Billy C. Merchant v. Charles K. Breland, Jr., Florencia Development, Inc., and A. Richard Maples, Jr.

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Feb. 5, 2026 Get Citation Alerts Download PDF Add Note

Billy C. Merchant v. Charles K. Breland, Jr., Florencia Development, Inc., and A. Richard Maples, Jr.

United States Bankruptcy Court, S.D. Alabama

• Citations: None known
• Docket Number: 25-01036

• Precedential Status: Unknown Status

• Opinion

• Authorities (14)

• Cited By (0)

• Summaries (0)

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Trial Court Document

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF ALABAMA

IN RE:

CHARLES K. BRELAND, JR.,
CASE NO. 16-2772-JCO

Debtor.

BILLY C. MERCHANT,

Plaintiff,

Adv Proc. No. 25-1036
v. Removed from the Circuit Court of
Baldwin County, Alabama
CV-2025-901556
CHARLES K. BRELAND, JR.
FLORENCIA DEVELOPMENT, INC.,
and A. RICHARD MAPLES, JR.,

Defendants.

MEMORANDUM ORDER AND OPINION

This matter came before the Court January 20, 2026 on the Motion for Discharge filed by
Charles K. Breland Jr. (“Breland”), the Objection thereto filed by Billy C. Merchant (“Merchant”),
The Notice of Removal of Baldwin County CV No.25-901556 by A. Richard Maples (“Maples”);
the Motion to Dismiss Party filed by Maples; Breland and Florencia Development Inc.’s Motion
to Dismiss or Abstain, Merchant’s Motion to Remand, and the related filings and briefs. (BK docs.
2716, 2723, 2730, AP Docs. 1, 4, 6, 10, 11).1 Proper notice of hearing was given and appearances

1 For ease of reference, docket entries in the underlying Chapter 11 Bankruptcy of Charles K. Breland, Jr.,(Bankr.
S.D. Ala. 16-2272) are cited herein as “BK doc.” and docket entries in this Adversary Proceeding are referred to as
“AP doc.”.
were noted on the record. Upon consideration of the pleadings, the briefs, and the record, this Court
finds good and reasonable grounds exist to abstain and remand for the reasons below.

PROCEDURAL HISTORY AND FACTUAL BACKGROUND2

The Debtor, Charles K. Breland, (“Breland”) filed the above-styled Chapter 11 bankruptcy
on July 8, 2016 (the “Petition Date”). (BK doc. 1). On the Petition Date, Breland’s interests in
numerous entities including Florencia Development Inc.3 (“Florencia”) became property of the
Bankruptcy Estate. (BK doc. 42; 11 U.S.C.§541). A. Richard Maples, Jr. was appointed as the

Chapter 11 Trustee (“Trustee”) for the Estate on May 3, 2017. (BK doc. 391). The administration
of the case was a long and arduous process including contested claims, adversary proceedings, and
disputes with various creditors, including the Internal Revenue Service, Levada EF Five, LLC, and
the Hudgens Creditors. After extensive negotiations, the Debtor and Trustee filed a Joint Plan of
Reorganization on April 11, 2022 (the “Plan”). (BK doc. 2287). The Plan and subsequent related
filings incorporated resolutions of disputed claims, provided for unsecured creditors to be paid in
full on the Effective Date, and revested estate assets in the Debtor upon payment or other resolution
of the outstanding claims of the Hudgens’ Creditors. (BK docs. 2312, 2287 at 19). The June 6,
2022 Confirmation Order provided in part that: (1) administrative expense claims incurred after
the Effective Date but before the Revesting of Assets in the Reorganized Debtor would be paid

only upon application and court approval within that period; (2) the Trustee retained sole authority
to act on behalf of each entity in which Breland directly or indirectly owned a controlling interest

2 As this is not the first instance in which abstention has been appropriate, portions of this Order are liberally
restated from this Court’s prior rulings.
3 Florencia developed a condominium in Escambia County, Florida, known as the Florencia condominium, and
additionally held an interest in certain submerged land adjoining the Florencia condominium.
until the revesting 4 (Id. at p. 9, 16). Thereafter, the claims of the Hudgens’ Creditors were resolved
by a Joint Motion To Approve Compromise (“Settlement Agreement”). (BK doc. 2635). The
November 3, 2023 Order Approving the Compromise states in part:
All Estate assets will revest in the Debtor individually upon closing of the
Settlement except for Unit 903 of the Florencia condominium complex in Perdido
Key, Florida, including the boat slip assigned to Unit 903, one designated parking
space in the garage below the complex, the carriage house assigned to Unit 903,
and the furnishings in Unit 903 (the “Condo”). . . Assets will revest free and clear
of all liens, claims, and encumbrances, except as set forth herein (see paragraph 2.e
below), in the Order approving the Settlement, and/or in the Order granting the
Second Supplemental Application for Compensation as counsel for Debtor filed by
McDowell Knight Roedder & Sledge, LLC (“McDowell The Trustee will initially
and immediately list the Condo for sale at a price of $2.4 million. The Trustee will
enter a listing agreement with Remax providing for a 5% commission to the listing
agent. The Trustee will have full control over the marketing and sales process
subject to the Debtor’s input, and the Debtor shall cooperate in good faith with the
Trustee, but the Debtor will not have the right to veto any sale. No further Court
order will be required for the Trustee to engage a new listing agent, to change the
list price, to sell the Condo,to pay the Levada debt referred to in subparagraph d.
below at closing, or to pay any commission or other necessary and reasonable
expenses of sale . . . Notwithstanding the foregoing, the Trustee’s authority to sell
the Condo is contingent upon a sale price which will yield proceeds sufficient to
pay the amounts in paragraphs d(1) and d(2) below. (Doc. 2632) . . . Net proceeds
after payment of necessary and reasonable expenses of sale of the Condo will be
paid to satisfy remaining payments due under the Plan in the following order and
priority: (1) at closing of the sale of the Condo, Levada will be paid directly from
the closing agent $1,000,000.00 plus interest as set forth in Article IV.D.1 of the
Plan and any post default reasonable attorneys’ fees subject to the $20,000 cap
referenced in paragraph 2(b), above; next (2) unpaid administrative and
professional expense claims; and next (3) unpaid fees of McDowell Knight . . .
(Id. at 2, 3).

Pursuant to the Order Approving the Compromise, the assets of the Estate, with the
exception of the Florencia Condominium and causes of action, revested in the Debtor on
November 6, 2023 when the Settlement Agreement closed. (BK doc. 2641). On June 26, 2025,
the Trustee sold Florencia Condominium Unit 903.(Bk doc. 2677). The sale included an
Assignment of Exclusive Right to Use of Boat Dock Slip. (BK doc. 2677-1). Net proceeds of

4 The Confirmation Order is incorporated by reference herein. (BK doc. 2325).
$423,693.82 (“Sale Proceeds”) were received by the Trustee at the closing. (BK doc. 2677-2). The
Trustee filed a Report of Remaining Assets on July 14, 2025, reflecting receipt of the Sale Proceeds
and itemizing unpaid administrative claims in the case. (BK doc. 2693). On September 11, 2025,
the Trustee filed his Final Consent Application for Compensation, which was recommended by

the Bankruptcy Administrator, and Approved by Order of this Court on October 8, 2025. (BK
docs, 2702, 2703, 2710, 2714). On November 6, 2025, Breland filed a Motion averring that he
was entitled to a discharge under 11 U.S.C. §1141 (d)(5) because all payments due under the Plan
have been made and all assets held by the Estate have now revested in him individually. (BK doc.
2716.) Merchant filed an Objection to the Motion for Discharge. (BK doc. 2723).
Merchant was not a pre-petition creditor of Breland, did not assert any claims against the
Bankruptcy Estate prior to confirmation, did not seek court approval for any loans to Florencia or
the Debtor, and did not request any administrative claim(s). On January 27, 2025 he filed an
Adversary “Complaint To Determine Validity, Amount, and Priority of Liens and Request For
Declaratory Judgment Against Debtor” seeking to compel the Chapter 11 Trustee to interplead the

net proceeds from the sale of Florencia Unit 903 pending resolution of such dispute. (Merchant v.
Breland, Bankr. S.D. Ala. Adv. Pro. No. 25-01004, docs 1, 18). Merchant’s claims arose from a
January 27, 2023 Joint Venture Agreement between Merchant and Florencia (“JVA”).5 The terms
of the JVA provide that: (1) Merchant would supply funding for improvements to boat slips
adjacent to the Florencia Condominium; (2) Florencia would repay the loan plus 20%; and (3)
Merchant would receive at least 60% of the proceeds of the sale of each boat slip until repaid. (Id.
at doc 1-2). In response to Merchant’s Complaint, Florencia and Breland contended that: (1) they

5 The JVA reflects that it was between Merchant and Florencia and Breland signed it as authorized representative of
Florencia. January 23, 2023 was post confirmation but pre-vesting of assets in the Debtor and the Trustee was not a
signatory to the JVA.
attempted to remit funds to Merchant and terminate the JVA in 2024; (2) Merchant refused the
payment; and (3) they intended to interplead funds (then held in trust by Florencia’s Counsel) into
the Circuit Court of Escambia County, Florida. (Id. docs. 6, 18)
This Court abstained and dismissed Merchant’s Adversary Proceeding on procedural

grounds because: (1) bankruptcy courts have limited jurisdiction; (2) Merchant’s claims were
essentially, post-petition, post-confirmation, state-law claims based on alleged breach of contract
by Florencia (a non-debtor, third party); (3) Breland’s Chapter 11 was confirmed in June 2022; (4)
assets revested in Breland on November 2023; and (4) the administration of the Chapter 11 case
was quickly approaching conclusion with payment of all allowed claims in full.6 (Id. at doc. 23).
This Court also noted that even if it had jurisdiction, permissive abstention would be warranted in
the interest of justice, judicial economy, and respect for state law because the claims relate to
alleged breach of a post-petition contract with a non-debtor entity, state law issues predominate,
state courts are well suited to handle such matters, Merchant’s claims are outside the scope of the
Chapter 11 plan, and litigating such claims in bankruptcy court would impede the efficient

completion of the administration of the bankruptcy estate. (Id.)
After this Court abstained, Merchant filed state court litigation against Breland, Florencia,
and the Chapter 11 Trustee, Maples, in the Circuit Court of Baldwin County, Alabama7 seeking
to pursue claims under the JVA for collection on notes receivable, fraud, misrepresentation,
promissory fraud, fraudulent transfer, voidable transfer, and declaratory judgment. The Trustee
removed the Baldwin County Litigation to this Court on November 11, 2025 and sought dismissal
from the action. (AP docs. 4,5).

6 This Court did not conduct an evidentiary hearing or make any substantive findings as to Merchant’s claims
against Florencia.
7 Merchant v. Breland et al, Baldwin County CV No.25-901556.
Upon consideration of the pleadings, briefs, record, and arguments of counsel at the
hearing, this Court found that Maples acted with express authority to dispose of Property of the
Estate consistent with the provisions of the confirmed Chapter 11 Plan; made disbursements
pursuant to court orders; and was not a signatory to the JVA. It also noted that Merchant did not

seek or obtain court approval for any loan or administrative claim in the bankruptcy proceeding
and the Chapter 11 Estate did not undertake any obligation with Merchant. Recognizing that
Maples, as a court appointed Trustee, was entitled to judicial immunity for acts taken within the
scope of his authority, this Court dismissed him from the action with prejudice on the record in
open Court on January 20, 2026.8 A written order dismissing Maples as a party was subsequently
entered on February 4,2026. (AP doc.28). This Court also found that Charles K. Breland Jr. met
the requirements for a discharge of his pre-petition debts under 11 U.S.C. §1141 (d)(5) and an
Order was entered on January 28, 2026. (BK doc.2739). Notably, dismissal of the Trustee places
this Adversary in a substantively similar posture to Merchant’s prior adversary proceeding.
(Bankr. S.D. Ala. AP 25-1004).9

ANALYSIS

As this Court has noted on several occasions, bankruptcy courts have limited jurisdiction
and must assess their authority to adjudicate matters brought before them. 28 U.S.C. §1134 (b); 28
U.S.C. 157; In re Toledo, 170 F.3d 1340 (11th Cir.1999) (citing Celotex Corp. v. Edwards, 514

8 See Chua v. Ekonomou, 1 F.4th 948 (11th Cir. 2021)(citing Prop. Mgmt. & Invs., Inc. v. Lewis, 752 F.2d 599, 602 (11th Cir. 1985))(Noting that court-appointed receivers enjoy judicial immunity for acts within the scope of their
authority).
9 As this Court finds its analysis in AP No. 25-1004 relevant to the present facts, portions thereof are liberally
incorporated below.
U.S. 300, 115 S.Ct. 1493, 131 L.Ed.2d 403 (1995)); In re Shortsleeve, 349 B.R. 297 (Bankr. M.D.
Ala. 2006). Federal district courts have original and exclusive jurisdiction over all “cases under
title 11,” and original but not exclusive subject matter jurisdiction over all civil proceedings
“arising under” Title 11, or “arising in” or “related to” cases under Title 11. 28 U.S.C. §1334; In

re United Container LLC, 284 B.R. 162, 168 (Bankr. S.D. Fla. 2002)(noting federal courts are
courts of limited jurisdiction which may only hear cases that they have been authorized to hear by
the Constitution or the Congress of the United States). Federal district courts may refer cases
under Title 11 and any or all proceedings arising under Title 11 or arising in or related to a case
under Title 11 to the bankruptcy judges for the district. 28 U.S.C. 157. Thus, bankruptcy courts
have limited jurisdiction to hear the following types of matters: (1) cases under Title 11; (2)
proceedings arising under Title 11; (3) proceedings arising in a case under Title 11; and (4)
proceedings related to a case under Title 11 and certain other matters under section 327 of the
Bankruptcy Code.
Mandatory Abstention

A core proceeding is one in which the matter at issue is one which “ could arise only in
bankruptcy.” In re Allied Sign Co., Inc., 280 B.R. 688, 691 (Bankr. S.D. Ala. 2001)(citing In re
Toledo, 170 F.3d 1340, 1345 (11th Cir.1999). Congress did not intend for bankruptcy courts to
hear matters just because a debtor is somehow involved. In re Efron, 535 B.R. 505, 511 (Bankr.
D.P.R. 2014), aff'd, 529 B.R. 396 (B.A.P. 1st Cir. 2015). The Bankruptcy Code provides,
Upon timely motion of a party in a proceeding based upon a State law claim
or State law cause of action, related to a case under title 11 but not arising under
title 11 or arising in a case under Title 11, with respect to which an action could not
have been commenced in a court of the United States absent jurisdiction under this
section, the district court shall abstain from hearing such proceeding if an action is
commenced, and can be timely adjudicated in a State forum of appropriate
jurisdiction . . . 28 U.S.C. §1334 (c)(2).

Thus, 28 U.S.C. §1334 (c)(2), requires bankruptcy courts to abstain from hearing state-law
claims when the following circumstances exist: (1) the claim has no independent basis for federal
jurisdiction, other than §1334(b); (2) the claim is a non-core proceeding (that is, it is related to a
case under title 11 but does not arise under or arise in a case under Title 11); (3) an action has been
commenced in state court; and (4) the action could be adjudicated timely in state court. In re United
Petroleum Grp., Inc., 311 B.R. 307, 311 (Bankr. S.D. Fla. 2004). The Eleventh Circuit has held
that §1334(c)(2) applies to state-law claims that have been removed to federal court under
§1452(a). Christo v. Padgett, 223 F.3d 1324, 1331 (11th Cir.2000).
Here, the allegations in the Adversary Complaint do not arise under the provisions of Title
11. Although Merchant previously asserted that his claims were somehow core proceedings under
28 U.S.C.§157(b)(2)(A) and (K), such assertions were simply untenable because his claims do not
concern the administration of the Estate or the validity, extent or priority of liens in Breland’s
individual bankruptcy case. Merchant’s claims are essentially post-petition, post-confirmation,
state-law claims based on alleged breach of the JVA by Florencia, a non-debtor, third party
corporation. The state-law claims are not core proceedings because they do not involve substantive
rights created by bankruptcy law. The fact that Breland holds an interest in Florencia is not
sufficient for this Court to exercise jurisdiction over post-petition, post-confirmation claims
against Breland or non-debtor, Florencia, which are beyond the scope of the confirmed plan. As
noted above, Merchant is not a creditor in Breland’s individual bankruptcy and Merchant entered
into the JVA with Florencia, not Breland individually or the Chapter 11 Trustee. Further, and
perhaps most importantly, Breland’s individual Chapter 11 was confirmed on June 6, 2022, assets
revested in Breland as provided in this Court’s November 3, 2023 Order Approving the
Compromise with the Hudgen’s Creditors, and the administration of the Chapter 11 case has been
completed with payment of all allowed claims in full. Thus, Merchant’s post-petition, dealings with
Breland and Florencia, without disclosure or Court approval, do not constitute a sufficient basis to

disregard the provisions of the Confirmation Order, upend the completed bankruptcy
administration, or otherwise allow this Court to exercise jurisdiction over Merchant’s claims.

Permissive Abstention

Even when mandatory abstention is not required, bankruptcy courts may decline to
consider certain matters under the doctrine of permissive abstention. Courts can permissively
abstain from hearing a particular proceeding arising under Title 11 or arising in or related to cases
under Title 11 in, “the interest of justice, or in the interest of comity with State courts or respect
for State law.” 28 U.S.C.§1334 (c)(1). The Eleventh Circuit has noted that, “[t]he usual
articulation of the test for determining whether a civil proceeding is related to bankruptcy is
whether the outcome of the proceeding could conceivably have an effect on the estate being
administered in bankruptcy.” In re Lemco Gypsum, Inc., 910 F.2d 784, 788 (11th Cir.1990).
Courts evaluating whether permissive abstention is appropriate have considered various factors
including: (1) the effect of abstention on the efficient administration of the bankruptcy estate; (2)
the extent to which state-law issues predominate over bankruptcy issues; (3) the difficulty or
unsettled nature of the applicable law; (4) the presence of a related proceeding commenced in state
court or other non-bankruptcy court; (5) the basis of bankruptcy jurisdiction, if any, other than 28
U.S.C. §1334; (6) the degree of relatedness or remoteness of the proceeding to the main bankruptcy
case; (7) the substance rather than form of an asserted “core” proceeding; (8) the feasibility of
severing state-law claims from core bankruptcy matters to allow judgments to be entered in state
court with enforcement left to the bankruptcy court; (9) the burden on the bankruptcy court's
docket; (10) the likelihood that the commencement of the proceeding in bankruptcy court involves
forum shopping by one of the parties; (11) the existence of a right to a jury trial; and (12) the

presence in the proceeding of non-debtor parties. In re United Container LLC, 284 B.R. 162, 176–
77 (Bankr. S.D. Fla. 2002); see also, Vision Bank v. Platinum Invs., LLC, WL 2144547 (S.D. Ala.
May 11, 2011)(citing, Retirement Sys. of Ala. v. Merrill Lynch & Co., 209 F.Supp.2d 1257 (M.D.
Ala 2002); St. Vincent's Hosp. v. Norrell (In re Norrell), 198 B.R. 987 (Bankr.N.D.Ala.1996)).
These factors are applied flexibly depending on their relevance and importance under the particular
circumstances of each case. Cassidy v. Wyeth–Ayerst Laboratories Div. of American Home
Products Corp., 42 F.Supp.2d 1260, 1263 (M.D.Ala.1999)(citing Matter of Chicago, Milwaukee,
St. Paul & Pacific R.R. Co., 6 F.3d 1184, 1189 (7th Cir.1993)).
An analysis of the relevant factors in this case supports permissive abstention. The first
and most compelling factor is that Merchant’s purported claims will not have any effect

whatsoever on the administration of the Bankruptcy Estate. The underlying bankruptcy case has
already been fully administered. The second factor also weighs in favor of abstention as
Merchant’s allegations are essentially state-law claims that do not arise from bankruptcy. Although
bankruptcy courts may apply state law, such undertaking is warranted only when there will be an
effect on the bankruptcy estate. The third and fourth factors also support abstention because the
claims are not necessarily difficult or unsettled in nature and state courts are equipped to handle
such matters.10 The fifth and sixth factors further favor permissive abstention because as discussed

10 As the Court notes that this removed action was initiated by Merchant in Baldwin County, Alabama close in time
to an action initiated by Florencia in Escambia County, Florida and the parties disagree on the proper venue, it will
leave that issue to be determined by the state court(s), if raised upon remand.
above, the outcome of the Removed Action will have no effect on the bankruptcy estate. The ninth
and eleventh factors further support abstention since trial would place an unnecessary burden on
the bankruptcy court's docket especially considering the lack of any benefit to the bankruptcy
estate. Therefore, an analysis of the relevant factors supports permissive abstention.

CONCLUSION

For these reasons, this Court finds that it lacks jurisdiction to adjudicate Merchant’s
remaining claims against Breland and Florencia. Accordingly, it is hereby ORDERED,
ADJUDGED, and DECREED as follows:
1. Breland and Florencia’s Request for Abstention and Merchant’s Motion to Remand are
GRANTED with regard to the remaining claims and parties. !!
2. As the Chapter 11 Trustee was dismissed from this action, Merchant and his counsel
are directed to take all actions necessary to ensure that no adverse action is taken or
attempted to be reinstated against the Trustee in the state court proceeding.
3. This Order should not be construed as determination on the merits of the claims and
defenses of the remaining parties in the litigation or preclude the parties from seeking
a determination with regard to the appropriate venue upon remand.
Dated: February 5, 2026
Ae —<—
CHIEF U.S. BANKRUPTCY JUDGE

'l As the Chapter 11 Trustee was dismissed as a party, the remaining parties are Billy Merchant. Charles K. Breland
Jr. and Florencia.
11