Wortley V. Chrispus Venture Capital LLC (In re Global Energies LLC), ___F.3d___, 2014 WL 3974577 (11TH CIR. 8/15/2014)
The Eleventh Circuit Court of Appeals held that the bankruptcy court abused its discretion and applied the incorrect legal standard in denying Joseph G. Wortley’s (“Wortley”) FRCP Rule 60(b)(2) [incorporated into bankruptcy practice by FRBP Rule 9024] motion to set aside an order denying Wortley’s motion to dismiss, with prejudice, an involuntary chapter 11 case that business partners of Wortley had filed, against Global Energies, LLC (the entity that Wortley, and Wortley’s partners were partners in), as respondent. The Eleventh Circuit decision remanded the case, with instruction to the bankruptcy court to grant Wortley’s Rule 60(b)(2) motion, and instructed the bankruptcy court to vacate the bankruptcy court’s order that had approved the sale of Global Energies, LLC’s assets to Chrispus Venture Capital, LLC The Eleventh Circuit also directed the bankruptcy court to conduct hearings to impose sanctions against Wortley’s former business partners, Chrispus, and Chrispus’ bankruptcy counsel for withholding email communications essential to Wortley’s ability to provide evidentiary support for dismissing the involuntary bankruptcy case as a bad faith filing and his business partners’ false deposition testimony with respect to their plan and intentions for filing the involuntary petition.