Van Horn Law Group has successfully won a case in the U.S. Bankruptcy Court Southern District against Citibank, N.A. for violating the automatic stay in a Chapter 11 bankruptcy case (CASE NO.:20-15425-PDR) and ignoring two separate court orders to cease its collection efforts.
U.S. Bankruptcy Court Judge Peter D. Russin ruled the debtor was entitled to an award of $271,615.91 in damages, comprised of compensatory damages of $52,031.71 and punitive damages of $175,607.02. Because Citibank, N.A. blatantly ignored the two initial orders, the award was entered in the form of a judgment.
Read the Order 9-27-23 Citibank order
“This is a case where a huge, powerful institution stomped on the rights of two regular individuals going through the bankruptcy process,” said Chad Van Horn, founding partner attorney of Van Horn Law Group. “My clients followed the bankruptcy process to the letter, while Citibank, showed flagrant disregard for the court by not showing up for all three hearings and disrespecting the rule of law by simply ignoring two court orders. Citibank’s noncompliance is egregious, deliberate and unjustifiable. Kudos to the Van Horn Law legal team led by Julia Osmolia for obtaining this result for our clients.”
Represented by Van Horn, Matthew Withington and Martha Cobo filed Chapter 11 in May 2020 and submitted their reorganization plan in November 2020, which was confirmed by the court. As part of the plan, Citibank’s debt was treated as a general unsecured claim and it received $10,017. In December 2022, the court closed the bankruptcy case. Despite the automatic stay and confirmation order, Citibank sent a collection notice for $28,956 and incorrectly reported to credit reporting agencies that Withington and Cobo’s account was delinquent, negatively affecting their credit scores.
To pursue sanctions, the Chapter 11 case was reopened in July of 2021. In a February 2022 hearing, Citibank was ordered to pay $4,000 in attorney’s fees and costs. In July 2022, a second motion was filed for noncompliance. In October 2022, the court awarded compensatory damages, sanctions, attorneys fees and costs, and punitive damages totaling $42,217.50.
Because Citibank did not comply with any of the court orders, Withington and Cobo continued to suffer. Despite working hard for three years to make every plan payment and earn their discharge, they couldn’t move forward, due to Citibank.
They couldn’t secure credit, couldn’t rent a different apartment and were being penalized with increased rent because their bankruptcy remained open and was not discharged, couldn’t get a car loan or a credit card or reopen their business. In addition to prolonged financial strain, the issue also took a toll on their mental and physical health.
Van Horn Law Group, P.A. practices in the areas of personal and corporate bankruptcy, student loan consolidation and litigation, foreclosure defense, corporate reorganization, debt negotiation, civil litigation, debt relief, and consumer law.
The firm is among the top five largest bankruptcy firms in Florida and the largest in Broward County based on cases filed in the past 12 months (Pacer.gov). Van Horn, the author of Everything You Need to Know About Bankruptcy in Florida and The Debt Life, is certified in business and consumer bankruptcy.
Van Horn Law Group, P.A., is headquartered in Fort Lauderdale with satellite offices in Doral, Miami Lakes, North Miami, Miramar, Orlando, and West Palm Beach. For more information about Van Horn Law Group, call (954) 637-0000 or visit www.vanhornlawgroup.com
