11 B 41826
In this post-confirmation Chapter 11 proceeding, the Michael Bahary & Steven Bahary Partnership (“the Reorganized Debtor”) filed a Motion for a Rule to Show Cause requiring Napleton Enterprises, LLC (“Napleton”) and its counsel to show cause why they should not be held in contempt for suing to enforce Napleton’s purported Right of First Refusal as to certain real property (the "Grand Avenue Property") in a state court action regarding transactions that ensued in this bankruptcy case in 2012. The Reorganized Debtor asserted that Napleton’s actions were inconsistent with the terms of the confirmed Amended Plan of Reorganization and the Bankruptcy Code’s discharge injunction.

Pursuant to the Confirmed Plan, the Reorganized Debtor surrendered the Grand Avenue Property to Banco Popular, its mortgagee, by giving it a Deed in Lieu of Foreclosure to satisfy Banco Popular’s secured claim.  Napleton was not scheduled as a creditor in the Reorganized Debtor’s bankruptcy and did not have notice of it.  The Court ruled that the transfer to the mortgagee was not subject to the Right of First Refusal which vested only if the Debtor, as Napleton's transferee, wanted to sell the property to a bona fide third party.  The Debtor did not sell the property in issue; it surrendered collateral to a lienholder.

In the April 1, 2015 Amended Memorandum Opinion, the Court declined to enter findings of contempt against Napleton and its attorney.