Partner David Edelberg Successfully Defeats Objection to Bankruptcy Discharge Through Directed Verdict
Little Falls NJ – August 29, 2023 – Scarinci Hollenbeckobtained a directed verdict in the United States Bankruptcy Court for the District of New Jersey rejecting an objection to discharge involving a $1.1 million debt. David Edelberg, Partner and Chair of Scarinci Hollenbeck’s Bankruptcy & Creditors’ Rights Practice Group, represented the debtor, Alicia Gallo.
Builders’ General Supply Company filed a complaint in bankruptcy court objecting to the discharge of its claim of over $1 million dollars against Ms. Gallo. While most debts can be discharged in bankruptcy, Section 523(a)(2)(A) of the Bankruptcy Code excepts from discharge a debt for money, property, or an extension of credit to the extent it was obtained by false pretenses, a false representation, or actual fraud. If an objection under Section 523(a)(2)(A) is successful, the debt will not be discharged.
Scarinci Hollenbeck filed motions which successfully dismissed two of Builders’ claims alleging breach of fiduciary duty and fraud in connection with credit card charges. The last remaining claim, alleging that Ms. Gallo fraudulently entered into a settlement agreement, proceeded to trial before Judge Kathryn Ferguson in April 2023.
After Builders’ concluded its case, Scarinci Hollenbeck moved for a directed verdict, arguing that Builders’ had not met its burden of proof. Judge Ferguson reserved her decision until June 2023, when the Court issued a ruling in favor of Ms. Gallo. As a result, Ms. Gallo has successfully discharged Builders’ $1.1 million dollar claim.
“We are pleased that the Bankruptcy Court agreed with us that Builders’ had failed to prove its claim,” Mr. Edelberg stated. “The verdict will allow our client to move forward and obtain the fresh start which she deserves.”
The case is Builders’ General Supply Co. v. Gallo (21-01220-KCF), New Jersey Bankruptcy Court.
Results may vary depending on your particular facts and legal circumstances
About David Edelberg
David Edelberg is a member of Scarinci Hollenbeck’s Bankruptcy and Creditors’ Rights practice group. Mr. Edelberg has extensive experience handling a wide variety of bankruptcy matters, including Debtor Representation, Creditors’ Rights, and Banking and Financial Services Litigation, and more. Mr. Edelberg is the Immediate Past Chair of the Bankruptcy Law Section of the NJ State Bar, Chair of the Professionalism Committee of the NJ State Bar, Chair of the Bankruptcy Law Section of the Bergen County Bar Association, and is a Trustee of the New Jersey Bar Association.
About Scarinci Hollenbeck’s NJ Bankruptcy Practice
Scarinci Hollenbeck’s attorneys are accustomed to dealing with complex and sophisticated business matters and have many years of experience handling the myriad of financial issues surrounding bankruptcy and reorganization, out of court workouts, and state and federal court litigation over creditors’ and debtors’ rights. Our attorneys’ broad legal and business knowledge allows them to achieve creative, expeditious, and cost-effective solutions to our clients’ most challenging issues.
For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]
Supreme Court and Title VII: Implications for Reverse Discrimination
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Short Form Merger: Streamlining the Process for Businesses
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Common Causes of Partnership Disputes and How to Resolve Them
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
