Bankruptcy Judge Burton Lifland

The court’s 2008 “sale order” approved sale of debtor Ritchie Risk’s assets to Nutmeg Life Settlement Trust. Included therein was the proceeds of a viatical settlement (UL policy) Ritchie Risk acquired in 2006 pursuant to a misrepresentation that it was free of liens. U.S. Bank moved to enforce the sale order’s injunctive provisions so as to prevent Bancorp Bank’s pursuit of its 2011 $3 million death benefit claim against the UL policy. In granting U.S Bank’s motion, the court found that the motion need not have been brought as an adversary proceeding, that permissive abstention—based on a 2012 interpleader action in federal court in Delaware—was inappropriate, and that Bancorp had adequate notice of the sale order. The court found that debtor Ritchie Risk searched its books and records so as to reasonably ascertain if there were creditors, and that Bancorp was not a known creditor entitled to actual notice. Further, Bancorp provided sufficient constructive notice following publication in the Wall Street Journal in 2007 detailing the time and place of the sale at auction and the time and place of a hearing thereon.