Bankruptcy Judge Robert Gerber
In an adversary proceeding under the umbrella of the Chapter 7 case of Debtor Pali Holdings Inc., plaintiff Geron, the Chapter 7 trustee, sought turnover, under §542 of the Bankruptcy Code, of the proceeds of a promissory note that defendant Peebler executed in favor of Pali Holdings. It was undisputed that payment under the note was due, and that Peebler had not repaid it. Peebler, however, attempted to defeat summary judgment by raising, as asserted genuine issues for trial, defenses that he believed the note to be non-recourse and that he was entitled to a bonus compensation that would offset amounts due under the note. The court determined that neither was a satisfactory defense and confirmed its earlier oral ruling that when, as here, a trustee’s turnover rights under §542 are appropriately invoked, such as to secure the return of property of the estate or to monetize it, bankruptcy judges plainly have the constitutional power to issue final judgments for turnover. On the merits, it also confirmed its oral ruling that there are no material disputed issues of fact and that Peebler has no defenses under the note. It granted summary judgment on the note in favor of the trustee and also entered a final judgment in the trustee’s favor.
