Jennifer Lyn Lacy v. eBay Inc. and Liberis US Inc. — Contempt Motion Denied

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March 31, 2026 Get Citation Alerts Download PDF Add Note

In re: Jennifer Lyn Lacy

United States Bankruptcy Court, D. Connecticut

• Citations: None known
• Docket Number: 25-20871

• Precedential Status: Unknown Status

• Opinion

• Authorities (2)

• Cited By (0)

• Summaries (0)

• Similar Cases (7K)

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Trial Court Document

UNITED STATES BANKRUPTCY COURT
DISTRICT OF CONNECTICUT
HARTFORD DIVISION

In re: Chapter 7

Jennifer Lyn Lacy, Case No. 25-20871 (JJT)

Debtor. Re: ECF No. 45

MEMORANDUM OF DECISION AND ORDER DENYING
AMENDED MOTION FOR CONTEMPT AND SANCTIONS

Before the Court is the Debtor’s Amended Motion for Contempt and
Sanctions for Willful Violation of the Automatic Stay and Discharge Injunction
(Amended Motion, ECF No. 45), in which the Debtor seeks sanctions against eBay
Inc. and Liberis US Inc.1 Neither eBay nor Liberis responded to the Amended
Motion. The Court held a preliminary hearing on February 12, 2026, and then
heard argument and received evidence on March 26, 2026, after which the Court
took the matter under advisement. For the following reasons, the Court denies the
Amended Motion.
1. Background
The Debtor has been a reseller on eBay for over 20 years. During that time,
she has operated under a number of business names, including CleoCasey Designs
and (currently) Rejenn-erated. These have been, according to the Debtor, sole

1 The Amended Motion supersedes the Debtor’s original Motion for Contempt for Willful Violation of
the Discharge Injunction (ECF No. 21). In deciding the instant matter, the Court has considered all
of the arguments and evidence submitted in the original Motion, Amended Motion, supplemental
memoranda of law (ECF Nos. 63, 69, 72), and supplemental evidence (ECF No. 68).
proprietorships. From 2024 to 2025, however, the Debtor operated through a
corporation, CleoCasey Auctions Inc.
In March 2024, the Debtor entered into a Business Revenue Finance

Agreement with Liberis.2 In December 2024, CleoCasey Auctions renewed the
Business Revenue Finance Agreement, with the Debtor as guarantor.3 Under this
agreement, CleoCasey Auctions (and the Debtor) agreed that Liberis was entitled to
20% of receivables from eBay sales until the amount of receivables purchased was
paid.4 Sweeps of these percentages were taken from the Debtor’s eBay account and
continued after the petition date. After the Debtor informed Liberis of her pending

bankruptcy, Liberis apparently charged off the remaining debt and sold its claim to
a third party.
As for eBay, the Debtor alleges that it closed her 20-year account on
December 16, 2025, which was shortly after her discharge. Although the Debtor has
since been able to operate from a secondary eBay account, the Debtor has alleged a
loss of significant goodwill and that she was harmed by her inability to access her
account and because the secondary account does not have the sales history of the

original account.
2. Jurisdiction
The United States District Court for the District of Connecticut has

2 Whether this was the first of one of several such agreements is irrelevant.
3 The Debtor testified that this renewal, which was with a corporation, was the operative agreement
as of the date she filed her bankruptcy petition.
4 The Business Revenue Finance Agreement and its renewals are merchant cash advances, whereby
a company such as Liberis agrees to purchase future accounts receivable in exchange for an
immediate infusion of cash.
jurisdiction over the instant proceedings under 28 U.S.C. § 1334 (b), and the
Bankruptcy Court derives its authority to hear and determine this matter on
reference from the District Court under 28 U.S.C. § 157 (a) and (b)(1) and the

General Order of Reference of the United States District Court for the District of
Connecticut dated September 21, 1984. This contested matter is a core proceeding
under 28 U.S.C. § 157 (b)(2)(A) and (O).
3. Discussion
The Debtor’s legal arguments have changed over time. Initially, she
requested that the Court find that eBay violated the discharge and order her eBay

account restored and award compensatory damages of $14,915.83 and sanctions of
$90,000. (ECF No. 21). She then added Liberis to the mix, and asked for damages of
$13,294.43 and sanctions of $150,000 each against eBay and Liberis, all for alleged
violations of the discharge injunction and automatic stay. (ECF No. 45). She later
argued that her agreements with Liberis were illegal and criminally usurious loans,
and asked the Court to cancel them, order disgorgement of $13,428.59 from the
payments made to Liberis, and award damages of $500,000 for destruction of her

business and $2,000,000 in punitive damages. (ECF No. 69).
The Court is not going to get into the weeds of every argument the Debtor
has made in her papers (or why her numbers keep changing). Instead, the Court is
going to focus on two narrow issues that are fatal to her claims, one for each of the
respondents.
3.1 Liberis
As noted above, the operative agreement with Liberis was with CleoCasey
Auctions Inc., which is a Connecticut corporation. The Debtor argues that because

she dissolved CleoCasey Auctions in April 2025, it no longer existed and Liberis
should have stopped sweeping her accounts. But dissolution does not wipe a
corporation from existence. “A dissolved corporation continues its corporate
existence but may not carry on any business except that appropriate to wind up and
liquidate its business and affairs, including: (1) Collecting its assets; (2) disposing of
its properties that will not be distributed in kind to its shareholders; (3) discharging

or making provision for discharging its liabilities; (4) distributing its remaining
property among its shareholders according to their interests; and (5) doing every
other act necessary to wind up and liquidate its business and affairs.” Conn. Gen.
Stat. § 33-884 (a). Because the operative agreement with Liberis was with the
corporation, its existence continued (and perhaps continues) to discharge its
liabilities (i.e., pay its debts). Moreover, there is no evidence that the Debtor ever
informed Liberis of the corporation’s dissolution5 or that the eBay and bank

accounts used were shared by the Debtor and the corporation. There is a “fair
ground of doubt” about whether Liberis’s conduct was unlawful under the automatic
stay and discharge order; therefore, the Court cannot hold Liberis in contempt.6 See

5 See Conn. Gen. Stat. § 33-886 (a) (“A dissolved corporation may dispose of the known claims against
it by notifying its known claimants in writing of the dissolution at any time after the effective date of
the dissolution.”).
6 The Debtor provided no evidence that Liberis proceeded against her as guarantor as opposed to the
corporation.
Taggart v. Lorenzen, 587 U.S. 554, 565 (2019).7
3.2 eBay
The Debtor also complains that eBay closed her seller account in violation of
the discharge injunction. But she has provided the Court with no evidence of any
agreement with eBay other than a copy of eBay’s “Limited Use Stored Value Terms
and Conditions,” which does not include her broader account agreement with eBay.
Thus, the Court is left with no evidence for why eBay closed the Debtor’s 20-year
seller account or whether such would comport with the terms of any agreement with
the Debtor.8 Absent such proof, there is no basis to hold eBay in contempt.
4. Conclusion
For the foregoing reasons, the Amended Motion is DENIED. !°
The Clerk of Court is directed to mail a copy of this Memorandum of Decision
and Order to eBay and Liberis care of their registered agents for service as noted in
the Debtor’s Certificate of Service (ECF No. 50).
IT IS SO ORDERED at Hartford, Connecticut this 31st day of March 2026.

James J. Tancredi
‘Lined Sales Rar aenupatc vy Tuuckge
Dstscl of Conmecticul

7 Because the operative agreement was with CleoCasey Auctions and not the Debtor, she has no
standing to argue whether it was a true sale or loan. See Rand v. Anaconda-Ericsson, Inc., 794 F.2d
848, 849 (2d Cir. 1986) (shareholders of corporation lacked standing where legal injury was to firm).
8 Although the Debtor complains the eBay was supposed to have provided a reason for shutting down
the account by now, that does not excuse her failure to provide copies of the relevant contracts with
eBay.
9 The Debtor has also tried to lump Liberis and eBay together as one entity, but, other than the
Debtor’s say so, there is no evidence that the two are related entities.
10 Nothing in this Memorandum of Decision is intended to determine whether the Debtor holds state
law contractual claims against eBay under an operative contract not before this Court and that may
be cognizable in state court or arbitration.