Advocate Financial, L.L.C. v. Sherman et al

Filing 52

ORDER denying 43 Motion to Vacate ; denying 44 Motion to Reopen Case. Signed by Judge Mary Ann Vial Lemmon. (cbn)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ADVOCATE FINANCIAL, LLC

CIVIL ACTION

VERSUS

NO: 14-946

H. EDWARD SHERMAN AND H.
EDWARD SHERMAN, APLC

SECTION: "S" (4)

ORDER AND REASONS
IT IS HEREBY ORDERED that Defendants' Motion to Vacate December 11, 2014
Judgment Pursuant to Federal Rule of Civil Procedure 60(b)(6) (Doc. #43) is DENIED.
IT IS FURTHER ORDERED that Defendants' Motion to Re-Open Case (Doc. #44) is
DENIED.
Defendants seek to reopen this case and assert counterclaims against Advocate Financial,
LLC. On September 1, 2015, H. Edward Sherman, APLC and H. Edward Sherman each filed a
Chapter 11 bankruptcy petition in the United States Bankruptcy Court for the Eastern District of
Louisiana. On December 22, 2015, the bankruptcy court converted both cases into Chapter 7
bankruptcy proceedings. Trustees have been appointed in both cases.
An estate comprised of, among other things, "all legal or equitable interest of the debtor in
property as of the commencement of the case" is created when a bankruptcy case is filed under 11
U.S.C. §§ 301, 302 or 303. 11 U.S.C. § 541(a)(1). "The legislative history of section 541(a)(1)
indicates that the definition of property of the estate is to be interpreted broadly, and includes causes
of action existing at the time of the commencement of the bankruptcy action." Drew v. Anderson,
988 F.2d 1212 (5th Cir. 1993) (citations omitted). In a Chapter 7 case, the trustee, not the debtor,
represents the estate, and"the trustee succeeds to all causes of action held by the debtor at the time
the bankruptcy petition is filed." Id. (citations omitted). Thus, "once a trustee is appointed in a
Chapter 7 case, only the trustee has the capacity to represent the estate and prosecute claims

formerly belonging to the debtor." Id. Defendants bankruptcy cases have been converted to Chapter
7 cases, and trustees have been appointed. Therefore, defendants lack capacity to pursue claims in
this litigation, and the motions to vacate and reopen are DENIED.

27th
New Orleans, Louisiana, this _____ day of January, 2016.

____________________________________
MARY ANN VIAL LEMMON
UNITED STATES DISTRICT JUDGE

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