Daniel W. Van Horn, Admitted Pro Hac 

Adam M. Langley, Admitted Pro Hac

R. Campbell Hillyer, Admitted Pro Hac

Butler Snow LLP 

6075 Poplar Ave., Ste. 500 

Memphis, TN 38119 

(901) 680-7200 

Martin A. Sosland, TX Bar No. 18855645 

Candice Carson, TX Bar No. 24074006 

Butler Snow LLP 

2911 Turtle Creek Blvd., Ste. 1400 

Dallas, TX 75219 

(469) 680-5502 

Attorneys for FedEx Supply Chain Logistics & Electronics, Inc. 

IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE NORTHERN DISTRICT OF TEXAS 

DALLAS DIVISION 

In re: ) 

 ) 

GOODMAN NETWORKS, INC., ) Case No. 23-31641-mvl-7 

 ) 

 Debtor. ) (Chapter 7) 

 ) 

 

SCOTT M. SEIDEL, TRUSTEE, ) 

 ) 

 Plaintiff, ) Adversary Proceeding 

 ) No. 23-03091 

v. ) 

 ) 

FEDEX SUPPLY CHAIN LOGISTICS ) 

& ELECTRONICS, INC., ) 

 ) 

 Defendant. ) 

FEDEX SUPPLY CHAIN LOGISTICS & ELECTRONICS, INC.’S 

MOTION TO DISMISS THE TRUSTEE’S ORIGINAL COMPLAINT 

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TO THE HONORABLE MICHELLE V. LARSON, U.S. BANKRUPTCY JUDGE: 

Comes now FedEx Supply Chain Logistics & Electronics, Inc. (“FSCLE” or “FedEx”) 

and files this Motion to Dismiss (“Motion”) the Trustee’s Original Complaint [ECF No. 1] (the 

“Trustee Complaint”) in this adversary proceeding, being Adv. Proc. No. 23-03091, pursuant to 

Bankruptcy Rule 7012 and Civil Rule 12(b)(1) and (6). FSCLE files its Brief in Support of this 

Motion contemporaneously herewith. FSCLE respectfully states as follows: 

SUMMARY OF MOTION 

1. Scott M. Seidel (the “Trustee”) commenced this adversary proceeding by filing the 

Trustee’s Original Complaint [ECF No. 1]. The Trustee Complaint asserts two classes of claims: 

(1) five requests for preemptive declarations that FSCLE cannot affirmatively seek property 

determinations or remedies for constructive, express, and resulting trusts in the future (Counts 1-

5, the “Declaratory Counts”) and (2) two requests seeking to collaterally attack and stay FSCLE’s 

District Court Lawsuit (Counts 6-7, the “Stay Counts”). The Trustee Complaint should be 

dismissed for lack of subject-matter jurisdiction and for failure to state a claim upon which relief 

can be granted pursuant to Bankruptcy Rule 7012, incorporating Civil Rule 12(b)(1) and (6). FED.

R. BANKR. P. 7012 and FED. R. CIV. P. 12. The Trustee has no cause of action against FSCLE, and 

FSCLE’s claims in the District Court Lawsuit are not property of the estate. Absent a substantive 

cause of action against FSCLE, the Court cannot provide the Trustee with the procedural remedies 

of declaratory and injunctive relief. 

2. The Declaratory Counts do not present an actual case and controversy because the 

Trustee mischaracterizes a reservation of rights in FSCLE’s Proof of Claim as a request for 

affirmative relief. FSCLE’s Proof of Claim speaks for itself, and FSCLE acknowledges that any 

request for affirmative relief in the form of property determinations or imposition of equitable 

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remedies like constructive and resulting trusts must be plead in an adversary proceeding. Until 

FSCLE files a complaint seeking property determinations or equitable remedies, there is no actual 

case or controversary because any relief FSCLE might seek is hypothetical, conjectural, and based 

on facts that must still be developed (e.g., will the Trustee recover stolen property). The Trustee is 

not entitled to a preemptive declaration that FSCLE can never assert property rights or equitable 

remedies in property possessed or recovered by the Trustee. The Trustee is in the process of 

recovering property for the estate, but to date little property is in the possession of the Trustee. 

FSCLE understands based on representations from the Trustee that the estate primarily possesses 

litigation claims – not stolen property or any tangible property for that matter. Indeed, the 4352 

Account and the Debtor’s operating account, the 1838 Account, held no funds as of the Petition 

Date. And, the Debtor appears to have transferred its material business assets and funds to third 

parties prior to the Petition Date. The Trustee has not provided an accounting of any property he 

possesses. Until the Trustee has recovered property and FSCLE asserts a property interest or 

equitable remedy to that property, there is no case or controversary for this Court to decide. 

Pursuant to Civil Rule 12(b)(1) and (6), the Declaratory Counts should be dismissed without 

prejudice to being reasserted should the Trustee recover tangible property that FSCLE asserts is 

its stolen property of the proceeds thereof. 

3. The Stay Counts fail as a matter of law. FSCLE filed the District Court Lawsuit to 

recover direct damages against non-debtor tortfeasors. Its claims are its personal property. 

FSCLE’s direct claims are not derivative claims of the bankruptcy estate and, therefore, are not 

property of the estate. Since its claims are not property of the estate, the automatic stay does not 

apply and this Court lacks subject-matter jurisdiction and constitutional authority to enjoin the 

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District Court Lawsuit. The Stay Counts are an improper collateral attack on FSCLE and the 

District Court Lawsuit, and they should be dismissed with prejudice. 

JURISDICTIONAL STATEMENT 

4. This Court has subject-matter jurisdiction over this bankruptcy case and its “arising 

under,” “arising in” and “related to” proceedings and to hear and determine questions regarding 

property of the estate, including making declarations regarding such property. 28 U.S.C. § 1334(b) 

and (e). As discussed in detail below and in the Brief filed contemporaneously herewith, FSCLE 

contests that there is subject-matter jurisdiction over the Trustee Complaint under section 1334(b) 

or (e) and that there is constitutional or statutory authority for a final adjudication on the Trustee 

Complaint because the matter is non-core. See 28 U.S.C. § 157(c)(1). FSCLE does not consent to 

a final adjudication of the Trustee Complaint. 

MOTION TO DISMISS STANDARD 

5. Bankruptcy Rule 7012 incorporated Civil Rule 12(b)(1) and (6) into this adversary 

proceeding. FED. R. BANKR. P. 7012; FED. R. CIV. P. 12(b)(1) and (6). This Court must dismiss a 

complaint where there is a “lack of subject-matter jurisdiction” or a “failure to state a claim upon 

which relief can be granted.” Id. This Court recently stated the applicable standards for motions to 

dismiss under Rule 12(b)(1) and (6), which are restated here: 

When a Rule 12(b)(1) motion is filed in conjunction with other Rule 12 motions, 

as it is here, a court should consider the jurisdictional attack prior to turning to the 

merits. In considering a Rule 12(b)(1) motion, the court is empowered to consider 

matters of fact which may be in dispute. Ultimately, the motion should be granted 

only if it appears that the plaintiff cannot prove any set of facts in support of his or 

her claim that would entitle the plaintiff to relief. 

In evaluating a Rule 12(b)(6) motion to dismiss, the Court “must accept all wellpleaded facts as true, and ... view them in the light most favorable to the plaintiff. 

However, the Court need not “strain to find inferences favorable to the plaintiffs.” 

To survive a motion to dismiss under Rule 12(b)(6), a complaint must contain 

sufficient factual allegations, which, if accepted as true, state a plausible cause of 

action. This plausibility requirement sits somewhere between possible and 

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probable, and is satisfied where the plaintiff's pleaded facts allow the court to draw 

the reasonable inference that the defendant is liable for the misconduct alleged. 

In re City Wide Cmty. Dev. Corp., 2023 WL 6542909, at *3 (Bankr. N.D. Tex. Oct. 6, 2023). 

STATEMENTS OF FACT 

6. In support of its Rule 12(b)(1) request for dismissal, FSCLE makes the following 

statements of fact and refers the Court the FSCLE Complaint in the District Court Lawsuit for 

additional factual statements. 

A. The Fraudulent and Racketeering Scheme 

7. Goodman Networks and FSCLE were counterparties to a Master Services 

Agreement, and from at least December 2020 into November 2021, the parties operated in a 

commercial manner under the Master Services Agreement and singular bank account at Prosperity 

Bank (the “4352 Account”) was used to facilitate the transactions between March 2021 and 

November 2021. FSCLE Complaint, ¶¶ 59-63, 78-79, 87, 91, 112-118. 

8. In internal communications, Goodman Networks described the commercial 

relationship with FSCLE as follows: 

GNET ATC, LLC has automated purchase order and invoice transactions in D365 

(previously was automated in Great Plains) that account for the purchase of mobile 

device accessories from FedEx and sale back to FedEx at .2% margin. In other 

words, the sales price is .2% higher than the purchase price. . . . Around the 15th of 

the following month, FedEx will confirm final pallet moves for the prior month and 

GNET ATC will invoice actual revenue in D365 which will be offset by the revenue 

reversing accrual from the previous month end. 

Exhibit 1 (emphasis added).1 Thus, each time Goodman Networks invoiced FSCLE there was to 

be a related payment back to FSCLE of all that FSCLE paid Goodman Networks less 0.2% and 

1

 Goodman Networks internally referred to GNET ATC, LLC as having the automated system. 

But, in form and substance, Goodman Networks was the counterparty to FSCLE and the owner of 

the automated system. All invoicing, accounts, and transactions occurred between Goodman 

Networks and FSCLE – not with GNET ATC. 

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less payment for actual pallet moves. The representation in each invoice was that the reversing 

transaction would also happen. 

9. In October 2021, AT&T and its related companies terminated its business with 

Debtor. FSCLE Compl., ¶ 84. Soon thereafter, all officers and directors at the Debtor resigned, 

except for James Goodman. Id. at ¶ 96. And, Jim Frinzi was appointed as the Debtor’s CEO. Id. at 

¶ 98. 

10. By November 2, 2021, the Debtor stopped paying FSCLE and FSCLE sent an email 

inquiring as to why the Debtor had not made the regular payment as part of the automated 

processes. Id. at ¶ 112. That FSCLE email was forwarded to Frinzi, who then directed persons at 

the Debtor to “suspend all other payments to FedEx” but to hide this from FSCLE. Id. at ¶¶ 113-

129. 

11. Frinzi, James Goodman, and others formulated a scheme to defraud FSCLE, 

embezzle FSCLE’s funds from its bank accounts using the automated system, and funnel FSCLE’s 

funds to themselves and their affiliates and co-conspirators for their own personal benefit. See 

FSCLE Complaint, generally. The scheme involved Frinzi and his affiliates (the Frinzi Family 

Trust and Multiband Global Resources LLC, among others) and co-conspirators (A) purchasing a 

public shell corporation (American Metals Recovery and Recycling, Inc. a.k.a. “AMRR”) or 

utilizing other shell companies (e.g., 18920 NW 11th, LLC (“18920 NW”) and Alliance Texas 

Holdings, LLC), (B) fraudulently inducing FSCLE to maintain the automated system that 

facilitated transactions between Goodman Networks and FSCLE under the guise that Goodman 

Networks needed to migrate its side of the automated system from a Microsoft Dynamics 365 

environment to a new platform, (C) embezzling cash from FSCLE through the automated system, 

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and (D) laundering the stolen cash through AMRR and other shell entities for the benefit of Frinzi, 

James Goodman, Shalom Auerbach, and others. Id. 

12. As the Trustee acknowledges in Paragraph 50 of his brief in support of his 

preliminary injunction motion [ECF No. 5], FSCLE can trace money from its bank accounts to 

AMRR, 18920 NW, and Hudson because the automated system established to facilitated 

transactions between Goodman Networks and FSCLE utilized a singular account, the 4352 

Account, to transact with FSCLE. See Exhibit 2, collective statements of the 4352 Account. 

13. On October 20, 2021, the 4352 Account held no funds ($0). Exhibit 2. 

14. From October 20, 2021, to January 10, 2022, the 4352 Account would balloon from 

$0 to $58,326,416.16 as the theft, fraud and racketeering occurred. Exhibit 2. 

15. The 4352 Account ballooned instead of immediately being laundered because 

Frinzi ran into a problem. He was the only officer at Goodman Networks, but he did not have 

authority to access the funds in the 4352 Account at Prosperity Bank. Moreover, Goodman 

Networks could not authorize him to have access to the 4352 Account because its Board of 

Directors had ceased to function due to resignations by Jody Goodman and Jason Goodman, 

leaving only James Goodman on a Board that required three members to act. Upon Frinzi learning 

about his lack of authority until Friday, January 7, 2022, (when Prosperity Bank gave Frinzi 

authority to transact on the 4352 Account), Frinzi, James Goodman, and Bater Bates on behalf of 

Prosperity Bank would knowingly create, send, receive, and accept falsified corporate documents 

of Goodman Networks to facilitate Frinzi getting access to the 4352 Account. FSCLE Complaint, 

¶¶ 215-239. 

16. Starting in January 2022, Frinzi, James Goodman, and their co-conspirators would 

take the stolen FSCLE funds located in the 4352 Account and launder them out of the 4352 

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Account through shell companies and fraudulent racketeering schemes for their personal benefit. 

Id. at ¶¶ 240-410. 

17. In total, FSCLE has in excess of $80 million stolen by Frinzi, James Goodman and 

their affiliates and co-conspirators and then laundered for their personal benefit. Prior to this theft, 

all of that cash resided in FSCLE bank accounts. 

B. THE INVOLUNTARY BANKRUPTCY 

18. In September 2022, FSCLE commenced mediation with Goodman Networks and 

Genesis, which was mandated by the Master Services Agreement. [POC No. 32-1, Part 2, ¶¶ 49-

50]. At that mediation, FSCLE was advised that an involuntary bankruptcy had been commenced 

against Goodman Networks on September 6, 2022. Id. FSCLE had no knowledge of the 

involuntary bankruptcy prior to mediation. Id. 

19. On October 17, 2022, FSCLE filed a joinder to the involuntary bankruptcy petition, 

which was later joined by ARRIS and other unsecured creditors. [ECF No. 29 in the Bankruptcy 

Case]. 

20. On December 12, 2022, the Court entered an order for relief based on the joinders, 

and soon thereafter the Trustee was appointed. [ECF No. 132 in the Bankruptcy Case]. 

21. On April 7, 2023, FSCLE filed its proof of claim and alleged claims for breach of 

contract, breach of implied duty of good faith and fair dealing, negligent misrepresentation, 

fraudulent inducement, fraudulent nondisclosure, actual fraud, constructive fraud, theft, 

conversion, conspiracy, unjust enrichment, and tortious interference with business relations, 

among other or substantially similar claims. [POC No. 32-1]. 

22. At the time of the filing of the proof of claim, the bankruptcy estate appeared to 

have no material, tangible assets in its possession that were derived from the direct fraud and 

embezzlement on FSCLE other than potential litigation claims. The 4352 Account had $0. [Exhibit 

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2; ECF No. 184, in the Bankruptcy case, Item 3.8]. The Debtor’s operating account, the 1838 

Account, had $0. [ECF No. 184 in the Bankruptcy Case, Item 3.5]. Had there been tangible assets 

in the possession of the bankruptcy estate derived from the fraud and embezzlement on FSCLE, 

FSCLE would have brought an adversary proceeding to assert a property interest in the stolen 

property or constructive trust on the proceeds of the theft. Instead, FSCLE filed a “Reservation of 

Rights” in its Proof of Claim, which stated: “. . . FSCLE specifically reserves the right to assert 

that the monies unlawfully appropriated from it by Goodman Networks and its related parties and 

co-conspirators and any traceable proceeds thereof are not property of the estate, property of 

Goodman Networks, or property of the related parties and co-conspirators. Moreover, FSLCE 

reserves the right to seek remedies at law and equity to have the monies unlawfully appropriated 

from it and any traceable proceeds to be determined as subject to an express, equitable, 

constructive, resulting, or other trust.” [POC No. 32-1, Part 2, ¶ 54]. Thus, contrary to the Trustee’s 

papers, FSCLE has not asserted a constructive trust against any property of the estate but only 

reserved the right to do so. Id. 

23. In June 2023, FSCLE and the Trustee met in person. The Trustee and his counsel 

made it clear that they did not have any issue with FSCLE pursuing its own direct and personal 

claims against non-debtors. FSCLE expressly stated to the Trustee that it would be pursing 

“independent tort, fraud and conspiracy claims.” The Trustee’s statement then was “go for it.” 

24. The Trustee made similar representations to FSCLE throughout this case. 

25. Indeed, the Trustee’s statements have not changed today: “. . . the Trustee did not 

seek to impede FedEx from asserting in personam claims against the individuals and entities 

involved.” Trustee Complaint, ¶ 26. 

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C. THE FSCLE COMPLAINT 

26. After a year of extensive discovery, tracing exercises, and other investigations, 

FSCLE had obtained substantial information and evidence to support it bringing direct and 

personal claims against non-debtors. The Trustee and his counsel had already blessed FSCLE 

bringing direct and independent claims saying “go for it” at the June 2023 meeting and at other 

times. 

27. On October 27, 2023, FSCLE filed a complaint against James Goodman, Frinzi, 

and Shalom Auerbach along with their co-conspirators, affiliates, and related entities, including 

John Goodman, Jonathan Goodman, Jake Goodman, Jody Goodman, Neil Auerbach, Steven 

Zakharyev, Evalina Pinkhasova, Genesis Networks Telcom Services, LLC, GNET ATC, LLC, 

Greater Tech Holdings, Inc., Goodman Investment Holdings, LLC, Unified Field Services, Inc., 

AMRR, HSB Holdings, LLC, AMR Resources, LLC, Hudson, 18920 NW, Prosperity Bank, the 

Frinzi Family Trust, Alliance Texas Holdings, LP, and OnePath Systems, LLC (the “FSCLE 

Complaint” naming the “Defendants”). FSCLE Complaint, generally. 

28. The primary claim and bulk of the FSCLE Complaint concerns a federal RICO 

claim related to an enterprise involving the Defendants that stole cash from FSCLE and laundered 

those monies through numerous transactions and entities including, AMRR, Hudson, and 18920 

NW (as discussed above) (the “RICO Claim”). FSCLE Complaint, ¶¶ 1-692; see also ¶ 462-463 

(defining the enterprise). But for this enterprise, FSCLE would have the stolen funds in its bank 

accounts. Thus, FSCLE was directly injured by the predicate acts and racketeering activity in 

violation of 18 U.S.C. § 1962 as alleged in the FSCLE Complaint. Id. at ¶¶ 476-689. 

29. Under the RICO claim, FSCLE alleges personal damages in an amount that exceeds 

$80,000,000 and seeks to have its damages trebled, as well as an award of attorney fees and costs, 

pursuant to 18 U.S.C. § 1964(c). Id. at ¶¶ 690-692. FSCLE seeks joint and several liability against 

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each Defendant. The Trustee asserts the RICO Claim is property of the estate and, therefore, is 

subject to the automatic stay. Trustee Complaint at ¶ 88. 

30. Second, FSCLE asserts a claim for Theft (Embezzlement) under the Texas Theft 

Liability Act against Frinzi and James Goodman (the “Texas Theft Claim”). FSCLE Complaint at 

¶¶ 693-711. As discussed above, Frinzi and James Goodman fraudulently induced FSCLE to 

maintain its business with Goodman Networks and its 4352 Account while knowingly intending 

to embezzle the funds that were transferred into the 4352 Account for their own personal benefit. 

Under the Texas Theft Claim, FSCLE alleges “direct and proximate” damages in excess of $80 

million resulting from Frinzi and James Goodman’s theft in addition to seeking a statutory award 

of attorney fees and the imposition of joint and several liability. Id. at ¶¶ 710-711. The Trustee 

asserts the Texas Theft Claim is property of the estate and, therefore, is subject to the automatic 

stay. Trustee Complaint at ¶ 88. 

31. When one party to a contract determines that it will no longer perform and induces 

further action on the part of the other party to the transaction, that behavior constitutes theft and 

fraud. See Taylor v. State, 450 S.W.3d 528, 536 (Tex. Crim. App. 2014); AAB Logistics, Inc. v. 

Forward Air, Inc., 2016 WL 8672773, *4 (N.D. Tex. Nov. 18, 2016); and Spoljaric v. Percival 

Tours, Inc., 708 S.W.2d 432, 434 (Tex. 1986). As set forth in the District Court Lawsuit, Frinzi 

and others decided to stop all payments to FSCLE as of November 3, 2021 but continued to send 

invoices to FSCLE thereafter knowing there would never be a reversing transaction. FSCLE 

Complaint at ¶¶ 116, 117, 125, 126, 130, 133, 136, 139, 152-203. Thus, there are certain claims 

that did not exist until November 3, 2021 that did thereafter. What may have been a breach of 

contract prior to November 3, 2021 became theft and fraud thereafter. 

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32. Third, FSCLE asserts a common law claim for theft, embezzlement and conversion 

against all Defendants (the “Common Law Theft Claim”). Id. at ¶¶ 712-727. As discussed above, 

all Defendants knew that they were receiving stolen/embezzled funds from FSCLE or aided and 

abetted Frinzi and James Goodman to assist with the theft, embezzling and laundering of the 

stolen/embezzled funds. Id. at ¶¶ 715-723. Under the Common Law Theft Claim, FSCLE alleges 

direct damages in excess of $80 million and seeks the imposition of joint and several liability. Id. 

at ¶¶ 726-727. The Trustee asserts the Common Law Theft Claim is property of the estate and, 

therefore, is subject to the automatic stay. Trustee Complaint at ¶ 88. 

33. Fourth, FSCLE asserts an unjust enrichment claim against all Defendants and seeks 

damages in excess of $80,000,000 and the imposition of joint and several liability (the “Unjust 

Enrichment Claim”). FSCLE Complaint at ¶¶ 728-736. The Trustee asserts the Unjust Enrichment 

Claim is property of the estate and, therefore, is subject to the automatic stay. Trustee Complaint 

at ¶ 88. 

34. Fifth, FSCLE asserts a common law constructive trust against any 

stolen/embezzled funds from FSCLE (the “Constructive Trust Remedy”), FSCLE Complaint at ¶¶ 

740-755, which is derivative of the Common Law Theft Claim, the Unjust Enrichment Claim and 

the Actual Fraud Claim, as defined below. FSCLE admits the Constructive Trust Remedy is 

unartfully drafted and may be the cause of confusion related to the Trustee’s Complaint. While 

plead as a separate claim, constructive trust is a remedy under Texas Law – not a claim. The 

Trustee asserts the Constructive Trust Remedy seeks to control property of the estate and, 

therefore, is subject to the automatic stay. Trustee Complaint at ¶ 88. 

35. Sixth, FSCLE asserts an actual fraud claim against Frinzi, James Goodman, 

Genesis-ATC and GNET ATC (the “Actual Fraud Claim”). FSCLE Complaint at ¶¶ 756-786. 

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FSCLE seeks direct and proximate damages in excess of $80 million, the imposition of punitive 

damages, and the imposition of joint and several liability. Id. at ¶¶ 784-786. The Trustee admits 

the Actual Fraud Claim is personal to FSCLE and not subject to the automatic stay. Trustee 

Complaint at ¶ 88. 

36. Seventh, FSCLE asserts a tortious interference claim against Frinzi, James 

Goodman, Prosperity Bank, Genesis-ATC and GNET ATC (the “Tortious Interference Claim”). 

FSCLE Complaint at ¶¶ 787-817. FSCLE seeks compensatory damages in excess of $80 million 

and the imposition of punitive damages. Id. at ¶¶ 816-817. The Trustee admits Tortious 

Interference Claim is personal to FSCLE and not subject to the automatic stay. Trustee Complaint 

at ¶ 88. 

37. Eighth, FSCLE asserts a civil conspiracy claim against all Defendants (the “Civil 

Conspiracy Claim”). FSCLE Complaint at ¶¶ 818-825. The Civil Conspiracy Claim is derivative 

of the Texas Theft Claim, the Common Law Theft Claim, the Unjust Enrichment Claim, the Actual 

Fraud Claim, and the Tortious Interference Claim because it alleges a conspiracy to participate in 

the activities that give rise to those claims. FSCLE seeks direct and proximate compensatory 

damages in excess of $80 million and the imposition of punitive damages. Id. at ¶¶ 823-825. The 

Trustee asserts the Civil Conspiracy Claim is property of the estate and, therefore, is subject to the 

automatic stay. Trustee Complaint at ¶ 88. 

D. THE TRUSTEE COMPLAINT AGAINST FSCLE 

38. On November 15, 2023, without advance notice to FSCLE or attempting to confer 

on any concerns he had about the FSCLE Complaint, the Trustee filed a complaint against FSCLE 

alleging seven causes of action. Trustee Complaint, generally. 

39. First, the Trustee seeks a declaration that FSCLE “held no constructive trust against 

or to the 4352 Account, the funds therein, and the Transfers and Proceeds of such funds, as of the 

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Petition Date under Texas Law, and that the Debtor at no time held the 4352 Account of the funds 

therein in constructive trust for the benefit of FedEx.” Id. at ¶ 55. 

40. Second, the Trustee seeks the same declaration except subject to the Bankruptcy 

Code instead of under Texas Law. Id. at ¶ 65. 

41. Third, the Trustee seeks a declaration that the Debtor and FSCLE “at no time had 

an express trust, and that the Debtor at no time held by (sic) property or funds in express trust for 

the benefit of [FSCLE], including against or to the 4352 Account, the funds therein, and the 

Transfers and Proceeds of such funds.” Id. at ¶ 70. 

42. Fourth, the Trustee seeks a declaration that FSCLE “did not own the 4352 Account 

or the funds therein, and that any transfer of those funds by the Debtor or its agents was not 

conversion, theft, or any similar cause of action, and that [FSCLE] has no right to a constructive 

trust against the 4352 Account, the funds therein, or the Transfers and Proceeds, such that no 

property of the Estate, including the Transfers and Proceeds, is held in resulting trust for the benefit 

of [FSCLE].” Id. at ¶ 78. 

43. Fifth, the Trustee seeks a limited objection to FSCLE’s claim “to the extent it 

asserts anything other than a general unsecured claim.” Id. at ¶ 83. The Trustee does not dispute 

the amount of FSCLE’s claim, which is $81,158,452.82, exclusive of any interest, costs, attorney 

fees, or punitive, special, exemplary, or other damages that FSCLE is entitled to as a matter of law 

or equity. [POC No. 32-1, Part 2, ¶ 3. The Trustee incorrectly states that FSCLE “asserts ‘an 

express, equitable, constructive, resulting, or other trust.’” As stated above, FSCLE reserved the 

right to assert those equitable remedies should they ripen and become meaningful, but to date, 

FSCLE has not elected to file an adversary proceeding seeking the imposition of any equitable 

remedies. 

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44. Sixth, the Trustee seeks damages for violation of the automatic stay, specifically 

subsections 362(a)(1) and (3). Trustee Complaint at ¶¶ 84-90. He alleges claims 1, 2, 3, 4, 5, and 

8 of the FSCLE Complaint are property of the estate and/or derivative actions of the estate. Id. at 

¶ 88. 

45. After filing his Complaint against FSCLE, the Trustee files a motion for a 

preliminary injunction and brief in support. [ECF Nos. 4 and 5]. 

REQUESTS FOR DISMISSAL 

46. FSCLE requests the Trustee Complaint be dismissed in its entirety for the following 

reasons. 

A. Count 1: Declaratory Judgment of No Constructive Trust Under Texas Law 

47. Count 1 should be dismissed for “lack of subject-matter jurisdiction” and for 

“failure to state a claim upon which relief can be granted.” FED. R. BANKR. P. 7012; FED. R. CIV.

P. 12(b)(1) and (6). 

48. Count 1 is not justiciable. There is not a ripe case or controversy because FSCLE 

has not sought affirmative relief of a constructive trust under Texas law and the Trustee does not 

state an underlying cause of action that would entitle him to the procedural remedy of declaratory 

judgment. Contrary to the Trustee’s allegations, nothing in the Proof of Claim seeks a 

determination or declaration of a constructive trust under Texas Law because reservations of rights 

are not affirmative requests for relief. Count 1 seeks the declaration of a negative in the abstract 

and should be dismissed as not justiciable. 

49. Count 1 fails to state a claim upon which relief can be granted. The Trustee fails to 

plead a specific res that is in dispute as to a constructive trust under Texas law because the Trustee 

possesses no funds in the 4352 Account for which he seeks a declaration. 

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50. This Court should exercise its discretion to dismiss Count 1 because it is an 

improper use of the Declaratory Judgment Act aimed at collaterally attacking FSCLE and the 

District Court Lawsuit. 

B. Count 2: Declaratory Judgment of No Constructive Trust Under the Bankruptcy 

Code 

51. Count 2 should be dismissed for “lack of subject-matter jurisdiction” and for 

“failure to state a claim upon which relief can be granted.” FED. R. BANKR. P. 7012; FED. R. CIV.

P. 12(b)(1) and (6). 

52. Count 2 is not justiciable. There is not a ripe case or controversy because FSCLE 

has not sought affirmative relief of a constructive trust under the Bankruptcy Code and the Trustee 

does not state an underlying cause of action that would entitle him to the procedural remedy of 

declaratory judgment. Contrary to the Trustee’s allegations, nothing in the Proof of Claim seeks a 

determination or declaration of a constructive trust under the Bankruptcy Code because 

reservations of rights are not affirmative requests for relief. Count 2 seeks the declaration of a 

negative in the abstract and should be dismissed as not justiciable. 

53. Count 2 fails to state a claim upon which relief can be granted. The Trustee fails to 

plead a specific res that is in dispute as to a constructive trust under the Bankruptcy Code because 

the Trustee possesses no funds in the 4352 Account for which he seeks a declaration. 

54. This Court should exercise its discretion to dismiss Count 2 because it is an 

improper use of the Declaratory Judgment Act aimed at collaterally attacking FSCLE and the 

District Court Lawsuit. 

C. Count 3: Declaratory Judgment of No Express Trust. 

55. FSCLE reserved the right to assert an express trust in its Proof of Claim. Like the 

other Declaratory Counts, Count 3 is not ripe because an express trust has not been asserted by 

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FSCLE. That said, FSCLE will waive any right to assert an express trust over any property of the 

estate in this bankruptcy case. This waiver moots Count 3 to the extent it was even ripe. 

D. Count 4: Declaratory Judgment of No Theft or Resulting Trust. 

56. Count 4 should be dismissed for “lack of subject-matter jurisdiction” and for 

“failure to state a claim upon which relief can be granted.” FED. R. BANKR. P. 7012; FED. R. CIV.

P. 12(b)(1) and (6). 

57. Count 4 is not justiciable. There is not a ripe case or controversy because FSCLE 

has not sought affirmative relief of a resulting trust and the Trustee does not state an underlying 

cause of action that would entitle him to the procedural remedy of declaratory judgment. Contrary 

to the Trustee’s allegations, nothing in the Proof of Claim seeks a determination or declaration of 

a resulting trust because reservations of rights are not affirmative requests for relief. Count 4 seeks 

the declaration of a negative in the abstract and should be dismissed as not justiciable. 

58. Count 4 fails to state a claim upon which relief can be granted. The Trustee fails to 

plead a specific res that is in dispute as to a resulting trust under the Bankruptcy Code because the 

Trustee possesses no funds in the 4352 Account for which he seeks a declaration. 

59. This Court should exercise its discretion to dismiss Count 4 because it is an 

improper use of the Declaratory Judgment Act aimed at collaterally attacking FSCLE and the 

District Court Lawsuit. 

E. Count 5: Objection to FedEx Claim. 

60. Count 5 should be dismissed for “lack of subject-matter jurisdiction” and for 

“failure to state a claim upon which relief can be granted.” FED. R. BANKR. P. 7012; FED. R. CIV.

P. 12(b)(1) and (6). 

61. Count 5 is not justiciable. There is not a ripe case or controversy because FSCLE 

has not sought affirmative relief in its Proof of Claim other than as an unsecured creditor. Contrary 

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to the Trustee’s allegations, nothing in the Proof of Claim seeks a determination or declaration of 

property rights or equitable remedies because reservations of rights are not affirmative requests 

for relief. Count 5 seeks the declaration of a negative in the abstract and should be dismissed as 

not justiciable. 

62. Count 5 fails to state a claim upon which relief can be granted. The Trustee fails to 

plead an actual objection to the Proof of Claim. Indeed, the Proof of Claim is undisputed in amount 

and should be allowed. 

F. Count 6: Damages for Violation of the Automatic Stay. 

63. Count 6 should be dismissed for “failure to state a claim upon which relief can be 

granted.” FED. R. BANKR. P. 7012; FED. R. CIV. P. 12(b)(6). 

64. Claim Nos. 1, 2, 3, 4, 5, and 8 in the District Court Lawsuit are property of FSCLE 

and are not property of the estate as a matter of law. FSCLE has asserted personal, tort claims for 

direct damages against non-debtors. See FSCLE Complaint. Its claims are not derivative claims of 

the bankruptcy estate. The Trustee fails to plead a violation of the automatic stay under 11 U.S.C. 

§ 362(a)(1) and (3). Count 6 should be dismissed because there is no stay violation as a matter of 

law. 

65. In addition, the Trustee is not entitled to relief under 11 U.S.C. § 362(k) because 

the debtor is not an individual. As a matter of law, the Trustee has no cognizable harm or injury 

that entitles him to damages. Count 6 should be dismissed. 

G. Count 7: Permanent Injunction. 

66. Count 7 should be dismissed for “lack of subject-matter jurisdiction” and for 

“failure to state a claim upon which relief can be granted.” FED. R. BANKR. P. 7012; FED. R. CIV.

P. 12(b)(1) and (6). 

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67. FSCLE’s tort claims for direct damages against other non-debtors are not within 

the subject-matter jurisdiction of bankruptcy courts under 28 U.S.C. § 1334(b) and (3), and this 

Court lacks subject-matter jurisdiction and constitutional and statutory authority to enjoin the 

District Court Lawsuit. This Circuit and the “large majority of cases reject the notion that 

bankruptcy courts have ‘related to’ jurisdiction over third party actions” grounded in tort. Matter 

of Walker, 51 F.3d 562, 569 (5th Cir. 1995)); Matter of Zale Corp., 62 F.3d 746, 753-57 (5th Cir. 

1995) (holding “the bankruptcy court has no jurisdiction over [non-debtor’s] tort actions against a 

[non-debtor].”); In re Bass, 171 F.3d 1016, 1023 (5th Cir. 1999) (holding no “related to” 

jurisdiction where “proceeds from a lawsuit” would not “be turned over to the bankruptcy 

trustee”). Count 7 should be dismissed for lack of subject-matter jurisdiction. 

68. Count 7 fails to state a claim upon which injunctive relief can be granted. An 

injunction is a procedural remedy that must be supported by an underlying cause of action. The 

Trustee has neither plead an underlying cause of action nor any cognizable injury, let alone an 

irreparable injury. In addition, the Trustee cannot show equities favor the granting of an 

extraordinary remedy. FSCLE is the victim of fraud and theft and is entitled to seek direct damages 

against non-debtor tortfeasors without the Trustee, who stands in the shoes of the Debtor tortfeasor, 

interfering with the District Court Lawsuit. Count 7 should be dismissed for failure to state a claim. 

69. Count 7 must be dismissed for the further reason that a permanent injunction is not 

authorized by the bankruptcy code under these facts and circumstances. See In re Zale, 62 F.3d at 

760. 

CONCLUSION 

70. For the forgoing reasons and the supporting reasons stated in FSCLE’s Brief filed 

contemporaneously herewith, the Trustee Complaint should be dismissed in its entirety. The 

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Declaratory Counts should be dismissed without prejudice. The Stay Counts should be dismissed 

with prejudice. 

Respectfully submitted, 

BUTLER SNOW LLP 

/s/ Adam M. Langley 

Adam M. Langley (admitted pro hac vice) 

R. Campbell Hillyer (admitted pro hac vice) 

Danny Van Horn (admitted pro hac vice) 

6075 Poplar Avenue, Suite 500 

Memphis, TN 38119 

Telephone: (901) 680-7316 

adam.langley@butlersnow.com

cam.hillyer@butlersnow.com 

danny.vanhorn@butlersnow.com 

and 

Martin A. Sosland (TX Bar No. 18855645) 

Candice Carson (TX Bar No. 24074006) 

2911 Turtle Creek Blvd., Suite 1400 

Dallas, Texas 75219 

Telephone: (469) 680-5502 

candice.carson@butlersnow.com

martin.sosland@butlersnow.com 

Attorneys for FedEx Supply Chain 

Logistics & Electronics, Inc. 

CERTIFICATE OF SERVICE 

I hereby certify that a true and correct copy of the foregoing document was served 

concurrently with the filing of the same via the Court’s CM/ECF electronic filing system upon all 

persons who have filed ECF appearances in this case and via email to Trustee’s Counsel: 

Michael J. Quilling, Esq. 

(Texas Bar No. 16432300) 

Joshua L. Shepherd, Esq. 

(Texas Bar No. 24058104) 

QUILLING, SELANDER, LOWNDS, 

 WINSLETT & MOSER, P.C. 

2001 Bryan Street, Ste. 1800 

Dallas, TX 75201 

(214) 871-2100 

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mquilling@qslwm.com 

jshepherd@qslwm.com 

Dated: January 10, 2024 

/s/ Adam M. Langley 

84649988.v5 

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