Visium Technologies Asks $5M as Damages From Defendants For Alleged “Reckless Filing” of an Involuntary Bankruptcy Case
March 30, 2021, Southern District of Florida – Recently, Visium Technologies, Inc. commenced an adversary proceeding against three companies and their principals to seek damages due to alleged “improvident, bad faith, wrongful, reckless filing of an involuntary bankruptcy case.” Visium Technologies also seek to recover the reasonable attorneys’ fees that the Debtor incurred for defending the involuntary bankruptcy case against it.
Recently, Visium specifically sued Tarpon Bay Partners, LLC, a Florida limited liability company; J.P. Carey Enterprises, Inc., a Florida profit corporation; Anvil Financial Management, LLC, a Florida limited liability company; Stephen Hicks, an individual; Joseph C Canouse, an individual; Jeffrey M. Canouse, an individual; and Paul A. Rachmuth, Esq., an individual (collectively referred herein as the “Defendants”).
By way of background, each of the Defendants allegedly asserted a claim based upon “two separate promissory notes.” The Defendants supposedly claimed interest in the notes to varying and conflicting degrees. Allegedly, two of the three Defendants were assigned interests in the promissory notes to create the required three creditors for an involuntary bankruptcy filing. The complaint highlights the following allegations, stating that the Defendants allegedly :
- orchestrated and were directly involved in the commencement and prosecution of the involuntary case.
- filed the “sham” involuntary petition when none of the Defendants were actual creditors of Debtor;
- gerrymandered the creation of two additional creditors to obtain the requisite three creditors to file the involuntary petition;
- filed the involuntary petition as a conscious collection tactic of using the bankruptcy court when they knew or should have known that the petitioning creditors held no “claims” and had no standing as creditors.
- exhibited bad faith in pursuing the filing of the involuntary petition, despite explicit written documents and pleadings conclusively establishing that the Defendants’ claims were disputed.
The complaint contends that Visium is entitled to relief because the Defendants “intentionally or recklessly failed to conduct any pre-filing due diligence” and investigation of factual and legal circumstances and issues sufficient to support the filing of the involuntary case against Visium. Visium also asserts that the Defendants violated the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, bankruptcy process, and the related protections afforded to it by filing the involuntary petition. Further, Visium alleges that the Defendants used the involuntary case as an apparent “collection vehicle to leverage and extort Visium into accepting an unfavorable settlement” of the underlying disputes pending in the lawsuit. Besides, according to Visium, the Defendants not only “failed to meet the quantitative and qualitative requirements of section 303(b)” of the Bankruptcy Code, but there was ample evidence of the “egregious conduct” of the Defendants, which mandated a finding of bad faith and award of compensatory, consequential, special and punitive damages.
The case is In re Visium Technologies, Inc. under case number 20-24221-SMG in the United States Bankruptcy Court for the Southern District of Florida.