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.
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Novation Agreement Process: Step-by-Step Guide for Businesses
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
What Is a Trade Secret? Key Elements and Legal Protections Explained
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
What Is Title Insurance? Safeguarding Against Title Defects
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
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.
Scarinci Hollenbeck Prevails in Discharging Client’s $1.1 Million Bankruptcy Debt
Author: Scarinci Hollenbeck, LLC
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.
