RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit I.O.P. 32.1(b)

File Name: 19a0026p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

NICOLE GAS PRODUCTION, LTD.,

Debtor.

___________________________________________

JAMES A. LOWE; CURTLAND H. CAFFEY; S. BREWSTER 

RANDALL, II; ROBERT C. SANDERS,

Appellants,

v.

BRENDA K. BOWERS, Chapter 7 Trustee of the 

Bankruptcy Estate of Nicole Gas Production, Ltd.,

Appellee.

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No. 18-3301

On Appeal from the Bankruptcy Appellate Panel of the Sixth Circuit.

Nos. 15-8053/8055—Paulette J. Delk, Marian F. Harrison, and Daniel S. Opperman,

Bankruptcy Appellate Panel Judges.

United States Bankruptcy Court for the Southern District of Ohio at Columbus.

No. 2:09-bk-52887—John E. Hoffman, Judge.

Argued: October 18, 2018

Decided and Filed: February 22, 2019

Before: MERRITT, COOK, and LARSEN, Circuit Judges. 

_________________

COUNSEL

ARGUED: Rick L. Ashton, ALLEN, KUEHNLE, STOVALL & NEUMAN, LLP, Columbus, 

Ohio, for Appellant Lowe. Robert C. Sanders, Upper Marlboro, Maryland, pro se. Daniel E. 

Shuey, VORYS, SATER, SEYMOUR AND PEASE LLP, Columbus, Ohio, for Appellee. 

ON BRIEF: Rick L. Ashton, James A. Coutinho, ALLEN, KUEHNLE, STOVALL 

>
No. 18-3301 In re Nicole Gas Production, Ltd. Page 2

& NEUMAN, LLP, Columbus, Ohio, for Appellant Lowe. Daniel E. Shuey, Brenda K. Bowers, 

VORYS, SATER, SEYMOUR AND PEASE LLP, Columbus, Ohio, for Appellee. Robert C. 

Sanders, Upper Marlboro, Maryland, S. Brewster Randall, II, Curtland H. Caffey, Columbus, 

Ohio, pro se.

_________________

OPINION

_________________

MERRITT, Circuit Judge. This is a bankruptcy contempt dispute. Normally a party’s 

conduct is contemptuous or it is not. But in this unusual case, whether the defendants are in 

contempt depends on statutory construction. The question presented is whether the Ohio RICO 

statute gives the sole shareholder of a bankrupt corporation standing to circumvent the automatic 

stay and individually sue a competitor. The issue is a complex intersection of three areas of law: 

the principle of the derivative suit in corporate law, the function of the automatic stay in 

bankruptcy, and the extent and construction of a specific state’s RICO laws. In this appeal, we 

must consider how these precepts work together where the RICO statute offers no explicit 

guidance on how the claim should operate in the corporate and bankruptcy contexts. But for all 

the legal overlays here, ultimately the Appellants are in contempt or they are not. 

The basic facts. Appellant Freddie Fulson1 owned a company called Nicole Gas that 

entered bankruptcy proceedings. During the bankruptcy, Fulson became dissatisfied with the 

Trustee’s handling of claims that Nicole Gas held against its competitors. With the help of two 

lawyers, Appellants Robert Sanders, Esq. and James A. Lowe, Esq., Fulson sought relief in state 

court under the Ohio Corrupt Practices Act (Ohio civil RICO) against the competitors that

allegedly put his business into bankruptcy. Because Fulson alleged damages incurred only by 

the debtor-business, the Trustee alleged that he had appropriated claims that the Trustee owned. 

By filing this action during the bankruptcy, the Trustee alleged that Fulson, Sanders, and Lowe 

violated the automatic stay. The Bankruptcy Court agreed and held the three in contempt and 

entered a judgment for roughly $91,000. The contempt finding and fee order are the subjects of 

the instant appeal.

 

1Fulson died during the pendency of the bankruptcy, and his estate was substituted in the proceedings 

below and here.
No. 18-3301 In re Nicole Gas Production, Ltd. Page 3

Back to legal principles. Derivative liability is a cardinal tenet of corporate common law. 

When an artificial entity (a corporation) is injured, shareholders cannot necessarily redress that 

injury themselves. See 19 Am. Jur. 2d Corporations § 1935 (1998) (“[W]here the injury is to the 

corporation, and only indirectly harms the shareholder, the claim must be pursued as a derivative 

claim.”); see also James D. Cox & Thomas Lee Hazen, 3 Treatise on the Law of Corporations 

§ 15:2 (3d ed. 2010) (“An almost necessary consequence of a wrong to a corporation is some 

impairment of the value of each shareholder’s stock interest. As a general rule, however, 

shareholders are considered to have no direct individual right of action for corporation wrongs 

that impair the value of their investment.”). 

As to the bankruptcy gloss on this dispute, the Bankruptcy Code imposes a powerful stay 

on parties attempting to gain control over the property of the debtor’s estate. See 11 U.S.C. 

§ 362(a)(3) (“[A] petition . . . operates as a stay, applicable to all entities, of . . . any act to obtain 

possession of property of the estate or of property from the estate or to exercise control over 

property of the estate”). The policy imperative behind the automatic stay is to “give[] the debtor 

a breathing spell from creditors and stop[] foreclosure actions, collection efforts, and creditor 

harassment.” 2 Norton Bankr. L. & Prac. 3d § 43:4 (2019). 

The precise language of the Ohio Corrupt Practices Act is the complicating factor here. 

The Appellants claim that the wording of the statute converts a derivative shareholder action to 

an individual claim because it provides a private right of action for “any person directly or 

indirectly injured by conduct” violating the Act. Ohio Rev. Code § 2923.34. As the sole 

shareholder of Nicole Gas, normally Fulson would have to seek relief from Nicole Gas’s 

competitors via the traditional route of derivative liability. But, his successors argue, the Corrupt 

Practices Act means both (a) that he did not have to pursue a derivative claim at all, and (b) that 

thus, the bankruptcy Trustee did not have the right to exercise control over the claim. If Fulson’s 

successors are right, and the claim against Nicole Gas’s competitors can be alleged outside of 

corporate law and via the Corrupt Practices Act, then they did not violate the automatic stay. 

Thus, the basis for the Contempt and Fee Orders would disappear. We shall see in due course 

that they are wrong. In agreement with the persuasively reasoned decisions below, both in the 

Bankruptcy Court and the Bankruptcy Appellate Panel, we AFFIRM.
No. 18-3301 In re Nicole Gas Production, Ltd. Page 4

I. FACTUAL AND PROCEDURAL BACKGROUND

In the late 1990s, Freddie Fulson formed several corporate entities to produce and market 

natural gas in the Midwest. One of these entities is the debtor in the bankruptcy case, Nicole Gas 

Production, Ltd. The bottom line is that Fulson was the indirect equity owner of Nicole Gas and 

was calling the shots. To market and move the gas, Fulson’s entities contracted with a larger 

company, Columbia Gas Transmission, and its affiliates. Eventually, relations between 

Columbia Gas and Fulson’s entities soured and in the early 2000s a decade of litigation in state 

and federal court began. For his part, Fulson believed that Columbia Gas had conspired with 

other entities, including Nicole Gas’s creditors, to put him out of business. Columbia Gas did 

this, he alleged, by mismeasuring the amount of natural gas produced by Fulson’s wells, 

misappropriating gas that the entities delivered into Columbia Gas’s transmission system, and 

improperly soliciting his creditors to force Nicole Gas into bankruptcy proceedings. This 

bankruptcy proceeding began in 2009 and has continued since then, but it is only the tip of the 

iceberg of the disputes between these entities. 

In 2013, while Nicole Gas was in bankruptcy proceedings, the corporation’s bankruptcy 

Trustee, Frederick Ransier, proposed settling all of Nicole Gas’s claims against Columbia Gas 

for $250,000. Back in 2001, one of Nicole Gas’s affiliates, Nicole Energy Services, Inc., had 

asserted claims against Columbia Gas for $36 million. Likely miffed that the Trustee was trying 

to settle similar claims for less than a million dollars, Fulson objected to that settlement in 

October of 2012. But objecting in the proper and usual course was not enough for him. 

Sometime after objecting to the settlement, Fulson began working with Robert C. Sanders, Esq., 

a Maryland attorney who had represented one of Fulson’s other gas companies in state court. 

Fulson filed a new complaint in Ohio state court against Columbia Gas seeking roughly $34 

million in damages. Fulson, Sanders, and Lowe wanted to try the claims to a jury in state court 

because, according to Sanders, jurors “don’t like utility companies.” 519 B.R. at 740 n.18.

The state court complaint recited the history between the companies and alleged that 

Columbia Gas had violated the Ohio Corrupt Practices Act, Ohio Rev. Code § 2923.31 et seq., 

which provides that no person shall engage in a pattern of corrupt activity, defined as engaging 

in racketeering, theft, telecommunications fraud, and the like. Id. § 2923.32. This is Ohio’s 
No. 18-3301 In re Nicole Gas Production, Ltd. Page 5

Racketeer Influenced and Corrupt Organizations (“RICO”) statute. The Act includes a private 

right of action in § 2923.34 which allows for treble damages for “any person directly or 

indirectly injured by conduct” violating the Act (emphasis added). The Act presented an 

attractive avenue for relief because it carries treble damages and confers broad standing on 

litigants. Fulson and Sanders then hired James A. Lowe, Esq., of Cleveland as local counsel, and 

the three of them together filed the complaint (with Fulson as the sole plaintiff) in the Court of 

Common Pleas for Franklin County, Ohio, in January 2013. Because Nicole Gas was a domestic 

limited liability company, it counted as a “person” in Ohio and could have asserted these claims 

against Columbia Gas. 

There was one big problem with the complaint: Fulson couched his damages as directly 

resulting from his status as the sole shareholder of Nicole Gas’ parent corporation. He alleged 

no damages that related to him personally; he only pled that he had been harmed because of his 

indirect ownership of Nicole Gas. In multiple paragraphs of the complaint, Fulson’s attorneys 

recited the damages to Fulson as sustained by the corporation he owned.2 Usually, when a 

corporation is damaged, shareholders seek relief through a derivative suit. Fulson, Sanders, and 

Lowe, however, believed that the language of the Corrupt Practices Act would allow them to 

circumvent both the automatic stay and the principle that the bankruptcy trustee has the sole right 

to assert a debtor’s causes of actions. See Stevenson v. J.C. Bradford & Co. (In re Cannon), 

277 F.3d 838, 853 (6th Cir. 2002); Bauer v. Commerce Union Bank, 859 F.2d 438, 441 (6th Cir. 

1988). 

Because Nicole Gas was in bankruptcy proceedings, filing a derivative suit (based on the 

Corrupt Practices Act or some other statute) would have meant seeking relief from the automatic 

stay, see 11 U.S.C. § 362(d); Fed. R. Bankr. P. 4001(a), or convincing the bankruptcy trustee to 

either bring the claims himself or abandon them, see Maloof v. Level Propane, Inc., 429 F. 

 

2For instance, Paragraph 120 of the state court complaint reads, “The Plaintiff has standing to bring a civil 

action against the Defendants under Section 2923.34(E) of the Act because, as the owner of NES, he is a person who 

was ‘directly or indirectly injured’ by the Defendants’ violations...” (emphasis added). Paragraph 126 continues 

this grammatical pattern: “The amount of the damages caused to the Plaintiff by the Defendant’s violations of the 

Act are (1) the net damages of $36,654,305.94 sustained by NES...and (2) the damages sustained by NGP...” 

(emphasis added). By its very terms, then, the state court complaint pled damages that were incurred by the 

corporation.
No. 18-3301 In re Nicole Gas Production, Ltd. Page 6

App’x 462, 468 (6th Cir. 2011). Keep in mind that in a Chapter 7 bankruptcy, the role of the 

Trustee is to close the estate as expeditiously as possible. See 11 U.S.C. § 704(a); see also In re 

Modern Plastics Corp., 732 F. App’x. 379, 384 (6th Cir. 2018) (discussing trustee duties). 

Fulson and his lawyers did not consult Ransier, who discovered the complaint when an employee 

conducted a routine state court docket check. At that time, Ransier was in the process of 

negotiating and finalizing a settlement agreement with Columbia Gas that would take care of 

“any and all” claims Nicole Gas might hold against Columbia. Ransier believed that the Corrupt 

Practices Act claim fell under this settlement umbrella, and he filed a Motion for Contempt 

before the Bankruptcy Court. The Corrupt Practices action in state court was stayed. 

The Bankruptcy Court held a hearing and heard testimony from Fulson’s two attorneys 

and Ransier. In a 56-page order (the “Contempt Order”), reported as In re Nicole Gas Prod., 

Ltd., 519 B.R. 723 (Bankr. S.D. Ohio 2014), the Court found that Fulson, Lowe, and Sanders 

(collectively, “the Fulson Parties”) had willfully violated the automatic stay, 11 U.S.C. 

§ 362(a)(3), by filing the Corrupt Practices Act complaint. In this order, the Bankruptcy Court 

analyzed the Ohio Corrupt Practices Act in detail and concluded that Fulson had no independent 

standing to raise claims that belonged to Nicole Gas. After soliciting additional briefing and 

holding a separate hearing, the Court issued a second 51-page order (the “Fee Order”), reported 

as In re Nicole Gas Prod., Ltd., 542 B.R. 204 (Bankr. S.D. Ohio 2015), detailing the amount of 

damage that the Fulson Parties had done to Nicole Gas’s estate and directing them to pay 

$91,068.00 to Ransier. The Fulson Parties – Fulson’s attorneys in the Corrupt Practices Act case 

(James A. Lowe, Esq. and Robert C. Sanders, Esq.), and the administrators of Fulson’s estate –

appealed the Contempt and Fee Orders to the Bankruptcy Appellate Panel for the Sixth Circuit. 

The Bankruptcy Appellate Panel proceeded in two stages. In August 2016, the Panel 

certified a question of law to the Ohio Supreme Court. The Panel asked the Ohio Supreme Court 

whether an injured shareholder was entitled to individual standing under the Ohio Corrupt 

Practices Act. In October 2016, the Ohio Supreme Court declined to answer the certified 

question and dismissed the cause. In March of 2018, the Bankruptcy Appellate Panel issued a 

decision addressing the merits of the Fulson Parties’ claims. The Panel affirmed the Bankruptcy 

Court in all respects (the “Bankruptcy Appellate Panel Opinion”), reported as In re Nicole Gas 
No. 18-3301 In re Nicole Gas Production, Ltd. Page 7

Prod., Ltd., 581 B.R. 843 (B.A.P. 6th Cir. 2018), and concluded that an individual shareholder 

could not use the Ohio Corrupt Practices Act to convert a corporate law claim into an individual 

one. Thus, the claim was the property of the bankruptcy estate, and the Fulson Parties had 

violated the automatic stay by misappropriating that claim. The Fulson Parties appealed again to 

the Sixth Circuit. Ransier was eventually replaced by Brenda K. Bowers, the Successor Trustee 

of the bankruptcy estate of Nicole Gas Production, Ltd. 

II. ANALYSIS

We have jurisdiction to review orders of the Bankruptcy Appellate Panel under 28 U.S.C. 

§ 158(d)(1). Review of the Bankruptcy Court’s decision is independent of the Bankruptcy 

Appellate Panel’s review. In re Curry, 509 F.3d 735 (6th Cir. 2007). The Sixth Circuit uses the 

“clear error” standard for factual findings and reviews conclusions of law de novo. In re Century 

Boat Co., 986 F.2d 154, 156 (6th Cir. 1993). Generally, bankruptcy court determinations of 

contempt are examined under an abuse of discretion standard. In re Wingerter, 594 F.3d 931, 

936 (6th Cir. 2010). 

Filing a bankruptcy petition creates a bankruptcy estate, which includes “all legal or 

equitable interests of the debtor in property as of the commencement of the case,” 11 U.S.C. 

§ 541(a)(1), including causes of action, In re Parker, 499 F.3d 616, 624 (6th Cir. 2007). “The 

nature and extent of property rights in bankruptcy are determined by the ‘underlying substantive 

law’”—Ohio law, in this case. Tyler v. DH Capital Mgmt., Inc., 736 F.3d 455, 461 (6th Cir. 

2013); In re Underhill, 579 F. App’x 480. 482 (6th Cir. 2014) (“State substantive law determines 

the ‘nature and extent’ of causes of action . . .”). “[O]nce that determination is made, federal 

bankruptcy law dictates to what extent that interest is property of the estate for the purposes of 

§ 541.” DH Capital Mgmt., 736 F.3d at 461 (quoting Bavely v. United States (In re Terwilliger’s 

Catering Plus, Inc.), 911 F.2d 1168, 1172 (6th Cir. 1990)).

If a shareholder has sole right to assert a cause of action, the cause of action is not part of 

the bankruptcy estate. Whether a shareholder “has sole right to a cause of action is determined in 

accordance with state law.” Honigman v. Comerica Bank (In re Van Dresser Corp.), 128 F.3d 

945, 947 (6th Cir. 1997) (citing Oakland Gin Co. v. Marlow (In re The Julien Co.), 44 F.3d 426, 
No. 18-3301 In re Nicole Gas Production, Ltd. Page 8

429 (6th Cir. 1995). Under Van Dresser, whether “shared” causes of action belong to the 

bankruptcy estate comes down to two questions: (1) whether both the shareholder and the 

corporation-debtor could state claims for the damages; and, if so, (2) whether the shareholder 

and corporation-debtor could both recover full damages. Van Dresser, 128 F.3d at 947–48. If 

either’s recovery can “preclude[] the other from a subsequent recovery, then the claims are not 

truly independent.” Id. Absent being “truly independent,” the claims belong to the bankruptcy 

estate in toto.

A. The Ohio Corrupt Practices Act

The most important question raised by the Fulson Parties is substantively a question of 

Ohio state law. There is no case or statute explicitly suggesting that the Ohio Corrupt Practices 

Act does or does not confer standing upon an individual shareholder to seek redress for damages 

visited upon a corporation. But applying principles of construction announced by the Ohio 

Supreme Court, we can triangulate a clear answer. The relevant section of the Corrupt Practices 

Act reads:

(E) In a civil proceeding under division (A) of this section, any person directly or

indirectly injured by conduct in violation of section 2923.32 of the Revised Code 

or a conspiracy to violate that section, other than a violator of that section or a 

conspirator to violate that section, in addition to relief under division (B) of this 

section, shall have a cause of action for triple the actual damages the person 

sustained. To recover triple damages, the plaintiff shall prove the violation or 

conspiracy to violate that section and actual damages by clear and convincing 

evidence. Damages under this division may include, but are not limited to, 

competitive injury and injury distinct from the injury inflicted by corrupt activity.

Ohio Rev. Code § 2923.34(E) (emphasis added).3 On its face, this is a broadly written statute 

allowing for a wide set of claims. It employs the words “any” and “indirectly” to expand the 

scope of civil RICO claims contemplated in the federal case law. See Iron Workers Local Union 

 

3The rest of the Ohio Corrupt Practices Act contains few explicit references to corporate law. First, Ohio 

Rev. Code § 2923.34(B)(5) allows a court to dissolve a corporation on a finding that the corporation violated the 

Act. Second, the Act’s Definitions section, § 2923.31(A)(3), excludes stockholders from the definition of 

“beneficial interest.” But as the Act currently stands, “beneficial interests” are only referenced in § 2923.36, which 

discusses the filing of corrupt activity liens. In other words, one may not file a corrupt activity lien against the 

interest of a stockholder. Aside from these passing references, corporate law and rights thereunder go unmentioned 

in the Act. The statute is simply not written as specifically addressing claims relating to the corporate form. 
No. 18-3301 In re Nicole Gas Production, Ltd. Page 9

No. 17 Ins. Fund v. Philip Morris Inc., 23 F. Supp. 2d 771, 788 (N.D. Ohio 1998) (hereinafter 

Iron Workers I) (“In choosing to broaden standing to bring RICO actions under state law, the 

Ohio General Assembly decided to widen the right to bring an action.”). But it is not clear in 

this context that by using “indirectly injured” the statute allows shareholders to seek recovery 

under the Corrupt Practice Act for an entity’s injury. Indeed, the conclusion that “indirect” 

injuries under the Corrupt Practices Act do include a shareholder’s derivative injuries is as 

plausible as the conclusion that they do not. The statutory language is thus ambiguous. See 

Jacobson v. Kaforey, 75 N.E.3d 203 (Ohio 2016) (“Ambiguity, in the sense used in our opinions 

on statutory interpretation, means that a statutory opinion is capable of bearing more than one 

meaning.” (quotation marks omitted)); Hughes v. White, 388 F.Supp.2d 805, 818 (S.D. Ohio 

2005) (“A statute is ambiguous ‘if the language is susceptible [to] more than one reasonable 

interpretation.” (quoting State v. Jordan, 733 N.E.2d 601, 605 (Ohio 2000))).

Because the language is ambiguous, we therefore look to additional principles of 

statutory interpretation. State v. Thomas, 70 N.E.3d 496, 498 (Ohio 2016). We must, for 

example, presume that the Ohio General Assembly passed the Corrupt Practices Act with 

knowledge of the existing common law of derivative suits. In Ohio, shareholders may not 

pursue claims based on injuries to a corporation in which the shareholder holds an interest; the 

proper path for remedy is the derivative suit. See generally 12 Ohio Jur. 3d Business 

Relationships § 899 (2018) (“A plaintiff-shareholder does not have an independent cause of 

action where there is no showing of individual injury in any capacity other than in common with 

all other shareholders as a consequence of the wrongful actions of a third party directed toward 

the corporation.”). The seminal Ohio case is Adair v. Wozniak, 492 N.E.2d 426 (Ohio 1986). In 

Adair, the Ohio Supreme Court wrote: 

Where the defendant’s wrongdoing has caused direct damage to corporate worth, 

the cause of action accrues to the corporation, not to the shareholders, even 

though in an economic sense real harm may well be sustained by the shareholders 

as a result of reduced earnings, diminution in the value of ownership, or 

accumulation of personal debt and liabilities from the company’s financial 

decline. The personal loss and liability sustained by the shareholder is both 

duplicative and indirect to the corporation’s right of action.... Although this is a 

case of first impression, we accept and follow the widely recognized rule that a 

plaintiff-shareholder does not have an independent cause of action where there is 
No. 18-3301 In re Nicole Gas Production, Ltd. Page 10

no showing that he has been injured in any capacity other than in common with 

all other shareholders as a consequence of the wrongful actions of a third party 

directed towards the corporation.

Id. at 429 (internal citations omitted) (emphasis added). In short: a shareholder cannot “enter the 

fray” for injuries sustained by a corporation that have lowered the value of his or her interest in 

that corporation. Interpreting Adair, the Bankruptcy Court below wrote that the Corrupt 

Practices Act may have removed “indirectness” as a bar to recovery but could not remove the bar 

erected by corporate law. 519 B.R. at 746. We agree.

The Fulson Parties, however, seize upon the language in Adair, and argue that the Ohio 

Supreme Court’s use of the word “indirect” in the above-quoted passage means that the claim for 

indirect damages under the Act is viable. Because Adair says that a shareholder is “indirectly” 

injured when the corporation is injured, they contend, the Corrupt Practices Act’s use of the 

word “indirect” affords an injured shareholder standing for civil RICO. The argument is that the 

Corrupt Practices Act gives the Fulson Parties an “out” with regard to complying with the rules 

of derivative shareholder suits. 

This reading is strained to say the least. Why? Because the two documents are not 

talking about the same thing. Adair employed the word “indirect” to characterize shareholder 

claims against a corporate antagonist as secondary and duplicative in a pejorative sense. If 

shareholders of Apple could pursue claims against Samsung and bypass the derivative suit, it 

would render the corporate form superfluous. The very holding of Adair is that shareholders 

cannot strike out on their own to right wrongs visited on the corporation. Allowing indirectly 

injured parties to sue does not mean that the Act allows anyone to sue in all situations. The use 

of the word “indirect” in both Adair and the Act is a coincidence, not a confluence. The Fulson 

Parties’ attempts to cast the occurrence of the word “indirect” in two places as somehow 

deliberate or instructive cannot overcome the presumption that the Act did not intend to 

restructure corporate law absent a clear statement of the intent to do so. See, e.g., Mann v. 

Northgate Invs., L.L.C., 5 N.E.3d 594, 598–99 (Ohio 2014). The Bankruptcy Court correctly 

deemed the Fulson Parties’ argument “the sophist’s game.” 519 B.R. at 746.
No. 18-3301 In re Nicole Gas Production, Ltd. Page 11

Ohio corporate law supplies further support for our conclusion. The analogous right to 

sue for injuries to Nicole Gas never belonged to Fulson in the first place. See Boedeker v. 

Rogers, 746 N.E.2d 625, 632–33 (Ohio Ct. App. 2000) (citing Adair for the proposition that 

“[w]here the basis of the action is a wrong to the corporation, redress must be sought in a 

derivative action”). As the Bankruptcy Appellate Panel noted, the state court complaint did not 

allege any injuries specific to Fulson outside of his role as owner. 581 B.R. at 851 (“Appellants 

have conceded at least three times – in the state court complaint, before the Bankruptcy Court, 

and in their initial appellate brief – that Fulson sought recovery which would make the Debtor

whole.”) (emphasis in original). If, for instance, a shareholder of Corporation A slipped and fell 

on the floor of the premises of Corporation B (Corporation A’s rival), then that shareholder 

would have an independent basis to pursue a claim against Corporation B. 519 B.R. at 739 

(citing Honigman v. Comerica Bank (In re Van Dresser Corp.), 128 F.3d 945, 947 (6th Cir. 

1997)). That is not the case here; there is no independent basis for liability. 

Corporate law cabins the claims that a shareholder may raise when the entity in which she 

owns stock is injured, and the value of her shares had decreased accordingly. “Stated another 

way, a shareholder brings a derivative action on behalf of the corporation for injuries sustained

by or wrongs done to the corporation, and a shareholder brings a direct action where the 

shareholder is injured in a way that is separate and distinct from the injury to the corporation.” 

HER, Inc. v. Parenteau, 770 N.E.2d 105, 109 (Ohio Ct. App. 2002); see also Crosby v. Beam, 

548 N.E.2d 217, 219 (Ohio 1989) (“[I]f the complaining shareholder is injured in a way that is 

separate and distinct from an injury to the corporation, then the complaining shareholder has a 

direct action.”). A derivative suit is a shareholder’s single path through which she may recover 

losses the corporation sustained in the rough and tumble of the marketplace. 

The Corrupt Practices Act says nothing about this process; allowing indirectly injured 

plaintiffs to sue is not the same as constructing an explicit statutory mechanism to bypass 

corporate law. Although the text of the Ohio RICO statute indicates that it grants broader 

standing than federal RICO, we see no clear indication that, by using the term “indirect,” the 

Ohio General Assembly supplanted an entire area of the common law. Instructively, 

shareholders cannot pursue claims individually against competitors under the federal RICO 
No. 18-3301 In re Nicole Gas Production, Ltd. Page 12

statutes. See Warren v. Mfrs. Nat’l Bank of Detroit, 759 F.2d 542 (6th Cir. 1985) (holding that a 

sole shareholder could not individually allege federal RICO claims that a bank put his steel 

company out of business); State v. Franklin, Nos. 24011 & 24012, 2011 WL 6920727, at *16 

(Ohio Ct. App. Dec. 30, 2011) (noting that Ohio courts still look to federal RICO case law for 

guidance in applying Ohio RICO). There is no basis for expanding Ohio RICO to the extent the 

Fulson Parties assert. 

The legislature is perfectly capable of adding a tool (broad civil RICO) to potential 

plaintiffs’ toolboxes without simultaneously throwing a different toolbox (corporate derivative 

suits) out the window. The Fulson Parties argue otherwise, and point to Clark v. Scarpelli, 744 

N.E.2d 719, 726 (Ohio 2001), which held that “[i]t is presumed that the General Assembly is 

fully aware of any prior judicial interpretation of an existing statute when enacting an 

amendment.” In other words, the Fulson Parties say, the Ohio legislature is presumed to have 

known about derivative liability and the key words of that corpus; so its choice of words in 

expanding civil RICO is the final say. But the legislature’s presumed omniscience does not 

mean that the enactors of the Corrupt Practices Act intended to destroy a whole area of corporate 

law without so much as mentioning it. As the Bankruptcy Appellate Panel correctly noted, “the 

Legislature can ‘mean what it said’ when it granted standing to those who suffer indirect injury 

without intending to turn on its head a century of law governing shareholder litigation. 

Shareholder derivative suits involve one discreet corner of corporate jurisprudence.” 581 B.R. at 

850. 

What little Ohio case law addresses these issues supports our conclusions.4 And although 

Ohio has not seen a case directly considering derivative civil RICO in the bankruptcy context, 

another state in our Circuit, Michigan, has. See Kelley v. Thompson-McCully Co., LLC, No. 

236229, 2004 WL 1676760 (Mich. Ct. App. July 27, 2004). And – no surprises – the Michigan 

Court of Appeals concluded that a shareholder’s derivative claim belonged to the bankruptcy 

 

4Ohio’s civil RICO jurisprudence contains several examples of “derivative” or “indirect” claims, although 

none in the corporate context. See Iron Workers I, 23 F. Supp. 2d at 791; Cleveland v. JP Morgan Chase Bank, 

N.A., No. 98656, 2013 WL 1183332 (Ohio Ct. App. Mar. 21, 2013). These cases are not wholly dispositive, but we 

may simply look to them for the proposition that the Corrupt Practices Act does not allow plaintiffs to merge distinct 

claims belonging to different parties.
No. 18-3301 In re Nicole Gas Production, Ltd. Page 13

trustee.5 The Michigan case also teaches that the Fulson Parties should have petitioned the 

Bankruptcy Court for guidance about their planned suit. Id. at *3 (“[T]he shareholder must make 

a demand on the trustee.”). Courts outside of our Circuit have held similarly when these 

problems have arisen.6

In sum: Fulson and his lawyers may have believed that the claims against Columbia Gas 

were worth more than the Trustee was settling them for. If they thought that Fulson had a shot at 

suing Columbia Gas via the Corrupt Practices Act, the proper course would have been to seek 

the Trustee’s cooperation or abandonment, or to seek relief from the automatic stay. But, as the 

Bankruptcy Court noted, “filing the Complaint without providing Ransier notice and without 

requesting the Court grant relief from the automatic stay appears to have been a calculated risk 

by one who believed it more expedient to ask for forgiveness rather than for permission.” 

519 B.R. at 736. It is clear that the Fulson Parties, by filing and continuing the state court 

lawsuit, “act[ed] to obtain possession of the property of the estate . . . or to exercise control over 

property of the estate.” 11 U.S.C. § 362(a)(3). 

B. The Automatic Stay and The Fee Award

Because Nicole Gas was in bankruptcy, the Trustee was in charge of any claims the 

debtor-business might hold. Cf. Griffin v. Bonapfel (In re All Am. of Ashburn, Inc.), 805 F.2d 

1515 (11th Cir. 1986) (similar dispute with shareholder suit). If Fulson was considering 

pursuing claims belonging to the corporation he owned, then upon the moment of the bankruptcy 

filing, those claims belonged to the corporation’s bankruptcy estate. In re Van Dresser Corp., 

 

5

In Kelley, the plaintiff was a shareholder and corporate officer in a company called West Shore 

Construction that entered bankruptcy proceedings. The suit concerned a failed corporate buyout, and the plaintiff 

alleged that the defendants had conspired to ruin West Shore. Kelley, 2004 WL 1676760, at *1. One of the claims 

was styled under the Michigan Antitrust Reform Act, Mich. Comp. Laws § 445.778(2), which allows “any other 

person...injured directly or indirectly...” to sue under the statute for antitrust claims. The Michigan Court of 

Appeals held that because the injured party was the corporation, West Shore, the derivative nature of the suit meant 

that the claim belonged to the bankruptcy trustee. Kelley, 2004 WL 1676760, at *3.

6The Oregon Court of Appeals has concluded that shareholders may not assert derivative claims under the 

Oregon RICO statutes. See Loewen v. Galligan, 882 P.2d 104, 113 (Or. Ct. App. 1994) (“[T]he only injury that 

plaintiffs’ [Oregon RICO] claims allege is a diminution in share value that affected all shareholders. Because 

that injury is derivative, we conclude that plaintiffs do not have standing to bring their [Oregon RICO] claims.”) 

(internal citations omitted). See also Harris v. Orange S.A., 636 F. App’x 476, 483 (11th Cir. 2015) (analyzing 

Georgia RICO).
No. 18-3301 In re Nicole Gas Production, Ltd. Page 14

128 F.3d at 947 (“[I]f the debtor could have raised a state claim at the commencement of the 

bankruptcy case, then that claim is the exclusive property of the bankruptcy estate...”). The 

Fulson Parties argue that Fulson’s individual Corrupt Practices Act claims were not the property 

of the bankruptcy estate because the claims had not accrued at the time of the petition. They 

further assert that it was only when the claims were valued at $250,000 by the Trustee that those 

claims accrued. This is nonsense. Fulson never had any independent claims to assert. The 

Bankruptcy Court fully and correctly addressed these arguments in the Contempt Order. To this, 

Appellants retort, if Fulson had no standing under the Corrupt Practices Act, then he could not 

have violated the stay by asserting “claims that do not exist.” This is, to borrow the Bankruptcy 

Court’s term, sophistry. To the contrary, because the Corrupt Practices Act claims were property 

of the estate, filing the state court complaint was an impermissible “act to obtain possession of 

the property of the estate . . . or to exercise control over property of the estate.” 11 U.S.C. 

§ 362(a)(3). Here is the bottom line: whatever corporate wrongs had been visited upon Nicole 

Gas, the right to redress those claims belonged to Nicole Gas itself. Upon the filing of the 

bankruptcy petition, those claims passed into the hands of Ransier, who was trying to settle “any 

and all” claims with Columbia Gas. Any Corrupt Practices Act claim that Nicole Gas could have 

asserted fell into that box. Before bankruptcy and after, Fulson did not have the power to sue 

individually on those claims. But he did, and thus violated the automatic stay.

The automatic stay is one of the most important and powerful features of the bankruptcy 

system. Cf. Easley v. Pettibone Mich. Corp., 990 F.2d 905, 911 (6th Cir. 1993) (“[A]ctions 

taken in violation of the stay are invalid and voidable and shall be voided absent limited 

equitable circumstances.”). Violating the automatic stay constitutes civil contempt. See In re 

Crabtree, 767 F.2d 919, 1985 WL 13441 (6th Cir. 1985) (table). The Bankruptcy Court below 

did not simply conclude that the Fulson Parties had fumbled their way into violating the 

automatic stay – it deemed their actions willful and called their credibility into question. 

519 B.R. at 736. Further, as highlighted by the Bankruptcy Appellate Panel, if Fulson had 

secured a judgment on his Corrupt Practices Act claims in state court, the bankruptcy estate 

would have been prejudiced. 581 B.R. at 853. The Bankruptcy Court made detailed findings in 

this regard, and it acted diligently and thoughtfully to protect its own procedures and the 

Bankruptcy Code. 
No. 18-3301 In re Nicole Gas Production, Ltd. Page 15

With regard to the Fee Order, the Fulson Parties argue that Baker Botts, L.L.P. v. 

ASARCO, L.L.C., 135 S. Ct. 2158 (2015), precludes the Bankruptcy Court from awarding fees to 

the trustee. The Baker Botts case simply held that, “Because § 330(a)(1) does not explicitly 

override the American Rule with respect to fee-defense litigation, it does not permit bankruptcy 

courts to award compensation for such litigation.” Id. at 2169. But, as recited by the Bankruptcy 

Appellate Panel, Section 330, which governs compensation for certain professionals, is irrelevant 

here. 581 B.R. at 854–55. The Bankruptcy Court here relied on 11 U.S.C. § 105(a) to hold 

Sanders, Lowe, and Fulson in contempt. 519 B.R. at 736–37. Section 105(a) states that “The 

court may issue any order, process, or judgment that is necessary or appropriate to carry out the 

provisions of this title.” The sole authority the Fulson Parties cite as to their Baker Botts

argument, City of Philadelphia v. Walker, No. CV-15-01685, 2015 WL 7428501 (E.D. Pa. Nov. 

23, 2015), contains no references to contempt or 11 U.S.C. § 105.

Whatever limits apply to the Bankruptcy Court’s contempt powers, see generally In re 

John Richards Homes Bldg. Co., 552 F. App’x 401, 414 (6th Cir. 2013) (“Those powers are 

circumscribed and have most often been limited to compensatory punitive awards of attorney’s 

fees after findings of bad faith or contempt.”), they do not apply on these facts. See Liberis v. 

Craig, 845 F.2d 326, 1988 WL 37450 at *8 (6th Cir. 1988) (table) (“In the instant case, there is 

no question that the bankruptcy court had the authority to award attorneys’ fees against the 

plaintiffs to compensate the trustee for bringing plaintiffs’ contempt to the court’s attention.”). 

In an opinion written with “painstaking detail,” 581 B.R. at 855, the Bankruptcy Court found that 

Fulson, Sanders, and Lowe were aware of the automatic stay, and had intentionally taken actions 

that violated it, regardless of their good faith or lack thereof. 519 B.R. at 729–30, 754–55. A 

contempt finding and accompanying sanctions were appropriate.

III. CONCLUSION

Assuming best intentions, Fulson may have believed he personally had a viable claim to 

assert against Columbia Gas. But by the time he filed the Corrupt Practices Act complaint, it 

was far too late to make such claims without seeking relief from the stay or the trustee’s 

cooperation. Fulson, Sanders, and Lowe were all aware of the automatic stay, and took action 

that, we agree, violated it. One of the unfortunate results in this case is that it is unclear precisely 
No. 18-3301 In re Nicole Gas Production, Ltd. Page 16

how much Fulson’s claims against Columbia Gas were worth. The Trustee tried to settle them 

for $250,000, but Fulson obviously believed them to be worth millions more. If Fulson or his 

attorneys had communicated their theory to the Trustee, perhaps the Ohio courts could have 

confronted head-on the question of indirect pursuit of civil RICO claims under Ohio law. And as 

a policy matter, there may be situations in which shareholders possess viable civil RICO claims 

against a company that destroyed the shareholder’s business. But instead, we are left to assess 

the question collaterally in the contempt context, with sanctions against the Fulson Parties riding 

on our interpretation. These legal ambiguities could have been addressed with a simple 

collaborative phone call. Instead, the Bankruptcy Court was forced to expend valuable judicial 

resources assessing whether the conduct was in fact contemptuous. 

This is a case where the Bankruptcy Court did its job and did it well. These issues have 

been extensively briefed thrice, once at the Bankruptcy Court, once at the Bankruptcy Appellate 

Panel, and again here in the Circuit. The one complex issue in this case – whether the Ohio 

Corrupt Practices Act allows shareholders to pursue claims individually – was convincingly 

handled by the Bankruptcy Court; the Bankruptcy Appellate Panel agreed and so do we. We 

conclude that the Corrupt Practices Act did not grant Fulson any independent cause of action to 

pursue his derivative damages without violating the automatic stay. And Baker Botts does not 

apply to the Bankruptcy Court’s fee award here, which was a contempt sanction. Fulson and his 

attorneys should have sought either the trustee’s cooperation or relief from the automatic stay in 

order to file the complaint. For all of the foregoing reasons, and for the reasons articulated by 

the Bankruptcy Court and the Bankruptcy Appellate Panel below, we AFFIRM.