Cattafi v. O'Neill (In Re Nuisance Corp.)

OPINION

D. JOSEPH DE VITO, Bankruptcy Judge.

Plaintiffs seek to enforce an alleged security interest in proceeds resulting from the sale of the debtor’s assets. The relevant undisputed facts may be summarized as follows:

1. Plaintiffs, Michael Cattafi, Jr., his wife Carolyn C. Cattafi, and Lillian R. Cattafi, Michael Jr.’s sister, collectively owned approximately 66 per cent of the corporation’s common stock. Michael Jr. was the president and a director of the bankrupt corporation. It appears that Lillian R. also served as an officer and/or director of the corporation. Michael Cattafi, Sr.,…