Opinion ID: 2782965
Heading Depth: 2
Heading Rank: 2

Heading: 2008 Involuntary Petition

Text: On November 7, 2008, Jane Fox, on behalf of the DVI Entities, filed an involuntary Chapter 7 bankruptcy petition against Rosenberg in the U.S. 5 Case: 13-14781 Date Filed: 02/27/2015 Page: 6 of 32 Bankruptcy Court for the Eastern District of Pennsylvania. Each of the DVI Entities asserted a claim against Rosenberg with respect to the 2005 individual limited guaranty he had made in connection with the equipment leases. The DVI Entities’ six claims totaled $5,363,361.56. The involuntary petition was later transferred to the U.S. Bankruptcy Court for the Southern District of Florida. Section 303 of the Bankruptcy Code governs the filing of involuntary bankruptcy petitions and allows creditors to force debtors into liquidation under Chapter 7 or reorganization under Chapter 11. 11 U.S.C. § 303. The petition must be brought by at least three eligible creditors (unless there are fewer than twelve eligible creditors), with each creditor holding a separate claim against the alleged debtor, and the claims must not be contingent or subject to a bona fide dispute as to liability or amount. See id. § 303(b). The November 7, 2008 involuntary petition nominally listed the DVI Entities as the “petitioning creditors.” Lyon was not expressly named on the petition as a petitioning creditor, either in its capacity as successor servicer for the DVI Entities or as agent for Trustee USB. However, abundant evidence showed that Lyon actually filed the petition on behalf of each DVI Entity. The petition’s signature blocks show that Jane Fox, the Director of Operations for Lyon, signed the petition individually on behalf of each DVI Entity. 1 In addition, for each DVI 1 The petition was subsequently amended, and the amendment was also signed by Fox. 6 Case: 13-14781 Date Filed: 02/27/2015 Page: 7 of 32 Entity, the petition listed “Jane Fox c/o U.S. Bank Portfolio Services, as Servicer” and “1310 Madrid Street, Suite 103[,] Marshall, MN 56258” as the name and mailing address of the “Individual Signing in Representative Capacity.” Lyon did business as “U.S. Bank Portfolio Services,” and this mailing address under Fox’s signature was Lyon’s too. Furthermore, the evidence showed that the DVI Entities had no knowledge of the involuntary petition separate from Fox’s knowledge. At the time Fox executed the involuntary petition in November 2008, Fox was not an officer, director, or employee of any DVI Entity. Rather, Fox was the Director of Operations for Lyon. There was no meeting of the directors or officers of any DVI Entity to authorize Fox to sign the involuntary petition. In fact, no one at Lyon, including Fox, ever corresponded with any DVI Entity before the filing of the petition. Indeed, as of the petition date, five of the DVI Entities were not even in good standing with the Delaware Secretary of State and had been administratively dissolved. It was not until mid-January 2009 that Lyon’s in-house counsel, at Fox’s direction, filed certificates of revival for the five DVI Entities to place them in good standing again. According to her deposition testimony concerning her role as the signer, Fox believed that only Lyon had the authority to sign the involuntary petition, and that none of the DVI Entities had the authority to do so on their own behalf because 7 Case: 13-14781 Date Filed: 02/27/2015 Page: 8 of 32 Lyon was granted broad authority to act for the DVI Entities. Fox testified that she understood Lyon’s authority to include the filing of the petition on behalf of the DVI Entities. While the DVI Entities were the original creditors in the underlying transactions, Lyon on its own made the decision to file the petition against Rosenberg and then Lyon actually filed it. On December 3, 2008, Rosenberg moved to dismiss the involuntary bankruptcy petition against him.