Centrix Financial, LLC et al v. Sutton et al

Filing 149

ORDER. 147 Motion to Reopen Case is granted. No later than ten days following the entry of this Order, plaintiffs shall file a motion for entry of order referring matters to the United States Bankruptcy Court for the District of Colorado. By Judge Philip A. Brimmer on 11/12/2015.(agarc, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Philip A. Brimmer
Civil Action No. 09-cv-00088-PAB-CBS
In re: CENTRIX FINANCIAL, LLC, et al.,
Debtors,
CENTRIX FINANCIAL LIQUIDATING TRUST, et al.,
Plaintiffs,
v.
ROBERT E. SUTTON, et al.,
Defendants.
_____________________________________________________________________
ORDER
_____________________________________________________________________
This matter comes before the Court on the Motion to Reopen Case [Docket No.
147] filed by plaintiff Jeffrey A. Weinman in his capacity as trustee of plaintiff Centrix
Liquidating Trust (the “Trust”). The Trust informs the Court that the parties directly
affected by this motion do not oppose the relief requested. Docket No. 148 at 1.
The Trust initiated an adversary proceeding against defendants in the
bankruptcy court on September 3, 2008. See Bankruptcy Case No. 08-01593-EEB
(Docket No. 1). Broadly speaking, the Trust alleged that Robert Sutton induced credit
unions to provide funds to the debtors and used those f unds for his personal expenses.
See id. On April 11, 2014, the parties executed a settlement agreement and sought
dismissal of this case. See Docket No. 145 at 2-3. The Court dismissed the case, but
retained jurisdiction over it to enforce the terms of the settlement agreement. Docket

No. 146.
In the instant motion, the Trust does not seek to enforce the settlement
agreement. Rather, the Trust seeks an order reopening the case so that the Trust may
pursue an investigation into certain financial disclosures provided by defendants during
the course of settlement. Docket No. 147 at 1. According to the trustee, after dismissal
of this case, the Trustee discovered that financial disclosures provided during the
course of settlement negotiations may have been materially false. Docket No. 147-1 at
3. The Trustee sought a production of documents from entities purportedly controlled
by defendant Robert Sutton and/or defendant David Sutton, but the entities refused and
sought a protective order in the underlying bankruptcy action. Id. On July 22, 2015,
following a hearing, the bankruptcy court denied the motion for a protective order
without prejudice due to concerns that, due to the Court’s retention of jurisdiction to
enforce the settlement agreement, the bankruptcy court lacked jurisdiction to rule on
the motion. Bankruptcy Case No. 06-16403-EEB (Docket No. 3104 at 1). T he
bankruptcy court “invited the parties to seek a ruling from the District Court or reference
of these matters back to [the bankruptcy court].” Id.
In the instant motion, the Trust seeks an order reopening the case, after which
the Trust will file a motion for entry of an order referring matters to the bankruptcy court.
Docket No. 147 at 2.
Good cause having been shown to reopen this matter for the limited purpose
described in the Trust’s motion, it is
ORDERED that the Motion to Reopen Case [Docket No. 147] f iled by plaintiff

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Jeffrey A. Weinman, as trustee of plaintiff Centrix Liquidating Trust, is GRANTED. It is
further
ORDERED that, no later than ten days following the entry of this Order, plaintiffs
shall file a motion for entry of order referring matters to the United States Bankruptcy
Court for the District of Colorado.

DATED November 12, 2015.
BY THE COURT:

s/Philip A. Brimmer
PHILIP A. BRIMMER
United States District Judge

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