In Re: Sterling
MEMORANDUM AND ORDER: The April 27, 2017 Order of dismissal is AFFIRMED. The Clerk is directed to close the case. (As further set forth in this Order.) (Signed by Judge P. Kevin Castel on 10/26/2017) (cf)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
EVERTON ALOYSIUS STERLING,
Everton Aloysius Sterling,
EVERTON ALOYSIUS STERLING,
Simply put, Everton Aloysius Sterling, a natural person, filed an involuntary
petition against himself or, as he puts it, EVERTON ALOYSIUS STERLING, a “juristic
person.” 1 The Bankruptcy Court (Hon. Sean H. Lane, U.S.B.J.), concluded that the two are one
and the same and dismissed Sterling’s “Involuntary Chapter 7” petition against Sterling, the
“juristic person.” (Order of April 27, 2017, In re Everton Aloysius Sterling, 16-13312 (SHL).)
Sterling, the natural person, now appeals.
Jurisdiction and Standard of Review
This Court has jurisdiction to hear an appeal from a final judgment of the
Bankruptcy Court. 28 U.S.C. § 158(a)(1). A notice of appeal was timely filed on May 24, 2017.
Mr. Sterling is listed as both the appellant and appellee in the submissions to this Court. Mr. Sterling describes
himself as the “Authorized Representative for Appellant Everton Aloysius Sterling.” He also refers to the “Estate of
the fictitious juristic Person, EVERTON ALOYSIUS STERLING.” (Appellant Br. 1.) In the text of the petition,
Everton Sterling describes himself as “Judgment Creditor” of EVERTON ALOYSIUS STERLING.
The Bankruptcy Court's findings of fact are reviewed under a clear error standard
and its conclusions of law are reviewed de novo. Pierce v. Underwood, 487 U.S. 552, 558
(1988); Rule 8013, Fed. R. Bankr. P.; In re CBI Holding Co., Inc., 529 F.3d 432, 449 (2d
Sterling, the appellant, raises several arguments regarding the filing of the
Involuntary Petition and the failure of the Clerk to receive all 168 pages of the petition. He
argues that the Clerk failed to accept the entirety of the submission and that the Bankruptcy
Judge erred because he ruled without having the entirety of appellant’s submission and, in any
event, erred on the merits. He also asserts that the Bankruptcy Judge was biased.
The Filing of the Petition
Sterling asserts that he delivered an “Involuntary Petition” with exhibits totaling
168 pages to the Clerk of the Bankruptcy Court. According to Sterling, the Clerk “did not
record” 163 of the 168 pages of the petition.
The argument proceeds from a misunderstanding of what occurred in this case.
The docket sheet, at Document 1, reflects the filing of a 5-page document described as
“Involuntary Petition Against Individual (Chapter 7)(Fee Amount $335.) Against Everton
Aloysius Sterling. Filed by Petitioning Creditor(s): Everton Sterling.” Notably the same docket
entry further states “Additional attachment(s) added on 11/23/2016.” The docket sheet contains
a hyperlink to the 5 pages of the Involuntary Petition but not to any of the exhibits. Appellant
Sterling conflates the availability of the petition with exhibits via a hyperlink on the electronic
case filing system with the docketing and filing of the petition with exhibits.
Rule 5003(a), Fed. R. Bankr. P., requires that “The clerk shall keep a docket in
each case under the Code and shall enter thereon each judgment, order, and activity in that case. .
. . .” Rule 5005(a), Fed. R. Bankr. P., provides that, with limited exceptions “The lists,
schedules, statements . . . complaints, motions, applications, . . .and other papers required to be
filed by these rules. . . shall be filed with the clerk. . . .” Neither rule was violated in this case.
The docket reflects the filing of the Involuntary Petition. The docket entry notes that “Additional
attachment(s) added on 11/23/2016.” Thus, the docket entry is accurate. The petition and
exhibits were filed because they were accepted by the Clerk. There is nothing in the record to
support a contrary conclusion or that they were not available to the Bankruptcy Judge for review.
Further, appellant Sterling made a lengthy submission with exhibits in opposition
to the Order to Show Cause enabling him to point out anything in the petition or its exhibits that
supported his position. The Court is unable to locate anything in the record that preserved the
issue of the docket entry or filing. But, in any event, the argument is not supported by the
Judge Lane issued an Order to Show Cause why the case should not be dismissed
pursuant to section 303(b) of the Bankruptcy Code on the ground that an involuntary case may
be commenced by a holder of a claim against a debtor but not by the debtor himself. (Doc 8.
Order of Apr. 3, 2017.) 11 U.S.C. § 303(b). Appellant Sterling responded to the Order to Show
Cause in a 30-page submission. (Doc 10, Apr. 18, 2017.) He argued that Everton Aloysius
Sterling the natural person was “distinct” from EVERTON ALOYSIUS STERLING the “juristic
person.” He asserted that his birth certificate reflected the “juristic person.” Neither Sterling, the
natural person, nor Sterling, the “juristic person” appeared on the return date of the Order to
In an Order, Judge Lane dismissed the case because it did not meet the standard
under section 303(b) of the Bankruptcy Code because a debtor may not file an involuntary
petition against himself. (Doc. 11; Order of Apr. 27, 2017.)
Sterling, the appellant, argues that, on the merits, the Bankruptcy Judge erred in
dismissing the Involuntary Petition. Upon review, this Court concludes that the Judge’s ruling
was free from error. He correctly concluded that Sterling, the judgment creditor, was, in fact and
in law, Sterling, the judgment debtor, and that a debtor may not file an involuntary petition
against himself. See In re Letourneau, 422 B.R. 132, 138 (Bankr. N.D. Ill. 2010) (“There is no
circumstance under which a debtor's filing of an involuntary case against himself can be proper.
An involuntary bankruptcy is a remedy for creditors, not debtors.”)
Disqualification of the Bankruptcy Judge
Finally, there is no basis in the record to conclude that the Bankruptcy Judge
exhibited bias towards any party. The Supreme Court in Liteky v. United States, 510 U.S. 540,
555 (1994), reviewed the standards for disqualification arising from conduct while presiding in a
[O]pinions formed by the judge on the basis of facts introduced or
events occurring in the course of the current proceedings, or of
prior proceedings, do not constitute a basis for a bias or partiality
motion unless they display a deep-seated favoritism or antagonism
that would make fair judgment impossible. Thus, judicial remarks
during the course of a trial that are critical or disapproving of, or
even hostile to, counsel, the parties, or their cases, ordinarily do
not support a bias or partiality challenge.
A section 455(a) motion is “to be evaluated on an objective basis, so that what
matters is not the reality of bias or prejudice but its appearance.” Id. at 548 (emphasis in the
original). The Court also noted that “judicial rulings alone almost never constitute a valid basis
for a bias or partiality recusal motion . . . .” Id. at 555. The Second Circuit, applying Liteky, has
said that on a section 455(a) motion “[t]he question . . . is whether ‘an objective, disinterested
observer fully informed of the underlying facts, [would] entertain significant doubt that justice
would be done absent recusal.’” ISC Holding AG v. Nobel Biocare Finance AG, 688 F.3d 98,
107 (2d Cir. 2012) (quoting United States v. Carlton, 534 F.3d 97, 100 (2d Cir. 2008)) (alteration
in original). On this record, there is no non-frivilous issue raised concerning the Bankruptcy
The April 27, 2017 Order of dismissal is AFFIRMED. The Clerk is directed to
close the case.
Dated: New York, New York
October 26, 2017
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