IN RE: (2025)

Chapter 7

ORDER DENYING MOTION FOR PRELIMINARY INJUNCTION WITHOUT PREJUDICE

THIS MATTER came before the Court for a hearing on April 10, 2025, to consider the Motion for Preliminary Injunction (the “Motion”) filed by Plaintiff John K. Fort (the “Trustee”), the Chapter 7 Trustee in the underlying bankruptcy case of Timothy Paul Kearns (“Debtor”),² and the objections thereto filed by the remaining Defendants in this action, Debtor, Bellissimo Holdings, LLC (“Bellissimo”), Jessica Paress Kearns (“Jessica Kearns”), Rey's, LLC (“Rey's”), TPTK, LLC (“TPTK”), Element Construction, LLC (“Element Construction”), and Whistler Restaurant Group, LLC (“Whistler”) (collectively, the “Defendants”)³ and by Ted Norman Price, III (“Price”), who is not a party in this adversary proceeding.⁴ Appearances were made by Joshua J. Hudson for the Trustee, Jason M. Ward (“Ward”) for Defendants, and Christine E. Brimm for Price.

Facts and Procedural Background

The following summary of the bankruptcy case and related proceedings is provided to place this matter in context. The Court's records reflect that on March 10, 2023 (the “Petition Date”), Debtor filed a petition for relief under Chapter 7 of the Bankruptcy Code with the assistance of Robert A. Pohl (“Pohl”) as counsel to initiate C/A No. 23-00717-HB, and the Trustee was appointed. On March 24, 2023, Debtor filed schedules and statements.⁵ On Schedule A/B, Debtor represented that he held a 1/3 ownership interest in Bellissimo and solely owned Rey's and United Solar, Inc. On Schedule I, Debtor listed his occupation as Chief Executive Officer of Bellissimo. On the Statement of Financial Affairs, Debtor indicated that Bellissimo was in the business of “flipping properties.”

The 11 U.S.C. § 341 meeting of creditors was scheduled for May 1, 2023, and was held and continued numerous times. After the July 17, 2023, § 341 meeting, the Trustee filed a Notice of Assets & Request for Notice to Creditors.

On October 23, 2023, a Consent Order substituting Ward for Pohl as Debtor's counsel was entered in the bankruptcy case.⁶

The Trustee has initiated various adversary proceedings, beginning with Adv. Pro. No. 23-80058-HB on December 6, 2023, against Debtor, Bellissimo, Jessica Kearns, Zach Purviance, and Element Construction, seeking (1) to avoid and recover alleged transfers by Debtor of a 66.66% interest in Bellissimo to Jessica Kearns and Zach Purviance (33.33% each) pursuant to S.C. Code Ann. § 27-23-10 (the “Statute of Elizabeth”), 11 U.S.C. § 548(a)(1)(A) and (B), and 11 U.S.C. § 550; (2) to pierce the corporate veil of Bellissimo and Element Construction; and (3) an order finding Element Construction is amalgamized with Bellissimo as a single business enterprise of Debtor. The defendants therein filed an Answer to Complaint and a trial was scheduled. The parties filed a Joint Pre-Trial Order in which they stipulated that on or about May 28, 2022, Debtor transferred approximately 66.66% of his interest in Bellissimo, 33.33% to Jessica Kearns and 33.33% to Zach Purviance, via an instrument titled “Partnership Agreement” that was signed and dated May 28, 2022.⁷ On the day of the scheduled trial, the parties filed a Stipulation of Dismissal dismissing that adversary proceeding with prejudice.⁸

On January 11, 2024, the Trustee initiated an additional adversary proceeding, Adv. Pro. No. 24-80003-HB, against Debtor, Bellissimo, James Kearns, Mountain Lane Investments, Inc., Monocle Man, LLC, Easley Rentals #1, LLC, and Glacier Holdings, LLC, seeking to (1) avoid transfers of real property and of membership interests in LLCs as fraudulent conveyances pursuant to the Statute of Elizabeth; (2) avoid and recover transfers of real property and of membership interests in LLCs as fraudulent pursuant to 11 U.S.C. §§ 548(a)(1)(A) and (B) and 550; and (3) avoid and recover transfers of real property as preferences pursuant to 11 U.S.C. §§ 547 and 550. The defendants therein filed Answers. An Application for Settlement followed, seeking approval of a settlement between the Trustee and James Kearns, Mountain Lane Investments, Inc., Monocle Man, LLC, Easley Rentals #1, LLC, and Glacier Holdings, LLC (all defendants therein other than Debtor and Bellissimo), under which those defendants would pay the Trustee $150,000.00 in full and complete settlement of the claims asserted against them in the adversary.⁹ The Court entered an Order approving the settlement.¹⁰ The Trustee and the remaining defendants therein, Debtor and Bellissimo, later entered a Stipulation of Dismissal with Prejudice, dismissing that adversary proceeding.¹¹

On January 15, 2024, the Trustee initiated Adv. Pro. No. 24-80004-HB against Debtor, Bellissimo, Hines Investments, LLC, and Green Light Investments, LLC, seeking to avoid and recover transfers of real property pursuant to the Statute of Elizabeth, 11 U.S.C. §§ 547, 548(a)(1)(A) and (B), and 550. The defendants therein filed Answers. An Application was filed seeking approval of a settlement between the Trustee and Hines Investments, LLC, Green Light Investments, LLC, Forest Capital, LLC,¹² and their members, under which those parties would pay the Trustee $100,000.00 in full and complete settlement of the claims asserted against them in the adversary.¹³ The Court entered an Order approving the settlement.¹⁴ Later, the Trustee, Debtor, and Bellissimo entered a Stipulation of Dismissal with Prejudice dismissing as to Debtor and Bellissimo.¹⁵

On June 13, 2024, the Trustee initiated the above-captioned adversary proceeding against Debtor, Bellissimo, Jessica Kearns, James Kearns, Monocle Man, LLC, Rey's, TPTK, Element Construction, and Whistler.¹⁶ The Trustee asserts causes of action for (1) avoidance of Debtor's transfer of an interest in Rey's to Jessica Kearns as fraudulent under the Statute of Elizabeth; (2) avoidance of Rey's transfer of property to Whistler as fraudulent under the Statute of Elizabeth; (3) avoidance of Debtor's transfer of his interest in Whistler to Jessica Kearns as fraudulent under the Statute of Elizabeth; (4) avoidance of transfers of money from Debtor, Bellissimo, and TPTK to Whistler as fraudulent under the Statute of Elizabeth; (5) avoidance of transfers of money from Debtor, Element Construction, and Bellissimo to Whistler as fraudulent under the Statute of Elizabeth; (6) avoidance of post-petition transfers of money from Bellissimo and TPTK to Whistler pursuant to 11 U.S.C. § 549; (7) turnover and accounting of post-petition transfers of money from Bellissimo and TPTK to Whistler pursuant to 11 U.S.C. § 542(a); (8-9) avoidance and recovery of the value of (a) Debtor's transfer of an interest in Rey's to Jessica Kearns, (b) Rey's transfer of property to Whistler, (c) Debtor's transfer of his interest in Whistler to Jessica Kearns, (d) transfers of money from Debtor, Bellissimo, and TPTK to Whistler, and (e) transfers of money from Debtor, Element Construction, and Bellissimo to Whistler pursuant to 11 U.S.C. §§ 548(a)(1)(A) and (B) and 550; and (10-11) avoidance and recovery of the value of the transfers listed in (8-9) pursuant to 11 U.S.C. §§ 547(b) and 550.

Counsel for the Trustee and counsel for James Kearns and Monocle Man, LLC filed a Stipulation of Dismissal with Prejudice, dismissing those defendants only.¹⁷

The remaining Defendants filed an Answer to Complaint.¹⁸ The Trustee alleges, and Defendants admit, that pre-petition, James Kearns sold Rey's to Debtor in exchange for three parcels of real property in Pickens County, SC. The parties further agree that, pre-petition, Members Statements of Dissociation were filed with the SC Secretary of State regarding Debtor's interest in Whistler and James Kearns's interest in Rey's. They also agree that, at the May 30, 2023, § 341 meeting, Debtor testified Rey's was last operational in October 2022. The Trustee alleges, but Defendants do not concede, that Debtor testified at the continued § 341 meeting on June 14, 2023, that Rey's closed in October 2022 and had no assets.

The Trustee and Defendants agree that Debtor has represented that Whistler paid him approximately $80,000.00 in the form of mortgage payments and truck payments over an 18-month period in the 24 months preceding the Petition Date. The Trustee alleges, but Defendants do not concede, that Debtor testified at a Rule 2004 examination held on August 9, 2023, to the following:

• Bellissimo did not keep accurate financial records and did not maintain a general ledger or capital accounts;

• In exchange for Bellissimo transferring three properties in Easley, South Carolina (122 Saint Lo Circle, 108 Saint Lo Circle, and 105 Ellison Circle) to his brother's entity, Monocle Man LLC, he and Jessica Kearns received an ownership interest in Rey's from James Kearns;

• Rey's owned a bar in downtown Greenville operating under the name “Rey's” (the “Rey's Bar”);

• Whistler now operates Rey's Bar;

• Whistler did not pay Rey's for any personal property it acquired when it undertook the operation of Rey's Bar;

• He was originally a one-third (33%) member of Whistler, but transferred his interest to Jessica Kearns in exchange for Whistler paying his car and house payments for 18 months, which is approximately $4,500.00 per month; and

• Whistler is now owned by Jessica Kearns.

The Trustee further alleges, but Defendants do not concede, that on or about September 22, 2023, Defendant Monocle Man, LLC sold 122 Saint Lo Cir. to Michael Wei-fung Chang, Jonathan Edmond Jacobs, and David Chang for $480,000.00 via a deed recorded with the Pickens County ROD Office on September 22, 2023, in Book 2585 at Page 192. The Trustee and Defendants agree that on or about August 23, 2023, the “Articles of Termination” for Rey's were filed by Debtor (as a member) with the SC Secretary of State stating that the dissolution date was April 1, 2023. They further agree that on or about October 20, 2023, the Trustee filed a lis pendens in Pickens County, South Carolina (i.e., Case #2023LP3900204) on (a) TMS #5019-10-45-2458 (105 Ellison Cir., Easley, SC 29640), (b) TMS #5029-17-02-8202 (108 Saint Lo Cir., Easley, SC 29640), and (c) TMS #5029-17-01-8533 (122 Saint Lo Cir., Easley, SC 29640). Defendants also admit that money was transferred to Whistler from Bellissimo (both pre-and post-petition), TPTK (only post-petition), and Element Construction (only pre-petition).¹⁹

After the U.S. Trustee (the “UST”) initiated a separate action, Adv. Pro. No. 23-80049-HB, against Debtor seeking denial of discharge under 11 U.S.C. § 727(a), the Court approved a voluntary waiver of discharge on October 9, 2024.²⁰

On January 10, 2025, the Trustee filed the Motion.²¹ The Motion alleges that the Trustee has recently become aware that Debtor has an interest in certain businesses that have been purchasing and selling real properties. The Motion seeks a preliminary injunction to halt Debtor, Bellissimo, Jessica Kearns, and TPTK from:

1. Selling, transferring, disposing of, or otherwise encumbering Debtor's and/or Bellissimo's membership interest in any and all business entities in which Debtor and/or Bellissimo have an interest, or the assets thereof, including but not limited to:

vii. 306 N Markley, LLC;

viii. 245 N Main ST, LLC;

ix. E365, LLC;

x. Front Cockpit, LLC;

xi. Rear Cockpit, LLC; and

xii. TPTK 22.

2. Selling, transferring, disposing of, or otherwise encumbering E365, LLC's membership interest in Front Cockpit, LLC;

3. Selling, transferring, disposing of, or otherwise encumbering Debtor's, Front Cockpit, LLC's, and/or Bellissimo's membership interest in TPTK Holdings, LLC;

4. Selling, transferring, disposing of, or otherwise encumbering Debtor's, Rear Cockpit, LLC's, and/or Bellissimo's membership interest in GSP RE Holdings, LLC;

5. Selling, transferring, disposing of, or otherwise encumbering the Greenville County parcel bearing Map #0074000101400 that is currently held by 306 N Markley, LLC;

6. Selling, transferring, disposing of, or otherwise encumbering Debtor's, E365, LLC's, and/or Bellissimo's portion of the proceeds from the sale of the Greenville County parcel bearing Map #0548150111300 by Front Cockpit, LLC for $645,000.00 that occurred on January 2, 2025;

7. Selling, transferring, disposing of, or otherwise encumbering the Greenville County parcel bearing Map #0546010102228 (205 Teaticket Ct.) that is currently held by Front Cockpit, LLC;

8. Selling, transferring, disposing of, or otherwise encumbering the Greenville County parcel bearing Map #P041000116000 (1000 Half Mile Way) that is currently held by TPTK Holdings, LLC;

9. Selling, transferring, disposing of, or otherwise encumbering the Greenville County parcel bearing Map #0548060111400 (700 River Walk Dr.) that is currently held by TPTK Holdings, LLC;

10. Selling, transferring, disposing of, or otherwise encumbering the Greenville County parcel bearing Map # 0386000107900 (106 Alpha Dr.) that is currently held by TPTK Holdings, LLC;

11. Selling, transferring, disposing of, or otherwise encumbering Debtor's and/or Bellissimo's portion of the proceeds from the sale of Greenville County parcel bearing Map #0354030105600 by TPTK, LLC for $386,000.00 that occurred on December 23, 2024; and

12. Selling, transferring, disposing of, or otherwise encumbering the Greenville County parcel bearing Map #0008000400600 (211 W. Earle St.) that is currently held by GSP RE Holdings, LLC.

The Motion does not adequately explain how granting the requested injunction is related to the allegations and causes of action asserted in the Complaint. The Motion states “If this property is converted to cash, there is no doubt the creditors will never see a dime of it. To allow the Debtor to pocket funds from the sale of these assets without said funds being property of the estate would deprive the creditors what they are entitled to in a Chapter 7 liquidation.”

The Court entered an Order scheduling a hearing on the Motion for January 29, 2025, and requiring any pleadings in support of or opposition to the Motion be filed by January 22, 2025.²³ Objections to the Motion were filed by Defendants ²⁴ and by Price.²⁵ Though not raised by the parties, the Court concludes that Price has standing to object to the Motion. The Motion seeks to enjoin TPTK from taking the actions listed and to enjoin the transfer or encumbrance of three properties currently held by TPTK Holdings, LLC. The record reflects that Price is the sole member of TPTK (see Trustee's Ex. 20 and 22) and has an 81% membership interest in Front Cockpit, LLC (see Price's Ex. D), which itself is the sole member of TPTK Holdings, LLC (see Price's Ex. F). See Murthy v. Mo., 603 U.S. 43, 57 (2024) (quoting Clapper v. Amnesty Int'l USA, 568 U.S. 398, 409 (2013)) (to establish standing, a party must show he “has suffered, or will suffer, an injury that is ‘concrete, particularized, and actual or imminent; fairly traceable to the challenged action; and redressable by a favorable ruling.’ ”).

On January 29, 2025, a Consent Order was entered between the Trustee, Defendants, and Price continuing the hearing on the Motion to February 26, 2025, and providing that (1) the Trustee shall release and withdraw the lis pendens filed in Greenville County on January 15, 2025, in Case No. 2025LP2300029, shall not place another lis pendens on the property located at 211 W. Earle St., Greenville, SC 29609, and shall not place another lis pendens on any of the other properties affected by the original lis pendens “except upon further order of this Court after the hearing on the Motion”; and (2) any membership distribution owed from the following entities to E365, LLC, Debtor, or Bellissimo “shall be held in trust and shall not be disbursed except upon further order of this Court after the hearing on the Motion”: (a) 306 Markley, LLC; (b) 245 N Main St., LLC; (c) E365, LLC; (d) Front Cockpit, LLC; (e) Rear Cockpit, LLC; (f) TPTK, LLC; and (g) TPTK Holdings, LLC.²⁶ The hearing was continued again to April 10, 2025, on the request of the parties.

Prior to that hearing, the Trustee filed a motion to amend the Scheduling Order issued in this proceeding ²⁷ and a Motion to Compel ²⁸ which alleged the Defendants had failed to timely respond to the Trustee's interrogatories and requests for production and requested the Court order them to do so within 10 days of the entry of an order granting the motion. The Court entered an Order setting an objection deadline for the motions.²⁹ After no responses were filed, the Court entered an amended Scheduling Order ³⁰ and an Order requiring Defendants to respond to the Trustee's interrogatories and requests for production by March 29, 2025.³¹

At the April 10, 2025, hearing on the Motion, some exhibits were submitted into evidence without objection, and Defendants and Price objected to some of the Trustee's exhibits. The exhibits consist largely of documents related to the transfer of real properties—including contracts for sale, deeds, mortgages, satisfactions of mortgages, and emails regarding ownership interests—and documents that appear to show transfers of money between businesses. No testimony was offered. The Trustee's counsel stated that the Defendants have not complied with the Order granting the Motion to Compel, and Defendants’ counsel responded that Defendants are working on their discovery responses. The Trustee's counsel stated the requested relief was necessary, as “something that prevents Bellissimo and/or the Debtor from getting this money [from the sales of properties] can at least stop the bleeding for now.” The Court surmises that the preliminary injunction is therefore intended to make sure that funds are available to satisfy any judgment that the Trustee may receive.

At the conclusion of the hearing, the Court took the matter under advisement, including the admissibility of exhibits to which Defendants and Price objected, and ordered that the Consent Order entered January 29, 2025, would continue in effect until a decision on the Motion was rendered.

Conclusions of Law

The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1334 and 157, this matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A), and the Court may enter a final order.

Fed. R. Civ. P. 65—made applicable to adversary proceedings by Fed. R. Bankr. P. 7065— governs preliminary injunctions. “The purpose of a preliminary injunction is merely to preserve the relative positions of the parties until a trial on the merits can be held”. Lackey v. Stinnie, 145 S. Ct. 659, 667 (2025) (quoting Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981)). “A preliminary injunction is an extraordinary remedy that may only be awarded upon a clear showing that the [moving party] is entitled to such relief.” Williams Ohio Valley Midstream, LLC v. Kittle, No. 23-2185, 2024 WL 3325532, at *3 (4th Cir. July 8, 2024) (quoting Mountain Valley Pipeline, LLC v. W. Pocahontas Props. Ltd. P'ship, 918 F.3d 353, 366 (4th Cir. 2019)).

A plaintiff seeking a preliminary injunction must establish (1) he is likely to succeed on the merits; (2) he is likely to suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities tips in his favor; and (4) an injunction is in the public interest. Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008) (citations omitted). Regarding the first element, the plaintiff must prove he is likely to succeed on the merits of his underlying complaint. See Poling v. Foxwell, No. PWG-18-80, 2019 WL 1472304, at *5 (D. Md. Apr. 3, 2019) (“a preliminary injunction must be tied to the likelihood of success on the merits of a properly pleaded complaint”). Regarding the second element, “[a] plaintiff must make a ‘clear showing’ it will suffer harm that is ‘neither remote nor speculative, but actual and imminent.’ ” Williams Ohio Valley Midstream, LLC v. Kittle, No. 23-2185, 2024 WL 3325532, at *3 (4th Cir. July 8, 2024) (quoting Direx Israel, Ltd. v. Breakthrough Med. Corp., 952 F.2d 802, 812 (4th Cir. 1991)). Further, a “preliminary injunction is not appropriate when the harm complained of does not arise from the harm alleged in the complaint․The movant must establish a nexus between the injury claimed in the motion and the conduct giving rise to the complaint.” Stepansky v. Sw. Va. Reg'l Jail Auth., No. 7:23-cv-00698, 2024 WL 3535138, at *1 (W.D. Va. July 25, 2024) (citing Omega World Travel, Inc. v. Trans World Airlines, 111 F.3d 14, 16 (4th Cir. 1997)).

On this record, although the record reflects a jumble of transactions involving Debtor and his current or former business interests, the Trustee has failed to meet his burden to clearly show that the extraordinary relief of the requested injunction is appropriate. The Court has reviewed the Trustee's supporting exhibits and concludes that, even assuming all are admissible, they do not demonstrate that a preliminary injunction is appropriate at this time. The exhibits—without additional context or explanation—appear to reflect businesses activities associated with the transfer and development of real estate, and many of the transactions involve entities that are not parties to this proceeding and property that is not directly at issue in the Complaint. On this record thus far, it is not apparent what interest the estate has, if any, in the entities or properties that are the subject of the Motion. While some of the exhibits are related to the Complaint (e.g., a document purporting to be an agreement for the sale of James Kearn's interest in Rey's to Debtor), it is not clear how they support the broad preliminary relief requested.

In short, the Trustee has failed to show through argument or evidence that the relief sought in the Motion is sufficiently connected in any way to the allegations and relief sought in the Complaint. Further, the Trustee has only alleged a speculative harm—that in the event he is successful in obtaining a judgment in this case against the remaining Defendants, he may be unable to collect. Protecting against such a speculative harm is outweighed by the interest of the non-party entities named in the Motion and the public in being able to freely carry on business transactions.

However, the Court is cognizant of the fact that Defendants have failed to comply with discovery orders, which may have impaired the Trustee's ability to fully prosecute the Motion or progress toward conclusion of this adversary proceeding. The discovery deadline is quickly approaching on June 4, 2025, with a Joint Pretrial Order due by July 16, 2025. Should the Trustee request this Court's assistance in obtaining discovery, or request penalties for any failure to provide discovery, the Court will entertain any such requests. Should the Trustee—through discovery or other means—receive new evidence to support the Motion, he may request a further hearing.

IT IS, THEREFORE, ORDERED the Motion for Preliminary Injunction filed by Plaintiff John K. Fort is denied without prejudice.

FOOTNOTES

2.   ECF No. 30, filed Jan. 10, 2025.

3.   ECF No. 33, filed Jan. 22, 2025.

4.   ECF No. 35, filed Jan. 27, 2025.

5.   ECF No. 11, C/A No. 23-00717-HB. For ease of reference, all further references to documents filed in the bankruptcy case will be made by listing “BK” followed by the ECF number of the document (e.g., BK 11).

6.   BK 54.

7.   Adv. Pro. No. 23-80058-HB, ECF No. 34.

8.   Adv. Pro. No. 23-80058-HB, ECF No. 35.

9.   Adv. Pro. No. 24-80003-HB, ECF No. 21.

10.   Adv. Pro. No. 24-80003-HB, ECF No. 23.

11.   Adv. Pro. No. 24-80003-HB, ECF No. 26.

12.   Though Forest Capital, LLC, was not a defendant, the Application for Settlement indicated its release from liability was a condition of settlement.

13.   Adv. Pro. No. 24-80004-HB, ECF No. 17.

14.   Adv. Pro. No. 24-80004-HB, ECF No. 20.

15.   Adv. Pro. No. 24-80004-HB, ECF No. 25.

16.   ECF No. 1.

17.   ECF No. 24.

18.   ECF No. 14. The docket text of the Answer to Complaint indicates it was filed on behalf of all the Defendants currently remaining in this action, but the first paragraph of the Answer only references Debtor and Bellissimo. Given the docket text and the fact that the Answer was filed by counsel for all remaining Defendants, it appears the Answer was filed on behalf of all remaining Defendants, not just Debtor and Bellissimo.

19.   See ¶¶ 53-55, 60-63 of the Complaint.

20.   See BK 94 (waiver of discharge) and 99 (Order approving waiver of discharge). As a result, that adversary proceeding was dismissed as moot (Adv. Pro. No. 23-80049-HB, ECF No. 46).

21.   ECF No. 30.

22.   Only TPTK is a Defendant in this action.

23.   ECF No. 31, entered Jan. 15, 2025.

24.   ECF No. 33, filed Jan. 22, 2025.

25.   ECF No. 35, filed Jan. 27, 2025.

26.   ECF No. 37.

27.   ECF No. 43.

28.   ECF No. 44.

29.   ECF No. 45.

30.   ECF No. 48

31.   ECF No. 49.