NY Post Reports A Kelley Drye Win For Bankruptcy Case Labeled ​“Unprecedented”

In an article entitled ​“Denied! Judge schools trustee seeking refund for tuition,” the NY Post reported on the ​“resounding” denial of a trustee’s bankruptcy claims against two Catholic schools, and characterized the outcome as follows: ​“Score one for Catholic schools and common sense.”

Serving as pro bono counsel for the Staten Island Catholic school, Our Lady of Mount Carmel-St. Benedicta, Kelley Drye special counsel Benjamin D. Feder and associates Damon W. Suden and Levi M. Downing prevailed in a  motion to dismiss. The case was filed last March by New York’s Eastern District bankruptcy trustee, Robert Geltzer, who ​“sought to recover $45,000 a bankrupt Staten Island couple spent on their kids’ tuition, arguing that the parents did not benefit from the expenditure.”

The article reports that Chief U.S. Bankruptcy Judge Carla Craig ​“shredded Geltzer’s case.” Her decision stated that ​“The trustee’s claims are based on a fundamentally flawed legal theory that is, moreover, at odds with common sense. The education provided … to these minor children constitutes both a direct and indirect benefit to their parents, who, with their children, must be considered a single economic unit.”

Commenting on the decision, Mr. Feder noted that Judge Craig ​“recognized the implications of the trustee’s argument and the door that would be opened” if [Mr. Geltzer] prevailed.

To read the complete article, please click here.