Hannah Woldeyohannes

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UNITED STATES BANKRUPTCY COURT
DISTRICT OF CONNECTICUT
NEW HAVEN DIVISION
In re:
Hannah Woldeyohannes
Debtor
Case No.: 11-20003 (AMN)
Chapter 7
Re: ECF Nos. 252, 261, 265, 266, 277,
280, 294, 295, 300
MEMORANDUM OF DECISION AND ORDER OVERRULING
OBJECTION TO CHAPTER 7 TRUSTEE’S NOTICE OF ABANDONMENT
AND DENYING MOTION TO REOPEN EVIDENTIARY RECORD
On August 15, 2025, the court reopened this Chapter 7 case for a limited purpose:
to appoint a Chapter 7 Trustee to determine whether any unadministered assets
remained in Hannah Woldeyohannes’s (“Debtor”) bankruptcy estate. 	ECF No. 252 (the
“Reopening Order”). For more context regarding the two-party dispute between creditor
Alyssa Peterson (“Ms. Peterson”) and Debtor Hannah Woldeyohannes and her family,
and its relationship to this case, see case number 18-21369 (the “2018 Case”), ECF No.
317, pp. 22-23.
Because the original Chapter 7 trustee assigned to this case retired, the United
States Trustee appointed Bonnie C. Mangan as the new Chapter 7 Trustee (the
“Trustee”). 	ECF No. 256. 	The Reopening Order directed the Trustee to file a report
clarifying whether there are unadministered assets remaining in the estate of this Chapter
7 case. 	ECF No. 252, p.9. 	The Trustee initially filed a Notice of Abandonment with
respect to an unadministered 75% membership interest in a limited liability company
known as A to Zee, LLC (the “LLC”; the 75% membership interest in the LLC is the
“Asset”). However, because the Reopening Order limited the scope of the Trustee’s tasks
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to identifying whether there were unadministered assets, the court entered a second order
clarifying the Chapter 7 Trustee needed to describe the steps taken and factors
considered in making her determination that unadministered assets remain in this 2011
bankruptcy estate. ECF No. 261. In response, the Trustee filed a statement explaining
the basis for her determination that the Asset remained in this bankruptcy case and had
not been fully administered by the original trustee, and her further determination the Asset
should be abandoned. 	ECF No. 265. 	Attached to the Trustee’s statement was a
declaration from the prior trustee, explaining his view of the Asset at the time he was the
case trustee.
The court then expanded the scope of the Reopening Order to include the
administration of the Asset and established a deadline for the Trustee to proceed with the
Asset’s administration. 	ECF No. 266. 	The Trustee filed a second Notice of Proposed
Abandonment 	or 	Disposition 	of 	Property 	and 	Opportunity 	for 	Objections 	Thereto
(“Abandonment Notice”). ECF No. 277. Pursuant to 11 U.S.C. §554(b) and Federal Rule
of Bankruptcy Procedure 6007, a Notice of Abandonment results in an abandonment of
estate property if there is no timely objection. No court order or hearing is required in the
absence of an objection.
Here, 	Ms. 	Peterson 	objected 	to 	the 	Abandonment 	Notice, 	raising 	several
arguments. ECF No. 280 (the “Objection”). A hearing was held on May 6, 2026. Before
the court entered a ruling on the pending Objection, Ms. Peterson filed a Motion to
Reopen the Evidentiary Record at ECF No. 300 (“Evidence Motion”).
After consideration of the written Objection and after an oral argument held on May
6, 2026, the court finds Ms. Peterson’s arguments opposing abandonment of the Asset
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to be unpersuasive and the Objection will be overruled. As explained below, the Evidence
Motion will be denied.
Background
General familiarity with the history of this case is assumed, but additional
background regarding the circumstances surrounding the reopening of this 2011 case
can be found in the Reopening Order.
As relevant here, on February 5, 2026, the Trustee filed a Status Report, identifying
the 75% partial interest in the LLC as an unscheduled and unadministered asset of the
estate. 	ECF No. 265 (the “Status Report”). 	The Trustee detailed the steps she took to
determine whether the Asset remained in this bankruptcy estate, and to determine it was
an unscheduled, unadministered asset. Status Report, pp. 4-5. The Trustee concurred
with the prior trustee’s reasoning and conclusions as articulated in the declaration
attached as Exhibit A to the Status Report (the “Declaration”) that the Asset has no value
to the estate. ECF No. 265, pp. 7-10. The Declaration identifies encumbrances against
the underlying real property owned by the LLC which exceeded its value, and the prior
trustee’s concern that “unresolved matters between Ms. Peterson and the Debtor in the
state court forum would continue in bankruptcy court, therefore, complicating my efforts
to sell the assets of the LLC and run up costs to the estate.” ECF No. 265, p. 8. To be
clear, the estate has no other assets or funds from which to pay for the Trustee to hire
special counsel to represent her in litigation.
The Abandonment Notice asserts the Trustee, “believes, in her business judgment,
that the administration of the property is of inconsequential value and of no benefit to the
creditors of the bankruptcy estate,” referencing the Status Report and the Declaration as
supporting this conclusion. 	Pursuant to 11 U.S.C. § 554(b), “[o]n request of a party in
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interest and after notice and a hearing, the court may order the trustee to abandon any
property of the estate that is burdensome to the estate or that is of inconsequential value
and benefit to the estate.”
During the May 6 th hearing, the Trustee argued that administration of the Asset via
a bankruptcy sale would be, in her business judgment, financially and professionally
burdensome and unlikely to result in any meaningful distribution to the creditors of the
estate. The time and cost of conducting such a sale far exceed any expected recovery,
she said. The only creditors of the estate who filed claims, and thus would be eligible to
participate in any distribution of estate assets, are Ms. Peterson (claiming approximately
$248,000 	arising 	from 	a 	court 	judgment) 	and 	Fia 	Card 	Services, 	N.A. 	(claiming
approximately $130 arising from credit card debt). 	The only other proof of claim filed in
this case was disallowed after objection by the former Chapter 7 Trustee. ECF Nos. 133,
146.
Applicable Law
Abandonment in Chapter 7 Cases
Fed.R.Bankr.P. 6007 and 11 U.S.C. §554(a) govern a trustee’s abandonment of
bankruptcy estate assets. 	Rule 6007 sets forth notice and service requirements and
Section 554 the type of property which may be abandoned. In particular, Section 554(a)
provides: “the trustee may abandon any property of the estate that is burdensome to the
estate or that is of inconsequential value and benefit to the estate.” 11 U.S.C. § 554(a).
Notably, upon filing a Chapter 7 petition, a debtor experiences immediate and
complete divestiture of control over all estate property under 11 U.S.C. § 541(a)(1). This
complete divestiture of control ensures that estate assets are preserved for the benefit of
creditors and administered solely by the trustee until formal abandonment occurs.
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Therefore, because a debtor is divested of control of their estate in Chapter 7, they are
unable to transfer or dispose of such unscheduled estate assets unless and until the
Chapter 7 trustee abandons the asset. 	In re Dicks, 579 B.R. at 708 (citing In re Arana,
456 B.R. 161, 170 (Bankr. E.D.N.Y. 2011)). 	Until then, only the Chapter 7 trustee has
standing to sell, lease, transfer, or use property of the estate under § 363 – to the
exclusion of the debtor. 	In re Mejia, 576 B.R. 464, 471 (Bankr. S.D.N.Y. 2017). 	Thus,
any agreement by a Chapter 7 debtor to transfer property of the estate without prior notice
and a hearing is void ab initio and of no force and effect. 	In re Cumberbatch, 657 B.R.
683, 703 (Bankr. E.D.N.Y. 2024).
Upon closure of a Chapter 7 case, “[u]nless the court orders otherwise, any
property scheduled under section 521(a)(1) of this title not otherwise administered at the
time of the closing of a case is abandoned to the debtor and administered for purposes
of section 350 of this title.” 	11 U.S.C. § 554(c). 	However, unscheduled assets are not
subject to 11 U.S.C. § 554(c)’s automatic abandonment upon closure of a bankruptcy
case, but a trustee may nevertheless affirmatively abandon such assets under 11 U.S.C.
§ 554(a) by filing a notice of abandonment, like the Abandonment Notice here. 	In re
Dicks, 579 B.R. 704, 708 (Bankr. E.D.N.Y. 2017); see also Ashmore v. CGI Grp., Inc.,
923 F.3d 260, 281 (2d Cir. 2019) (accepting a trustee’s abandonment of property that is
not included in the debtor’s schedule A/B, without deciding if inclusion of an asset solely
in the debtor’s statement of financial affairs is constitutes “scheduling” within the meaning
of § 521(a)(1)). 	A Chapter 7 trustee's formal abandonment of an unscheduled asset
under § 554 is the only mechanism by which such unscheduled property can exit the
bankruptcy estate. 	Here, the Asset was not scheduled by the Debtor and the prior trustee
did not file a notice of abandonment of the 75% interest in the LLC.
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Standard of Review for a Court Order Abandoning Property of the Estate
A court order to abandon or not abandon property is reviewed on an abuse of
discretion standard, unless it is based upon a clearly erroneous finding of fact. Miller v.
Generale Bank Nederland, N.V. (In re Interpictures, Inc.), 217 F.3d 74 (2d Cir. 2000).
Business Judgment Standard Applies to a Trustee’s Abandonment Decision
Courts apply a business judgment standard to a trustee's decision to abandon
estate property. To meet that burden, a trustee need only demonstrate she has exercised
reasonable judgment, within her scope of authority, and concluded in good faith to
abandon the property as a result. In re Ditech Holding Corp., No. 19-10412 (JLG), 2023
Bankr. LEXIS 1363, at *22 (Bankr. S.D.N.Y. May 24, 2023). The business judgment of a
trustee is entitled to great deference. 	In re Kerner, 599 B.R. 751, 756 (Bankr. S.D.N.Y.
2019); In re MF Glob. Ltd., 535 B.R. 596, 605 (Bankr. S.D.N.Y. 2015).
A party opposing a trustee’s request to abandon property must show some likely
benefit to the estate; mere speculation about possible scenarios in which there might be
a benefit is not sufficient. 	In re Crockett, 642 B.R. 97, 101 (Bankr. D. Conn. 2022). 	A
party opposing abandonment must also show that a sale of an asset, pursuant to 11
U.S.C. § 363(b), is likely to be approved where that is the alternative to abandonment.
Effect of Formal Abandonment on the Title and Ownership of Property
Once a trustee formally abandons estate property, the abandonment constitutes a
complete 	divestiture 	of 	the 	estate's 	interests 	in 	the 	property 	and, 	upon 	proper
abandonment, the property then revests in the debtor retroactively, as though no
bankruptcy 	had 	ever 	been 	filed. 	5–554 	Collier 	on 	Bankruptcy 	¶ 	554.02 	(2017);
Chartschlaa v. Nationwide Mutual Ins. Co., 538 F.3d 116, 123 (2d Cir. 2008)(citing
Catalano v. Comm'r, 279 F.3d 682, 686 (9th Cir. 2002). “In other words, when property
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of the bankrupt is abandoned, the title reverts to the bankrupt, nunc pro tunc, so that he
is treated as having owned it continuously.” 	Moses v. Howard University Hospital, 606
F.3d 789, 795 (D.C. Cir. 2010).
Sale of Estate Property as Alternative to Abandonment
Like a trustee’s abandonment decision, a trustee’s proposed sale of estate assets,
pursuant to 11 U.S.C. § 363(b), is also reviewed under the business judgment standard,
and a court must determine whether the trustee’s judgment to sell an asset is reasonable
and whether a sound business justification exists supporting the sale and its terms. In re
Genco Shipping & Trading Ltd., 509 B.R. 455, 464 (Bankr. S.D.N.Y. 2014). In considering
whether a sale should be conducted pursuant to § 363(b), courts must consider the
following factors:
(i) whether a sound business reason exists for the proposed transaction;
(ii) whether fair and reasonable consideration is provided;
(iii) whether the transaction has been proposed and negotiated in good faith; and
(iv) whether adequate and reasonable notice is provided.
Barnes v. Barnes (In re Barnes), 615 B.R. 514, 524 (Bankr. D. Conn. 2020) (Citing In re
Lionel Corp., 722 F.2d 1063, 1071 (2d Cir. 1983)).
Discussion
Context of this Chapter 7 Case
This Chapter 7 case presents a classic two-party dispute. The only allowed claims
against the estate are Ms. Peterson’s unsecured claim for over $248,000 and a claim by
FIA Card Services N.A. (“FIA”) for $130.09 in credit card debt. FIA was served with the
Abandonment Notice and did not object. One can only assume FIA has long since written
off this minimal claim and, for all intents and purposes, Ms. Peterson is the sole creditor
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of this estate. 	Indeed, Ms. Peterson acknowledges this throughout her Objection and
Supplemental Brief. ECF Nos. 280, 295.
The court denied Debtor Hannah Woldeyohannes a bankruptcy discharge in this
case so Ms. Peterson can pursue collection of her pre-petition unsecured claim from the
Debtor’s assets that are not property of this bankruptcy estate. 	Continued litigation
between the Debtor and her family and Ms. Peterson revealed in the 2018 Case that the
Asset was potentially an unadministered asset of this 2011 bankruptcy case. 	The task
the Trustee was assigned here – identification and administration of unadministered
estate assets – needs to be completed. 	A bankruptcy trustee “administers” an asset of
the bankruptcy estate by abandoning it when the property is otherwise burdensome to
the estate or has inconsequential value. The Trustee is not required to sell assets where
there are insufficient estate funds to pay for the process or where there is little prospect
of an efficient sale that will generate a meaningful return to unsecured creditors.
Here, the Trustee has clearly stated that in her business judgment there are no
estate funds that will pay the administrative costs for a sale and Ms. Peterson does not
dispute that. Undertaking a sale process would therefore be burdensome to the estate.
The Trustee also asserts the litigation surrounding the real property owned by the LLC is
likely to be burdensome to the estate and to the Trustee by causing delay and additional
cost when the estate has no funds to hire special counsel to represent her in any litigation.
As to the value of the property owned by the LLC, the Trustee asserts it is of
inconsequential value based on the existence of liens and encumbrances against the real
property. 	The court attributes great weight to the Trustee’s business judgment that the
uncertainty surrounding the still-pending state court litigation will be burdensome to the
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estate. 	The Trustee is well-acquainted with the litigation history surrounding the Asset
from her experience as the Chapter 7 Trustee for the Debtor’s 2018 Case.
Ms. Peterson’s Arguments Against Abandonment
1. The Asset has benefit to the estate and should not be abandoned
Ms. Peterson raises three arguments in one short paragraph on page three of her
Objection. Her primary argument is that the Trustee did not adequately explain how she
determined the Asset has no value to creditors. But, the Trustee explained the Asset has
limited or no value in the first place because the underlying real property as well as the
LLC interest itself remains the subject of considerable unresolved litigation. Second, the
Trustee noted the encumbrances on the underlying real property owned by the LLC
exceed the value of the real property and Ms. Peterson has not argued the real property’s
value exceeds its encumbrances. 	Based on these factors, the Trustee determined that
the Asset has no value net of encumbrances or other costs for creditors of the estate,
considering the unresolved litigation regarding the real property. 	The Trustee also
reasonably concluded any sale would result in substantial administrative costs to the
estate which would likely exceed any reasonable recovery from a sale of Asset (the partial
LLC membership interest).
Ms. Peterson also appears to argue the Trustee should administer the Asset in
order to avoid a lien which was recorded against A to Zee, LLC in 2025. 	However, this
argument is unclear and not further developed in the Objection or Ms. Peterson’s
Supplemental Brief filed as ECF No. 295. 	To the extent a 2025 lien may improperly
encumber the Asset, that issue may be litigated before the state court, which is well
equipped to decide it. The question before this court is limited to whether the Trustee’s
exercise of her business judgment to abandon the Asset was reasonable.
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Ms. Peterson next argues the Trustee must proceed with a sale because Ms.
Peterson is willing to purchase the Asset via a “credit bid” (and possibly some additional
amount of cash to pay the Trustee’s administrative expenses). 	At the outset, a sale
pursuant to 11 U.S.C. § 363(b) must be supported by a sound business reason, fair and
reasonable consideration, and be proposed in good faith, among other considerations.
Barnes v. Barnes (In re Barnes), 615 B.R. 514, 524 (Bankr. D. Conn. 2020). It is unclear
whether any of those requirements could be met in this case.
The practical absurdity of Peterson’s demand for a sale is notable. 	The Trustee
concluded no reasonable, good faith purchaser will express any interest in the Asset if it
is marketed for sale and, given the history of this litigation, that conclusion appears very
reasonable. 	While Ms. Peterson argued she will “credit bid” using her $248,000
unsecured claim against the estate, the court notes it is unaware of a circumstance when
an unsecured creditor was permitted to submit a credit bid to purchase property. In order
to make the whole process work, Ms. Peterson suggests she would pay the Trustee’s
costs and expenses for undertaking the sale process, which just illustrates the absurdity
of the exercise. Ms. Peterson can pursue her non-bankruptcy rights against the Asset at
any time after the Trustee’s proposed abandonment is effective, at her own cost. 	Her
unsecured claim is not discharged by the Debtor’s 2011 bankruptcy case or her later 2018
bankruptcy case. 	Such a sale would be of no benefit to the estate. 	See, e.g., In re
Fialkowski, 483 B.R. 590, 592 (Bankr. W.D.N.Y. 2012) (sale paying only expenses related
to the sale does not benefit the estate whatsoever).
As the Trustee explained, the time, money, and other resources she would need
to expend in order to conduct a sale of this Asset she believes to have little or no value
to the estate would cause undue financial and administrative burden, and would
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needlessly detract from her ability to perform her duties as a Trustee in other cases. To
demand a sale when there is objectively no benefit to be realized is the equivalent of
placing the Trustee on a hamster wheel.
According to the U.S. Trustee Program Policy and Practices Manual, “Trustees
should not administer fully encumbered assets primarily for the benefit of the trustee and
the trustee’s professionals and with no meaningful distribution to creditors or other
significant benefit." U.S. Trustee Program Policy and Practices Manual, Vol. 2, § 2-2.3.1,
https://www.justice.gov/ust/united-states-trustee-program-policy-and-practices-manual
(last checked September 30, 2026). 	In addition to the fact that the sale of a fully
encumbered asset is generally prohibited, it is a breach of a trustee’s fiduciary duties to
make a side deal with a creditor to increase their compensation by liquidating an asset
which is otherwise over encumbered and properly abandoned. 	In re Stark, No. 20-CV-
4766(EK), 2022 U.S. Dist. LEXIS 114275, at *2 (E.D.N.Y. June 28, 2022) (Citing In re
Bird, 577 B.R. 365, 379 (B.A.P. 10th Cir. 2017)); In re Preston Lumber Corp., 199 B.R.
415, 416 (Bankr. N.D. Cal. 1996).
Viewed form this lens, Ms. Peterson’s offers to credit bid for an Asset the Trustee
views as having no value for the estate and to personally fund the Trustee’s commission
are self-serving and not intended to generate a commercially reasonable sale of the Asset
or otherwise bring money into the estate to pay claims.
The court agrees the Trustee’s business judgment is reasonable and the court
should therefore defer to her determination that the Asset is unlikely to generate a return
for the creditors of the estate due to the factors she identified, including substantial
uncertainty due to pending litigation regarding the underlying real property owned by the
LLC. Under these circumstances, the Asset is properly described as being burdensome
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to the estate and/or of inconsequential value and benefit to the estate, within the meaning
of 11 U.S.C. § 554(a).
2. Judicial Estoppel
Ms. Peterson argues abandonment of the Asset would reward the Debtor for her
misconduct in concealing the Asset when she omitted it from her bankruptcy schedules.
This argument is unpersuasive. 	See Keathley v. BuddyAyers Constr., Inc., No. 25-6,
2026 U.S. LEXIS 2465, at *4 (June 11, 2026)(declining to decide if judicial estoppel is
applicable in the bankruptcy context). The question for the court is whether the Trustee’s
business judgment that the Asset is burdensome or of inconsequential value or benefit to
the estate in the context of this case is reasonable. This remains true even when a debtor
(intentionally or not) fails to schedule an asset.
Ms. Peterson makes generalized statements about alleged fraud and misconduct
and what she believes is right and wrong, but she does not specifically identify how the
abandonment is “rewarding” the Debtor’s alleged scheme to conceal it from her creditors.
Although Ms. Peterson also claims the “U.S. Trustee obtained a fraud judgment for
concealment of assets owned 100% by the Debtor Woldeyohannes,” this is simply untrue.
No court has adjudicated this issue, and the Debtor resolved Adversary Case No. 12-
02021 via a stipulated judgment which included no findings of fact. Case No. 12-02021,
ECF Nos. 26, 35; Case No. 11-20003 ECF Nos. 63, 64, 78, 79.
Ms. Peterson is correct that a debtor’s concealment or non-disclosure of an asset
may have consequences. However, the inability of a trustee to abandon that asset is not
one of those consequences. Pursuant to 11 U.S.C. § 554, by not scheduling the Asset it
has remained “trapped” in the estate for more than a decade. To the extent a transaction
relating to A to Zee, LLC may have occurred while the asset was still part of the Debtor’s
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estate, the validity and enforceability of such a transaction can be litigated in the state
courts and it is possible Ms. Peterson’s estoppel and standing arguments may prevail in
that context. 	However, they are irrelevant with respect to the subject of the Trustee’s
abandonment of the Asset now.
3. The Asset is adequately identified.
Ms. Peterson also challenges the Trustee’s description of the Asset in the Notice.
Specifically, the Trustee’s choice to describe the property being abandoned as: any
interest in the Asset that the Debtor “has, had, or may have had.” Ms. Peterson’s issue
with this hedging language appears to be that it does not commit to the narrative she has
adopted throughout this litigation, i.e., that the Asset has always been and still is owned
by the Debtor.
For over a decade the Debtor and Ms. Peterson have argued about the efficacy of
the Debtor’s attempted dissociation from A to Zee, LLC. 	However, no court has finally
adjudicated what effect, if any, the Debtor’s actions may have had with respect to the
Asset, and thus the Trustee’s choice to use hedging language is not inappropriate.
Further, the court finds the description of the Asset is sufficiently specific so as to enable
any party in interest to understand, with certainty, what property the Trustee seeks to
abandon. Indeed, it is abundantly clear from her Objection that Ms. Peterson understands
exactly what is being abandoned. 	Accordingly, the court finds Ms. Peterson’s objection
as to the Asset’s description unpersuasive.
Ms. Peterson’s Supplemental Memorandum
After the May 6th hearing on the Objection the court set a deadline for parties in
interest to file supplemental legal support for their positions. ECF No. 289. Ms. Peterson
argues in her supplemental brief (ECF No. 295 the “Supplement”) that the Trustee
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impermissibly took “no action” with respect to the administration of the Asset, citing In re
Ira Haupt & Co., 398 F.2d 607, 613 (2d Cir. 1968) and Jepsen v. Taylor (In re Taylor),
Nos. 15-31208 (AMN), 2019 Bankr. LEXIS 2828; 2019 WL 4281896 (Bankr. D. Conn.
Sep. 10, 2019). 	However, both cases discuss a trustee’s duty to take some action to
administer assets of the estate, rather than no action (in particular these cases relate to
causes of action held by the estate). 	A trustee has many options when administering
assets of the estate, one of which is precisely what the Trustee now seeks: abandonment.
“A trustee has a wide variety of choices as to claims of the bankrupt - to
prosecute, allow another to prosecute on mutually satisfactory terms, sell,
or abandon, he may not simply do nothing.”
In re Taylor at *18 (emphasis added).
To the extent they are applicable, these cases actually support this outcome. The
prior trustee took no action with respect to the Asset, leaving it in an unadministered limbo
for years. 	Now this case has been reopened, and the Trustee is fulfilling her duty by
taking the affirmative action of administering the Asset via abandonment. Although Ms.
Peterson may believe the Trustee should take or should have taken a different course of
action with respect to the Asset (and any claims that may surround it), the Court must
defer to the Trustee’s business judgment so long as it is reasonable.
For all of these reasons, the Trustee’s decision to abandon the Asset is reasonable
and abandonment is a valid administrative action by the Trustee.
Ms. Peterson’s remaining arguments in the Supplement have been considered and
found to be without merit.
Edward Taiman’s Supplemental Memorandum
Attorney Edward Taiman also filed a supplemental memorandum. 	ECF No. 294
(the “Taiman Memo”). 	Notably, the Taiman Memo is not related to any independent
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objection filed by Mr. Taiman and does not request an Order from the court pursuant to
Fed.R.Bankr.P. 9013(a). 	Mr. Taiman is not a creditor of this estate, does not currently
represent any party in interest in this 2011 case, is without standing to object to the Notice
or to request an order relating to it in the first place, and so the Taiman Memo can be
disregarded for those reasons. However, the court also finds the arguments articulated
in the Taiman Memo to be unpersuasive even were they properly before the court. The
Court has already discussed the business judgment standard which applies to a trustee’s
abandonment at length and Mr. Taiman has not set forth any authority which counters the
court’s conclusion on that issue.
Mr. Taiman also offers no authority in support of his argument that the court should
(or even can) apply the equitable principle of laches under these circumstances.
However, it is readily apparent upon review of the public docket in this case that the
ownership status of A to Zee, LLC was disputed long before 2011. Questions about the
Debtor’s ownership interest in A to Zee, LLC and her dissociation therefrom have been
raised on numerous occasions and have been raised in the presence of Mr. Taiman and
others who have allegedly relied upon this notoriously unresolved issue when transacting
with the Debtor and/or A to Zee, LLC. The provisions of 11 U.S.C. § 554(c) and (d) are
also clear and readily available to the public for review. To the extent anyone negligently
failed to diligently research the ownership status of A to Zee, LLC, the Debtor’s ability to
engage in transactions relating to it as a result of this bankruptcy, or to otherwise address
these known issues when dealing with them, their assumption of that risk was at their
own peril. 	Accordingly, the Taiman Memo is unpersuasive on all issues, even if Mr.
Taiman had standing to raise these arguments.
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The Motion to Reopen the Evidentiary Record Will Be Denied
Through her Evidence Motion, Ms. Peterson also seeks to re-open the record to
offer additional evidence, in accordance with Federal Rules of Bankruptcy Procedure
9014 and 9017. 	ECF No. 300. 	Although the authority to reopen evidence prior to the
entry of judgment is more than likely derivative of the authority conferred in Rule 59, a
contextual reading of the rule ostensibly presumes that a court previously entered a
judgment, whereas, here, Peterson seeks to reopen evidence prior to the court's
rendering judgment. Nevertheless, while it may not be clear which Federal Rule of Civil
Procedure authorizes a court to reopen an evidentiary record prior to judgment, it is clear
that this Court has the ability to do so and that the decision to reopen an evidentiary record
prior to judgment is “committed to the sound discretion of the [ ] court.” Romeo v. Sherry,
308 F.Supp.2d 128, 138–39 (E.D.N.Y. 2004); See also In re Dunson, No. 13-10604-WHD,
2014 WL 7793689, at *1 (Bankr. N.D. Ga. Sept. 16, 2014).
The Second Circuit has articulated that the reopening of a hearing for additional or
supplemental evidence may be justified so long as (1) the additional evidence was
material; (2) the opposing party had an opportunity for cross-examination; and (3) the
opposing party suffered no prejudice. 	Matthew Bender & Co., Inc. v. West Publ'g Co.,
158 F.3d 674, 679 (2d Cir. 1998). Additionally, in such circumstances, courts are advised
to consider whether the failure originally to introduce the evidence reflected a lack of
diligence on the part of the moving party. 	e.g., Garcia v. Woman's Hosp., 97 F.3d 810,
814 (5th Cir. 1996).
Here, Ms. Peterson seeks to introduce a document which prominently states
"CONFIDENTIAL 	SETTLEMENT 	COMMUNICATION 	FOR 	PURPOSES 	OF
COMPROMISE NEGOTIATIONS THROUGH MEDIATION" and cites to Connecticut
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Code of Evidence § 4-8 (analogous to Federal Rule of Evidence 408). 	The document
appears to have been created in relation to Superior Court Case No. HHD-CV-23-
5078361-S (the “2023 Boatman/Taiman Case”), which appears to relate in part to certain
real property owned by the LLC.
In the first instance, documents prepared in the context of settlement discussions
are not admissible, pursuant to Federal Rule of Evidence 408. However, the content of
the document, despite also being unauthenticated and inadmissible hearsay, also
appears to have little to no probative value as to the issues presently before the court.
Indeed, this only serves to further highlight the substantial and ongoing litigation
surrounding the Asset which would have to be addressed by any bona fide purchaser and
therefore supports the Trustee's determination that the Asset has no value to the estate
and should be abandoned. 1
The Court also notes Ms. Peterson is the plaintiff in the 2023 Boatman/Taiman
Case which has been pending for several years now, and so Ms. Peterson could have
obtained this same information via discovery in that case prior to the May 6, 2026, hearing
on the Objection. Therefore, her failure to present this information prior to, or during the
May 6th hearing is not excusable neglect, within the meaning of Fed.R.Civ.P. 59 or 60(b),
and so reflects a lack of diligence on her part.
Even ignoring its apparent inadmissibility, accepting Ms. Peterson’s belated
submission of this non-probative, immaterial exhibit would be prejudicial to the Trustee.
1 No party to the 2023 Boatman/Taiman Case (other than Attorney Taiman in this case) was served
with the Evidence Motion and it seems likely that further litigation will follow as a result.
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As a non-party to the 2023 Boatman/Taiman Case, the Trustee would not have had an
opportunity to depose or cross examine any party with respect to this document.
For these reasons the Evidence Motion must be denied.
Conclusion
Having considered all other arguments made and finding them to be without merit,
it is hereby
ORDERED: The Objection (ECF No. 280) is OVERRULED and the Trustee’s
abandonment of the estate’s interest in A to Zee, LLC is deemed effective as of the date
of this Order; and it is further
ORDERED: The Evidence Motion (ECF No. 300) is DENIED.
Dated this 30th day of September, 2026, at New Haven, Connecticut.
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