Corey S. Ribotsky Chapter 11 Bankruptcy Dismissal Decision

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April 17, 2026 Get Citation Alerts Download PDF Add Note

In re: Corey S. Ribotsky

United States Bankruptcy Court, S.D. New York

• Citations: None known
• Docket Number: 25-12094

• Precedential Status: Unknown Status

• Opinion

• Authorities (12)

• Cited By (0)

• Summaries (0)

• Similar Cases (41K)

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Trial Court Document

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
In re: Chapter 11

COREY S. RIBOTSKY, Case No. 25-12094 (DSJ)

Debtor.

DECISION AND ORDER GRANTING SECURITIES AND EXCHANGE
COMMISSION’S MOTION TO DISMISS DEBTOR’S CHAPTER 11 CASE WITH
PREJUDICE AND DENYING DEBTOR’S MOTION TO EXTEND STAY

APPEARANCES:

COREY S. RIBOTSKY
Pro Se
P.O Box 248
Old Westbury, NY 11568

THE KRUPNICK FIRM
Counsel for Creditor
56 Hammond Road
Glen Cove, NY 11542
By: Kevin Phillip Krupnick

U.S. SECURITIES AND EXCHANGE COMMISSION
U.S. Securities and Exchange Commission
100 Pearl Street
New York, NY 10004
By: Patricia Schrage
Neil Jacobson

ANNIE WELLS
Office of the United States Trustee
Alexander Hamilton U.S. Custom House
One Bowling Green
New York, NY 10004
By: Annie Wells

HONORABLE DAVID S. JONES
UNITED STATES BANKRUPTCY JUDGE
Before the Court is the motion of the U.S. Securities and Exchange Commission (“the
SEC”) to dismiss the bankruptcy case of Corey S. Ribotsky (“Debtor” or “Ribotsky”) pursuant
to section 1112(b) of the Bankruptcy Code or, in the alternative, to convert the case to chapter 7
(the “Motion”). The SEC argues that the case should be dismissed because the Debtor’s
bankruptcy petition was filed in bad faith without a legitimate bankruptcy purpose, but rather with
the intention to avoid post-judgment discovery requests, and further because this case is in essence
nothing more than an effort to open a new front in a two-party dispute between the Debtor and the

SEC. Extensive litigation has already occurred in district court and is ongoing, and the SEC urges
dismissal so that it can continue pursuing discovery in the district court proceeding. The Debtor
filed an objection (the “Objection”), arguing that he filed his petition as part of a good faith effort
to reorganize and comprehensively resolve his affairs with his creditors. Additionally, Debtor
contends that the SEC misrepresents the record of prior proceedings and has not met its evidentiary
burden to establish bad faith. Debtor also filed a motion to extend the automatic stay pursuant to
section 362(c)(3)(B) of the Bankruptcy Code.1 See Motion to Extend Automatic Stay Pursuant to 11 U.S.C. § 362 (c)(3)(B), Dkt. No. 12.
Prior to the commencement of this bankruptcy case, the U.S. District Court for the Eastern

District of New York entered a $14,500,000 judgment against the Debtor, in connection to a 2011
SEC complaint filed against the Debtor for violations of federal securities laws (the “SEC Civil
Enforcement Action”). The Krupnick Firm (“Krupnick”) represented Debtor in the SEC Civil
Enforcement Action, that firm and is a creditor in this bankruptcy case.
On March 26, 2026, the Court conducted a hearing on both motions, during which the
Court observed that at the time of the hearing, Debtor’s opposition was the sole opposition filed
on the docket. In the hours following the hearing, an opposition signed by Krupnick but filed by

1 Krupnick filed a motion to join Debtor’s motion to extend the automatic stay. See Dkt. No. 17.
Ribotsky was entered on the docket (“Krupnick Opposition”). On April 1, 2026, Krupnick filed
the same documents on the docket. See First Motion to Extend Time, Dkt. No. 55.
For reasons explained further below, the SEC’s motion to dismiss Debtor’s bankruptcy
case is granted because the facts presented establish that Debtor’s petition was filed in bad faith.
Consequently, Debtor’s motion to extend the automatic stay is denied as moot.

BACKGROUND

A. The Debtor’s Bankruptcy

Debtor filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code on
September 25, 2025. See Chapter 11 Voluntary Petition for Individual, Dkt. No. 1 (“Petition”).
Debtor is an individual with no reported assets, and reports less than $40,000 in gross annual
income. Id. Debtor resides in an Upper East Side residence with his non-debtor spouse and
daughter, the rent and expenses of which are paid by his non-debtor spouse. See Schedule J –
Individual, Dkt. No. 11. The overwhelming majority (in dollar amount) of Debtor’s liabilities
consists of $14,500,000 in non-dischargeable debt owed to the SEC pursuant to a 2013 consent
judgement. Debtor’s remaining scheduled or reported liabilities include: 1) $345,498 owed to The
Krupnick Firm for legal services in connection to the SEC litigation; 2) $36,240 in student loans
owed to the U.S. Department of Education; and 3) an unknown amount owed to PSEG. See
Declaration About Individual Debtor’s Schedules, Dkt. No. 10.
The SEC in its Motion and Reply contends that Debtor has undisclosed assets and a hidden
income stream. Specifically, the SEC identified a bank account owned by Krupnick-Ribotsky Ltd.
(“KRL”), a company where Debtor was listed as the co-owner and signatory on certain 2022 and
2023 financial documents. See Declaration in Support of Motion to Dismiss, Exs. 2 & 3, Dkt. No.
28. The SEC further alleges that the Debtor used undisclosed assets from KRL to cover personal
expenses including over $146,000 in rental payments for an Upper East Side apartment where he
currently resides. See Motion at 8. As stated earlier, Debtor maintains that his non-debtor spouse
pays the rent for the apartment. The Court did not conduct an evidentiary hearing and makes no
findings as to whether Debtor has hidden assets or income.

B. The SEC Civil Enforcement Action and Resulting Consent Judgment

On August 17, 2011, the SEC filed a complaint against The NIR Group, LLC (Debtor’s
former investment advisory firm), the Debtor individually, and other parties in the United States
District Court for the Eastern District of New York alleging violations of anti-fraud provisions of
the federal securities laws. See Complaint, S.E.C. v. The NIR Group, LLC et al., No. 11-cv-04723
(JMA) (AYS) (E.D.N.Y. Sep. 28, 2011), ECF No. 1. On November 13, 2013, the district court
entered a final consent judgment against Debtor in the amount of $14.5 million, without making
any findings of fact or conclusions of law. See Judgement, S.E.C. v. The NIR Group, LLC et al.,
No. 11-cv-04723 (JMA) (AYS), ECF No. 90. The judgement amount consisted of 1) disgorgement
of $12,500,000 for profits gained through the means alleged in the complaint; 2) $1,000,000 in
prejudgment interest; and 3) $1,000,000 as a civil penalty. See id. C. Debtor’s Previous Bankruptcy Cases

On December 17, 2014, Ribotsky filed his first bankruptcy case, a chapter 7 proceeding
that in the Eastern District of New York, one month after the SEC indicated its intention to initiate
collection efforts on its judgment. See Motion at 4; Chapter 7 Voluntary Petition, In re Corey
Ribotsky, No. 14-75575 (AST) (Bankr. E.D.N.Y. Dec. 17, 2014), ECF No. 1. On January 26, 2016,
Debtor received a general discharge. See Order Discharging Debtor, In re Corey Ribotsky, No. 14-
75575 (AST), ECF No. 94. On June 19, 2018, Ribotsky’s first chapter 7 bankruptcy case was
closed. See Final Decree Chapter 7, In re Corey Ribotsky, No. 14-75575 (AST), ECF No. 132.
On October 10, 2022, in the midst of resumed SEC judgment enforcement efforts and on
the eve of depositions that the SEC had requested, Ribotsky filed for chapter 11 bankruptcy
protection, again in the U.S. Bankruptcy Court for the Eastern District of New York. See Motion
at 5; Chapter 11 Voluntary Petition for Individuals, In re Corey S. Ribotsky, 22-72781 (AST)
(Bankr. E.D.N.Y. Oct. 10, 2022), ECF No. 1. That case was eventually dismissed for failure to

pay the filing fee. See Order Dismissing Case for failure to pay the chapter 11 filing fee with Notice
of Dismissal, In re Corey S. Ribotsky, 22-72781 (AST), ECF No. 16.
On February 17, 2023, within one year of his second bankruptcy filing, Ribotsky again
filed a bankruptcy petition, this time under chapter 7. See Chapter 7 Voluntary Petition for
Individuals, In re Corey S. Ribotsky, No. 23-70583 (AST) (Bankr. E.D.N.Y. Feb. 17, 2023), ECF
No. 1. The bankruptcy court in that third case denied a motion by Debtor seeking to extend the
automatic stay to the SEC after having previously granted an extension of the stay, with the result
that the SEC could continue with its enforcement efforts. See Order Vacating Extension of
Automatic Stay as to SEC, In re Corey S. Ribotsky, No. 23-70583 (AST), ECF No. 28. On the

question of the dischargeability of the SEC’s consent judgment, on December 21, 2023, the
bankruptcy court granted summary judgment in part for the SEC, holding that the $1,000,000
penalty owed as part of the total $14,500,000 judgement was non-dischargeable under section
523(a)(7) of the Bankruptcy Code as it constituted a “fine, penalty, or forfeiture payable to and for
the benefit of a governmental unit, and is not compensation for actual pecuniary loss.” See Order
Granting in Part and Denying in Part Cross Motions for Summary Judgment, In re Corey S.
Ribotsky, No. 23-70583 (AST), ECF. No. 52. On January 10, 2025, after an evidentiary hearing,
the bankruptcy court held that the remaining $13,500,000 of the money judgement (representing
the disgorgement of profits and pre-judgment interest) was non-dischargeable as a judgment in
connection to “violation of any of the Federal securities laws” under section 523(a)(19) of the
Bankruptcy Code. See Order and Judgement, In re Corey S. Ribotsky, No. 23-70583 (AST), ECF.
No. 110. On March 23, 2026, District Judge Joan M. Azrack affirmed the bankruptcy court’s
decision. See Ribotsky v. S.E.C, No. 25-cv-00349 (JMA), (E.D.N.Y. Mar. 23, 2026), ECF. No. 16.
On August 24, 2025, Debtor filed a chapter 11 petition in this District—his fourth

bankruptcy filing since the SEC obtained its consent judgment against him. See Chapter 11
Voluntary Petition for Individual, In re Corey S. Ribotsky, No. 25-11781 (PB) (Bankr. S.D.N.Y.
Aug. 14, 2025), ECF. No. 1. Debtor voluntarily dismissed that case one month later. See Order
Dismissing Chapter 11 Case, No. 25-11781 (PB), ECF. No. 16.
On September 15, 2025, the SEC filed a motion for discovery and a status update letter to
the District Court, stating its desire for further inquiry concerning the financial affairs of Debtor
and KRL. See Motion for Discovery and Status Update on Productions Compelled by Court Order,
S.E.C. v. The NIR Group et al., No. 11-cv-04723 (JMA) (AYS) (E.D.N.Y. Sep. 15, 2025), ECF
No. 172. On September 19, 2025, Krupnick (on behalf of Debtor) filed an Opposition to the SEC’s

discovery motion. See Opposition to Motion for Discovery, S.E.C. v. The NIR Group et al., No.
11-cv-04723, ECF No. 173.
On September 23, 2025, the SEC filed a discovery status update letter notifying the court
of ongoing issues as to discovery. The letter explained that the SEC intended to seek information
as to the KRL entity and related bank account records. See Reply to Opposition to Motion for
Discovery, S.E.C. v. The NIR Group et al., No. 11-cv-04723, ECF No. 174. Two days later, Debtor
filed the instant bankruptcy case, his fifth since the SEC began its enforcement efforts against him.
D. The SEC’s Motion to Dismiss This Case
On January 16, 2026, the SEC filed its Motion to dismiss this case or in the alternative to
convert the case to chapter 7. See Dkt. No. 27. On February 13, Debtor filed his Opposition to the
Motion. See Dkt. No. 37. Following the filing of additional pleadings, the Court heard argument
on March 26, and reserved judgement. As stated earlier, after the hearing, an opposition signed by
Kevin Phillip Krupnick but filed by Ribotsky was filed on the docket. See Dkt. No. 49. On April

1, the Krupnick Firm filed the same opposition. See Dkt. No. 55.

JURISDICTION

This Court has jurisdiction over this bankruptcy case pursuant to 28 U.S.C. §§ 157 (b) and
1334. This is a “core proceeding” pursuant to 28 U.S.C. § 157 (b) because it concerns a motion to
dismiss the debtor’s bankruptcy petition. This Court possesses the authority to enter a final
judgement in a core proceeding “arising under title 11” consistent with Article II of the United
States Constitution. See Stern v. Marshall, 564 U.S. 462, 474–75 (2001); see also In re Fairfield
Sentry Ltd. Litig., 458 B.R. 665, 674 (S.D.N.Y. 2011) (proceedings arise under title 11 “when the
cause of action or substantive right claimed is created by the Bankruptcy Code”). Venue is proper
in this District under 28 U.S.C. §§ 1408 and 1409.

DISCUSSION

A. Legal Standard

Section 1112(b)(1) of the Bankruptcy Code provides that a case may be dismissed “for
cause.” Section 1112(b)(4) sets forth numerous specific examples of “cause,” but that list is
illustrative, not exhaustive. See In re C-TC 9th Ave. P'ship, 113 F.3d 1304, 1311 (2d Cir. 1997).
Courts have determined that a finding that a bankruptcy case was filed in bad faith can constitute
“cause” for dismissal under section 1112(b). See In re AAGS Holdings LLC, 608 B.R. 373, 382
(Bankr. S.D.N.Y. 2019); see also In re SGL Carbon Corp., 200 F.3d 154, 160 (3d Cir. 1999)
(collecting cases); C-TC, 113 F.3d at 1310.
“The standard in this Circuit is that a bankruptcy petition will be dismissed if both objective
futility of the reorganization process and subjective bad faith in filing the petition are found.” In
re Kingston Square Assocs., 214 B.R. 713, 725 (Bankr. S.D.N.Y. 1997) (emphasis omitted). The

inquiry of whether a debtor filed in bad faith “depends upon ‘the totality of the circumstances, and
involves finding an intent to abuse the judicial process, and the purpose of the reorganization
process.’” In re JJ Arch LLC., 663 B.R. 258, 281 (Bankr. S.D.N.Y. 2024) (citing Clear Blue Water,
LLC v. Oyster Bay Mgmt. Co., LLC, 476 B.R. 60, 68 (E.D.N.Y. 2012)). Courts will hold that “[a]
petition is filed in bad faith ‘if it is clear that on the filing date there was no reasonable likelihood
that the debtor intended to reorganize and no reasonable probability that it would eventually
emerge from bankruptcy proceedings.’” In re AAGS Holdings LLC, 608 B.R. at 382–83 (quoting
Baker v. Latham Sparrowbush Assocs. (In re Cohoes Indus. Terminal, Inc.), 931 F.2d 222, 227 (2d Cir. 1991)).

Courts in the Second Circuit examine a number of factors that are viewed as indicative of
a bad faith filing:
(1) the debtor has only one asset;
(2) the debtor has few unsecured creditors whose claims are small in relation to those of
the secured creditors;
(3) the debtor's one asset is the subject of a foreclosure action as a result of arrearages or
default on the debt;
(4) the debtor's financial condition is, in essence, a two party dispute between the debtor
and secured creditors which can be resolved in the pending state foreclosure action;
(5) the timing of the debtor's filing evidences an intent to delay or frustrate the legitimate
efforts of the debtor's secured creditors to enforce their rights;
(6) the debtor has little or no cash flow;
(7) the debtor can't meet current expenses including the payment of personal property and
real estate taxes; and
(8) the debtor has no employees.
C–TC, 113 F.3d at 1311 (quoting Pleasant Pointe Apartments, Ltd. v. Kentucky Hous. Corp., 139
B.R. 828, 832 (W.D. Ky. 1992)).
In considering the above-listed factors, courts should not apply the factors mechanically but
rather consider all the facts and circumstances of the case as no one factor is determinative. See Id.
at 383 (citations omitted). Courts have concluded that a debtor filed its chapter 11 petition in good

faith when the debtor was experiencing a difficult financial situation and needed to reorganize, but
courts have also found that a debtor filed its petition in bad faith when the debtor had no reason to
reorganize or rehabilitate and the petition was filed “merely [to] attempt to avoid litigating issues
in state court.” Fraternal Composite Servs. v. Karczewski, 315 B.R. 253, 257 (N.D.N.Y. 2004).
B. Analysis

Applying the C-TC factors governing dismissal due to bad faith pursuant to section 1112(b)
of the Bankruptcy Code, the Court finds that several of the factors are present, and while some are
not, the facts and circumstances surrounding the case demonstrate that Debtor is not engaged in a
good-faith effort to reorganize through the bankruptcy process. Dismissal therefore is warranted.
Debtor’s bankruptcy case is essentially a two-party dispute between Debtor and the SEC,
and the timing of this filing (and his previous filings) indicates Debtor’s attempt to evade or at
least delay the SEC’s post-judgement discovery requests. Debtor in his Petition claims to have no
assets and total gross income of less than $40,000 per year. Additionally, the debt that he owes to
the SEC pursuant to the consent judgment constitutes approximately 97% of the total amount of
his debt at issue in this bankruptcy case. See Declaration About Individual Debtor’s Schedules,
Dkt. No. 10. According to the claims register, the following claims, in addition to the SEC claim,
have been asserted against the Debtor: 1) a $345,498 claim by Krupnick Firm for legal services
related to the SEC litigation; 2) a $39,104.70 claim by the U.S. Department of Education; 3) a
disputed $1,698.75 claim by Merrick Bank; and 4) a $3,689.40 claim by the NYS Department of
Taxation and Finance. Although not on the claims register, PSE&G is listed as a creditor for an
unknown amount in the Debtor’s schedules.
Thus, C-TC factors one (debtor has just one asset – here actually none), four (debtor
presents a two-party dispute that can be resolved in a non-bankruptcy forum), and six (debtor has

little or no cash flow) are present and weigh in favor of a bad-faith finding. See In re Ancona, No.
14-10532 (MKV), 2016 WL 7868696, at *4–5 (Bankr. S.D.N.Y. Nov. 30, 2016) (holding debtor
filed bankruptcy petition in bad faith where debtor’s case was essentially a two-party dispute and
unsecured claims by non-insiders constituted a minimal portion of total debt); In re Reyes, No. 14-
13233 (SMB), 2015 WL 4624156, at *5–6 (Bankr. S.D.N.Y. Aug. 4, 2015) (dismissing chapter
11 debtor's petition for cause on finding of bad faith where debtor had one asset, the petition was
filed shortly before a state court hearing to sell debtor's property, and there were few other
unsecured creditors). Contrast In re SPAC Recovery Co., No. 25-12109 (JPM), 2026 WL 323115,
at *7 (Bankr. S.D.N.Y. Feb. 6, 2026) (finding bankruptcy case was not a two-party dispute where

there were substantial other unsecured claims totaling over $5,000,000).
Furthermore, the timing of Debtor’s voluntary petition as well as his prior bankruptcy
filings reflects an intention to frustrate the SEC’s lawful pursuit of information in order to enforce
the consent judgment. Debtor filed his current bankruptcy case shortly before an upcoming
deposition in connection with the SEC Civil Enforcement Action and after the SEC submitted
evidence to the district court as to what appeared to be undisclosed bank accounts. See Declaration
in Support of Motion to Dismiss, Exs. 4 & 5, Dkt. No. 28 (SEC letter to the district court outlining
ongoing discovery disputes with Debtor). While not dispositive, the filing of a bankruptcy petition
immediately after an adverse ruling or circumstance in a separate litigation can indicate a bad faith
filing. See In re Ancona, 2016 WL 7868696, at *6 (finding debtor filed bankruptcy petition in bad
faith where timing of bankruptcy filing indicated an intent to delay upcoming damages trial).
Chapter 11 is not meant to serve as a new forum to re-adjudicate issues already present in an
ongoing two-party litigation, and filing a petition for that purpose is an indication of bad faith. See
In re JJ Arch LLC., 663 B.R. at 283–84 (holding that debtor filed bankruptcy in bad faith where

facts and circumstances indicated an intent to avoid an ongoing state court proceeding); In re
Syndicom Corp., 268 B.R. 26, 50–51 (Bankr. S.D.N.Y. 2001) (granting motion to dismiss under
section 1112(b) where debtor filed bankruptcy after the issuance of a warrant of eviction,
evidencing an intent to thwart possession efforts); In re HBA East, Inc., 87 B.R. 248, 260 (Bankr.
E.D.N.Y. 1998) (“Chapter 11 was never intended to be used as a fist in a two party bout. The
Chapter is entitled reorganization and not litigation.”).
Here, the SEC’s money judgment has been declared non-dischargeable debt by the EDNY
Bankruptcy Court in a decision that the district court affirmed. See Ribotsky v. S.E.C., No. 25-cv-
00349 (JMA) (E.D.N.Y. Mar. 3, 2026), ECF No. 16 (affirming bankruptcy court’s finding that the

money judgement was “for the violation of the Federal securities laws” and therefore non-
dischargeable pursuant to section 523(a)(19) of the Bankruptcy Code). The Debtor’s expressed
dissatisfaction with the SEC’s collection-related discovery efforts can and should be addressed in
the district court that is presiding over the SEC matter, and the timing and lack of substance of
Debtor’s filing here strongly indicates that Debtor filed this bankruptcy case with the sole intention
of impeding the SEC’s collection efforts. As noted, this Court makes no findings as to the veracity
of the SEC’s claim that Debtor has allegedly maintained and benefitted from undisclosed assets;
that inquiry is best resolved within the ongoing litigation in the district court, and is unnecessary
to this Court’s decision. See In re Wally Findlay Galleries (New York) Inc., 36 B.R. 849, 851 (Bankr. S.D.N.Y. 1984) (dismissing chapter 11 petition for cause where debtor “did not file its
petition to reorganize, but rather as a litigation tactic” in dispute with its creditors). For all of these
reasons, C-TC factor five is present here and supports the finding of bad faith.
Additionally, C-TC factor eight also applies because the Debtor has no employees, thus
further suggesting that Debtor has no business or (according to his own submissions) other

economic activity or interests to preserve, which in turn is suggestive of a bad faith finding. See
C-TC, 113 F.3d at 1312.
The Court is unpersuaded by the cases cited and arguments raised in the Oppositions. First,
although Debtor and Krupnick correctly observe that most bad-faith filing dismissals are of single-
asset real estate cases, see Opposition at 23, the C-TC framework and the possibility of dismissal
of bad faith filings apply in other types of cases. See, e.g., In re Ancona, 2016 WL 7868696, at *4
n.2 (applying the C-TC factors outside the single-asset real estate context, where the case was
essentially a two-party dispute with a creditor who had “by far, the most significant claim” in the
debtor’s case).

The objectors also argue that dismissal is not warranted because a debtor’s desire to obtain
a litigation advantage, by itself, does not establish cause under section 1112(b) of the Bankruptcy
Code. That may be true at least when a bankruptcy case serves some reorganization or debt-
resolution purpose, but bad faith is present and dismissal is appropriate where a petition is filed
solely for litigation advantage, with no legitimate bankruptcy purpose. See In re SPAC Recovery
Co., 2026 WL 323115, at **5–6 (“Crucially, the inquiry is not whether litigation considerations
played any role in the filing, but whether the petition was filed solely to obtain an improper
litigation advantage”); In re Anmuth Holdings LLC, 600 B.R. 168, 193 (Bankr. E.D.N.Y. 2019)
(finding “bad faith is manifest” where “a petition is filed as a litigation tactic, solely to avoid the
consequences of an adverse state court decision”). And here, viewing the totality of the
circumstances, this case was filed solely to obtain a tactical litigation advantage in what is
essentially a two-party dispute and does not present a viable path forward for reorganization given
Debtor’s low acknowledged income and the established nondischargeability of approximately
97% of his debt. See C-TC, 113 F.3d at 1309–12 (holding that filing a bankruptcy petition as a

mere litigation tactic in a two-party dispute is an “impermissible use of Chapter 11”) (quoting In
re Wally Findlay Galleries (New York) Inc., 36 B.R. at 851). Debtor’s circumstances stand in stark
contrast to cases where there is a “clear, quick plan out of the chapter 11.” Compare In re AAGS
Holdings LLC, 608 B.R. at 383–84 (Bankr. S.D.N.Y. 2019) (denying motion to dismiss where
debtor had already filed a plan and had obtained financing to demonstrate a viable path forward).
Nor has the debtor demonstrated any prospect of a sale (he has no disclosed assets to sell) or other
means of compensating his creditors adequately to achieve a confirmable plan. Contrast In re JPA
No. 111 Co., Ltd., No. 21-12075 (DSJ), 2022 WL 298428, at *11 (Bankr. S.D.N.Y. Feb. 1, 2022)
(denying motion to dismiss where debtors were in active pursuit of an expedited sales process to

satisfy the claims of creditors).
In sum, several of the C-TC factors are present and support the finding of bad faith.
Accordingly, the SEC has demonstrated that “cause” exists to dismiss or convert Debtor’s
bankruptcy case pursuant to section 1112(b) of the Bankruptcy Code.
Where cause is present, Bankruptcy Code Section 1112(b)(1) instructs the Court either to
convert the case for cause or to dismiss it, “whichever is in the best interest of creditors and the
estate.” Here the Court readily concludes that dismissal is the superior option. There are no visible
assets for a Chapter 7 trustee to administer and the Debtor’s estate is saddled with an established
nondischargeable $14.5 million liability. Creditors’ interests will best be served by eliminating the
impediment that a pending bankruptcy case presents to the SEC’s return to the district court
presiding over its case, and other creditors will not be meaningfully disadvantaged by a dismissal
rather than a conversion of this case.
The Court now turns to the SEC’s request for dismissal with prejudice. Section 349(a)
provides that “[u]nless the court, for cause, orders otherwise, the dismissal of a case under this title

does not bar the discharge, in a later case under this title, of debts that were dischargeable in the
case dismissed; nor does the dismissal of a case under this title prejudice the debtor with regard to
the filing of a subsequent petition under this title, except as provided in section 109(g) of this title.” 11 U.S.C. § 349 (a). Relatedly, section 109(g) provides in relevant part: “[n]otwithstanding any
other provision of this section, no individual ... may be a debtor under this title who has been a
debtor in a case pending under this title at any time in the proceeding 180 days if— (1) the case
was dismissed by the court for willful failure of the debtor to abide by orders of the court, or to
appear before the court in proper prosecution of the case; or (2) the debtor requested and obtained
the voluntary dismissal of the case following the filing of a request for relief from the automatic

stay provided by section 362 of this title.” 11 U.S.C. § 109 (g).
Nonetheless, “[t]he Second Circuit, and all other circuits except the Tenth Circuit,
recognize the authority of the bankruptcy courts to sanction bad-faith serial filers by prohibiting
future bankruptcy filings for longer periods of time than the 180 days specified by Section 109(g).”
In re D&G Constr. Dean Gonzalez, LLC, 635 B.R. 232, 240 (Bankr. E.D.N.Y. 2021) (citing In re
Casse, 198 F.3d 327, 337–38 (2d Cir. 1999) (collecting cases)). “Cause [under Section 349(a)]
exists to prohibit debtors from filing petitions for periods of time exceeding 180 days in cases of
serial filers and their bad faith abuse of the bankruptcy process.” Id (internal citations omitted).
Here, based on the facts and circumstances of this case detailed above, the Court concludes that
Debtor’s repeated filings—five in all—indicate a bad faith abuse of the bankruptcy process and
warrant a dismissal of this case with prejudice to refiling under any chapter of the Bankruptcy
Code for a period of one year from entry of this decision, to allow the SEC time to finalize its
discovery and collection efforts. This one-year bar may be further extended by this Court for cause
shown upon an application by the SEC if it believes circumstances warrant, with such an extension

being subject to notice to Ribotsky and an opportunity for him to object. The Court contemplates
that a demonstrated pattern of obstruction or failure to engage with the SEC in good faith may
constitute cause to further extend the “with prejudice” period.
To the extent this Decision and Order does not specifically address any arguments raised
by the Debtor or Krupnick, those arguments are rejected.
CONCLUSION
For the reasons stated above, the SEC’s motion to dismiss Debtor’s bankruptcy case is
GRANTED with prejudice as to further bankruptcy filings for one year, with the length of that
period subject to extension by the Court as described above. Consequently, Debtor’s Motion to

Extend the Automatic Stay pursuant to section 362(c)(3)(B) is DENIED as moot.

IT IS SO ORDERED.

Dated: New York, New York
April 17, 2026
s/ David S. Jones
Honorable David S. Jones
United States Bankruptcy Judge