Summary:
A tangle of multiple cases- Thomas Brown, Michael Barns , W. Watson Barns and David Woodard were directors of Brown Oil. Brown filed Chapter 11 on August 3, 2007, but that case was dismissed on November 30, 2011. An involuntary Chapter 7 was filed for Brown Oil on October 19, 2010. Michael Barnes filed Chapter 13 on July 19, 2011.
Etheridge Oil brought an adversary proceeding against Brown seeking to have his debt declared nondischargable pursuant to 11 U.S.C. § 523(a)(2) and (a)(6). The bankruptcy court found that the dischargeability complaint was moot in the Chapter 11 case, as it had been dismissed.
In that Adversary Proceeding, Etheridge Oil also raised a breach of contract claim against Brown Oil, asserting that Brown Oil had defaulted on payments for deliveries of fuel by terminating authorization to complete bank drafts and by refusing to execute security instruments to secure the amount of indebtedness. The bankruptcy court did find that Brown Oil, by terminating Etheridge Oil’s authority to initiate bank draft was in breach of contract and allowed Etheridge Oil a claim for such breach.
Lastly, Etheridge Oil sought a money judgment under several state law claims against the four Directors of Brown Oil. In a proposed findings of fact and conclusions of law, the bankruptcy court found that the Directors did not owe any fiduciary duty to Etheridge Oil, were not parties to the breach of contract, and that Etheridge Oil had neither presented evidence of unjust enrichment, fraud, unfair and deceptive trade practices, civil conspiracy, fraudulent transfers by the Directors nor any basis for piercing the corporate veil.
For a copies of the opinions, please see:
Etheridge v. Brown Oil- Termination of Bank Draft constitutes Breach of Contract.pdf
Etheridge v. Brown- Discharge Complaint Moot due to Dismissal of Bankruptcy.pdf
Etheridge v. Brown, Barns, Barns, & Woodard- Liability of Corporate Officers.pdf
Blog comments