HLNT/NIR/Humphries/Walters/PWC Lawsuits Update, Part 2:
Motions #9 and #10 were answered in this Decision by the Judge (Document #150).
Review:
First, the Judge dealt with the Humphries Bankruptcy issue, drawing on the fact that Humphries current Bankruptcy filing was limited in the duration as to the Automatic Stay under the Bankruptcy laws. While the Judge did not have at hand the ruling handed down today that Humphries Bankruptcy was dismissed, she felt that Bankruptcy had already surpassed its effect on the HLNT Counter Claims and 3rd Party Action (CC3PA).
Second, as was said last May and June, Walters failed to properly respond timely in the CC3PA by HLNT. When he did file, it was in opposition to HLNT's Motion to lift the Bankruptcy stay and rejoin the CC3PA for all parties except Humphries. The Judge also noted the Filing of the Texas Court Case, and that the Notes in contention in that case arose out of the same transactions that HLNT alleged were fraudulent in nature. Also, the Judge noted the filing of Walters Motion to Compel Arbitration/Stay Discovery (Motion #10) in August of 2011. And lastly, the Judge noted the Demand for Arbitration, filed on October 24th, after the hearings on HLNT's Motion to lift the stay and rejoin the CC3PA to the original case of NIR.
Interpretations:
Both Walters and Humphries have hurt themselves repeatedly by making mistakes in their conduct of the case. As a result, Humprhies can no longer use the protection of the Bankruptcy Court to prevent HLNT from involving Humphries in the case. In addition, Walters can no longer rely on the situation with Humphries to stall or delay the CC3PA as well. As mentioned in prior posts, Ribotsky has been ousted as the Manager of NIR. This was the first Domino to fall in this convoluted litigation. The second Domino to fall was the loss of the protection of bankruptcy by Humphries, and subsequently by Walters and NIR.
Walters poor timing (like Humphries in his 3rd Bankruptcy filing) of filing the Demand for Arbitration so late cost him the luxury of being able to rely on the arbitration clause to keep himself out of litigation, and now he is paying the price for that. His planned delay and dragging out the suit has now been used against him, and cost him the ability to force the New York case into arbitration. So his misguided attempts to cause HLNT harm by extended litigation with the resulting legal fees has now backfired against him. In addition, HLNT has been able to survive the extended litigation process as well. This denial of he Arbitration has been the third Domino to fall.
With the loss of the bankruptcy protection, with the denial of the Motion to Compel Arbitration, there was no longer any reason to keep the cases (NIR's Original case and the CC3PA) severed, and it was just a natural conclusion to the rejoining the two cases. The rejoining of the cases has been the 4th Domino to Fall.
This decision has far reaching implications for the Texas Case and also the California Arbitration. While it hasn't brought the other two issues to a complete halt, the recognition of the notes in Texas as being a part of the same transactions, and the denial of the arbitration has served to weaken the seperateness of those two isssues.
AI
