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H&R Property Trustee Seeks Damages For Alleged Violation Of Automatic Stay

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October 7, 2021, Eastern District of Michigan – Trustee Samuel D. Sweet, for the bankruptcy estate of H&R Property, LLC, brings an adversary proceeding against RPF Oil, Inc. and Northern Lights Energy, LLC (“NLE”). The Trustee demands damages from the Defendants by alleging violation of the automatic stay, conversion, and breach of contract. 

According to the complaint, Defendant, NLE, was a gasoline supplier to the Debtor under a contract. Later, Defendant assigned the contract to RPF Oil. The agreement was for providing gasoline for a gasoline station at Debtor’s property. As a part of the contract, Defendant also supplied gasoline pumps to the Debtor. The Trustee claims that immediately after the filing of bankruptcy by the Debtor, the Defendants stopped servicing gasoline under the contract and “removed the gasoline pumps in violation of the gasoline supply agreement and in violation of the automatic stay” under the Court’s order. 

The Trustee alleges that the Defendants “willfully violated the automatic stay” by wrongfully taking control and taking possession of property of the estate. The Trustee argues that the Defendants received actual notification of the order for relief and the imposition of the automation stay. However, they still “ignored the automatic stay and took possession and control” of the estate’s property. Thus, the Trustee contends that these actions resulted in damages for the Debtor. Further, the Trustee argues that Defendant’s refusal to supply gasoline and Defendant’s removal of the gasoline pumps constitutes a “breach of contract”. The Trustee asserted that under the gasoline supply agreement, Defendants were to provide gasoline to Debtor and the operating gasoline station entity with gas for 15.4 years. 

The Trustee seeks a declaration that the Defendants violated the automatic stay, breached the contract, and thereby requests the Court to award a judgment against the Defendant for an amount that the Court deems appropriate along with payment of costs. Additionally, the Trustee seeks punitive damages and sanctions against Defendant under 11 USC §362(k) and 11 USC §105(a). 

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