PTGi International Carrier Services, Inc.

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re: Chapter 7

PTGi International Carrier Services, Inc.1, Case No. 24-12603 (TMH)

Alleged Debtor.

MEMORANDUM OPINION

Before the court is alleged debtor PTGi International Carrier Services, Inc.’s

(“PTGi”) Motion to Dismiss the Involuntary Petition (the “Motion to Dismiss”).2

PTGi requests that this Court either dismiss the involuntary petition under 11

U.S.C. § 303 because the Petitioning Creditors filed it in bad faith or abstain from

the proceeding under 11 U.S.C. § 305(a). PTGi also seeks an award of attorneys’ fees

from the petitioning creditors. The petitioning creditors argue that the case should

not be dismissed. They also argue that the Court should not consider Amped I, LLC

and Amped II, LLC’s (collectively “Arena”) Joinder to PTGi’s Motion to Dismiss.3

This Court finds that petitioning creditor Acmetel USA, Inc. (“Acmetel”) filed

the petition in bad faith, and therefore dismisses the petition. Additionally, because

the dismissal of Acmetel leaves only two petitioning creditors, the numerosity

1 The Alleged Debtor in this case is PTGi International Carrier Services, Inc. Proposed Debtor’s

federal tax identification number is unknown. The Alleged Debtor’s address is 125 Park Ave, 25th

Floor, New York, NY 10017.

2 PTGi International Carrier Services, Inc.’s (I) Response to the Involuntary Petition and (I) Motion

for Entry of an Order (A) Dismissing the Involuntary Petition Under Section 303 or, Alternatively,

Dismissing the Involuntary Petition or Abstaining from Entering the Order Granting the

Involuntary Petition Under Section 305 and (B) Awarding Damages Under Section 303(I) of the

Bankruptcy Code [D.I. 45].

3 D.I. 46.

requirement is no longer fulfilled, and on that additional basis, the petition is

dismissed.4 Further, this Court awards attorneys’ fees to PTGi.

I. Background

a. Parties

PTGi is a Delaware corporation that, before ceasing operations and beginning

its winddown, traded in telecommunications minutes. Charge Enterprises, Inc.

(“Charge”) an electric vehicle company, is PTGi’s parent.5

There are three petitioning creditors: Acmetel, Omantel International

(“Omantel”), and TM Technology Services Sdn. Bhd (“TM”) (collectively, the

“Petitioning Creditors”). Each of the Petitioning Creditors had contracts to provide

telecommunications minutes to PTGi. On November 12, 2024, the date the

Petitioning Creditors filed the involuntary petition, PTGi owed Acmetel

$6,727,272.98, TM $11,271,903.42, and Omantel $11,980,720.91. PTGi does not

contest these amounts.

Arena is a secured creditor of PTGi. On May 19, 2021, Arena obtained a lien

on certain of PTGi’s assets in consideration for money Arena loaned to Charge

(“Charge’s Loan Agreement”).6 The parties amended and restated their Security

Agreement on December 17, 2021. On the same day, the parties entered into a

Guaranty Agreement, under which PTGi guaranteed repayment of Charge’s debt.7

4 Because the involuntary petition is dismissed, this Court does not need to address PTGi’s request

for abstention.

5 Charge is the debtor in a case pending in this Court (Case No. 24-10349 (TMH)).

6 D.I. 45 Ex. 4.

7 Id. Ex. 5.

Arena filed a UCC-1 financing statement on July 2, 2021.8 Arena, PTGi, and PNC

Bank (where PTGi’s cash is deposited) entered into a Deposit Account Control

Agreement (the “DACA”) on March 1, 2024.9 PTGi’s secretary and corporate

controller, Mr. Matthew Chee, testified at the hearing on this matter that PTGi

benefitted from this agreement in two ways.10 First, PTGi and Charge had a shared

services agreement, so Charge absorbed certain costs that PTGi would have had to

pay but did not.11 Second, Charge was able to use the funds to grow its business,

thus helping PTGi’s business grow.12

b. PTGi’s Winddown and Subsequent Litigation

On November 30, 2023, PTGi’s board of directors decided to cease providing

all services to customers effective December 1, 2023, and wind down the business.13

PTGi no longer has any employees or operations.14 Its only remaining assets are a

PNC Bank account containing about $964,000 and three uncashed checks totaling

about $166,000.15

On December 20, 2023, Acmetel initiated a lawsuit against PTGi in the

Unites States District Court for the Southern District of New York (the “District

Court”) to recover the debts owed to it.16 Acmetel asserted causes of action for

8 Motion for Relief from Stay [D.I. 8] Ex. B.

9 Id. Ex. C.

10 D.I. 61 at 12, 14.

11 Id. at 14.

12 Id.

13 Statement of PTGi International Carrier Services, Inc. in Connection with Amped I, LLC and

Amped II, LLC’s Motion for Relief from the Automatic Stay, 1 [D.I. 17].

14 2/20/2025 Tr. at 16.

15 D.I. 46 at 2.

16 Case No. 1:23-cv-11027-LJL.

breach of contract and unjust enrichment.17 Acmetel and PTGi entered into a

stipulated judgment on April 23, 2024, which the District Court entered that day,

and on May 24, 2024, the court entered an abstract of judgment in Acmetel’s

favor.18 However, Acmetel never obtained an execution or enforcement order to

perfect a judgment lien.19

On March 7, 2024, Charge commenced a voluntary chapter 11 case in this

Court.20 Because of Charge’s default on its payments to Arena and the lien PTGi

granted Arena under Charge’s Loan Agreement, Arena asserts a more than $196

million claim against PTGi.21 Arena holds an uncontested first-priority security lien

in PTGi’s remaining assets.22 Arena filed a notice of strict foreclosure on PTGi’s

assets.23 Acmetel objected to a strict foreclosure by letter to Arena on July 10,

2024.24 Thereafter and given Acmetel’s objection, Arena shifted to a public

foreclosure on PTGi’s assets and issued another notice thereof.25 Arena conducted a

public foreclosure under Article 9 of the New York Uniform Commercial Code on

August 9, 2024.26

On June 7, 2024, Acmetel served an Information Subpoena and Restraining

Notice upon PNC, requiring it not to transfer any funds held in PTGi’s account that

17 D.I. 47 at 11.

18 Id.; D.I. 45 at 6-7.

19 D.I. 45 at 5.

20 D.I. 47 at 9.

21 D.I. 46 at 2.

22 Id.

23 PTGi Ex. 26-29.

24 D.I. 47 Ex. B.

25 Id. Ex. C; D.I. 45 at 12; PTGi Ex. 26-29.

26 D.I. 45 at 12.

is subject to the DACA.27 PNC demanded that Arena obtain a court order lifting the

Restraining Notice before releasing the funds.28 On July 30, 2024, Arena filed a

motion to intervene in Acmetel’s New York action and a motion to quash or vacate

the Restraining Notice to honor its first priority lien.29

On October 10, 2024, the District Court issued an Opinion and Order

granting Arena’s motion to vacate.30 It found that because Arena submitted proof of

a valid first-priority, perfected lien on PTGi’s assets, Arena had a pre-existing right

to the money held at PNC.31 It explained that Acmetel had never obtained an order

to enforce its previous judgment, meaning it is an unsecured creditor.32 Meanwhile,

Arena had perfected its lien with a financing statement and a DACA and

subsequently attempted to enforce its lien through the foreclosure action.33 Further,

while the court said it was not considering equitable subordination, it opined that

Acmetel had not met any of the requirements that would be necessary to

successfully request equitable subordination.34 The court explained that Acmetel’s

allegations of inequitable conduct by Arena were “not sufficient,” and “conclusory[,]

and unpersuasive[.]”35 Thus, granting Acmetel’s request for equitable subordination

27 PTGi Ex. 26-29.

28 Id.

29 Acmetel USA LLC v. PTGi Int’l Carrier Servs., Inc., No. 23-CV-11027 (LJL), 2024 WL 4467174, at

*2 (S.D.N.Y. Oct. 10, 2024).

30 Id. at *9.

31 Id. at *8.

32 Id. at *5.

33 Id. at *2.

34 Id. at *7.

35 Id.

would be “subvert[ing] the entire priority scheme.”36 Accordingly, the court vacated

the Restraining Notice.37

Acmetel notified Arena, PTGi, and PNC that it would appeal, and requested

that PNC maintain a restriction on the funds until such litigation was completed.38

However, on the last day to file a notice of appeal, Acmetel and the other Petitioning

Creditors instead filed the involuntary petition.39

On January 10, 2025, PTGi filed the Motion to Dismiss. The Petitioning

Creditors objected, and on February 20, 2025, this Court conducted an evidentiary

hearing on the Motion to Dismiss. At the hearing, PTGi and the Petitioning

Creditors introduced various exhibits without objection. PTGi also presented the

testimony of Mr. Chee. The Petitioning Creditors presented no witnesses.

II. Analysis

a. Arena’s Joinder

As an initial matter, this Court determines that it may consider Arena’s

Joinder to PTGi’s Motion to Dismiss the Involuntary Petition.40 Acmetel is correct

that a creditor does not have standing to contest an involuntary bankruptcy filing.41

However, Arena does not seek to directly contest the bankruptcy filing; rather, it

merely joins PTGi’s motion. Despite non-petitioning creditors’ lack of standing to

36 Id.

37 Id. at *8.

38 D.I. 45 at 6.

39 Id. at 11.

40 D.I. 46.

41 11 U.S.C. § 303; see In re QDN, LLC, 363 F. App’x 873, 875-76 (3d Cir. 2010) (“Congress chose to

preclude creditors from opposing involuntary petitions because such opposition invariably was to

protect a preference or to gain some unfair advantage at the expense of other creditors, contrary to

the policy of providing equitable distribution of assets among all creditors.”).

contest the petition, other courts have allowed this type of joinder, albeit on an

uncontested basis.42 Courts have also considered a non-petitioning creditor’s

allegations that petitioning creditors have acted in bad faith.43 Furthermore,

Acmetel did not file a motion to strike Arena’s Joinder and instead simply raised

the argument in the course of briefing on the Motion to Dismiss. Nevertheless,

consideration of Arena’s Joinder does not affect the analysis of the Motion to

Dismiss, and the Court has not relied on Arena’s arguments in reaching today’s

decision.

b. Acmetel’s Bad Faith

In the Motion to Dismiss, PTGi argues that the Petitioning Creditors filed the

petition in bad faith because the factors enumerated by the United States Court of

Appeals for the Third Circuit in In re Forever Green Athletic Fields, Inc.44 weigh

towards a finding of bad faith. The Petitioning Creditors counter that they filed the

petition in the interests of all creditors rather than to obtain a disproportionate

advantage, the case would serve a bankruptcy purpose and would benefit from the

bankruptcy forum because of the availability of a chapter 7 trustee to conduct

investigations. They also allege there were preferential and fraudulent transfers

among PTGi, Arena, and Charge prior to the filing of the petition. When pressed at

oral argument on what tools a chapter 7 trustee would possess that are not

42 See In re Amanat, 321 B.R. 30, 33 (Bankr. S.D.N.Y. 2005) (allowing a non-petitioning creditor to

join in the debtor’s motion to dismiss the involuntary petition); In re O’Reilly & Collins, No. 12-

33016DM, 2013 WL 4548260, at *1 (Bankr. N.D. Cal. Aug. 26, 2013) (same).

43 In re Houston Reg’l Sports Network, L.P., 505 B.R. 468 (Bankr. S.D. Tex. 2014) (finding that a non-

petitioning creditor did not have standing to contest the involuntary petition but considering its

allegations of bad faith on the part of the petitioning creditors).

44 804 F.3d 328 (3d Cir. 2015).

available outside of bankruptcy, the Petitioning Creditors pointed to equitable

subordination.45 This Court finds that Acmetel filed the involuntary petition in bad

faith because Acmetel is attempting to use it as a litigation tactic, to obtain a

disproportionate advantage for themselves, and as a substitute for customary debt-

collection procedures, and because the filing had suspicious timing.

The Bankruptcy Code establishes certain requirements that an involuntary

petition must satisfy to proceed if a proposed debtor has 12 or more creditors: 1)

there must be three or more petitioning creditors; 2) each petitioning creditor must

hold a claim against the debtor that is not contingent as to liability or the subject of

a bona fide dispute; and 3) the claims must aggregate at least $15,325 more than

the value of liens on the debtor’s property.46 PTGi does not contest that these

elements are satisfied. Courts presume that petitioning creditors file an involuntary

petition in good faith and that the involuntary petition is meritorious.47

However, the Third Circuit has held that bad faith provides a basis to dismiss

an involuntary petition even where the alleged debtor meets the statutory

requirements for an involuntary petition and is not paying its debts as they become

due.48 In In re Forever Green Athletic Fields, Inc., the Third Circuit set forth the test

for determining whether a petitioning creditor has filed an involuntary petition in

bad faith.49 The court adopted a “totality of the circumstances” approach to

45 2/20/2025 Tr. 60:2–24 [D.I. 61].

46 11 U.S.C. § 303; see also In re Forever Green, 804 F.3d at 333 (reiterating section 303’s

requirements).

47 In re Forever Green, 804 F.3d at 335.

48 Id. at 333-34.

49 Id. at 336.

reviewing the good faith of an involuntary petition.50 It explained that some factors

to consider in making such a determination include

whether: the creditors satisfied the statutory criteria for filing the

petition; the involuntary petition was meritorious; the creditors made a

reasonable inquiry into the relevant facts and pertinent law before

filing; there was evidence of preferential payments to certain creditors

or of dissipation of the debtor’s assets; the filing was motivated by ill will

or a desire to harass; the petitioning creditors used the filing to obtain a

disproportionate advantage for themselves rather than to protect

against other creditors doing the same; the filing was used as a tactical

advantage in pending actions; the filing was used as a substitute for

customary debt-collection procedures; and the filing had suspicious

timing.51

To dismiss the petition based on the bad faith of a petitioning creditor, the debtor

must show bad faith by a preponderance of the evidence.

Here, while PTGi admits that the involuntary petition meets the statutory

requirements, it is not paying its debts as they become due, and the petition is

meritorious, various factors indicate that Acmetel filed the petition in bad faith.

First, Acmetel is attempting to use the bankruptcy process as a litigation tactic in

the wake of its loss in the New York Action. Courts (including this Court) have held

that even if petitioning creditors have met the numerosity requirement, one of the

petitioning creditors may have spearheaded the involuntary petition and convinced

enough creditors to join their petition.52 In In re Metrogate, LLC,53 this Court found

that while the petitioning creditors met the numerosity requirement, the dispute

50 Id.

51 Id.

52 See, e.g., In re Metrogate, LLC, No. 15-12593 (KJC), 2016 WL 3150177, at *14 (Bankr. D. Del. May

26, 2016); In re Spade, 258 B.R. 221, 234-35 (Bankr. D. Colo.), aff’d, 269 B.R. 225 (D. Colo. 2001); In

re Starlite Houseboats, Inc., 426 B.R. 375, 388 (Bankr. D. Kan. 2010).

53 2016 WL 3150177.

was functionally a two-party dispute.54 It explained that there was “a single

recalcitrant creditor who is more concerned with a collection action than with the

alleged debtor’s well-being as a going concern.”55 It continued to explain that

avoiding this kind of recalcitrant debtor is a strong reason behind the numerosity

requirement.56

Similarly, here, while Acmetel recruited two other creditors to join the

involuntary petition, doing so appears to have been to meet the technical

requirement of numerosity. Like the creditors in In re Metrogate, LLC, neither

Omantel nor TM took any action to pursue its debts prior to the filing of this

involuntary petition.57 Further, while all three Petitioning Creditors have been

responsive to the proceedings, they also all have one counsel; Omantel and TM have

not participated individually before this Court in any way that would differentiate

them or show that they participated for any reason other than to meet the

numerosity of creditors requirement under Bankruptcy Code section 303(b).58 Even

the Petitioning Creditor’s responses on this matter focus on Acmetel’s role in the

proceedings by speaking at length about Acmetel’s New York Action and only

mentioning Omantel and TM to introduce them as parties, briefly describe their

54 Id. at *14.

55 Id.

56 Id. at *14, n.61 (“‘[The numerosity] requirements are based on strong policy considerations, which

include the fear that one or two recalcitrant creditors might file an involuntary case to harass a

debtor.’ 2 Collier on Bankruptcy ¶ 303.14[2] (citing In re Tichy Elec. Co., 332 B.R. 364, 377 (Bankr.

N.D. Iowa 2005)).”).

57 D.I. 61 at 17.

58 D.I. 47 at 1, 26.

contracts with PTGi, and say that their presence precludes the possibility that this

proceeding is a litigation tactic by Acmetel.59

Second, Acmetel filed the petition in bad faith as a substitute for debt-

collection procedures and to gain a disproportionate advantage for themselves

rather than to protect against other creditors doing the same. Acmetel had already

litigated its dispute with Arena in the Southern District of New York, and the

District Court ruled against Acmetel.60 It is true that Acmetel and PTGi entered

into a stipulated judgment, but Acmetel failed to take any action to enforce that

judgment.61 In doing so, Acmetel remained an unsecured creditor. The Southern

District of New York then confirmed that Arena had an uncontested first-priority,

perfected security lien on PTGi’s assets and that Acmetel had failed to take action

to enforce the judgment.62 Acmetel told Arena and PTGi that it planned to appeal

that ruling, but instead of pursuing an appeal, Acmetel decided to try its luck

here.63 Acmetel began its debt-collection process in the Southern District of New

York. Its failure to successfully obtain a first-priority lien in that forum does not

justify the change to this forum and use of the bankruptcy process except to seek a

disproportionate advantage for Acmetel.64

59 See D.I. 47 (Petitioning Creditors’ Response).

60 Acmetel USA LLC, 2024 WL 4467174, at *9.

61 Id. at *8.

62 Id. at *5.

63 D.I. 45 at 6.

64 Cf. In re Park Place Dev. Primary, LLC., No. 21-10849 (CSS), 2021 WL 5072976, at *11-12 (Bankr.

D. Del. Nov. 2, 2021) (finding that the petitioning creditors filed the involuntary petition to stay the

foreclosure action, so they did not have to file answers, and in hopes of expediting a resolution,

meaning the petitioning creditors filed the petition for a disproportionate advantage and as a

substitute for debt-collection).

Third, the timing of the filing is suspect. The Petitioning Creditors filed the

involuntary petition on the last day that Acmetel could have filed an appeal in the

New York Action.65 This timing further supports the conclusion that Acmetel is

attempting to use the bankruptcy process as a litigation tactic, for a

disproportionate advantage, and as a substitute for debt-collection procedures.

Courts have found the timing suspicious in cases where petitioning creditors file the

involuntary petition multiple days or even weeks before a filing is due in a separate

action.66 Under these criteria, the timing of Petitioning Creditors’ filing the same

day Acmetel’s notice of appeal was due is suspicious.

Acmetel’s counterarguments fail to rebut the weight of these factors. Acmetel

attempts to argue that it is pursuing the involuntary filing for the benefit of all

creditors. The Petitioning Creditors’ counsel told this Court that other creditors

have contacted them regarding potentially joining the involuntary petition but did

not seek to introduce any evidence of such communications.67 Review of the docket

shows that no other creditors have thus far sought redress for their rights against

PTGi since the commencement of the case more than four months ago. Additionally,

Acmetel claims that it is pursuing the involuntary filing to prevent Arena from

obtaining a disproportionate advantage, but Arena’s first-priority, perfected lien is

65 D.I. 45 at 6.

66 In re Forever Green, 804 F.3d at 337 (finding the timing of the filing suspicious when it was two

weeks before a brief in another action was due); In re Park Place, 2021 WL 5072976, at *12 (finding

the timing of filing suspicious when it was two days prior to a deadline to respond in another action).

67 D.I. 47 at 3.

not a disproportionate advantage where it was validly obtained and upheld by a

court of competent jurisdiction.68

Acmetel next contends that the circumstances of the case justify a chapter 7

trustee to investigate PTGi’s activities, its relationship with Arena, and possible

preferential or fraudulent transfers, and it contends that the estate would be served

by this Court’s ability to order equitable subordination of Arena’s claim. While this

Court does not decide today the merits of whether preferential or fraudulent

transfers existed between PTGi and Arena, Acmetel has not even presented

sufficient evidence to suggest that a chapter 7 trustee investigating these

transactions would be beneficial to the estate. On the contrary, at the hearing on

this matter, Mr. Chee provided testimony that at all relevant times, Arena and

PTGi had an arms-length relationship.69 He testified that no one from Arena served

as a director or officer of or asserted any control over PTGi or its parent, Charge.70

Further, Arena never held any interest in PTGi, and while it held interest in

Charge, that interest was capped at 9.99% in nonvoting stock.71 All of this evidence

is unrebutted.

Similarly, Acmetel has not provided sufficient evidence to suggest that the

estate would benefit through the Bankruptcy Court’s power to impose the remedy of

equitable subordination. As in the New York Action, Acmetel has only made

68 Acmetel USA LLC, 2024 WL 4467174, at *5.

69 2/20/25 Tr. at 14-15.

70 Id.

71 D.I. 45 at 3; PTGi Ex. 22 (reporting Arena’s equity ownership in Charge as 9.99% at the time the

parties entered into DACA); PTGi Ex. 23 (limiting Arena’s potential equity ownership in Charge to

9.99%).

unsubstantiated allegations to suggest that these conclusory statements may be

true.72 While it has had months since the District Court’s opinion, Acmetel did not

come forward with any evidence at all that would suggest that there is any basis

upon which a chapter 7 trustee could pursue claims of equitable subordination so as

to justify use of the bankruptcy process. Proceeding further would not serve a

proper bankruptcy purpose, further supporting the decision to dismiss the

petition.73

PTGi has shown by a preponderance of the evidence that Acmetel filed the

involuntary petition in bad faith, so this Court dismisses the involuntary petition.

While there are still two other petitioning creditors, the Bankruptcy Code requires

at least three petitioning creditors. The Petitioning Creditors assert that other

creditors have contacted counsel about joining the petition, but the time to do so has

passed.74 Therefore, even if Omantel and TM were to find another creditor to join

the petition at this point, it would be too late.75 The petition is dismissed.

c. Attorneys’ Fees

PTGi requests that this Court award its attorney’s fees. 11 U.S.C. § 303(i)

provides that

If the court dismisses a petition under this section other than on consent

of all petitioners and the debtor, and if the debtor does not waive the

72 Acmetel USA LLC, 2024 WL 4467174, at *8.

73 In re Silverman, 230 B.R. 46, 53 (Bankr. D.N.J. 1998) (finding that the petitioning creditor sought

to gain a litigation advantage, which meant the intent of the involuntary petition was to serve an

improper purpose).

74 11 U.S.C. § 303(c) (delineating that other creditors may join the petition after it has been filed but

before the case is dismissed or relief is ordered).

75 In re Forever Green, 804 F.3d at 337 (holding that while there were two creditors remaining whose

filing the court had not found to be in bad faith, they did not meet the numerosity requirement, and

no more could join at the late stage in the proceedings).

right to judgment under this subsection, the court may grant

judgment—...

(2) against any petitioner that filed the petition in bad faith, for—

(A) any damages proximately caused by such filing|.|76

Because Acmetel filed the involuntary petition in bad faith, this Court awards

against Acmetel and in favor of PTGi attorneys’ fees and costs incurred in

connection with this filing, without prejudice to PTGi’s ability to seek punitive

damages or any damages proximately caused by the involuntary petition, if any.

PTGi should not have to bear the costs of Acmetel’s bad faith.

CONCLUSION

PTGi’s Motion to Dismiss and its request for attorneys’ fees and costs are

granted. The parties are directed to settle an appropriate form of order and submit

it to this Court under certification of counsel within five business days of the entry

of this Opinion.

wade Wh. Hoe

Dated: March 14, 2025 ThomasM.Horan ————<C~S—C—

Wilmington, Delaware United States Bankruptcy Judge

U.S.C. § 303@).

15