LasproO Consultores LTDA v. Alina Corporation et al

Filing 16

Order Adopting Bankruptcy Judge's Proposed Findings of Fact and Conclusion of Law. The Court adopts the Bankruptcy Court's PFFCL (ECF No. 228 in Bankruptcy Case No. 16-01315-BKC-LMI) and denies the Defendants' motion DE# 13 as moot. This case shall remain administratively closed until notice from the Bankruptcy Court that this case is ready for trial. Signed by Judge Robert N. Scola, Jr on 3/3/2022. See attached document for full details. (ebz)

United States District Court
for the
Southern District of Florida
In re:

)
)
Massa Falida Do Banco Cruziero Do
)
Civil Action No.
Sul, S.A., Debtor in Foreign
)
17-22072-Civ-Scola
Proceeding
)
)
)
Laspro Consultores LTDA., Plaintiff
)
)
Bankruptcy Case No.
v.
)
16-01315-BKC-LMI
)
Alinia Corporation and 110 CPS,
)
Inc., Defendants.
)
Order Adopting Bankruptcy Judge’s
Proposed Findings of Fact and Conclusion of Law
This matter is before the Court on the U.S. Bankruptcy Court for the
Southern District of Florida’s (“Bankruptcy Court”) entry of its proposed
findings of fact and conclusions of law (“PFFCL”) as to the parties’ crossmotions for summary judgment pursuant to 28 U.S.C. § 157(c)(1). For the
reasons below, the Court overrules the Defendants’ objection (ECF. No. 10)
and adopts the Bankruptcy Court’s PFFCL (PFFCL, ECF No. 228 in
Bankruptcy Case No. 16-01315-BKC-LMI) (the “Bankruptcy Case”). The
Court also denies the Defendants’ related motion (ECF No. 13) as moot.
1. Background
This case involves adversarial proceedings before the Bankruptcy Court.
Plaintiff Laspro Consultores Ltda. (“Laspro”) represents the trustee of Banco
Cruzeiro do Sul (“BCSUL”), which is the subject of a Brazilian bankruptcy
proceeding. Defendants Alina Corporation and 110 CPS, Inc. are entities that
belong to the previous controlling shareholders of BCSUL. The Brazilian
proceeding seeks to recover real estate and artwork held by the Defendants on
the basis of alleged misappropriation by the Defendants’ owners. In 2016,
Laspro filed an amended complaint against the Defendants in the Bankruptcy
Court alleging thirty-six counts stemming from that alleged misappropriation.
In 2021, the Bankruptcy Court entered its PFFCL on the parties’ cross-motions
for summary judgment, which is now before the Court.
The PFFCL recommends that the Court deny Plaintiff Laspro’s motion
and partially grant the Defendants’ motion. (PFFCL 36.) Laspro timely objected

to the following statement contained in the PFFCL “insofar as it may be a
finding of fact and/or conclusion of law[,]” which concerns Laspro’s expert
witness, Alvin Hommerding: “I already held that it appears Mr. Hommerding
did not opine that the money is traceable.” (Pl. Obj., ECF No. 10 ¶¶ 8, 10.) That
was Laspro’s only objection.
The Defendants filed no objection of their own and timely responded to
Laspro’s objection. (Def. Resp., ECF No. 12.) They argued that the Bankruptcy
Court’s statement was a “finding of fact” and “therefore, reviewable on a ‘clearly
erroneous standard.’” (Id. 7.) At the same time, the Defendants also admitted
that the traceability of the allegedly misappropriated funds would remain
irrelevant until the underlying litigation in Brazil is resolved. (Id. 9.) Laspro
filed no reply nor sought leave to, thus closing briefing on the matter.
However, days after submitting their above response, the Defendants
moved the Court for “an order adopting the Bankruptcy Court’s” PFFCL
“pursuant to” 28 U.S.C. § 157(c)(1) and Fed. Bankr. P. 9033. (Def. Mot., ECF
No. 13). Neither Section 157(c)(1) nor Rule 9033 authorizes a party to move a
district court for such an order. The procedure is clear: once a party’s
objection(s) have been briefed, the matter rests with the Court. The additional
briefing prompted by the Defendants’ motion was unnecessary. That motion is
denied as moot.
2. Legal Standard
The Defendants’ assertion of a “clearly erroneous” standard is incorrect.
(See Def. Resp. 7). The Court may enter an order on the basis of the
Bankruptcy Court’s PFFCL “after reviewing de novo those matters to which any
party has timely and specifically objected.” 28 U.S.C. 157(c)(1). Specifically, the
Court’s de novo review extends to “any portion of the bankruptcy judge’s
findings of fact or conclusions of law to which specific written objection has
been made . . . .” Fed. Bankr. P. 9033 (emphasis added).
To back up the application of a “clearly erroneous” standard, the
Defendants cite to Rule 8013 and two Second Circuit decisions, none of which
apply. Rule 8013 governs motion practice in the context of appeals to district
courts under 28 U.S.C. § 158, which is not the case here. See Fed. Bankr. P.
8001. And because this not an appeal, the Defendants’ reliance on In re Motors
Liquidation Co., 957 F.3d 357 (2d Cir. 2020) is misplaced. So too is Defendants’
reliance on U.S. v. Berchcansky, 788 F.3d 102 (2d Cir. 2015), which involves an
appellate court’s approach to its review of a district court’s ruling on a motion
to suppress in a child pornography case. Simply, Laspro’s objection is subject
to de novo review. See, e.g., 28 U.S.C. 157(c)(1); In re Williford, 222 Fed. App’x.
843 (11th Cir. 2007).

Separately, as part of the extraneous briefing on the Defendants’ motion
discussed above, Laspro asserted that the Court is not to make, or adopt,
findings of fact in entering an order on the cross-motions for summary
judgment. (See Pl. Resp. 2-3, ECF No. 14.) However, Fed. R. Civ. P. 56, which
applies by virtue of Fed. Bankr. P. 7056, authorizes the Court to “enter an
order stating any material fact – including an item of damages or other relief –
that is not genuinely in dispute and treating the fact as established in the case”
when denying relief requested by a motion for summary judgment. Fed. R. Civ.
P. 56(g). Such is the case here.
3. Discussion
Regardless, the statement Laspro objected to is neither a finding of fact
nor a conclusion of law. The statement is underlined below:
“The Plaintiff [Laspro] argues that he has demonstrated through
the testimony of Alvin Hommerding that all the money used to
purchase the Penthouse can be traced . . . However, I find that the
Plaintiff has confused the burden of proof. I have already found Mr.
Hommerding’s testimony on many things to be of questionable
value. In fact, I already held that it appears Mr. Hommerding did
not opine that the money is traceable.17 Because the Defendants
have expert testimony that there are other sources of funds from
which the purchases can be made, which testimony I ruled is
admissible, the Defendants have satisfied their ‘burden’ under Rule
56 of demonstrating this material fact is ‘genuinely disputed’
. . . Thus, summary judgment is not appropriate.”
Memorandum Opinion on Motions to Exclude Expert Reports and
Testimony of Alvin Hommerding and Lopes Machado Consultores at
10 n.23 (ECF #202).
(PFFCL 33) (citation omitted). The contended statement is a reference to a
previous holding—a narrow one at most—that the Bankruptcy Court made in a
footnote when ruling on the parties’ cross-motions to exclude expert testimony
in May 2020.
At that point in time, the Bankruptcy Court admitted Mr. Hommerding’s
expert testimony—a ruling favorable to Laspro—while noting as follows:
“[T]he Court agrees with the Defendants that Mr. Hommerding did
not explain what information was triangulated from what
documents against what other information to arrive at what
conclusions23, just collectively what documents he and his team
used for this cross-checking.
17

23A

good example of this is Mr. Hommerding’s testimony regarding
the tracing of the payments to purchase the artwork and
apartments. It is unclear what information Mr. Hommerding or his
team looked at to render an opinion regarding what money was
used to purchase the artwork and the apartments available
although the Court notes that it appears that Mr. Hommerding is
not opining that the money is traceable. See Hommerding
Deposition page 223.”
(ECF No. 202 10 in the Bankruptcy Case) (emphasis added).
In May 2020, the Bankruptcy Court was ruling on the basis of Mr.
Hommerding’s deposition testimony, without the benefit of hearing Mr.
Hommerding live. (See id.; see also Tr. Oral Arg. on Mot. Summ. J. 72-73, 7578, ECF No. 11.) Logically, that gave rise to the Bankruptcy Court’s language
concerning what it understood Mr. Hommerding’s testimony “appeared” to offer
at that point in time, which holding the Court does not now disturb. Additional
testimony from Mr. Hommerding may be forthcoming thereby detracting from
any sort of preclusive effect the Bankruptcy Court’s May 2020 holding could be
said to have. (See Order on Mot. for Reconsideration 3, ECF No. 224 in the
Bankruptcy Case.)
The statement as contained in the PFFCL presents as mere dictum and
cannot be divorced from its context. Its function is to simply point to both
sides’ competing expert testimony to allow for the conclusion that the money’s
traceability remains in genuine dispute. That fact, in turn, supports the
Bankruptcy Court’s conclusion that Laspro’s motion for summary judgment
should be denied. Nowhere does the PFFCL establish a “finding that
Hommerding did not testify that dividends paid to the Indio da Costas could be
traced to the purchase of the Apartments and Art . . .” as the Defendants
purport. (See Def. Resp. 7.)
Last but not least, Laspro objected to the statement in the PFFCL
“insofar as it may be a finding of fact and/or a conclusion of law . . . .” (Pl. Obj.
¶ 8.) Having found that the statement does not constitute a finding of fact or a
conclusion of law in the context of the PFFCL, the Court has disposed of
Laspro’s objection. Simply put, the statement is a reference to the Bankruptcy
Court’s understanding of Mr. Hommerding’s deposition testimony as of May
2020.
4. Conclusion
Accordingly, the Court adopts the Bankruptcy Court’s PFFCL (ECF No.
228 in Bankruptcy Case No. 16-01315-BKC-LMI) and denies the

Defendants’ motion (ECF No. 13) as moot. This case shall remain
administratively closed until notice from the Bankruptcy Court that this case
is ready for trial.
Done and ordered, in chambers at Miami, Florida, on March 3, 2022.
_______________________________
Robert N. Scola, Jr.
United States District Judge