1 

UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF FLORIDA 

Miami Division 

www.flsb.uscourts.gov

In re: Chapter 11 

FF FUND I, L.P., Case No. 19-22744-BKC-LMI 

F5 BUSINESS INVESTMENT PARTNERS, LLC, Case No. 20-10996-BKC-LMI 

Debtors. Jointly Administered Under 

 Case No. 19-22744-BKC-LMI 

___________________________________________/ 

SONEET R. KAPILA not individually but ADV. No. 22-1017-BKC-LMI 

as Liquidating Trustee of the FF FUND 

LIQUIDATING TRUST, 

Plaintiff, 

v. 

F1 GENERAL TRADING PARTNERS, L.P., et al.,

 Defendants. 

_________________________________________________/ 

LIQUIDATING TRUSTEE’S MOTION TO DISMISS 

ADVERSARY COMPLAINT WITH PREJUDICE AND FOR RELATED RELIEF 

Plaintiff, Soneet R. Kapila (the “Liquidating Trustee” or “Plaintiff”), in his capacity as 

Liquidating Trustee of the FF Fund Liquidating Trust and the F5 Liquidating Trust (collectively, 

the “Liquidating Trusts”), as successors respectively to FF Fund I, L.P. (the “FF Fund Debtor”) 

and F5 Business Investment Partners, LLC (the “F5 Debtor”) (the FF Fund Debtor and the F5 

Debtor collectively the “Debtors”), by and through undersigned counsel, files this Motion to 

Dismiss Adversary Complaint With Prejudice and for Related Relief (this “Motion”) pursuant to 

Fed. R. Civ. P. 41(a)(2), made applicable in bankruptcy proceedings by Fed.R.Bankr. P. 7041. In 

support of this Motion, the Liquidating Trustee respectfully states as follows: 

Case 22-01017-LMI Doc 97 Filed 07/15/24 Page 1 of 10
 CASE NO.:22-01017-LMI 

2 

I. BACKGROUND 

1. On September 24, 2019 (the “FF Fund Petition Date”), the FF Fund Debtor filed a 

voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the United States 

Bankruptcy Court for the Southern District of Florida, Miami Division (the “Bankruptcy Court”) 

under Case No. 19-22744-LMI (the “FF Fund Case”). 

2. On January 24, 2020 (the “F5 Petition Date”), the F5 Debtor filed a voluntary 

petition for relief under Chapter 11 of the Bankruptcy Court under Case No. 20-10996-LMI (the 

“F5 Case”). The FF Fund Case and the F5 Case are being jointly administered pursuant to Order 

of the Bankruptcy Court under the FF Fund Case (the “Bankruptcy Cases”) entered on February 

4, 202 [ECF No. 98]. 

3. On May 18, 2021, the Debtors prepared and filed their (i) Second Amended Chapter 

11 Plan of Reorganization Proposed by FF Fund I, L.P. [ECF No. 468] (the “Second FF Fund 

Plan”), and (ii) Second Amended Chapter 11 Plan of Reorganization Proposed by F5 Business 

Investment Partners, LLC [ECF No. 469] (the “Second F5 Plan”) (collectively, the “Second 

Amended Plans”).1 Pursuant to the Second Amended Plans, the Debtors sought confirmation 

under the Liquidating Trust Alternative. 

4. On June 4, 2021, the Court entered an Order Confirming Debtors’ Second Amended 

Plans of Reorganization Dated May 18, 2021 [ECF No. 494] (the “Confirmation Order”), which 

Confirmation Order implemented the Liquidating Trust Alternative. The Effective Date for each 

of the Second Amended Plans was June 14, 2021 [ECF No. 502] (the “Effective Date”). 

5. Pursuant to the Second Amended Plans and the Confirmation Order, (i) the FF Fund 

Liquidating Trust and the F5 Liquidating Trust were created and all property of the respective 

1

 Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Second Amended 

Plans (as defined below). 

Case 22-01017-LMI Doc 97 Filed 07/15/24 Page 2 of 10
 CASE NO.:22-01017-LMI 

3 

bankruptcy estates of the FF Fund Debtor and the F5 Debtor was transferred to the FF Fund 

Liquidating Trust and the F5 Liquidating Trust respectively (collectively, the “Liquidating 

Trusts”), and (ii) the Trustee was appointed as the liquidating trustee for each of the Liquidating 

Trusts, which the sole authority, among other things, to sell, liquidate, monetize, transfer and/or 

assign any and all such assets. 

II. ADVERSARY PROCEEDINGS 

6. To implement and effectuate his mandate under the confirmed Second Amended 

Plans and Liquidating Trusts, among other things, the Liquidating Trustee filed on January 24, 

2022, the instant adversary proceeding, together with the three (3) other adversary proceedings 

seeking the recovery of certain asserted avoidable transfers as follows: 

 On January 24, 2022, the Liquidating Trustee filed an adversary proceeding (Adv. Case 

No. 22-01016-LMI) against Blue Devil 83, LLC seeking the recovery of certain asserted 

avoidable transfers (the “Blue Devil Adversary”). On February 7, 2024, the 

Liquidating Trustee and Blue Devil agreed to dismiss such adversary proceeding and 

filed a Joint Notice of Stipulated Dismissal [ECF No. 40 in Adv. Case No. 22-01016-

LMI]. 

 On January 24, 2022, the Liquidating Trustee filed an adversary proceeding (Adv. Case 

No. 22-01018-LMI) against Kloe Korby seeking the recovery of certain asserted 

avoidable transfers (the “Korby Adversary”). On January 31, 2024, the Liquidating 

Trustee filed a voluntary Notice of Dismissal of such adversary proceeding [ECF No. 

8 in Adv. Case No. 22-01018-LMI]. 

 On January 16, 2023, the Liquidating Trustee filed an adversary proceeding (Adv. Case 

No. 23-01008-LMI) against Dimension Capital Management seeking the recovery of 

certain avoidance transfers (the “Dimension Adversary”). On January 20, 2023, the 

Liquidating Trustee and Dimension resolved the adversary and filed a Notice of 

Stipulated Dismissal [ECF No. 4 in Adv. Case No. 22-01008-LMI]. 

 On January 24, 2022, the Liquidating Trustee commenced this adversary proceeding 

(Adv. Case No. 22-01017-LMI) against each of F1 General Trading Partners, L.P., F3 

Real Estate Partners, LLC, F7 Group Operating Partners, LLC, FF Fund Management, 

LLC, FF Trading Management, LLC, FF Reserve Account, LLC, Andrew T. Franzone, 

LLC (the “Franzone Defendants”) seeking the recovery of certain avoidance transfers. 

(collectively, the “Adversary Cases”). 

Case 22-01017-LMI Doc 97 Filed 07/15/24 Page 3 of 10
 CASE NO.:22-01017-LMI 

4 

7. After the filing of the above Adversary Cases, the Liquidating Trustee was 

successful in monetizing one of the investments held by FF Fund in Coreweave, Inc. 

(“Coreweave”). After substantial amount of work in evaluating the Coreweave investment and 

the various methods and means of monetizing such investment, on November 14, 2023, the 

Liquidating Trustee filed a sealed motion with the Court for authority to accept a tender offer for 

the Coreweave Investment [ECF No. 629, the “Motion for Authority”]. Due to confidentiality 

obligations, the Liquidating Trustee requested and the Court entered orders authorizing the Motion 

for Authority and related pleadings to be filed under seal, and the hearing thereon to be conducted 

under seal. See ECF Nos. 624, 626, 627, 628 and 630. Based on the Motion for Authority and the 

proffer of the Liquidating Trustee’s testimony regarding his business decision at the hearing 

thereon, the Court granted the Motion for Authority and entered an order authorizing the 

Liquidating Trustee to participate in the Coreweave tender offer [ECF No. 633, the “Approval 

Order”]. The Coreweave tender offer was oversubscribed and as a result the Trustee was only able 

to monetize a portion of the FF Fund Liquidating Trust’s investment in Coreweave for an amount 

equal to $55,526,033.24. 

8. The Liquidating Trustee is in possession of such funds, which are invested, and has 

obtained a bond thereon for the benefit of the Liquidating Trusts. The FF Fund Liquidating Trust 

also continues to own the remaining portion of the Coreweave Investment, which the Trustee 

believes has substantial additional value. 

9. In addition to managing and monetizing the Coreweave investments, the 

Liquidating Trustee reached settlements with certain third parties based on claims and causes of 

action asserted by the Liquidating Trustee resulting in the payment of additional monies to the 

estates and release of claims. 

Case 22-01017-LMI Doc 97 Filed 07/15/24 Page 4 of 10
 CASE NO.:22-01017-LMI 

5 

10. After the Coreweave transaction was consummated, the Liquidating Trustee 

proceeded to dismiss the Blue Devil Adversary and the Korby Adversary (having previously 

settled and dismissed the Dimension Adversary). The Liquidating Trustee has also indicated a 

willingness to dismiss this adversary proceeding in exchange for an agreement that both sides 

would be responsible for their own fees and costs. This proposal was communicated to the 

Franzone Defendants’ counsel, Dana L. Kaplan, prior to her withdrawal as counsel of record for 

Defendants,2

 but the offer was declined. Thereafter, on March 26, 2024, John Anthony, Esq. filed 

a Notice of Appearance in the case as counsel to the Franzone Defendants. The Liquidating 

Trustee extended, through counsel, the same offer to dismiss the adversary case to Mr. Anthony 

and the same was declined. On May 13, 2024, Mr. Anthony moved to withdraw as counsel for the 

Franzone Defendants [ECF No. 88], which Motion was granted at the hearing on June 5, 2024, at 

9:30 a.m. 

11. On June 22, 2024, a Notice of Appearance was filed by George J. Vila, Esq as 

attorney for Defendant, FF Fund Management, LLC [ECF No. 90]. Once again, the Liquidating 

Trustee, through counsel, extended an offer to dismiss the adversary case and the same was 

declined. 

12. On June 24, 2024, more than two years following the filing of the original Answer 

and Affirmative Defenses to Plaintiff’s Adversary Complaint [ECF No. 10] (the “Answer”), Mr. 

Vila, as counsel to FF Fund Management, LLC, filed a Motion for Leave to File Amended Answers, 

Affirmative Defenses and Counterclaims [ECF No. 91 in Adv. Case No. 22-01017-LMI] (the 

“Motion to Amend”) seeking leave to amend its answer and affirmative defenses, and present its 

2

 On February 22, 2024, attorney Dana L. Kaplan, filed a Motion to Withdraw as Attorney of Record for Defendants 

filed by attorney Dana L. Kaplan on February 22, 2024 [ECF No. 79] which Motion was granted on March 11, 2024 

[ECF No. 84]. 

Case 22-01017-LMI Doc 97 Filed 07/15/24 Page 5 of 10
 CASE NO.:22-01017-LMI 

6 

counterclaims against Plaintiff (the “Proposed Counterclaims”) to Plaintiff’s Adversary Complaint 

[ECF No. 91-1] (the “Proposed Amendment”). Contemporaneously hereunder, the Liquidating 

Trustee is filing his opposition to the Motion to Amend, including because the Liquidating Trustee 

has indicated a willingness to dismiss this adversary proceeding and because the proposed 

counterclaims described therein are meritless and sanctionable as described in more detail in the 

Liquidating Trustee’s Response In Opposition to Defendant FF Fund Management’s Motion to 

Amend (“Trustee Response”) filed contemporaneously herewith. 

III. ARGUMENT 

13. Fed.R.Civ.P. 41(a)(2), incorporated by Fed.R.Bankr.P. 7041, provides, in pertinent 

part, that "an action shall not be dismissed at the plaintiff's instance, save upon order of the court, 

and upon such terms and conditions as the court deems proper." The Rule provides the Court broad 

equitable discretion to "weigh the relevant equities and do justice between the parties in each case, 

imposing such costs and attaching such conditions to the dismissal as are deemed 

appropriate.” E.g., Pontenberg v. Boston Scientific Corp., 252 F.3d 1253, 1255-56 (11th Cir. 

2001).The Court must "weigh the relevant equities and do justice between the parties" when 

"exercising its broad equitable discretion under Rule 41(a)(2)." Id. at 1256. The "crucial question" 

is whether the non-moving party would "lose any substantial right by the dismissal." Id. at 1255 

(citation and quotations omitted). See, Four Seasons Trucking, Inc. v. Crawford (In re Crawford), 

2018 Bankr. LEXIS 2924 (Bankr. N.D. Ga 2018). If a counterclaim has been pleaded by a 

defendant prior to the service upon the defendant of the plaintiff's motion to dismiss, the action 

shall not be dismissed against the defendant's objection unless the counterclaim can remain 

pending for independent adjudication by the court. See, Novak v. Sherman ( In re Reilly) 265 B.R. 

197, 205 ( U.S. Dist. Conn. 2001). 

Case 22-01017-LMI Doc 97 Filed 07/15/24 Page 6 of 10
 CASE NO.:22-01017-LMI 

7 

14. Under the Second Amended Plans, the Liquidating Trustee has a duty to maximize 

the value of the estate for the benefit of creditors and equity holders, and to avoid unnecessary 

costs and expenses. The dismissal of this adversary proceeding aligns with the Liquidating 

Trustee’s duties under the Second Amended Plans, the Liquidating Trusts and the Bankruptcy 

Code, as it will prevent unnecessary litigation costs and expedite the proposed distribution holders 

of allowed claims and interim distribution to limited partners. As there is no legal requirement to 

pursue avoidance actions if the creditors’ claims are fully satisfied, the Liquidating Trustee is 

fulfilling his duty to maximize the estate for the benefit of creditors and limited partners by seeking 

dismissal. Avoiding these actions when creditors are fully paid helps streamline the liquidation 

process. 

15. Although dismissal under Fed. R. Civ. P. 41(a)(2) is generally sought without 

prejudice, in this case the Liquidating Trustee is requesting dismissal with prejudice to provide the 

Franzone Defendants assurances that they will not face the prospect of another lawsuit related to 

the transfers in question. As such, the Court does not have to determine whether dismissal under 

Rule 41(a)(2) would be prejudicial to the defendants. The question, then, is whether Franzone 

Defendants will lose any substantive rights if the Court dismisses the complaint. 

16. This adversary case was originally filed on January 24, 2022. On March 1, 2023, 

certain of the Franzone Defendants, FF Fund Management and Andrew T. Franzone, LLC, filed 

the Answer without asserting any counterclaims. Following the filing of various motions for the 

withdrawal of reference and stay of adversary proceeding, the Court issued on August 23, 2022, 

the Order Granting in Part Defendants’ Motion for Stay of Adversary Proceeding [ECF No. 

30](“Stay Order”). This Stay Order suspended the adversary proceedings for 180 days to allow 

for a resolution in the Southern District of New York concerning Mr. Franzone’s criminal action. 

Case 22-01017-LMI Doc 97 Filed 07/15/24 Page 7 of 10
 CASE NO.:22-01017-LMI 

8 

Shortly after entry of the Stay Order, the first of several attorneys for the Franzone Defendants 

withdrew as counsel. No other substantive pleadings were filed by the Defendants until the recent 

filing of the Motion to Amend which introduces, for the first time in over two years, frivolous 

counterclaims against the Trustee and FF Fund Liquidating Trust. 

17. Since the commencement of the Adversary Cases, the Liquidating Trustee has 

diligently administered the estates and determined that additional asset recovery is no longer 

necessary to ensure a 100% payout to creditors as provided in the Second Amended Plans. The 

Liquidating Trustee has closed the Coreweave Transaction, which will result in a distribution to 

beneficiaries of the Liquidating Trust. Consequently, all pre-petition creditors will be paid in full, 

and all limited partners will receive a multiple of their investments. Sufficient funds are on hand 

to pay all allowed claims in full, negating the need for further asset recovery efforts by the 

Liquidating Trustee related to the pursuit of litigation claims. Therefore, dismissal of this 

adversary proceeding is appropriate to facilitate the Liquidating Trustee’s completion of the 

estates’ administration so that creditors and limited partners may be paid without incurring 

additional fees and costs. 

18. The Liquidating Trustee contends that FF Fund Management will not be lose any 

substantive rights if the Court dismisses this Adversary Case. The counterclaims that FF Fund 

Management purports to assert against the Liquidating Trust and the Liquidating Trustee in the 

Motion to Amend lack merit, as detailed in the Trustee’s Response. Specifically, the Liquidating 

Trustee argues that the Defendant, FF Fund Management, seeks to assert baseless claims against 

the Liquidating Trust and the Liquidating Trustee. The claims are futile, inconsistent with the 

language of the Second Amended Plans, the Confirmation Order and the Liquidating Trust 

Agreement, and fail as a matter of law. Additionally, the single claim against the Liquidating 

Case 22-01017-LMI Doc 97 Filed 07/15/24 Page 8 of 10
 CASE NO.:22-01017-LMI 

9 

Trustee for breach of fiduciary duty is futile and fails because the Liquidating Trustee has quasijudicial immunity. Therefore, the Motion to Amend should be denied. If the Court agrees with 

the Liquidating Trustee’s reasoning in the Trustee’s Response, and the Motion to Amend is denied, 

then FF Fund Management would have no counterclaims to be considered under Rule 41(a)(2). 

Accordingly, FF Fund Management will not lose any substantive rights if the Court dismisses this 

adversary case. 

19. Based on, and in accordance with, the foregoing, the Liquidating Trustee requests 

that the Court grant this Motion and dismiss this adversary proceeding with prejudice, and require 

that each party bear its own costs and attorneys’ fees in connection with this adversary proceeding 

as part of such dismissal. 

WHEREFORE, the Liquidating Trustee respectfully requests that this Court enter an 

order (i) granting this Motion and dismiss this adversary proceeding with prejudice; (ii) order that 

each party shall bear their own costs and attorneys’ fees incurred in connection with this adversary 

proceeding; and (ii) grant such other and further relief as is just and proper. 

DATED: July 15, 2024. 

VENABLE LLP 

 Attorneys for Soneet R. Kapila, Liquidating 

 Trustee of the FF Fund Liquidating Trust 

 100 Southeast Second Street, Suite 4400 

 Miami, Florida 33131 

 Telephone: (305) 349-2300 

 Facsimile: (305) 349-2310 

 By: /s/Paul J. Battista 

 Paul J. Battista, Esq. 

Florida Bar No. 884162 

pjbattista@venable.com 

 Eric D. Jacobs, Esq. 

 Florida Bar No. 85992 

ejacobs@venable.com 

Mariaelena Gayo-Guitian, Esq. 

Florida Bar No. 0813818 

Case 22-01017-LMI Doc 97 Filed 07/15/24 Page 9 of 10
 CASE NO.:22-01017-LMI 

10 

mguitian@venable.com 

CERTIFICATE OF SERVICE 

I HEREBY CERTIFY that, on July 15, 2024, a true and correct copy of the foregoing 

document was furnished via electronic mail by virtue of the Court’s CM/ECF System to all parties 

in interest who have elected to receive notice in this case. 

 

By: /s/ Paul J. Battista, Esq. 

 Paul J. Battista, Esq. 

Case 22-01017-LMI Doc 97 Filed 07/15/24 Page 10 of 10