In re: Nicole Gas Production, Ltd.

Fulson was the indirect equity owner of the Chapter 7 Debtor, based on his ownership of Nicole Gas, the Debtor’s sole owner. While Debtor’s bankruptcy was pending Fulson filed a state court complaint against the Columbia Gas entities under the Ohio Corrupt Practices Act (OCPA), alleging that the companies caused him indirect injury by harming Debtor; the only damages Fulson pled were those Debtor suffered—he did not claim any unique individual damages. Ransier, as Bankruptcy Trustee, eventually settled those claims on behalf of Debtor’s estate. Appellants, representing Fulson's probate estate, unsuccessfully objected. Ransier moved for contempt against Appellants, arguing that Fulson had merely a derivative claim based on Debtor’s injury, for damages that duplicated Debtor’s damages, that the claim became the property of Debtor’s bankruptcy estate, and that Appellants violated Debtor’s automatic stay. The Bankruptcy Court agreed, rejecting an argument that the claim was for “indirect” injury that fell within OCPA’s “directly or indirectly injured” language. The Bankruptcy Court held Appellants in contempt for violating 11 U.S.C. 362(a)(3) and awarded Ransier $91,068.00. The Ohio Supreme Court declined to answer the certified question: Whether a shareholder of a corporation has standing to bring a claim individually (as opposed to merely derivatively) under OCPA. The Bankruptcy Appellate Panel Judge then affirmed the contempt order and sanction award. OCPA did not provide Fulson an individual claim against the Columbia Gas entities. View "In re: Nicole Gas Production, Ltd." on Justia Law