and if they are the 

subject of litigation; (b) the total amount of general unsecured claims; (c) the 

number of persons employed by the Debtor; (d) whether the Debtor’s financial 

disputes involve disputes that may be resolved in pending litigation; (e) if the 

timing of the bankruptcy filing evidences an intent to frustrate efforts by creditors 

Case 20-13363-PGH Doc 10 Filed 03/19/20 Page 6 of 15
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to enforce rights; and (f) how the Debtor has conducted itself during the case. In 

re Phoenix Piccadilly, Ltd., 849 F.2d at 1394-95. 

Here, the record of this Case is replete with evidence of bad faith: Debtor

is purportedly owned by Hernandez, a person who has been found to participate 

in willful fraudulent activities and otherwise ignore injunctions without worry, while 

continuing to seek to benefit from the bankruptcy cases she has filed to maintain 

the assets that have been already determined to belong to Bullseye #1 – in other 

words, the purported property of the instant Debtor is not the Debtor’s and Debtor 

is in violation of an ongoing injunction entered by the State Court.

The total amount of unsecured debts speaks volumes in this Case, as the 

single largest creditor of this Debtor in ECF No. 2 is the instant Creditor; whose 

interests in the assets of Bullseye #1 continue to be impaired and otherwise 

removed from the efforts to judicially winddown Bullseye #1 -- despite the 

language in the Final Judgment (Exhibit “D”) which mandates such winding 

down.

Furthermore, the timing of the instant bankruptcy reflects the efforts of the 

Debtor and Hernandez to frustrate both the Creditor in his collection activities 

and otherwise winding down the affairs of Bullseye #1, but also in the efforts to 

frustrate the rulings and injunction of the State Court.

The litigation between Creditor and Debtor, and others has been pending 

since the year 2015, over 5 years now, and the Debtor and Hernandez are trying 

their best to avoid surrendering the assets they stole from Bullseye #1.

These tactics should not be rewarded, and if anything, it is clear that 

Hernandez cannot be trusted. After all she willfully flaunted a State Court 

injunction (which Hernandez consented to), spoiled evidence on purpose by 

deleting the computer information of the Debtor to prevent discovery of her 

activities, and post-litigation incorporated the instant Debtor to transfer the assets 

to in order to avoid judicial authority and the Creditor’s rightful claim to the value 

thereof.

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Bankruptcy courts routinely find dismissal warranted when a petition is 

filed with the “intent to frustrate” an ongoing state court proceeding, like the 

matter at bar. See, e.g. Shell Oil Co. v. Waldron (In re Waldron), 785 F.2d 936, 

940 (11th Cir.1986), In re Manhattan Industries, Inc., 224 B.R. 195, 199, 201 

(Bankr. M.D. Fla. 1997). 

Although there is no precise test for determining bad faith, courts have 

recognized factors which show an “intent to abuse the judicial process and the 

purposes of the reorganization provisions.” Natural Land, 825 F.2d at 298. These 

factors include the timing of the filing of the petition, id.; whether the debtor is 

“financially distressed,” In re Waldron, 785 F.2d 936, 939 (11th Cir.), cert. 

dismissed sub nom. Waldron v. Shell Oil Co., 478 U.S. 1028, 106 S.Ct. 3343, 92 

L.Ed.2d 763 (1986); whether the petition was filed strictly to circumvent pending 

litigation, Holtkamp, 669 F.2d at 508; and whether the petition was filed solely to 

reject an unprofitable contract, Waldron, 785 F.2d at 939–41. See also Furness 

v. Lilienfield, 35 B.R. 1006 (D.Md.1983) (petition dismissed which had been filed 

just prior to district court civil RICO trial after a continuance in the trial had been 

denied); In re Wally Findlay Galleries (New York), Inc., 36 B.R. 849

(Bankr.S.D.N.Y.1984) (petition dismissed which was filed the same day judgment 

entered against debtor in state court); In re Smith, 58 B.R. 448 

(Bankr.W.D.Ky.1986) (petition dismissed where financially sound debtor filed to 

avoid posting a supersedeas bond in pending state court litigation).

The court in In re Natural Land Corp, 825 F.2d 296, 298 (11th Cir. 

1987) further noted, with approval, some of the various cases finding bad faith 

and approving of dismissal –

“Although there is no particular test for determining whether a 

debtor has filed a petition for reorganization in good faith, “[i]n finding a 

lack of good faith, courts have emphasized an intent to abuse the 

judicial process and the purposes of the reorganization 

provisions.” Albany Partners, Ltd. v. Westbrook (In re Albany Partners, 

Ltd.), 749 F.2d 670, 674 (11th Cir.1984); see also In re 299 Jack-Hemp 

Assocs., 20 B.R. 412, 413 (Bankr.S.D.N.Y.1982) (dismissing petition 

Case 20-13363-PGH Doc 10 Filed 03/19/20 Page 8 of 15
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raising “disingenuous” attempt to bring administration of decedent's 

estate within bankruptcy court's jurisdiction). Factors the bankruptcy 

court may consider include the following: (1) the lack of a “realistic 

possibility of an effective reorganization,” Albany Partners, Ltd., 749 

F.2d at 674; (2) evidence that “the debtor seeks merely to delay or 

frustrate the legitimate efforts of secured creditors to enforce their 

rights,” id.; (3) whether the debtor is seeking to use the bankruptcy 

provisions “to create and organize a new business, not to reorganize or 

rehabilitate an existing enterprise, or to preserve going concern values 

of a viable or existing business,” In re Victory Constr. Co., 9 B.R. 549, 

564 (Bankr.C.D.Cal.1981), modified, 9 B.R. 570,vacated as moot, 37 

B.R. 222 (Bankr. 9th Cir.1984); (4) the timing of the debtor's relevant 

actions, see In re 299 Jack-Hemp Assocs., 20 B.R. at 413; (5) whether 

the debtor appears to be merely a “shell” corporation, see In re Dutch 

Flat Inv. Co., 6 B.R. 470, 471 (Bankr.N.D.Cal.1980); and (6) whether 

the debtor was created, or the subject property transferred to the 

debtor, “for the sole purpose of obtaining protection under the 

automatic stay [of Chapter 11] by filing bankruptcy, Meadowbrook 

Investors' Group v. Thirtieth Place, Inc. (In re Thirtieth Place, Inc.), 30 

B.R. 503, 506 (Bankr. 9th Cir.1983). This list of factors is not 

exhaustive; nor is there any single factor that will necessarily lead to a 

finding of bad faith. See In re Levinsky, 23 B.R. 210, 217 

(Bankr.E.D.N.Y.1982); see generally Ordin, The Good Faith Principle 

in the Bankruptcy Code: A Case Study, 38 Bus.Law. 1795 (1983) 

(discussing factors of significance in cases dismissed for lack of good 

faith).

The facts in the Case at bar weigh heavily in favor of a finding of bad faith 

by the Debtor in accordance with the Piccadilly factors. In the Piccadilly case, the 

Eleventh Circuit affirmed a bad faith finding as “cause” for dismissal. Dismissal 

of this Case (and any pending adversary proceedings) is in the best interests of 

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the Debtor’s creditors and the Case was filed in bad faith, as reflected by the fact 

that:

1. The assets upon which this Debtor would need to use for purposes 

of any attempt at reorganization are not the Debtor’s and Debtor is 

the mere continuance of Bullseye #1; 

2. the timing of the filing just after entry of a significantly adverse 

ruling where the Creditor was seeking to execute on his judgment; 

3. the simultaneous filing of a Chapter 13 petition by Hernandez to 

thwart such collection efforts and discovery of the disposition of 

assets; 

4. the prior filing of an earlier Chapter 13 by Hernandez (which was 

dismissed after motion practice) to thwart the discovery process in 

the State Court matters;

5. Debtor was created by the insider, Hernandez, to abscond with 

fraudulently transferred assets and in an effort to avoid the State 

Court’s authority; and,

6. This is simply a two-party dispute, as Debtor has no creditors.

This is not the case of a troubled company seeking help under the 

provisions of the bankruptcy code in order to obtain a breathing period with which 

to deal with its creditors. Nor is it a case of a legitimately distressed debtor 

attempting to reorganize. Rather, this is the case of seasoned, cold, calculating 

and dishonest Debtor (through its insiders, Hernandez), once again attempting to 

game the system so that they can purloin as much revenue as possible while 

hiding behind the shield of 11 U.S.C. § 362. Therefore, this Case should be 

immediately dismissed with sanctions, fees and costs awarded to Creditor and 

any stay be deemed annulled retroactively to the Petition Date. .

ii. Abstention

Furthermore, 28 U.S.C. § 1334(c)(1) provides:

Except with respect to a case under Chapter 15 of title 11,

nothing in this section prevents a district court in the interest 

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of justice, or in the interest of comity with State courts or 

respect for State law, from abstaining from hearing a 

particular proceeding arising under title 11 or arising in or 

related to a case under title 11.

Under this permissive abstention provision, “courts have broad 

discretion to abstain from hearing state law claims whenever appropriate in 

the interest of justice or in the interest of comity with state courts or respect 

for state law.” In re United Container LLC, 284 B.R. 162, 176 (Bankr. S.D. 

Fla. 2002). “Where a court proceeding sounds in state law and bears a 

limited connection to a debtor’s bankruptcy case, abstention is particularly 

compelling.” Southerland v. Smith, 142 B.R. 980, 982 (M.D. Fla. 1992).

Bankruptcy courts have identified numerous factors to consider in 

deciding whether abstention is warranted under section 1334(c)(1). The court 

in Clegg v. Bristol-Myers Squibb Co., 285 B.R. 23 (M.D. Fla. 2002), listed the 

principal ones:

(1) the effect or lack thereof on the efficient administration of the 

bankruptcy estate if a court abstains;

(2) the extent to which state law issues predominate over 

bankruptcy issues;

(3) the difficulty or unsettled nature of applicable law; 

(4) the presence of a related proceeding commenced in state court 

or other non-bankruptcy court; 

(5) the jurisdictional basis of the action, if any, other than 28 U.S.C. 

§ 1334; 

(6) the degree of relatedness or remoteness of the proceeding to 

the main bankruptcy case; 

(7) the substance rather than form of an asserted ‘core’ proceeding; 

(8) the feasibility of severing state law claims from core bankruptcy 

matters to

allow judgments to be entered in state court with enforcement 

left to the

bankruptcy court; 

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(9) the burden o[n] the bankruptcy court's docket; 

(10) the likelihood that the commencement of the proceeding in 

bankruptcy 

 court involved forum shopping by one of the parties; 

(11) the existence of a right to a jury trial; 

(12) the presence in the proceeding of non-debtor parties.

Id. at 37 (citing In re Wood, 216 B.R. 1010, 1014 (Bankr. M.D. Fla. 1998)). 

These factors are not exclusive, but rather serve as a guide to the Court in 

exercising its discretion. In re Alliance Leasing Corp., 2007 WL 5595446, *12 

(Bankr. M.D. Tenn. 2007). No one factor is determinative, In re Resource 

Tech. Corp., 2004 WL 419918, *2 (N.D. Ill. 2004), nor does a court need to 

find that every factor favors abstention to abstain. In re Cody, Inc., 281 B.R. 

182, 190 (S.D.N.Y. 2002). 

Here, the majority of factors are present and overwhelmingly support 

permissive abstention. 

The only matter this Debtor seeks to have this Court interject in is the 

State Litigation to avoid the injunction therein, and otherwise avoid turning 

over and accounting for the assets of Bullseye #1, which is subject of a 

judicial dissolution. The matter in state court is in collection and enforcement, 

the sole true creditor of this Estate is the instant Creditor, and otherwise 

Bullseye #1 for purposes of recovering its fraudulently transferred assets from 

Debtor and Hernandez.

Debtor and Hernandez are trying to obtain a windfall and continue to 

use the fraudulently transferred assets to generate profits and income for 

themselves while avoiding the sole legitimate creditor, the instant Creditor.

This case is nothing more than a two-party dispute, and the Court 

should abstain.

“One of the primary concerns of 28 U.S.C. § 1334(c)(1) is ‘comity and 

respect for state law.’” Agee, 2005 WL 2387603, at *6. Thus, factors 2 and 3 

weigh in favor of abstention. In the matter at bar, the Debtor is facing 

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injunction violations and continuing to abscond with fraudulently transferred 

assets, all of which the State Court has been dealing with for five (5) years 

preceding this Bankruptcy Case.

While this Court is capable of deciding state law issues, “[s]tate courts, 

not federal courts, should be the final arbiters of state law.” Baggett v. First 

Nat’l Bank of Gainesville, 117 F.3d 1342, 1353 (11th Cir. 1997); see also 

Agee, 2005 WL 2387603, at *6 (explaining that “[i]t is true that on the surface, 

the state law issues presented do not appear to be difficult or complex, 

however this court is willing to recognize that state courts routinely hear state 

law issues and are likely in a better position to resolve those issues.”). 

In a case such as this, which has a tenuous link to bankruptcy other 

than for the petition filing, the mere presence of state law claims militates in 

favor of abstention, even if the claims or issues are not particularly complex. 

See, Delphi Auto. Sys., LLC v. Segway Inc., 519 F. Supp. 2d 662, 671 (E.D. 

Mich. 2007) (in abstaining under section 1334(c)(1), court noted that “[w]hile 

the state law claims do not appear to be based on any unsettled issues of 

state law, this Court is convinced that Plaintiff’s state law claims are only 

indirectly related to its bankruptcy case”). 

Finally, no matter the inherent difficulty of these claims, bankruptcy 

courts recognize that state courts are better equipped to deal with questions 

of state law, Clegg, 285 B.R. at 37 (“the Florida state court is perfectly able 

(and in fact best suited) to adjudicate the Florida law claims in this case”), if 

for no other reason than that allowing state courts to resolve state law issues 

minimizes the risk of inconsistent rulings concerning the various states’ laws. 

See, Orion Refining Corp. v. Fluor Enters., Inc., 319 B.R. 480, 488 (E.D. La. 

2004).

Factors 2, 3 and 6, thus, favor abstention.

iii. Additional Considerations

Additional factors to consider are that this Court can also dismiss this 

Case under 11 U.S.C. Sec. 1112(B)(4)(A) and/or (B).

Case 20-13363-PGH Doc 10 Filed 03/19/20 Page 13 of 15
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Specifically, 11 U.S.C. § 1112(b)(4)(A) “provides the bankruptcy court with 

the requisite authority to terminate a chapter 11 case based on a showing of 

unreasonable delay, or continuing losses coupled with the absence of a 

reasonable likelihood of rehabilitation, or inability to effectuate a plan of 

reorganization.” United Sav. Ass'n of Tex. v. Timbers of Inwood Forest Assocs., 

Ltd. (In re Timbers of Inwood Forest Assocs., Ltd.), 808 F.2d 363, 371 (5th 

Cir.1987) (en banc), aff'd 484 U.S. 365 (1988); Sun Valley Newspapers v. Sun 

World Corp. (In re Sun Valley Newspapers), 171 B.R. 71, 74 (9th Cir.BAP1994) 

(citing Timbers of Inwood Forest Assocs. for the proposition that there must be “a 

reasonable possibility of a successful reorganization within a reasonable time.”). 

In connection with this statutory provision, the bankruptcy court must “evaluate 

each debtor's viability and rate of progress in light of the ‘best interest of creditors 

and the estate.’“ Timbers of Inwood Forest Assocs., 808 F.2d at 372. 

In the matter sub judice, it is clear that, given the State Court’s finding that 

the Debtor is a mere continuance of Bullseye #1, and that Bullseye #1’s assets 

were transferred or otherwise commingled with Debtor, that these assets are still 

Bullseye #1’s, the Debtor cannot reorganize with fraudulently transferred assets 

that do not belong to it. Therefore, there is no probability of reorganization. 

Further, 11 U.S.C. § 1112((b)(4)(B) allows for dismissal for gross 

mismanagement. Gateway Access Solutions, Inc., 374 B.R. 556, 566 

(Bankr.M.D.Pa.2007). Failure of a debtor to properly report income and 

expenses constitutes evidence of “gross mismanagement” under § 

1112(b)(4)(B). In re Halal 4 U LLC, 2010 WL 3810860, *4 (Bankr. S.D.N.Y.

2010). 

Here, the record from the State Court litigation (see Exhibit “C”) reflects 

intentional gross mismanagement of exposing Debtor to liability for fraudulent 

transfer san then using Debtor illegally in violation of an injunction to operate with 

assets fraudulently transferred to it. Based upon these further grounds the Debtor 

is mismanaging the Estate and this Case should be dismissed.

Therefore, based upon the facts and the law, this Case should be forthwith 

dismissed.

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WHEREFORE, Creditor seeks an order of dismissal (with prejudice), 

abstention and/or such other and further relief appropriate under the 

circumstances, as well as sanctions, fees and costs under 11 USC §105 against 

Debtor and its counsel. 

JAMES B. MILLER, P.A.

Counsel to Creditor

19 West Flagler Street, Suite 416

Miami, FL 33130

Tel. No. (305) 374-0200

Fax. No. (305) 374-0250

_/s/ James B. Miller____________

JAMES B. MILLER, ESQ.

Florida Bar No. 0009164

Certificate of Service

I HEREBY CERTIFY that a true and correct copy of this Pleading and Attachments were

served this 19th day of March, 2020 via United States mail upon those named on the attached 

Service List; and via CM/ECF by the Clerk of the Court immediately upon the fling of same with 

the Bankruptcy Court upon those named below receiving copies via CM/ECF:

_/s/ James B. Miller____________

JAMES B. MILLER, ESQ.

Florida Bar No. 0009164

ECF SERVICE:

Office of the US Trustee USTPRegion21.MM.ECF@usdoj.gov

Peter D Spindel peterspindel@gmail.com, peterspindelcmecf@gmail.com

Certificate of Admission

I HEREBY CERTIFY that I am admitted to the Bar for the District Court in and for the Southern District of 

Florida, and am duly-qualified to practice before this Court as set forth in Local Rule 2090-1(A).

Respectfully submitted this 19th day of March, 2020.

_/s/ James B. Miller____________

JAMES B. MILLER, ESQ.

Florida Bar No. 0009164

Case 20-13363-PGH Doc 10 Filed 03/19/20 Page 15 of 15