| ABI

November 22, 2024

Proceedings on a Confession of Judgment Can’t Be Removed as ‘Related To’

At least in New York, proceedings on a confession of judgment are neither a ‘claim’ nor a ‘cause of action’ and can’t be removed under 28 U.S.C. § 1452(a).

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Opinion Link

View Opinion

https://abi-opinions.s3.us-east-1.amazonaws.com/Honeedew.pdf

Case Details

Case Citation

Honeedew Investing LLC v. Abadi, 24-6434 (S.D.N.Y. Nov. 13, 2024)

Case Name

Honeedew Investing LLC v. Abadi

Case Type

Court

2nd Circuit

New York

New York Southern District

Bankruptcy Tags

Automatic Stay

Venue/Jurisdiction

Comments

Submitted by Sam Gregory on November 22, 2024

Can anyone shed light on how failure to pay the judgment resulted in incarceration? The opinion refers to failure to pay a "purge amount." Is the "purge amount" related to debtors' failure to answer post-judgment discovery or some affirmative action to hide assets? This is a foreign concept to a Texas practitioner.

Submitted by David Wander on November 22, 2024

Order of contempt. If you read the facts of the case, you will understand clearly why they were incarcerated.

Submitted by Wayne Pocock on November 22, 2024

Very interesting!

Submitted by James Hill on November 22, 2024

I was not aware that there is a debtor's prison in the United States. This process would not pass muster in California. We have incarcerated judgment debtors who have been found in contempt of court for failing to turnover assets until their contempt is purged--but that's a different remedy than what seems to be reported here in New York.

Submitted by Bruce Markell on November 22, 2024

OK -- a bunch of us academics were concerned by the imprisonment for debt implications, and so we took a dive into the court records. The contempt order that led to the incarceration is on the state court's docket page (see https://iapps.courts.state.ny.us/webcivil/ecourtsMain, and then search using the docket number referenced in the District Court's opinion). Briefly, and without nuance, the debtors had resisted enforcement of the judgment in Argentina (where they had significant assets) by claiming they owed nothing, causing the plaintiff to initiate judgment debtor proceedings in New York (where the debtors also resided) in an effort to force the debtors to admit the validity of the judgment and that they owed the plaintiff money. In response, the debtors apparently refused to cooperate with the state court's orders regarding attesting to the validity of the debt represented by the confession, as well as other matters. Long story short, the refusal to obey court orders led the state court judge to seek compliance by civil contempt, including incarceration. If you do search for the state court docket, look at the transcript from the last hearing -- the state court judge was none too happy that her contempt order might be affected by the automatic stay (and her tone and argumentative manner would have lead most attorneys to seek to find another court, by removal or otherwise).