UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

www.flsb.uscourts.gov

In re:

TED & STAN’S TOWING SERVICES, INC.,

Debtor. /

TED & STAN’S TOWING SERVICES, INC.,

Case No.: 21-10663-AJC

Chapter 11

 Plaintiff

v. Adv. Case No.

Tokyo Century (USA); Eastern Funding, LLC;

Agentis PLLC; Greenlight Premium Finance Co.

Impact Staff Leasing, Inc. 

Defendants

______________________/

VERIFIED EXPEDITED MOTION FOR TEMPORARY RESTRAINING ORDER

AND PRELIMINARY INJUNCTION

(Expedited hearing requested)

Statement of Exigent Circumstances

Plaintiff Debtor sues Defendants and seeks a temporary injunction against

Defendants from prosecution of guaranty cases against Edwyyn Martinez, owner of

debtor, while debtor is attempting to reorganize and settle their claims.

The Debtor seeks to continue to operate its business, to preserve the value of

the business, to preserve the estate and to facilitate a successful reorganization or

other disposition. 

The Debtor believes that a hearing on this Motion is needed as soon as possible

in order for it to continue to operate its business for the benefit of the estate, however 

immediate relief is required to prevent irreparable harm to debtor and its estate, 

because collection activity against Edwyn Martinez as co-debtor directly affects the 

reorganization effort.

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TED & STAN’S TOWING SERVICES, INC. (the “Debtor”), by and

through undersigned counsel, moves for temporary restraining order, and

respectfully represents the following to the court.

I. Jurisdiction

1. This Court has jurisdiction over this case pursuant to 28 U.S.C. §§ 157 and

1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A). Venue is

proper in this District pursuant to 28 U.S.C. § 1408.

II. Background

2. On January 26, 2021 (the “Petition Date”), the Debtor filed its voluntary

petitionfor relief under Chapter 11, title 11, United States Code, (the “Bankruptcy

Code”).

3. The Debtor is operating its business and managing its affairs as debtors in

possession.

4. No trustee, or examiner or committee has been appointed in this Chapter 11

case except Chapter V trustee Carol Fox.

5. Prepetition, the Debtor operated it business.

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III. Requested Relief and Basis Therefor

6. Plaintiff Debtor sues Defendants and creditors and seeks a temporary injunction 

against Defendants from prosecution of guaranty cases against Edwyn Martinez while

debtor is attempting to reorganize and settle their claims.

7. This complaint and accompanying emergency motion seek a temporary stay against

collection activity against Martinez, while debtor attempts to reorganize and settletheir

claims.

8. Edwyn Martinez, although thimself not a debtor, is a key persons and as such should

be protected against lawsuits in order to enable him to devote his full time and energy to 

the affairs of the debtor, especially at the initial stage of the proceeding and in formulating a

plan of reorganization.

9. Furthermore, the individual earns income and owns assets which may

be used as a source to fund the plan, and the preservation of his income and assets can 

play a significant and meaningful role in a debtor's attempt to achieve reorganization.

Also, in appropriate circumstances, Chapter 11 plans may include injunctions that prohibit

actions against non debtors such as guarantors. Courts generally have found that such

injunctions or thirdparty releases are permissible in some cases, as long as they are fair and 

necessary to the debtor's reorganization. In re Scrub Island Development Group Limited, 523

B.R. 862, 876 (Bankr. M.D. Fla. 2015)(citing In re Transit Group, 286 B.R. 811,817M18 (Bankr.

M.D. Fla. 2002). In re Otero Mills, Inc., 25 B.R. 1018 (Bankr. D.N.M. 1982). In Otero Mills 

the bankruptcy court granted a permanent injunction against the Security Bank and Trust, 

preventing the bank from executing or otherwise attempting to collect upon a state court 

judgment against Charles Dugan. Mr. Dugan was the President and shareholder of the 

bankruptcy corporation, Otero Mills, Inc. Dugan was not in bankruptcy, but a judgment 

had been rendered against him in the state court on his individual guarantee of 

Case 21-01093-AJC Doc 2 Filed 03/17/21 Page 3 of 9
promissory notes owed by Otero Mills to the bank, holding [t]o so enjoin a creditor's action 

against a third party, the court must find that failure to enjoin would effect [sic] the 

bankruptcy estate and would adversely or detrimentally influence and pressure the debtor 

through the third party." In Otero Mills the court held that the standard used by the 

bankruptcy court was appropriate because of the debtor's assertion that its reorganization 

plan would require contribution of assets by the third party to the bankruptcy-debtor

10. In Matter of Provincetown Boston Airline, Inc., 52 B.R. 620 (Bankr. M.D. Fla., 1985),

Judge Alexander Paskay held in granting a temporary injunction in favor of the head of the

debtor corporation in suits on a guaranty:

§ 105 of the Bankruptcy Code, which provides that a bankruptcy court may

"issue any order, process or judgment that is necessary or appropriate to carry out

the provisions of Title 11." This Section is merely a restatement of the provisions of

the AllMWrit Statute, 28 U.S.C. § 1651, and while it does not use the term "injunction", 

there is no longer any doubt that the relief available under this Section is, in fact, in

the nature of an injunction and, as such, is governed by the principles which govern

injunctions in general. In re Otero Mills, Inc., 25 B.R. 1018 (D.N.M.1982)= In the

Matter of JohnsMManville Corp., 26 B.R. 405 (Bankr.S.D.N. Y.1983)= Doran v. Salem, 

Inc., 422 U.S. 922, 95 S.Ct. 2561, 45 L.Ed.2d 648 (1975)= In re Brookfield Tennis,

Inc., 29 B.R. 1 (E.D.Wisc.1982) In re Larmar Estates, Inc., 5 B.R. 328

(Bankr.E.D.N.Y.1980). Id. at 624.

It is well established that in order to prevail on a motion for preliminary injunction,

the party seeking the relief must establish the following: (1) a strong probability of

success on the merits= (2) irreparable injury to the movant if the relief sought is not

granted= (3) injunctive relief granting will not cause substantial harm to the party

against whom the injunctive relief is granted= and (4) the public interest will be best

served by issuing the preliminary injunction. Id at 625.

There are, generally speaking, two instances in a Chapter 11 case when

injunctive relief was found to be justified, of course only on a temporary basis. One,

when a principal of a debtor who himself is not a debtor, is a key person and as such

should be protected against lawsuits in order to enable him to devote his full time and

energy to the affairs of a debtor, especially at the initial stage of the proceeding.

Thus, upon showing that his time and energy is needed in order to allow him to tend

to the affairs of a debtor and to allow him to devote his full time to formulating a plan

of reorganization, such nonMdebtor principal may be entitled to temporary protection. 

The second instance when injunctive relief was justified was when the individual nonM 

debtor owned assets which either were to be used as a source to fund the plan

through liquidation or when the preservation of his credit standing played a significant

and meaningful role in a debtor's attempt to achieve reorganization. In such

situations, injunctive relief was issued to protect the individual at least until the

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necessary financing to fund the plan of reorganization was secured. Id at 625,626.

11. Litigation against the guarantor on claims for which the debtor is primarily liable, will

create waste in the form of litigation costs and a disincentive to fund the plan if the guarantoris 

forced to transfer its funds to the creditor who has the guaranty, rather than to the estatefor the

benefit of all creditors. See, e.g., Chase Manhattan Bank v. Third EightyMNinth Assocs. (In re

Third EightyMNinth Assocs.) 138 B.R. 144, 146 (S.D. N.Y. 1992).

12. The time necessary to defend a collection action, in consulting with lawyers and

considering strategy, is time that the guarantor does not have to commit to assisting in the

debtor’s reorganization. See, e.g., A.H. Robins Co. v. Piccinin (In re A.H. Robins Co.) 788 F.2d

994, 1008 (4th Cir. 1986) In re Ionosphere Clubs, Inc. 111 B.R. 423, 433 (Bankr. S.D.N.Y. 1990).

13. In addition, any funds expended defending the guaranty actions would be

“deadweight” loss. If the debtor’s plan will pay the creditor in full, or if the guaranty were

subject to defenses, such as the invalidity of the underlying debt, all such maters should be

dealt with in the debtor’s bankruptcy.

The Seventh Circuit has held that the moving party need not show irreparable harm

but instead must show an interference with the effective reorganization of the debtor and thismay 

in and of itself create the irreparable harm. See Fisher v. Apostolou 155 F.3d 876, 882(7th Cir. 

1998)= In re L&S Indus., Inc. 989 F.2d 929, 932 (7th Cir. 1993). The Seventh Circuitis joined in

that view by the First Circuit, which also has stayed a nonMdebtor action without applying or 

discussing the usual preliminary injunction standard. See In re G.S.F. Corp. 938F.2d 1467,

1474M76 (1st Cir. 1999) overruled on other grounds by Conn. Nat’l. Bank v. Germain 503 U.S.

249 (1992).

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14. Bankruptcy Rule 7065, Injunctions, states Rule 65 F.R.Civ.P. applies in adversary

proceedings, except that a temporary restraining order or preliminary injunction may be

issued on application of a debtor, trustee, or debtor in possession without compliance withRule

65(c) (security).

Wherefore Plaintiff demands a temporary restraining order and preliminary injunction to

preserve the status quo.

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I hereby certify unless said party is a registered CM/ECF participant who has

consented to electronic notice, and the notice of electronic filing indicates that notice

was electronically mailed to said party.

JOEL M. ARESTY, P.A.

Counsel for Debtor

309 1st Ave S

Tierra Verde, FL 33715

Phone: 305M904M1903 

Fax: 800M559M1870

EMmail: Aresty@Mac.com

By:/s/ Joel M. Aresty,Esq.

Fla. Bar No. 197483

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