Monarch Steel Company, Inc. v. Versa Capital Management, LLC et al
Memorandum Opinion and Order denying Monarch's Motion 62 to reinstate case and file second amended complaint. In light of the automatic stay and dismissal, Monarch's motion 63 requesting the Court order Versa to show cause why it not be found in contempt of court is hereby denied as moot. Judge Donald C. Nugent 8/9/17(C,KA)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO
MONARCH STEEL COMPANY, INC.,
VERSA CAPITAL MGMT, LLC, et al.,
CASE NO. 1:17 CV 17
JUDGE DONALD C. NUGENT
This matter is before the Court on the Motion to Reinstate and to File Second Amended
Complaint and for Sanctions Against Versa (Docket #62), and the Motion Requesting the Court
Order Versa to Show Cause Why It Not Be Found in Contempt of Court (Docket #63), filed by
Plaintiff, Monarch Steel Company, Inc. (“Monarch”).
Monarch’s claims in this Court were the result of its inability to collect on a State Court
Judgment against Republic Storage Systems, LLC (“Republic”)1 based on what it alleges was a
conspiracy – involving Defendant, Versa Capital Management, LLC (“Versa”) and others – to
fraudulently transfer the assets of Republic to the detriment of Republic’s creditors. Monarch
initially filed its Complaint in this case on December 1, 2016 in the Cuyahoga County Court of
Common Pleas, Case No. CV 16 872562. On January 4, 2017, Defendant, Salus Capital, filed a
Notice of Removal with this Court. (Docket #1.) Monarch filed a First Amended Complaint on
Monarch incorrectly refers to Republic Storage Systems, LLC as “Republic Steel
Services, LLC” in its Motion to Reinstate.
February 9, 2017. (Docket #26.)
On June 13, 2017, Defendants Republic and Buckeye RSS, LLC, filed for bankruptcy
relief in the United States Bankruptcy Court for the District of Delaware. Monarch is a named
creditor in the bankruptcy proceeding, along with hundreds of others. Pursuant to 11 U.S.C. §
362, the bankruptcy filings resulted in an automatic stay of Monarch’s lawsuit in this Court and
the lawsuit was dismissed as a result. There is no indication that Monarch has requested the
Bankruptcy Court grant it relief from the stay; the Bankruptcy Trustee now has the exclusive
right to bring fraudulent transfer claims on behalf of all creditors; and, once the bankruptcy was
filed, Monarch lost standing to bring fraudulent transfer or alter ego claims against third-party
non-debtors. Lincoln Elec. Co. v. Manahan, Case No. 1:10 CV 724, 2011 U.S. Dist. LEXIS
89169 (N.D. Ohio Aug. 11, 2011). Accordingly, Monarch’s Motion to Reinstate and File
Second Amended Complaint (Docket #62) is DENIED.
In light of the automatic stay and dismissal, Monarch’s Motion Requesting the Court
Order Versa to Show Cause Why It Not Be Found in Contempt of Court (Docket #63) is hereby
DENIED AS MOOT.
IT IS SO ORDERED.
s/Donald C. Nugent
DONALD C. NUGENT
United States District Judge
DATED: August 9, 2017
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