Yerushalmi v. Pergament, as Chapter 7 Trustee

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------------------------x
In re:
Chapter 7
Joseph Yerushalmi,
Case No.: 8-07-72816-478
Debtor.
-------------------------------------------------------x
Joseph Yerushalmi,
Plaintiff,
Adv. Pro. No.: 8-09-08415-478
- against -
Marc A. Pergament, as chapter 7 Trustee,
Defendant.
-------------------------------------------------------x
MEMORANDUM DECISION AND ORDER
Appearances:
Forchelli, Curto, Deegan,
Schwarz, Mineo, Cohn & Terrana, LLP
Attorneys for Plaintiff
By: Gary M. Kusher, Esq.
333 Earle Ovington Boulevard, Suite 1010
Uniondale, New York 11553
Weinberg Gross & Pergament
Attorneys for Defendant
By: Marc A. Pergament, Esq.
400 Garden City Plaza, Suite 403
Garden City, New York 11530
Honorable Dorothy T. Eisenberg, United States Bankruptcy Judge
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

Before the Court is (1) the Plaintiff Debtor’s motion for summary judgment seeking a
declaratory judgment as to whether Marc A. Pergament, the chapter 7 trustee of the Debtor’s
bankruptcy estate (the “Trustee”), abandoned the appeal of pending state court litigation between
the Debtor and a third party (the “Motion for Summary Judgment”), and (2) the Trustee’s motion
to dismiss this adversary proceeding. At issue is what was abandoned by the Trustee when he
abandoned his interest in prosecuting the appeal of a state court judgment. This Court has
jurisdiction over this core proceeding under 28 U.S.C. §§ 1334(b) and 157(b)(2)(A) and (O) and
11 U.S.C. § 554 and Fed. R. Bankr. P. 7001(1) and (9). The following constitutes the Court’s
finding of fact and conclusions of law pursuant to Fed. R. Bankr. P. 7052.
FACTS
The Debtor filed for chapter 11 relief under the Bankruptcy Code on July 25, 2007. The
case was converted to a chapter 7 case on October 2, 2007 and the Trustee was appointed to
administer the assets of the Debtor’s bankruptcy estate.
Prior to the Debtor’s bankruptcy filing, the Debtor was a partner of a law firm known as
Yerushalmi, Shiboleth, Yisraeli & Roberts, LLP (“YSYR”). In or about March 31, 1995, the
partnership dissolved. The Debtor commenced another law practice under the name of
Yerushalmi & Associates LLP (“Y&A”). On or about January 23, 1998, Amon Shiboleth,
individually and on behalf of YSYR, commenced an action in the Supreme Court of the State of
New York against the Debtor and Y&A, among others, bearing Index No. 600350/98, which
sought, inter alia, a partnership accounting of the various fees that were due to YSYR (the
“Accounting Action”). On March 7, 2007, Special Referee, Lancelot B. Hewitt, entered a
11
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

judgment in the Accounting Action awarding Shiboleth and YSYR a total sum of $3,540,046.91
as follows: (a) $2,036,273.09 was charged against the Debtor and Y&A, and (b) $1,503,773.82
was charged against the Debtor only (the “Judgment”). On September 26, 2007, Shiboleth and
YSYR filed a proof of claim in the Debtor’s bankruptcy case based upon the Judgment.
At the time of the bankruptcy filing, there was an appeal of this Judgment by the Debtor
and Y&A pending before the Appellate Division of the Supreme Court of the State of New York
(the “Appellate Division”). The Trustee examined the Debtor at the initial meeting of creditors
in the Chapter 7 case regarding the appeal. The Trustee decided that the prosecution of the
appeal would have imposed a significant expense upon the bankruptcy estate. On February 11,
2008, the Trustee filed a “Notice of Intention to Abandon Estate’s Interest” notifying creditors,
the Debtor and all parties in interest that the Trustee “intends to abandon the estate’s interest in
the appeal of the Decision and Order in Shiboleth, et. al. v. Yerushalmi, et. al., Index No.
600350/98, pending in the Appellate Division of the State of New York” (the “Appeal”). No
objections to the Notice of Intention to Abandon the Estate’s Interest in the Appeal were filed.
On March 24, 2008, Bankruptcy Judge Jerome Feller entered an order directing the Appeal be
abandoned to the Debtor and ordered that the Debtor’s bankruptcy estate has no further interest
or rights in the Appeal (the “Abandonment Order”). The bankruptcy case was subsequently
transferred to this Judge. Judge Feller’s Abandonment Order was not appealed and remains a
final order.
The Debtor undertook the prosecution of the Appeal, including the legal costs and
expenses. On January 6, 2009, the Appellate Division rendered a decision affirming the trial
court’s Judgment in part but vacating the award of damages and remanding the matter to the
22
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

Special Referee to apportion the value of the NSN Contingency fee and the Phoenix Group fee
together with the recalculation of interest based on such reapportionment. Depending on the
results of the remanded proceeding, a reapportionment in the Accounting Action may result in a
monetary award in favor of the state court defendants in the Accounting Action rather than to
Shiboleth and YSYR.
A dispute has now arisen between the Trustee and the Debtor as to who has standing to
pursue the further proceedings remanded by the Appellate Division with respect to the
Accounting Action. The Debtor commenced this adversary proceeding and subsequently filed
the Motion for Summary Judgment arguing that (1) when the Trustee abandoned the Appeal he
abandoned the entire underlying cause of action and all of its related claims, and (2) the appeal
process (i.e. to have the matters tried before a hearing officer so that sums could be fixed) is not
a final determination of all issues contained in the appeal. The Trustee abandoned his right to
litigate such proceedings. The Trustee counters in his Motion to Dismiss that the scope of the
Abandonment Order was limited to the estate’s interest in prosecuting the appeal of the
Judgment in the Accounting Action and that the underlying Accounting Action was never
expressly abandoned and continues to remain property of the bankruptcy estate. The Trustee
argues that any further proceedings after a decision rendered by the Appellate Division is a new
proceeding and not part of the Appeal. The Trustee does not indicate what, if anything, may
remain that is not part of the appeal between the present parties to this litigation.
33
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

DISCUSSION
Pursuant to 11 U.S.C. § 554(a), “[a]fter notice and a hearing, 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.
Despite the Trustee’s arguments that the interpretation of the Abandonment Order should
be limited to only the proceedings before the Appellate Division, the Court finds that when the
Trustee abandoned the Appeal, he abandoned the estate’s interest in prosecuting and defending
any and all proceedings relating to such appeals process, including the proceedings remanded by
the Appellate Division to the trial court. While the January 6, 2009 order by the Appellate
Division may have concluded the proceedings before the Appellate Division, it was not a final
order that resolved the Appeal. ‘A “final” order or judgment is one that disposes of all of the
causes of action between the parties in the action or proceeding and leaves nothing for further
judicial action apart from mere ministerial matters.’ Burke v. Crosson, 85 N.Y.2d 10, 15 (N.Y.
1995). See also, 73 N.Y. Jur. 2d Judgments §29 (2d ed. 2009). “Under this definition, an order
or judgment that disposes of some but not all of the substantive and monetary disputes between
the same parties, is, in most cases, nonfinal.” Burke v. Crosson, 85 N.Y.2d at 15.
Because the remand to the trial court regarding the apportionment of certain fees involves
more than a mere ministerial matter, especially in an accounting action, the order of the
Appellate Division regarding the Appeal is not final. Indeed, until all of the causes of action and
substantive issues relating to the Appeal and any subsequent proceedings stemming from the
Appeal of the Judgment have been resolved and there is nothing left for further judicial action,
including any further appeals, the appeal process is not final. Accordingly, the Court finds that
44
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

the Trustee has no standing to prosecute the proceedings on remand and any further appeal that
may arise as a result of such remand by the Appellate Division.
Although the Court finds that the term “Appeal” encompasses not only the proceedings
before the Appellate Division but any subsequent proceedings arising from the Appeal regarding
the Accounting Action, the Court finds that it is premature at this time to determine whether the
Trustee’s abandonment of the prosecution of the Appeal also means that he abandoned any
recovery that may result once the apportionment is finalized and the Accounting Action is
concluded without any further appeals. The Accounting Action is still pending and the final
outcome is still uncertain. Should the Accounting Action ultimately be concluded in favor of
Shiboleth, then the dispute between the Debtor and the Trustee regarding the scope of the
Abandonment Order and whether the Debtor’s estate retains an interest in any recovery that may
arise under the Accounting Action would be moot. Indeed, the Accounting Action, the ultimate
determination of the reapportionment, and whether the Debtor has any liability to Shiboleth
affect not only this adversary proceeding but also several other adversary proceedings involving
the Debtor, the Trustee and Shiboleth that are pending before this Court
CONCLUSION AND ORDER
Based upon the foregoing, the Court finds that the Trustee does not have standing to
prosecute the Appeal of the Judgment and any proceedings arising within this Appeal as the
Trustee has abandoned the prosecution of this Appeal. 	In order to forestall any further litigation
between the Debtor and the Trustee, and the needless expenditure of judicial resources, and to
further efficient administration of the Debtor’s bankruptcy case and its related adversary
55
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

proceedings, the Court will determine the issue of the estate’s interest in any recovery arising
from the Accounting Action when there has been a final determination in the Accounting Action.
IT IS HEREBY ORDERED, that Debtor’s motion for summary judgment declaring that
the Trustee of the Chapter 7 bankruptcy estate has abandoned the appeal to index no. 600350/98,
pending in the Appellate Division of the State of New York, is granted; and it is further
ORDERED, that the Trustee’s motion to dismiss this adversary proceeding is denied,
without prejudice to the Trustee to renew any claim the Trustee may have after the appeal is
finally adjudicated.
Dated: 	Central Islip, New York
February 12, 2010.
/s/ Dorothy Eisenberg
DOROTHY EISENBERG
UNITED STATES BANKRUPTCY JUDGE
66
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------------------------x
In re:
Chapter 7
Joseph Yerushalmi,
Case No.: 8-07-72816-478
Debtor.
-------------------------------------------------------x
Joseph Yerushalmi,
Plaintiff,
Adv. Pro. No.: 8-09-08415-478
- against -
Marc A. Pergament, as chapter 7 Trustee,
Defendant.
-------------------------------------------------------x
MEMORANDUM DECISION AND ORDER
Appearances:
Forchelli, Curto, Deegan,
Schwarz, Mineo, Cohn & Terrana, LLP
Attorneys for Plaintiff
By: Gary M. Kusher, Esq.
333 Earle Ovington Boulevard, Suite 1010
Uniondale, New York 11553
Weinberg Gross & Pergament
Attorneys for Defendant
By: Marc A. Pergament, Esq.
400 Garden City Plaza, Suite 403
Garden City, New York 11530
Honorable Dorothy T. Eisenberg, United States Bankruptcy Judge
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

Before the Court is (1) the Plaintiff Debtor’s motion for summary judgment seeking a
declaratory judgment as to whether Marc A. Pergament, the chapter 7 trustee of the Debtor’s
bankruptcy estate (the “Trustee”), abandoned the appeal of pending state court litigation between
the Debtor and a third party (the “Motion for Summary Judgment”), and (2) the Trustee’s motion
to dismiss this adversary proceeding. At issue is what was abandoned by the Trustee when he
abandoned his interest in prosecuting the appeal of a state court judgment. This Court has
jurisdiction over this core proceeding under 28 U.S.C. §§ 1334(b) and 157(b)(2)(A) and (O) and
11 U.S.C. § 554 and Fed. R. Bankr. P. 7001(1) and (9). The following constitutes the Court’s
finding of fact and conclusions of law pursuant to Fed. R. Bankr. P. 7052.
FACTS
The Debtor filed for chapter 11 relief under the Bankruptcy Code on July 25, 2007. The
case was converted to a chapter 7 case on October 2, 2007 and the Trustee was appointed to
administer the assets of the Debtor’s bankruptcy estate.
Prior to the Debtor’s bankruptcy filing, the Debtor was a partner of a law firm known as
Yerushalmi, Shiboleth, Yisraeli & Roberts, LLP (“YSYR”). In or about March 31, 1995, the
partnership dissolved. The Debtor commenced another law practice under the name of
Yerushalmi & Associates LLP (“Y&A”). On or about January 23, 1998, Amon Shiboleth,
individually and on behalf of YSYR, commenced an action in the Supreme Court of the State of
New York against the Debtor and Y&A, among others, bearing Index No. 600350/98, which
sought, inter alia, a partnership accounting of the various fees that were due to YSYR (the
“Accounting Action”). On March 7, 2007, Special Referee, Lancelot B. Hewitt, entered a
11
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

judgment in the Accounting Action awarding Shiboleth and YSYR a total sum of $3,540,046.91
as follows: (a) $2,036,273.09 was charged against the Debtor and Y&A, and (b) $1,503,773.82
was charged against the Debtor only (the “Judgment”). On September 26, 2007, Shiboleth and
YSYR filed a proof of claim in the Debtor’s bankruptcy case based upon the Judgment.
At the time of the bankruptcy filing, there was an appeal of this Judgment by the Debtor
and Y&A pending before the Appellate Division of the Supreme Court of the State of New York
(the “Appellate Division”). The Trustee examined the Debtor at the initial meeting of creditors
in the Chapter 7 case regarding the appeal. The Trustee decided that the prosecution of the
appeal would have imposed a significant expense upon the bankruptcy estate. On February 11,
2008, the Trustee filed a “Notice of Intention to Abandon Estate’s Interest” notifying creditors,
the Debtor and all parties in interest that the Trustee “intends to abandon the estate’s interest in
the appeal of the Decision and Order in Shiboleth, et. al. v. Yerushalmi, et. al., Index No.
600350/98, pending in the Appellate Division of the State of New York” (the “Appeal”). No
objections to the Notice of Intention to Abandon the Estate’s Interest in the Appeal were filed.
On March 24, 2008, Bankruptcy Judge Jerome Feller entered an order directing the Appeal be
abandoned to the Debtor and ordered that the Debtor’s bankruptcy estate has no further interest
or rights in the Appeal (the “Abandonment Order”). The bankruptcy case was subsequently
transferred to this Judge. Judge Feller’s Abandonment Order was not appealed and remains a
final order.
The Debtor undertook the prosecution of the Appeal, including the legal costs and
expenses. On January 6, 2009, the Appellate Division rendered a decision affirming the trial
court’s Judgment in part but vacating the award of damages and remanding the matter to the
22
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

Special Referee to apportion the value of the NSN Contingency fee and the Phoenix Group fee
together with the recalculation of interest based on such reapportionment. Depending on the
results of the remanded proceeding, a reapportionment in the Accounting Action may result in a
monetary award in favor of the state court defendants in the Accounting Action rather than to
Shiboleth and YSYR.
A dispute has now arisen between the Trustee and the Debtor as to who has standing to
pursue the further proceedings remanded by the Appellate Division with respect to the
Accounting Action. The Debtor commenced this adversary proceeding and subsequently filed
the Motion for Summary Judgment arguing that (1) when the Trustee abandoned the Appeal he
abandoned the entire underlying cause of action and all of its related claims, and (2) the appeal
process (i.e. to have the matters tried before a hearing officer so that sums could be fixed) is not
a final determination of all issues contained in the appeal. The Trustee abandoned his right to
litigate such proceedings. The Trustee counters in his Motion to Dismiss that the scope of the
Abandonment Order was limited to the estate’s interest in prosecuting the appeal of the
Judgment in the Accounting Action and that the underlying Accounting Action was never
expressly abandoned and continues to remain property of the bankruptcy estate. The Trustee
argues that any further proceedings after a decision rendered by the Appellate Division is a new
proceeding and not part of the Appeal. The Trustee does not indicate what, if anything, may
remain that is not part of the appeal between the present parties to this litigation.
33
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

DISCUSSION
Pursuant to 11 U.S.C. § 554(a), “[a]fter notice and a hearing, 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.
Despite the Trustee’s arguments that the interpretation of the Abandonment Order should
be limited to only the proceedings before the Appellate Division, the Court finds that when the
Trustee abandoned the Appeal, he abandoned the estate’s interest in prosecuting and defending
any and all proceedings relating to such appeals process, including the proceedings remanded by
the Appellate Division to the trial court. While the January 6, 2009 order by the Appellate
Division may have concluded the proceedings before the Appellate Division, it was not a final
order that resolved the Appeal. ‘A “final” order or judgment is one that disposes of all of the
causes of action between the parties in the action or proceeding and leaves nothing for further
judicial action apart from mere ministerial matters.’ Burke v. Crosson, 85 N.Y.2d 10, 15 (N.Y.
1995). See also, 73 N.Y. Jur. 2d Judgments §29 (2d ed. 2009). “Under this definition, an order
or judgment that disposes of some but not all of the substantive and monetary disputes between
the same parties, is, in most cases, nonfinal.” Burke v. Crosson, 85 N.Y.2d at 15.
Because the remand to the trial court regarding the apportionment of certain fees involves
more than a mere ministerial matter, especially in an accounting action, the order of the
Appellate Division regarding the Appeal is not final. Indeed, until all of the causes of action and
substantive issues relating to the Appeal and any subsequent proceedings stemming from the
Appeal of the Judgment have been resolved and there is nothing left for further judicial action,
including any further appeals, the appeal process is not final. Accordingly, the Court finds that
44
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

the Trustee has no standing to prosecute the proceedings on remand and any further appeal that
may arise as a result of such remand by the Appellate Division.
Although the Court finds that the term “Appeal” encompasses not only the proceedings
before the Appellate Division but any subsequent proceedings arising from the Appeal regarding
the Accounting Action, the Court finds that it is premature at this time to determine whether the
Trustee’s abandonment of the prosecution of the Appeal also means that he abandoned any
recovery that may result once the apportionment is finalized and the Accounting Action is
concluded without any further appeals. The Accounting Action is still pending and the final
outcome is still uncertain. Should the Accounting Action ultimately be concluded in favor of
Shiboleth, then the dispute between the Debtor and the Trustee regarding the scope of the
Abandonment Order and whether the Debtor’s estate retains an interest in any recovery that may
arise under the Accounting Action would be moot. Indeed, the Accounting Action, the ultimate
determination of the reapportionment, and whether the Debtor has any liability to Shiboleth
affect not only this adversary proceeding but also several other adversary proceedings involving
the Debtor, the Trustee and Shiboleth that are pending before this Court
CONCLUSION AND ORDER
Based upon the foregoing, the Court finds that the Trustee does not have standing to
prosecute the Appeal of the Judgment and any proceedings arising within this Appeal as the
Trustee has abandoned the prosecution of this Appeal. 	In order to forestall any further litigation
between the Debtor and the Trustee, and the needless expenditure of judicial resources, and to
further efficient administration of the Debtor’s bankruptcy case and its related adversary
55
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

proceedings, the Court will determine the issue of the estate’s interest in any recovery arising
from the Accounting Action when there has been a final determination in the Accounting Action.
IT IS HEREBY ORDERED, that Debtor’s motion for summary judgment declaring that
the Trustee of the Chapter 7 bankruptcy estate has abandoned the appeal to index no. 600350/98,
pending in the Appellate Division of the State of New York, is granted; and it is further
ORDERED, that the Trustee’s motion to dismiss this adversary proceeding is denied,
without prejudice to the Trustee to renew any claim the Trustee may have after the appeal is
finally adjudicated.
Dated: 	Central Islip, New York
February 12, 2010.
/s/ Dorothy Eisenberg
DOROTHY EISENBERG
UNITED STATES BANKRUPTCY JUDGE
66
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------------------------x
In re:
Chapter 7
Joseph Yerushalmi,
Case No.: 8-07-72816-478
Debtor.
-------------------------------------------------------x
Joseph Yerushalmi,
Plaintiff,
Adv. Pro. No.: 8-09-08415-478
- against -
Marc A. Pergament, as chapter 7 Trustee,
Defendant.
-------------------------------------------------------x
MEMORANDUM DECISION AND ORDER
Appearances:
Forchelli, Curto, Deegan,
Schwarz, Mineo, Cohn & Terrana, LLP
Attorneys for Plaintiff
By: Gary M. Kusher, Esq.
333 Earle Ovington Boulevard, Suite 1010
Uniondale, New York 11553
Weinberg Gross & Pergament
Attorneys for Defendant
By: Marc A. Pergament, Esq.
400 Garden City Plaza, Suite 403
Garden City, New York 11530
Honorable Dorothy T. Eisenberg, United States Bankruptcy Judge
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

Before the Court is (1) the Plaintiff Debtor’s motion for summary judgment seeking a
declaratory judgment as to whether Marc A. Pergament, the chapter 7 trustee of the Debtor’s
bankruptcy estate (the “Trustee”), abandoned the appeal of pending state court litigation between
the Debtor and a third party (the “Motion for Summary Judgment”), and (2) the Trustee’s motion
to dismiss this adversary proceeding. At issue is what was abandoned by the Trustee when he
abandoned his interest in prosecuting the appeal of a state court judgment. This Court has
jurisdiction over this core proceeding under 28 U.S.C. §§ 1334(b) and 157(b)(2)(A) and (O) and
11 U.S.C. § 554 and Fed. R. Bankr. P. 7001(1) and (9). The following constitutes the Court’s
finding of fact and conclusions of law pursuant to Fed. R. Bankr. P. 7052.
FACTS
The Debtor filed for chapter 11 relief under the Bankruptcy Code on July 25, 2007. The
case was converted to a chapter 7 case on October 2, 2007 and the Trustee was appointed to
administer the assets of the Debtor’s bankruptcy estate.
Prior to the Debtor’s bankruptcy filing, the Debtor was a partner of a law firm known as
Yerushalmi, Shiboleth, Yisraeli & Roberts, LLP (“YSYR”). In or about March 31, 1995, the
partnership dissolved. The Debtor commenced another law practice under the name of
Yerushalmi & Associates LLP (“Y&A”). On or about January 23, 1998, Amon Shiboleth,
individually and on behalf of YSYR, commenced an action in the Supreme Court of the State of
New York against the Debtor and Y&A, among others, bearing Index No. 600350/98, which
sought, inter alia, a partnership accounting of the various fees that were due to YSYR (the
“Accounting Action”). On March 7, 2007, Special Referee, Lancelot B. Hewitt, entered a
11
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

judgment in the Accounting Action awarding Shiboleth and YSYR a total sum of $3,540,046.91
as follows: (a) $2,036,273.09 was charged against the Debtor and Y&A, and (b) $1,503,773.82
was charged against the Debtor only (the “Judgment”). On September 26, 2007, Shiboleth and
YSYR filed a proof of claim in the Debtor’s bankruptcy case based upon the Judgment.
At the time of the bankruptcy filing, there was an appeal of this Judgment by the Debtor
and Y&A pending before the Appellate Division of the Supreme Court of the State of New York
(the “Appellate Division”). The Trustee examined the Debtor at the initial meeting of creditors
in the Chapter 7 case regarding the appeal. The Trustee decided that the prosecution of the
appeal would have imposed a significant expense upon the bankruptcy estate. On February 11,
2008, the Trustee filed a “Notice of Intention to Abandon Estate’s Interest” notifying creditors,
the Debtor and all parties in interest that the Trustee “intends to abandon the estate’s interest in
the appeal of the Decision and Order in Shiboleth, et. al. v. Yerushalmi, et. al., Index No.
600350/98, pending in the Appellate Division of the State of New York” (the “Appeal”). No
objections to the Notice of Intention to Abandon the Estate’s Interest in the Appeal were filed.
On March 24, 2008, Bankruptcy Judge Jerome Feller entered an order directing the Appeal be
abandoned to the Debtor and ordered that the Debtor’s bankruptcy estate has no further interest
or rights in the Appeal (the “Abandonment Order”). The bankruptcy case was subsequently
transferred to this Judge. Judge Feller’s Abandonment Order was not appealed and remains a
final order.
The Debtor undertook the prosecution of the Appeal, including the legal costs and
expenses. On January 6, 2009, the Appellate Division rendered a decision affirming the trial
court’s Judgment in part but vacating the award of damages and remanding the matter to the
22
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

Special Referee to apportion the value of the NSN Contingency fee and the Phoenix Group fee
together with the recalculation of interest based on such reapportionment. Depending on the
results of the remanded proceeding, a reapportionment in the Accounting Action may result in a
monetary award in favor of the state court defendants in the Accounting Action rather than to
Shiboleth and YSYR.
A dispute has now arisen between the Trustee and the Debtor as to who has standing to
pursue the further proceedings remanded by the Appellate Division with respect to the
Accounting Action. The Debtor commenced this adversary proceeding and subsequently filed
the Motion for Summary Judgment arguing that (1) when the Trustee abandoned the Appeal he
abandoned the entire underlying cause of action and all of its related claims, and (2) the appeal
process (i.e. to have the matters tried before a hearing officer so that sums could be fixed) is not
a final determination of all issues contained in the appeal. The Trustee abandoned his right to
litigate such proceedings. The Trustee counters in his Motion to Dismiss that the scope of the
Abandonment Order was limited to the estate’s interest in prosecuting the appeal of the
Judgment in the Accounting Action and that the underlying Accounting Action was never
expressly abandoned and continues to remain property of the bankruptcy estate. The Trustee
argues that any further proceedings after a decision rendered by the Appellate Division is a new
proceeding and not part of the Appeal. The Trustee does not indicate what, if anything, may
remain that is not part of the appeal between the present parties to this litigation.
33
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

DISCUSSION
Pursuant to 11 U.S.C. § 554(a), “[a]fter notice and a hearing, 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.
Despite the Trustee’s arguments that the interpretation of the Abandonment Order should
be limited to only the proceedings before the Appellate Division, the Court finds that when the
Trustee abandoned the Appeal, he abandoned the estate’s interest in prosecuting and defending
any and all proceedings relating to such appeals process, including the proceedings remanded by
the Appellate Division to the trial court. While the January 6, 2009 order by the Appellate
Division may have concluded the proceedings before the Appellate Division, it was not a final
order that resolved the Appeal. ‘A “final” order or judgment is one that disposes of all of the
causes of action between the parties in the action or proceeding and leaves nothing for further
judicial action apart from mere ministerial matters.’ Burke v. Crosson, 85 N.Y.2d 10, 15 (N.Y.
1995). See also, 73 N.Y. Jur. 2d Judgments §29 (2d ed. 2009). “Under this definition, an order
or judgment that disposes of some but not all of the substantive and monetary disputes between
the same parties, is, in most cases, nonfinal.” Burke v. Crosson, 85 N.Y.2d at 15.
Because the remand to the trial court regarding the apportionment of certain fees involves
more than a mere ministerial matter, especially in an accounting action, the order of the
Appellate Division regarding the Appeal is not final. Indeed, until all of the causes of action and
substantive issues relating to the Appeal and any subsequent proceedings stemming from the
Appeal of the Judgment have been resolved and there is nothing left for further judicial action,
including any further appeals, the appeal process is not final. Accordingly, the Court finds that
44
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

the Trustee has no standing to prosecute the proceedings on remand and any further appeal that
may arise as a result of such remand by the Appellate Division.
Although the Court finds that the term “Appeal” encompasses not only the proceedings
before the Appellate Division but any subsequent proceedings arising from the Appeal regarding
the Accounting Action, the Court finds that it is premature at this time to determine whether the
Trustee’s abandonment of the prosecution of the Appeal also means that he abandoned any
recovery that may result once the apportionment is finalized and the Accounting Action is
concluded without any further appeals. The Accounting Action is still pending and the final
outcome is still uncertain. Should the Accounting Action ultimately be concluded in favor of
Shiboleth, then the dispute between the Debtor and the Trustee regarding the scope of the
Abandonment Order and whether the Debtor’s estate retains an interest in any recovery that may
arise under the Accounting Action would be moot. Indeed, the Accounting Action, the ultimate
determination of the reapportionment, and whether the Debtor has any liability to Shiboleth
affect not only this adversary proceeding but also several other adversary proceedings involving
the Debtor, the Trustee and Shiboleth that are pending before this Court
CONCLUSION AND ORDER
Based upon the foregoing, the Court finds that the Trustee does not have standing to
prosecute the Appeal of the Judgment and any proceedings arising within this Appeal as the
Trustee has abandoned the prosecution of this Appeal. 	In order to forestall any further litigation
between the Debtor and the Trustee, and the needless expenditure of judicial resources, and to
further efficient administration of the Debtor’s bankruptcy case and its related adversary
55
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

proceedings, the Court will determine the issue of the estate’s interest in any recovery arising
from the Accounting Action when there has been a final determination in the Accounting Action.
IT IS HEREBY ORDERED, that Debtor’s motion for summary judgment declaring that
the Trustee of the Chapter 7 bankruptcy estate has abandoned the appeal to index no. 600350/98,
pending in the Appellate Division of the State of New York, is granted; and it is further
ORDERED, that the Trustee’s motion to dismiss this adversary proceeding is denied,
without prejudice to the Trustee to renew any claim the Trustee may have after the appeal is
finally adjudicated.
Dated: 	Central Islip, New York
February 12, 2010.
/s/ Dorothy Eisenberg
DOROTHY EISENBERG
UNITED STATES BANKRUPTCY JUDGE
66
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------------------------x
In re:
Chapter 7
Joseph Yerushalmi,
Case No.: 8-07-72816-478
Debtor.
-------------------------------------------------------x
Joseph Yerushalmi,
Plaintiff,
Adv. Pro. No.: 8-09-08415-478
- against -
Marc A. Pergament, as chapter 7 Trustee,
Defendant.
-------------------------------------------------------x
MEMORANDUM DECISION AND ORDER
Appearances:
Forchelli, Curto, Deegan,
Schwarz, Mineo, Cohn & Terrana, LLP
Attorneys for Plaintiff
By: Gary M. Kusher, Esq.
333 Earle Ovington Boulevard, Suite 1010
Uniondale, New York 11553
Weinberg Gross & Pergament
Attorneys for Defendant
By: Marc A. Pergament, Esq.
400 Garden City Plaza, Suite 403
Garden City, New York 11530
Honorable Dorothy T. Eisenberg, United States Bankruptcy Judge
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

Before the Court is (1) the Plaintiff Debtor’s motion for summary judgment seeking a
declaratory judgment as to whether Marc A. Pergament, the chapter 7 trustee of the Debtor’s
bankruptcy estate (the “Trustee”), abandoned the appeal of pending state court litigation between
the Debtor and a third party (the “Motion for Summary Judgment”), and (2) the Trustee’s motion
to dismiss this adversary proceeding. At issue is what was abandoned by the Trustee when he
abandoned his interest in prosecuting the appeal of a state court judgment. This Court has
jurisdiction over this core proceeding under 28 U.S.C. §§ 1334(b) and 157(b)(2)(A) and (O) and
11 U.S.C. § 554 and Fed. R. Bankr. P. 7001(1) and (9). The following constitutes the Court’s
finding of fact and conclusions of law pursuant to Fed. R. Bankr. P. 7052.
FACTS
The Debtor filed for chapter 11 relief under the Bankruptcy Code on July 25, 2007. The
case was converted to a chapter 7 case on October 2, 2007 and the Trustee was appointed to
administer the assets of the Debtor’s bankruptcy estate.
Prior to the Debtor’s bankruptcy filing, the Debtor was a partner of a law firm known as
Yerushalmi, Shiboleth, Yisraeli & Roberts, LLP (“YSYR”). In or about March 31, 1995, the
partnership dissolved. The Debtor commenced another law practice under the name of
Yerushalmi & Associates LLP (“Y&A”). On or about January 23, 1998, Amon Shiboleth,
individually and on behalf of YSYR, commenced an action in the Supreme Court of the State of
New York against the Debtor and Y&A, among others, bearing Index No. 600350/98, which
sought, inter alia, a partnership accounting of the various fees that were due to YSYR (the
“Accounting Action”). On March 7, 2007, Special Referee, Lancelot B. Hewitt, entered a
11
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

judgment in the Accounting Action awarding Shiboleth and YSYR a total sum of $3,540,046.91
as follows: (a) $2,036,273.09 was charged against the Debtor and Y&A, and (b) $1,503,773.82
was charged against the Debtor only (the “Judgment”). On September 26, 2007, Shiboleth and
YSYR filed a proof of claim in the Debtor’s bankruptcy case based upon the Judgment.
At the time of the bankruptcy filing, there was an appeal of this Judgment by the Debtor
and Y&A pending before the Appellate Division of the Supreme Court of the State of New York
(the “Appellate Division”). The Trustee examined the Debtor at the initial meeting of creditors
in the Chapter 7 case regarding the appeal. The Trustee decided that the prosecution of the
appeal would have imposed a significant expense upon the bankruptcy estate. On February 11,
2008, the Trustee filed a “Notice of Intention to Abandon Estate’s Interest” notifying creditors,
the Debtor and all parties in interest that the Trustee “intends to abandon the estate’s interest in
the appeal of the Decision and Order in Shiboleth, et. al. v. Yerushalmi, et. al., Index No.
600350/98, pending in the Appellate Division of the State of New York” (the “Appeal”). No
objections to the Notice of Intention to Abandon the Estate’s Interest in the Appeal were filed.
On March 24, 2008, Bankruptcy Judge Jerome Feller entered an order directing the Appeal be
abandoned to the Debtor and ordered that the Debtor’s bankruptcy estate has no further interest
or rights in the Appeal (the “Abandonment Order”). The bankruptcy case was subsequently
transferred to this Judge. Judge Feller’s Abandonment Order was not appealed and remains a
final order.
The Debtor undertook the prosecution of the Appeal, including the legal costs and
expenses. On January 6, 2009, the Appellate Division rendered a decision affirming the trial
court’s Judgment in part but vacating the award of damages and remanding the matter to the
22
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

Special Referee to apportion the value of the NSN Contingency fee and the Phoenix Group fee
together with the recalculation of interest based on such reapportionment. Depending on the
results of the remanded proceeding, a reapportionment in the Accounting Action may result in a
monetary award in favor of the state court defendants in the Accounting Action rather than to
Shiboleth and YSYR.
A dispute has now arisen between the Trustee and the Debtor as to who has standing to
pursue the further proceedings remanded by the Appellate Division with respect to the
Accounting Action. The Debtor commenced this adversary proceeding and subsequently filed
the Motion for Summary Judgment arguing that (1) when the Trustee abandoned the Appeal he
abandoned the entire underlying cause of action and all of its related claims, and (2) the appeal
process (i.e. to have the matters tried before a hearing officer so that sums could be fixed) is not
a final determination of all issues contained in the appeal. The Trustee abandoned his right to
litigate such proceedings. The Trustee counters in his Motion to Dismiss that the scope of the
Abandonment Order was limited to the estate’s interest in prosecuting the appeal of the
Judgment in the Accounting Action and that the underlying Accounting Action was never
expressly abandoned and continues to remain property of the bankruptcy estate. The Trustee
argues that any further proceedings after a decision rendered by the Appellate Division is a new
proceeding and not part of the Appeal. The Trustee does not indicate what, if anything, may
remain that is not part of the appeal between the present parties to this litigation.
33
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

DISCUSSION
Pursuant to 11 U.S.C. § 554(a), “[a]fter notice and a hearing, 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.
Despite the Trustee’s arguments that the interpretation of the Abandonment Order should
be limited to only the proceedings before the Appellate Division, the Court finds that when the
Trustee abandoned the Appeal, he abandoned the estate’s interest in prosecuting and defending
any and all proceedings relating to such appeals process, including the proceedings remanded by
the Appellate Division to the trial court. While the January 6, 2009 order by the Appellate
Division may have concluded the proceedings before the Appellate Division, it was not a final
order that resolved the Appeal. ‘A “final” order or judgment is one that disposes of all of the
causes of action between the parties in the action or proceeding and leaves nothing for further
judicial action apart from mere ministerial matters.’ Burke v. Crosson, 85 N.Y.2d 10, 15 (N.Y.
1995). See also, 73 N.Y. Jur. 2d Judgments §29 (2d ed. 2009). “Under this definition, an order
or judgment that disposes of some but not all of the substantive and monetary disputes between
the same parties, is, in most cases, nonfinal.” Burke v. Crosson, 85 N.Y.2d at 15.
Because the remand to the trial court regarding the apportionment of certain fees involves
more than a mere ministerial matter, especially in an accounting action, the order of the
Appellate Division regarding the Appeal is not final. Indeed, until all of the causes of action and
substantive issues relating to the Appeal and any subsequent proceedings stemming from the
Appeal of the Judgment have been resolved and there is nothing left for further judicial action,
including any further appeals, the appeal process is not final. Accordingly, the Court finds that
44
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

the Trustee has no standing to prosecute the proceedings on remand and any further appeal that
may arise as a result of such remand by the Appellate Division.
Although the Court finds that the term “Appeal” encompasses not only the proceedings
before the Appellate Division but any subsequent proceedings arising from the Appeal regarding
the Accounting Action, the Court finds that it is premature at this time to determine whether the
Trustee’s abandonment of the prosecution of the Appeal also means that he abandoned any
recovery that may result once the apportionment is finalized and the Accounting Action is
concluded without any further appeals. The Accounting Action is still pending and the final
outcome is still uncertain. Should the Accounting Action ultimately be concluded in favor of
Shiboleth, then the dispute between the Debtor and the Trustee regarding the scope of the
Abandonment Order and whether the Debtor’s estate retains an interest in any recovery that may
arise under the Accounting Action would be moot. Indeed, the Accounting Action, the ultimate
determination of the reapportionment, and whether the Debtor has any liability to Shiboleth
affect not only this adversary proceeding but also several other adversary proceedings involving
the Debtor, the Trustee and Shiboleth that are pending before this Court
CONCLUSION AND ORDER
Based upon the foregoing, the Court finds that the Trustee does not have standing to
prosecute the Appeal of the Judgment and any proceedings arising within this Appeal as the
Trustee has abandoned the prosecution of this Appeal. 	In order to forestall any further litigation
between the Debtor and the Trustee, and the needless expenditure of judicial resources, and to
further efficient administration of the Debtor’s bankruptcy case and its related adversary
55
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

proceedings, the Court will determine the issue of the estate’s interest in any recovery arising
from the Accounting Action when there has been a final determination in the Accounting Action.
IT IS HEREBY ORDERED, that Debtor’s motion for summary judgment declaring that
the Trustee of the Chapter 7 bankruptcy estate has abandoned the appeal to index no. 600350/98,
pending in the Appellate Division of the State of New York, is granted; and it is further
ORDERED, that the Trustee’s motion to dismiss this adversary proceeding is denied,
without prejudice to the Trustee to renew any claim the Trustee may have after the appeal is
finally adjudicated.
Dated: 	Central Islip, New York
February 12, 2010.
/s/ Dorothy Eisenberg
DOROTHY EISENBERG
UNITED STATES BANKRUPTCY JUDGE
66
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------------------------x
In re:
Chapter 7
Joseph Yerushalmi,
Case No.: 8-07-72816-478
Debtor.
-------------------------------------------------------x
Joseph Yerushalmi,
Plaintiff,
Adv. Pro. No.: 8-09-08415-478
- against -
Marc A. Pergament, as chapter 7 Trustee,
Defendant.
-------------------------------------------------------x
MEMORANDUM DECISION AND ORDER
Appearances:
Forchelli, Curto, Deegan,
Schwarz, Mineo, Cohn & Terrana, LLP
Attorneys for Plaintiff
By: Gary M. Kusher, Esq.
333 Earle Ovington Boulevard, Suite 1010
Uniondale, New York 11553
Weinberg Gross & Pergament
Attorneys for Defendant
By: Marc A. Pergament, Esq.
400 Garden City Plaza, Suite 403
Garden City, New York 11530
Honorable Dorothy T. Eisenberg, United States Bankruptcy Judge
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

Before the Court is (1) the Plaintiff Debtor’s motion for summary judgment seeking a
declaratory judgment as to whether Marc A. Pergament, the chapter 7 trustee of the Debtor’s
bankruptcy estate (the “Trustee”), abandoned the appeal of pending state court litigation between
the Debtor and a third party (the “Motion for Summary Judgment”), and (2) the Trustee’s motion
to dismiss this adversary proceeding. At issue is what was abandoned by the Trustee when he
abandoned his interest in prosecuting the appeal of a state court judgment. This Court has
jurisdiction over this core proceeding under 28 U.S.C. §§ 1334(b) and 157(b)(2)(A) and (O) and
11 U.S.C. § 554 and Fed. R. Bankr. P. 7001(1) and (9). The following constitutes the Court’s
finding of fact and conclusions of law pursuant to Fed. R. Bankr. P. 7052.
FACTS
The Debtor filed for chapter 11 relief under the Bankruptcy Code on July 25, 2007. The
case was converted to a chapter 7 case on October 2, 2007 and the Trustee was appointed to
administer the assets of the Debtor’s bankruptcy estate.
Prior to the Debtor’s bankruptcy filing, the Debtor was a partner of a law firm known as
Yerushalmi, Shiboleth, Yisraeli & Roberts, LLP (“YSYR”). In or about March 31, 1995, the
partnership dissolved. The Debtor commenced another law practice under the name of
Yerushalmi & Associates LLP (“Y&A”). On or about January 23, 1998, Amon Shiboleth,
individually and on behalf of YSYR, commenced an action in the Supreme Court of the State of
New York against the Debtor and Y&A, among others, bearing Index No. 600350/98, which
sought, inter alia, a partnership accounting of the various fees that were due to YSYR (the
“Accounting Action”). On March 7, 2007, Special Referee, Lancelot B. Hewitt, entered a
11
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

judgment in the Accounting Action awarding Shiboleth and YSYR a total sum of $3,540,046.91
as follows: (a) $2,036,273.09 was charged against the Debtor and Y&A, and (b) $1,503,773.82
was charged against the Debtor only (the “Judgment”). On September 26, 2007, Shiboleth and
YSYR filed a proof of claim in the Debtor’s bankruptcy case based upon the Judgment.
At the time of the bankruptcy filing, there was an appeal of this Judgment by the Debtor
and Y&A pending before the Appellate Division of the Supreme Court of the State of New York
(the “Appellate Division”). The Trustee examined the Debtor at the initial meeting of creditors
in the Chapter 7 case regarding the appeal. The Trustee decided that the prosecution of the
appeal would have imposed a significant expense upon the bankruptcy estate. On February 11,
2008, the Trustee filed a “Notice of Intention to Abandon Estate’s Interest” notifying creditors,
the Debtor and all parties in interest that the Trustee “intends to abandon the estate’s interest in
the appeal of the Decision and Order in Shiboleth, et. al. v. Yerushalmi, et. al., Index No.
600350/98, pending in the Appellate Division of the State of New York” (the “Appeal”). No
objections to the Notice of Intention to Abandon the Estate’s Interest in the Appeal were filed.
On March 24, 2008, Bankruptcy Judge Jerome Feller entered an order directing the Appeal be
abandoned to the Debtor and ordered that the Debtor’s bankruptcy estate has no further interest
or rights in the Appeal (the “Abandonment Order”). The bankruptcy case was subsequently
transferred to this Judge. Judge Feller’s Abandonment Order was not appealed and remains a
final order.
The Debtor undertook the prosecution of the Appeal, including the legal costs and
expenses. On January 6, 2009, the Appellate Division rendered a decision affirming the trial
court’s Judgment in part but vacating the award of damages and remanding the matter to the
22
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

Special Referee to apportion the value of the NSN Contingency fee and the Phoenix Group fee
together with the recalculation of interest based on such reapportionment. Depending on the
results of the remanded proceeding, a reapportionment in the Accounting Action may result in a
monetary award in favor of the state court defendants in the Accounting Action rather than to
Shiboleth and YSYR.
A dispute has now arisen between the Trustee and the Debtor as to who has standing to
pursue the further proceedings remanded by the Appellate Division with respect to the
Accounting Action. The Debtor commenced this adversary proceeding and subsequently filed
the Motion for Summary Judgment arguing that (1) when the Trustee abandoned the Appeal he
abandoned the entire underlying cause of action and all of its related claims, and (2) the appeal
process (i.e. to have the matters tried before a hearing officer so that sums could be fixed) is not
a final determination of all issues contained in the appeal. The Trustee abandoned his right to
litigate such proceedings. The Trustee counters in his Motion to Dismiss that the scope of the
Abandonment Order was limited to the estate’s interest in prosecuting the appeal of the
Judgment in the Accounting Action and that the underlying Accounting Action was never
expressly abandoned and continues to remain property of the bankruptcy estate. The Trustee
argues that any further proceedings after a decision rendered by the Appellate Division is a new
proceeding and not part of the Appeal. The Trustee does not indicate what, if anything, may
remain that is not part of the appeal between the present parties to this litigation.
33
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

DISCUSSION
Pursuant to 11 U.S.C. § 554(a), “[a]fter notice and a hearing, 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.
Despite the Trustee’s arguments that the interpretation of the Abandonment Order should
be limited to only the proceedings before the Appellate Division, the Court finds that when the
Trustee abandoned the Appeal, he abandoned the estate’s interest in prosecuting and defending
any and all proceedings relating to such appeals process, including the proceedings remanded by
the Appellate Division to the trial court. While the January 6, 2009 order by the Appellate
Division may have concluded the proceedings before the Appellate Division, it was not a final
order that resolved the Appeal. ‘A “final” order or judgment is one that disposes of all of the
causes of action between the parties in the action or proceeding and leaves nothing for further
judicial action apart from mere ministerial matters.’ Burke v. Crosson, 85 N.Y.2d 10, 15 (N.Y.
1995). See also, 73 N.Y. Jur. 2d Judgments §29 (2d ed. 2009). “Under this definition, an order
or judgment that disposes of some but not all of the substantive and monetary disputes between
the same parties, is, in most cases, nonfinal.” Burke v. Crosson, 85 N.Y.2d at 15.
Because the remand to the trial court regarding the apportionment of certain fees involves
more than a mere ministerial matter, especially in an accounting action, the order of the
Appellate Division regarding the Appeal is not final. Indeed, until all of the causes of action and
substantive issues relating to the Appeal and any subsequent proceedings stemming from the
Appeal of the Judgment have been resolved and there is nothing left for further judicial action,
including any further appeals, the appeal process is not final. Accordingly, the Court finds that
44
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

the Trustee has no standing to prosecute the proceedings on remand and any further appeal that
may arise as a result of such remand by the Appellate Division.
Although the Court finds that the term “Appeal” encompasses not only the proceedings
before the Appellate Division but any subsequent proceedings arising from the Appeal regarding
the Accounting Action, the Court finds that it is premature at this time to determine whether the
Trustee’s abandonment of the prosecution of the Appeal also means that he abandoned any
recovery that may result once the apportionment is finalized and the Accounting Action is
concluded without any further appeals. The Accounting Action is still pending and the final
outcome is still uncertain. Should the Accounting Action ultimately be concluded in favor of
Shiboleth, then the dispute between the Debtor and the Trustee regarding the scope of the
Abandonment Order and whether the Debtor’s estate retains an interest in any recovery that may
arise under the Accounting Action would be moot. Indeed, the Accounting Action, the ultimate
determination of the reapportionment, and whether the Debtor has any liability to Shiboleth
affect not only this adversary proceeding but also several other adversary proceedings involving
the Debtor, the Trustee and Shiboleth that are pending before this Court
CONCLUSION AND ORDER
Based upon the foregoing, the Court finds that the Trustee does not have standing to
prosecute the Appeal of the Judgment and any proceedings arising within this Appeal as the
Trustee has abandoned the prosecution of this Appeal. 	In order to forestall any further litigation
between the Debtor and the Trustee, and the needless expenditure of judicial resources, and to
further efficient administration of the Debtor’s bankruptcy case and its related adversary
55
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

proceedings, the Court will determine the issue of the estate’s interest in any recovery arising
from the Accounting Action when there has been a final determination in the Accounting Action.
IT IS HEREBY ORDERED, that Debtor’s motion for summary judgment declaring that
the Trustee of the Chapter 7 bankruptcy estate has abandoned the appeal to index no. 600350/98,
pending in the Appellate Division of the State of New York, is granted; and it is further
ORDERED, that the Trustee’s motion to dismiss this adversary proceeding is denied,
without prejudice to the Trustee to renew any claim the Trustee may have after the appeal is
finally adjudicated.
Dated: 	Central Islip, New York
February 12, 2010.
/s/ Dorothy Eisenberg
DOROTHY EISENBERG
UNITED STATES BANKRUPTCY JUDGE
66
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------------------------x
In re:
Chapter 7
Joseph Yerushalmi,
Case No.: 8-07-72816-478
Debtor.
-------------------------------------------------------x
Joseph Yerushalmi,
Plaintiff,
Adv. Pro. No.: 8-09-08415-478
- against -
Marc A. Pergament, as chapter 7 Trustee,
Defendant.
-------------------------------------------------------x
MEMORANDUM DECISION AND ORDER
Appearances:
Forchelli, Curto, Deegan,
Schwarz, Mineo, Cohn & Terrana, LLP
Attorneys for Plaintiff
By: Gary M. Kusher, Esq.
333 Earle Ovington Boulevard, Suite 1010
Uniondale, New York 11553
Weinberg Gross & Pergament
Attorneys for Defendant
By: Marc A. Pergament, Esq.
400 Garden City Plaza, Suite 403
Garden City, New York 11530
Honorable Dorothy T. Eisenberg, United States Bankruptcy Judge
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

Before the Court is (1) the Plaintiff Debtor’s motion for summary judgment seeking a
declaratory judgment as to whether Marc A. Pergament, the chapter 7 trustee of the Debtor’s
bankruptcy estate (the “Trustee”), abandoned the appeal of pending state court litigation between
the Debtor and a third party (the “Motion for Summary Judgment”), and (2) the Trustee’s motion
to dismiss this adversary proceeding. At issue is what was abandoned by the Trustee when he
abandoned his interest in prosecuting the appeal of a state court judgment. This Court has
jurisdiction over this core proceeding under 28 U.S.C. §§ 1334(b) and 157(b)(2)(A) and (O) and
11 U.S.C. § 554 and Fed. R. Bankr. P. 7001(1) and (9). The following constitutes the Court’s
finding of fact and conclusions of law pursuant to Fed. R. Bankr. P. 7052.
FACTS
The Debtor filed for chapter 11 relief under the Bankruptcy Code on July 25, 2007. The
case was converted to a chapter 7 case on October 2, 2007 and the Trustee was appointed to
administer the assets of the Debtor’s bankruptcy estate.
Prior to the Debtor’s bankruptcy filing, the Debtor was a partner of a law firm known as
Yerushalmi, Shiboleth, Yisraeli & Roberts, LLP (“YSYR”). In or about March 31, 1995, the
partnership dissolved. The Debtor commenced another law practice under the name of
Yerushalmi & Associates LLP (“Y&A”). On or about January 23, 1998, Amon Shiboleth,
individually and on behalf of YSYR, commenced an action in the Supreme Court of the State of
New York against the Debtor and Y&A, among others, bearing Index No. 600350/98, which
sought, inter alia, a partnership accounting of the various fees that were due to YSYR (the
“Accounting Action”). On March 7, 2007, Special Referee, Lancelot B. Hewitt, entered a
11
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

judgment in the Accounting Action awarding Shiboleth and YSYR a total sum of $3,540,046.91
as follows: (a) $2,036,273.09 was charged against the Debtor and Y&A, and (b) $1,503,773.82
was charged against the Debtor only (the “Judgment”). On September 26, 2007, Shiboleth and
YSYR filed a proof of claim in the Debtor’s bankruptcy case based upon the Judgment.
At the time of the bankruptcy filing, there was an appeal of this Judgment by the Debtor
and Y&A pending before the Appellate Division of the Supreme Court of the State of New York
(the “Appellate Division”). The Trustee examined the Debtor at the initial meeting of creditors
in the Chapter 7 case regarding the appeal. The Trustee decided that the prosecution of the
appeal would have imposed a significant expense upon the bankruptcy estate. On February 11,
2008, the Trustee filed a “Notice of Intention to Abandon Estate’s Interest” notifying creditors,
the Debtor and all parties in interest that the Trustee “intends to abandon the estate’s interest in
the appeal of the Decision and Order in Shiboleth, et. al. v. Yerushalmi, et. al., Index No.
600350/98, pending in the Appellate Division of the State of New York” (the “Appeal”). No
objections to the Notice of Intention to Abandon the Estate’s Interest in the Appeal were filed.
On March 24, 2008, Bankruptcy Judge Jerome Feller entered an order directing the Appeal be
abandoned to the Debtor and ordered that the Debtor’s bankruptcy estate has no further interest
or rights in the Appeal (the “Abandonment Order”). The bankruptcy case was subsequently
transferred to this Judge. Judge Feller’s Abandonment Order was not appealed and remains a
final order.
The Debtor undertook the prosecution of the Appeal, including the legal costs and
expenses. On January 6, 2009, the Appellate Division rendered a decision affirming the trial
court’s Judgment in part but vacating the award of damages and remanding the matter to the
22
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

Special Referee to apportion the value of the NSN Contingency fee and the Phoenix Group fee
together with the recalculation of interest based on such reapportionment. Depending on the
results of the remanded proceeding, a reapportionment in the Accounting Action may result in a
monetary award in favor of the state court defendants in the Accounting Action rather than to
Shiboleth and YSYR.
A dispute has now arisen between the Trustee and the Debtor as to who has standing to
pursue the further proceedings remanded by the Appellate Division with respect to the
Accounting Action. The Debtor commenced this adversary proceeding and subsequently filed
the Motion for Summary Judgment arguing that (1) when the Trustee abandoned the Appeal he
abandoned the entire underlying cause of action and all of its related claims, and (2) the appeal
process (i.e. to have the matters tried before a hearing officer so that sums could be fixed) is not
a final determination of all issues contained in the appeal. The Trustee abandoned his right to
litigate such proceedings. The Trustee counters in his Motion to Dismiss that the scope of the
Abandonment Order was limited to the estate’s interest in prosecuting the appeal of the
Judgment in the Accounting Action and that the underlying Accounting Action was never
expressly abandoned and continues to remain property of the bankruptcy estate. The Trustee
argues that any further proceedings after a decision rendered by the Appellate Division is a new
proceeding and not part of the Appeal. The Trustee does not indicate what, if anything, may
remain that is not part of the appeal between the present parties to this litigation.
33
Case 8-09-08415-las Doc 22 Filed 02/12/10 Entered 02/12/10 14:40:28

DISCUSSION
Pursuant to 11 U.S.C. § 554(a), “[a]fter notice and a hearing, 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.
Despite the Trustee’s arguments that the interpretation of the Abandonment Order should
be limited to only the proceedings before the Appellate Division, the Court finds that when the
Trustee abandoned the Appeal, he abandoned the estate’s interest in prosecuting and defending
any and all proceedings relating to such appeals process, including the proceedings remanded by
the Appellate Division to the trial court. While the January 6, 2009 order by the Appellate
Division may have concluded the proceedings before the Appellate Division, it was not a final
order that resolved the Appeal. ‘A “final” order or judgment is one that disposes of all of the
causes of action between the parties in the action or proceeding and leaves nothing for further
judicial action apart from mere ministerial matters.’ Burke v. Crosson, 85 N.Y.2d 10, 15 (N.Y.
1995). See also, 73 N.Y. Jur. 2d Judgments §29 (2d ed. 2009). “Under this definition, an order
or judgment that disposes of some but not all of the substantive and monetary disputes between
the same parties, is, in most cases, nonfinal.” Burke v. Crosson, 85 N.Y.2d at 15.
Because the remand to the trial court regarding the apportionment of certain fees involves
more than a mere ministerial matter, especially in an accounting action, the order of the
Appellate Division regarding the Appeal is not final. Indeed, until all of the causes of action and
substantive issues relating to the Appeal and any subsequent proceedings stemming from the
Appeal of the Judgment have been resolved and there is nothing left for further judicial action,
including any further appeals, the appeal process is not final. Accordingly, the Court finds that
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the Trustee has no standing to prosecute the proceedings on remand and any further appeal that
may arise as a result of such remand by the Appellate Division.
Although the Court finds that the term “Appeal” encompasses not only the proceedings
before the Appellate Division but any subsequent proceedings arising from the Appeal regarding
the Accounting Action, the Court finds that it is premature at this time to determine whether the
Trustee’s abandonment of the prosecution of the Appeal also means that he abandoned any
recovery that may result once the apportionment is finalized and the Accounting Action is
concluded without any further appeals. The Accounting Action is still pending and the final
outcome is still uncertain. Should the Accounting Action ultimately be concluded in favor of
Shiboleth, then the dispute between the Debtor and the Trustee regarding the scope of the
Abandonment Order and whether the Debtor’s estate retains an interest in any recovery that may
arise under the Accounting Action would be moot. Indeed, the Accounting Action, the ultimate
determination of the reapportionment, and whether the Debtor has any liability to Shiboleth
affect not only this adversary proceeding but also several other adversary proceedings involving
the Debtor, the Trustee and Shiboleth that are pending before this Court
CONCLUSION AND ORDER
Based upon the foregoing, the Court finds that the Trustee does not have standing to
prosecute the Appeal of the Judgment and any proceedings arising within this Appeal as the
Trustee has abandoned the prosecution of this Appeal. 	In order to forestall any further litigation
between the Debtor and the Trustee, and the needless expenditure of judicial resources, and to
further efficient administration of the Debtor’s bankruptcy case and its related adversary
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proceedings, the Court will determine the issue of the estate’s interest in any recovery arising
from the Accounting Action when there has been a final determination in the Accounting Action.
IT IS HEREBY ORDERED, that Debtor’s motion for summary judgment declaring that
the Trustee of the Chapter 7 bankruptcy estate has abandoned the appeal to index no. 600350/98,
pending in the Appellate Division of the State of New York, is granted; and it is further
ORDERED, that the Trustee’s motion to dismiss this adversary proceeding is denied,
without prejudice to the Trustee to renew any claim the Trustee may have after the appeal is
finally adjudicated.
Dated: 	Central Islip, New York
February 12, 2010.
/s/ Dorothy Eisenberg
DOROTHY EISENBERG
UNITED STATES BANKRUPTCY JUDGE
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