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UNITED STATES BANKRUPCY COURT

SOUTHERN DISTRICT OF FLORIDA

WEST PALM BEACH DIVISION

In the Matter of: Case No. 21-18481-MAM

NITV, LLC, Chapter 7

Debtor.

__________________________________/

TRUSTEE IN BANKRUPTCY’S MOTION 

FOR CLARIFICATION THAT THE AUTOMATIC STAY IS NOT APPLICABLE

OR ALTERNATIVELY

FOR RELIEF FROM STAY

TO PURSUE PENDING STATE COURT ACTION

ON BEHALF OF CREDITORS

Michael R. Bakst, Trustee in Bankruptcy for Debtor, NITV, LLC, (Hereinafter, “Trustee”) by 

and through his undersigned attorneys, files this Motion for Clarification that the Automatic Stay is 

Not Applicable, or Alternatively, for Relief from Stay, to Pursue Pending State Court Action on Behalf 

of Creditors and in support hereof states:

1. On August 31, 2021, Debtor filed its Chapter 7 Bankruptcy Petition [ECF #1] naming four 

creditors to whom it was indebted over $761,000.00.

Prior State Court Collection Proceedings

2. At the time of its Chapter 7 filing, Debtor NITV LLC was already a defendant in 

“proceedings supplementary” to a State Court action entitled “ELWOOD GARY BAKER 

vs. NITV, LLC and NITV FEDERAL SERVICES, LLC, LOURDES IRIMIA, JAMES 

KANE and CHARLES HUMBLE” and assigned Palm Beach County, Circuit Court Case 

Number: 50 2005 CA 001771 XXXX MB AE (Hereinafter, the “State Court 

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Collection/Supplementary Proceeding/Action”).

3. Within said State Court Collection/Supplementary Proceeding, state court Judgement holder 

and Creditor, Elwood Gary Baker, had been trying to collect his judgment from not only the 

Debtor here, but also others (pursuant to §56.29 “Proceedings Supplementary” and Chapt. 

726, Florida Statutes – which is specifically referenced within §56.29 and the supplementary 

state court pleading at issue). The Allegations in the State Court Collection/Supplementary 

Proceeding/Action involved inter-alia, that the Debtor was/is a Successor / Alter Ego / 

business Continuation of Debtor, sought to “Pierce the Corporate Veil” and that the original 

judgment debtor and others had effectuated, and continue to effectuate “fraudulent transfers” 

(as defined by Chapter 726, Florida Statutes) among themselves. The State Court 

Collection/supplementary Proceeding/Action was “mid trial docket” on the date of Debtor’s 

bankruptcy filing.

This Court’s Prior, Related Order

4. On October 21, 2021, after investigating the State Court Collection/Supplementary 

Proceedings, Trustee filed a “Motion to Approve Employment of Scott Zappolo, Esq. (the 

undersigned) as his “Special Litigation Counsel” [ECF # 12].

5. Said Motion specifically stated (at para. 3 therein) that Trustee wanted to employ the 

undersigned “to represent the estate for the State Court Action whether in Circuit Court of 

the Bankruptcy Court” and (at para. 5) took the position that pending State Court Action was 

“now property of the bankruptcy estate.”

6. On November 4, 202, this Court Granted Trustee’s Motion. [ECF # 15].

Trustee’s Pursuit of Debtor’s Assets

7. Given:

A. The basis of the Motion to Employ Special Litigation Counsel (inter-alia, to represent 

the Bankruptcy Estate in the pending state court action) and the related November 4

th

Order granting same; and 

B. The fact that the pursuit of the Debtor’s assets via the “State Court 

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Collection/Supplementary Proceedings” are an independent action (especially given the 

fact that it involves non-bankruptcy participants)

on December 31, 2022, the undersigned filed “Michael R. Bakst, Trustee in Bankruptcy’s 

Motion to Intervene on Behalf of Bankruptcy Creditors of NITV, LLC” in the State Court 

Collection/Supplementary Proceedings (Hereinafter, “State Court Intervention Motion”). A 

copy of said motion is attached hereto as “EXHIBIT 1.”

Debtor’s Response / Basis for Instant Motion

8. Upon Receipt of the State Court Intervention Motion, Debtor’s counsel opined that the State 

Court Collection/Supplementary Proceedings are a “proceedings supplementary emanating 

from a stayed action against the debtor . . .” but further opined that “the objection here may 

be more properly the province of the third parties . . .”

9. In an abundance of caution, the undersigned brings this Motion.

Argument / Legal Authority

10. Trustee believes that a State Court supplementary proceeding against a Judgement Debtor’s 

tranferees (as is pending within the State Court), is an independent action, that is no different 

than if the Trustee had chosen to pursue its own fraudulent transfer action pursuant to state 

law (and would not require relief from stay) - particularly when third parties are named 

defendants. Jackson-Platts, v. General Electric Capital Corporation, 727 F.3d 1127 (11th

Cir., 2013). Within Jackson-Platts, when considering whether or not a case could be 

removed from State to Federal court, the 11th Circuit opined that a supplementary proceeding 

brought (as here) pursuant to §56.29 was an “independent civil action.” In reaching this 

decision, the 11th Circuit noted “§56.29 supplementary proceedings afford judgment 

creditors independent substantive claims. The statute also affords parties stout procedural 

guarantees not generally found in ancillary proceedings.” Id. at 1135. The 11th Circuit also 

noted that had the estate (there) sued (alleged transferees) “in state court under the Uniform 

Fraudulent Transfer Act, the lawsuit plainly would have been a ‘civil action’” (and 

removeable as being an “independent action”). Jackson-Platts at 1137. The Court also 

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noted various similar proceedings which are treated as “independent suits” such as 

garnishment. Id. at 1139.

11. Here, the state court action was brought pursuant to both §56.29 and Chapter 726 –

thereby intensifying the 11th Circuit’s holding in Jackson-Platts. The undersigned posits 

such proceedings are particularly appropriate where as here, the Trustee seeks to marshall 

assets for the protection of creditors.

12. When sitting in its appellate capacity on a bankruptcy ruling, the US District Court, for the 

Northern District of Alabama (Southern Division) noted a summary of the United States 

Bankruptcy Appellate Panel of the Ninth Circuit which provided: “Under Code § 544(b), 

the filing of a bankruptcy petition does not strip creditors of state-created rights to avoid 

transfers, it merely shifts that right to the creditors’ representative . . .Rather the creditor 

is stayed from prosecuting the claim and unless the trustee opts to intervene . . .” In Re 

Leopard, 2014 WL 2740320 (US District Court, N.D. Alabama (Southern Div), 

2014)(emphasis added)(internal citations omitted). See Also, In Re Zwirn, 362 B.R. 536 

(S.D. FLA., 2007)(Holding, state court fraudulent transfer claims to be property of the 

Bankruptcy Estate as of the petition date, and with rare exception may only be prosecuted by 

Trustee in Bankruptcy); In Re CD Jones & Co., Inc., 482 B.R. 449 (N.D. FLA., 2012). 

13. Here, the Trustee in Bankruptcy has, as is suggested in In Re Leopard, and In Re Zwirn, 

appropriately sought to intervene in the state court matter – on behalf of the creditors.

14. Of note: The only case the undersigned has been able to locate which appears to seek a 

direct ruling as to whether a Trustee in Bankruptcy has a direct right to intervene within a 

state court action (or must first seek relief from stay) was In Re Vandevort, 2009 WL 

7809927 (US Bankr. App Panel, 9th Cir, 2009) wherein the 9th Circuit Bankruptcy Appellate 

Panel denied a cross-appeal as moot since the Trustee in Bankruptcy had obtained relief 

from stay, after filing a similar motion as the motion at bar (seeking either a ruling that the 

Bankruptcy Stay was not applicable, or alternatively, for relief from stay). Thus, while the 

Trustee in Bankruptcy believes (based upon the cases cited above) that the Bankruptcy Stay 

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is/was not a bar to his intervention in the State Court Collection/supplementary 

Proceeding/Action, it would seem the simplest remedy would be for this Court to enter an 

order for Relief from Stay. 

WHEREFORE, Michael R. Bakst, Trustee in Bankruptcy for Debtor, NITV, LLC, 

respectfully requests this Court enter an order:

A. Clarifying/finding that the Automatic Stay does/did not effect the Trustee in 

Bankruptcy’s intervention (that the Trustee in Bankruptcy may pursue the State Court 

Claims on behalf of Creditors without further order of Court); and/or alternatively

B. Grant the Trustee in Bankruptcy relief from stay in order to pursue the State Court claims 

on behalf of the Creditors; and

C. Grant any further relief as the court deems just and appropriate.

CERTIFICATE OF COMPLIANCE

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 

requirements to practice in this Court as set forth in Local Rule 2090-1(A).

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true copy of the foregoing was is being filed with the 

court’s electronic filing system on this 23rd day of February, 2022 and thus served on 

those parties listed below.

Electronic Mail Notice List:

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Michael R. Bakst: efilemrb@gmlaw.com; ecf.alert+Bakst@titlexi.com; 

efileu1084@gmlaw.com; efileu1086@gmlaw.com; efileu386@gmlaw.com; 

efileu1857@gmlaw.com 

Julianne R. Frank, attorney for Debtor: julianne@jrfesq.com; 

G59511@notify.cincompass.com

Mark A. Levy: mark.levy@brinkleymorgan.com; 

Sandra.gonzalez@brinkleymorgan.com; brinkleymorgancf@gmail.com

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

ZAPPOLO & FARWELL, P.A.

Attorneys for Michael R. Bakst, Trustee in Bankruptcy

7108 Fairway Drive, Suite 322

Palm Beach Gardens, FL 33418

(561) 627-5000 (telephone)

(561) 627-5600 (facsimile)

szappolo@zappolofarwell.com

filings@zappolofarwell.com

jfarwell@zappolofarwell.com

By: /S/ Scott W. Zappolo 

 SCOTT W. ZAPPOLO

 Florida Bar Number: 132438

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