# Cohen v. SN Servicing Corporation as servicer for U.S. Bank Trust National Association, as Trustee of the SCIG Series III Trust

> District Court, E.D. New York · August 11, 2025

URL: https://www.frixlaw.com/law-library/cases/11118563

## Case

- **Court:** District Court, E.D. New York
- **Decided:** August 11, 2025
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------------------------------X
In re: DUANE EDWARD COHEN,
Debtor-Appellant,
MEMORANDUM
AND ORDER
v. 24-CV-7962-SJB
SN SERVICING CORPORATION AS SERVICER
FOR U.S. BANK TRUST ASSOCIATION, AS
TRUSTEE OF THE SCIG SERIES III TRUST,
Creditor-Appellee.
---------------------------------------------------------------X
BULSARA, United States District Judge:
Duane Edward Cohen appeals a Bankruptcy Court order that retroactively
annulled the automatic stay resulting from Cohen’s filing of a second bankruptcy
petition, which was initiated for the sole purpose of frustrating a foreclosure sale. For
the reasons that follow, the decision of the Bankruptcy Court is affirmed.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
This case originates from a foreclosure of Cohen’s property located in Mount
Sinai, New York (the “Property”). (Br. of Debtor-Appellant dated Feb. 12, 2025
(“Appellant Br.”), Dkt. No. 7 at 3; Br. of Appellee-Creditor dated Mar. 17, 2025
(“Appellee Br.”), Dkt. No. 9 at 1). On July 14, 2020, U.S. Bank Trust Association, as
Trustee of the SCIG Series III Trust (“U.S. Bank”), commenced a foreclosure action on
the Property; a judgment of foreclosure and sale was entered in its favor on May 12,
2023. (Judgment of Foreclosure and Sale dated May 9, 2023 (“JFS”), attached as Ex. B to
Creditor Mot. for Order Confirming Absence of Automatic Stay, Case No. 8:24-73464,
Bankr. E.D.N.Y., Dkt. No. 12-3 at 1). On August 7, 2023, Cohen filed his first Chapter 13
bankruptcy case (the “2023 Case”). (Appellant Br. at 3; Ch. 13 Voluntary Pet. dated
Aug. 1, 2023, Case No. 8:23-72870, Bankr. E.D.N.Y., Dkt. No. 1). This filing of the 2023

Case triggered an automatic stay that prevented U.S. Bank from proceeding with the
foreclosure sale. (Appellee Br. at 1); 11 U.S.C. § 362(a). On June 24, 2024, and following
a motion filed by U.S. Bank, United States Bankruptcy Judge Robert E. Grossman lifted
the automatic stay. (Order dated June 24, 2024, Case No. 8:23-72870, Bankr. E.D.N.Y.,
Dkt. No. 30).
Acting on that order—which Cohen did not challenge or appeal—U.S. Bank

scheduled a foreclosure sale for September 11, 2024. (Appellee Br. at 2; see Tr. dated
Oct. 30, 2024 (“Oct. 2024 Tr.”), attached as Ex. A to Appellant Br., Dkt. No. 7-1 at 7:24–
8:4). Cohen then filed a second Chapter 13 bankruptcy case on September 9, 2024 (the
“2024 Case”), in an effort to delay the sale by triggering another automatic stay. (Ch. 13
Voluntary Pet. dated Sept. 9, 2024, Case No. 8:24-73464, Bankr. E.D.N.Y., Dkt. No. 1;
Appellant Br. at 3–4). Cohen’s 2023 Case was still open when he filed the 2024 Case.
(See Oct. 2024 Tr. at 6:7–10, 8:20–25). U.S. Bank proceeded with the foreclosure sale on

September 11, 2024, and shortly thereafter filed a motion in the 2024 Case to confirm
that no Section 362(a) automatic stay took effect upon Cohen’s filing of that action or,
alternatively, to retroactively annul any such stay. (Appellee Br. at 2; Mot. to Confirm
Absence of Automatic Stay dated Sept. 24, 2024 (“2024 Stay Mot.”), Case No. 8:24-73464,
Bankr. E.D.N.Y., Dkt. No. 12-1).
The Bankruptcy Court heard oral argument and granted U.S. Bank’s motion,
holding that Cohen’s 2024 Case did not trigger an automatic stay barring the
foreclosure sale. (Oct. 2024 Tr. at 11:24–12:8; Order Confirming Absence of Automatic

Stay dated Nov. 5, 2024 (“Nov. 2024 Order”), Case No. 8:24-73464, Bankr. E.D.N.Y., Dkt.
No. 25). The Court found that Cohen’s initiation of the 2024 Case was
“clearly . . . unsupported by the law,” explaining that “there’s nothing in the statutes
that permit[ted]” Cohen’s second case while the first one was pending. (Oct. 2024 Tr. at
9:1–2, 11:25–12:7). Following the hearing, the Bankruptcy Court issued an Order that
provided: “[the] automatic stay imposed under 11 U.S.C. § 362(a) did not take effect

upon the filing of the Debtor’s current bankruptcy petition on September 9, 2024 . . . as
it relates to Movant’s interests in the real property known as 55 Plymouth Avenue,
Mount Sinai, NY 11766.” (Nov. 2024 Order). In the same Order, the Court dismissed
the 2024 Case. (Id.).
Cohen’s appeal of the Nov. 2024 Order timely followed. (Not. of Appeal from
Bankruptcy Court dated Nov. 14, 2024, Dkt. No. 1); Fed. R. Bankr. P. 8002(a)(1).
DISCUSSION

“Bankruptcy court decisions are subject to appellate review in the first instance
by the district court, pursuant to the statutory scheme articulated in 28 U.S.C. § 158.” In
re Anderson, 884 F.3d 382, 387 (2d Cir. 2018). “Because this scheme requires district
courts to operate as appellate courts,” district courts apply the same standard of review
as the circuit courts. Id. That is, a bankruptcy court’s legal conclusions are reviewed de
novo and its factual findings are reviewed for clear error. Id.; In re Nordlicht, 115 F.4th
90, 104 (2d Cir. 2024). Discretionary rulings, however, are reviewed for abuse of
discretion.1 Nordlicht, 115 F.4th at 104. “A bankruptcy court abuses its discretion when
its decision ‘rests on an error of law . . . or a clearly erroneous factual finding,’ or

‘cannot be located within the range of permissible decisions.’” Id. (quoting In re Aquatic
Dev. Grp., Inc., 352 F.3d 671, 678 (2d Cir. 2003)) (alterations omitted).
Here, Cohen’s appeal seeks review of an Order that “confirm[ed] [the] absence of
the automatic stay,” and dismissed the 2024 Case. (Nov. 2024 Order). The Order does
not cite any authority or provision of the Bankruptcy Code, other than the general
automatic stay provision. (See id.). The effect of the Order was to retroactively annul

the automatic stay created by the filing of the 2024 Case, and thereby bless the
foreclosure sale, which would otherwise be invalid.
Although the Second Circuit has not articulated the standard for a district court’s
review of a bankruptcy court’s decision to retroactively annul a stay, the Circuit itself
reviews such decisions for an abuse of discretion. Aquatic, 352 F.3d at 678–79.
Consistent with the principle that district courts here sit as appellate courts, supra at 3,
other courts have reviewed decisions to annul stays retroactively against that same

standard. See In re Newton, No. 16-BR-11304, 2020 WL 2731995, at *10 (S.D.N.Y. May 26,

1 “In reviewing a decision of a bankruptcy court, the district court may affirm on
any ground that finds support in the record, and need not limit its review to the bases
raised or relied upon in the decisions below.” Sec. Inv. Prot. Corp. v. Bernard L. Madoff
Inv. Sec. LLC, 598 B.R. 102, 111 (S.D.N.Y. 2019) (quotations and citation omitted), aff’d
sub nom. In re Bernard L. Madoff Inv. Sec. LLC, 818 F. App’x 48 (2d Cir. 2020); see also
Collins v. J&N Rest. Assocs., Inc., 676 F. App’x 18, 19 (2d Cir. 2017) (“We review the
bankruptcy court’s legal conclusions de novo and its factual findings for clear error, but
may affirm on any ground supported by the record.”).
2020); In re Jean-Francois, 516 B.R. 699, 703 (E.D.N.Y. Sep. 29, 2014) (collecting cases).
This Court therefore reviews the Order for an abuse of discretion.
The Bankruptcy Court’s Order—“confirming [the] absence of the automatic stay”

upon the initiation of the 2024 Case and dismissing it—does not use the word
“annulment.” (Nov. 2024 Order). But that was its effect. The Order removed, after the
fact, the only obstacle to the foreclosure sale’s validity—that it took place during the
automatic stay. E. Refractories Co. Inc. v. Forty Eight Insulations Inc., 157 F.3d 169, 172 (2d
Cir. 1998) (“[A]n order “annulling” a stay . . . reaches back in time to validate
proceedings or actions that would otherwise be deemed void ab initio.”); see also

Koutsagelos v. PII SAM, LLC, No. 12-CV-1703, 2013 WL 2898120, at *3 (E.D.N.Y. June 13,
2013) (“An ‘annulment’ of the automatic stay grants retroactive relief, thereby
validating past proceedings or actions that would otherwise be deemed void.”).
(Indeed, the Bankruptcy Court granted U.S. Bank’s motion, which sought in the
alternative “retroactive relief from the automatic stay[.]” (2024 Stay Mot. at 1)).
Section 362(d) of the Bankruptcy Code provides a mechanism to annul the
automatic stay triggered by the filing of a bankruptcy petition. 11 U.S.C. § 362(d). And

“section 362(d)(4) addresses conduct that could be indicative of an abusive bankruptcy
filing in relation to a real property foreclosure.” 3 Collier on Bankruptcy ¶ 362.05(19)(a)
(16th ed. 2025). It provides that a court may annul a stay if “the court finds that the
filing of the petition was part of a scheme to delay, hinder, or defraud creditors that
involved . . . multiple bankruptcy filings affecting . . . real property.” 11 U.S.C.
§ 362(d)(4); see also In re Newton, No. 16-BR-11304, 2020 WL 2731995, at *7 (S.D.N.Y. May
26, 2020). “[T]he apparent purpose of this provision . . . is to provide a remedy for
addressing the abusive practices of certain ‘mortgage consultants’ and ‘foreclosure
specialists’ involving serial bankruptcy filings to delay home foreclosures and whose

intent is to defraud creditors.” 3 Collier on Bankruptcy ¶ 362.05(19)(a). “[T]he filing of
multiple bankruptcy cases by the debtor or others holding an interest in the property
for the purpose of delaying a foreclosure could be part of the requisite scheme.” Id.
While relief under Section 362(d)(4)(B) often entails more than two bankruptcy filings—
which is all there were here—“[t]he number of filings is only one factor that the court
must weigh in determining whether relief under § 362(d)(4) is warranted. The timing

and sequencing of the filings is also significant.” In re Richmond, 516 B.R. 229, 235
(Bankr. E.D.N.Y. 2014) (quotations and citation omitted).
Though the Bankruptcy Court did not cite § 362(d)(4)(B) in its Order, it set forth
sufficient factual findings to satisfy the standards under that provision.2 The
Bankruptcy Court noted that Cohen filed the 2024 Case with knowledge that the 2023
Case remained open, (Oct. 2024 Tr. at 5:13–14); by doing so, violated the Order lifting
the automatic stay in the 2023 Case, (id. at 6:4–6); and filed a second bankruptcy case

2 “Under the rules governing proceedings in the bankruptcy courts, Rule 52(a) of
the Federal Rules of Civil Procedure applies to the resolution of a dispute over a request
for relief from the automatic stay.” In re Mazzeo, 167 F.3d 139, 142 (2d Cir. 1999). “Rule
52(a) provides, in pertinent part, that ‘[i]n all actions tried upon the facts without a jury
or with an advisory jury, the court shall find the facts specially and state separately its
conclusions of law[.]’” Id. The Bankruptcy Court’s failure to cite to any provision of
Section 362, other than subsection (a) (see Nov. 2024 Order), does not preclude this
Court from affirming the decision: there need only be “enough solid facts from the
record” to permit appellate review. Eng. v. Town of Huntington, 448 F.2d 319, 321 (2d
Cir. 1971); see also Weitzman v. Stein, 897 F.2d 653, 658 (2d Cir. 1990).
without any legal basis, (id. at 8:12–19). The timing of the 2024 Case—brought two days
prior to the sale—was intended to prevent the foreclosure. (Id. at 6:9–10 (“He filed that
case to stop a foreclosure sale[.]”), 10:6–7). Cohen took these steps despite having

ample options in the 2023 Case to delay the sale. (Id. at 6:10–12, 8:1–2, 8:20–25).3
“The existence of multiple cases may indicate an exploitation of the bankruptcy
process and an attempt at reimposing the automatic stay after it had been previously
lifted.” In re Turner, 207 B.R. 373, 379 (B.A.P. 2d Cir. 1997) (collecting cases); see also In re
Felberman, 196 B.R. 678, 681 (Bankr. S.D.N.Y. 1995) (“The filing of a bankruptcy petition
merely to prevent foreclosure, without the ability or the intention to reorganize, is an

abuse of the Bankruptcy Code.”). In addition, “the timing of [D]ebtor’s filing[s]
evidences an intent to delay or frustrate the legitimate efforts of [Creditors] to enforce
their rights.” In re C-TC 9th Ave. P’ship, 113 F.3d 1304, 1311 (2d Cir. 1997).4 Concluding,

3 Indeed, Cohen himself now concedes that he filed the 2024 Case to “forestall the
[foreclosure] sale, and while the first Chapter 13 [action] was still pending[.]”
(Appellant Br. at 3).

4 Though the Bankruptcy Court indicated it was not going to delve into whether
Cohen’s actions were taken “in . . . good faith or not” and it was “not going to get into
[Cohen’s] mindset,” (Oct. 2024 Tr. at 12:1–3), the record suggests bad faith conduct. But
in any event, bad faith is not required to retroactively annul an automatic stay pursuant
to § 362(d)(4). See In re Blair, No. 09-76150, 2009 WL 5203738, at *4 (Bankr. E.D.N.Y. Dec.
21, 2009) (“[T]his Court [has] joined those courts which hold that the mere timing and
filing of several bankruptcy cases is an adequate basis from which a court can draw a
permissible inference that the filing of a subsequent case was part of a scheme to hinder,
delay, and defraud creditors.”); In re Kearns, 616 B.R. 458, 467 (Bankr. W.D.N.Y. 2020):

It is well-settled that a debtor need not admit to having engaged in a scheme
to hinder or delay creditors—the Court can draw an inference of a debtor’s
intent to hinder or delay from the filing of several bankruptcy cases, and
the timing of those filings. Courts have consistently recognized that
repeated bankruptcy filings made on the eve of successive foreclosure
under all of these circumstances, that no stay was in place following the initiation of the
2024 Case was, therefore, not an abuse of discretion.5 See, e.g., In re Richmond, 513 B.R.
34, 38 (Bankr. E.D.N.Y. 2014):

Here, Lyceum's chapter 11 filing, timed to stop P.B.’s foreclosure sale, was
followed by the Debtor’s chapter 13 filing, shortly after the stay was lifted
in Lyceum’s case. Both the Debtor’s and Lyceum’s filings were on the eve
of significant events in the foreclosure action. Lyceum filed its case on the
eve of a foreclosure sale and the Debtor’s case was filed on the eve of the
return date of P.B.’s motion in state court to file a notice of foreclosure sale.
The timing of both filings permits an inference that the Debtor is attempting
to hinder or delay P.B.’s efforts to enforce the Foreclosure Judgment.

Despite citing to Turner, Cohen nonetheless contends that the Bankruptcy Court
erred in finding that the 2024 Case did not trigger an automatic stay. (Appellant Br. at
9–10, 13–14). This position has no merit. Cohen does not dispute any of the Bankruptcy
Court’s factual findings—about the timing of the second case; the procedural posture
under which it was brought; or the illicit purpose to avoid the foreclosure sale and the
prior Order lifting the stay in the 2023 Case. (See generally id.). All he offers is a baseless
legal argument. First, he cites to generic authority about foreclosure sales being void if
filed in violation of an automatic stay. (Id. at 6–9). None of these cases involved a

attempts constitute strong evidence of an intent to delay and hinder secured
creditors from collection.

(quotations and citation omitted) (collecting cases).

5 Though some courts evaluate the seven factors articulated in In re Stockwell, 262
B.R. 276 (Bankr. D. Vt. 2001) to determine, as a general matter, whether retroactive relief
from an automatic stay is warranted, see In re Crichlow, 666 B.R. 441, 451 (Bankr.
E.D.N.Y. 2024), the record here is insufficient to enable such review. Regardless,
however, those factors need not all be satisfied to achieve relief under the more specific
Section 362(d)(4).
second petition filed during the pendency of a related bankruptcy case, and none
address a bankruptcy court’s ability to nullify retroactively a stay in the face of a second
petition (and a prior order lifting the stay). Second, Cohen cites to Federal Rule of

Bankruptcy Procedure 1014(b), which he says contemplates the existence of multiple or
successive bankruptcy petitions. (Id. at 10). As a corollary, he cites to In re Barnes,
which Cohen argues requires the automatic stay to take effect until the second petition
is found to be in bad faith. (Id. at 10 (citing 231 B.R. 482 (E.D.N.Y. 1999)). Nothing
about Barnes is relevant here: a second petition’s automatic stay does have effect, until it
is annulled retroactively. That is precisely why U.S. Bank had to file a motion,

following the foreclosure sale, to validate what would otherwise have been an
unauthorized transaction.6
Finally, Cohen contends that when a creditor has knowledge of an automatic
stay—because of the filing of a second petition—it must first go to court to lift the stay,
and cannot seek retroactive annulment. (Appellant Br. at 12–13). Cohen is arguing, in
essence, that a bankruptcy court’s power to annul only exists if it finds the creditor
violated the stay innocently or unknowingly. No case stands for such a proposition;

6 Cohen’s reliance on In re Fogarty, 39 F.4th 62 (2d Cir. 2022) is misplaced. In
Fogerty there was no second petition and no motion to lift the stay. Id. at 78 (“[I]f
Bayview wanted to proceed with the Sale after Fogarty filed her bankruptcy petition, its
proper course of action was to seek and obtain relief from the automatic stay pursuant
to Section 362(d).”). That makes all the difference: had U.S. Bank proceeded with the
sale without successfully moving to lift the automatic stay in the 2023 Case, the
Bankruptcy Court could not have retroactively blessed the transaction through
annulment, because the original stay would have remained in place.
and nothing in Section 362(d)(4)(B) turns on a creditor’s knowledge.7 See In re Aki Oya,
No. 19-1095, 2019 WL 5390007, at *4–*5 (B.A.P. 9th Cir. Oct. 18, 2019) (“This Panel
has . . . affirmed bankruptcy court decisions retroactively annulling the automatic stay,

even when the creditor had (or allegedly had) knowledge of the debtor’s bankruptcy
filing prior to acting. The creditor’s knowledge is just one factor to consider in
weighing the equities of the case.”).
Accordingly, the Court concludes that the Bankruptcy Court did not abuse its
discretion in confirming the absence of—and effectively annulling—the automatic stay
arising from the 2024 Case. E.g., In re Estavan Cap. LLC, No. 15-1084, 2015 WL 7758494,

at *3–*4, *7 (B.A.P. 9th Cir. Dec. 1, 2015) (affirming annulment of stay under Section
362(d)(4)(B)); Rodriguez v. Murphy, No. 13-CV-23363, 2014 WL 1414424, at *3–*5 (S.D.
Fla. Apr. 11, 2014) (affirming bankruptcy court’s denial of motion to reconsider its

7 Cohen cites to Turner and other cases where the creditor did not have
knowledge of the stay. (Appellant Br. at 13; Reply Br. of Debtor-Appellant dated Apr.
9, 2025 (“Reply Br.”), Dkt. No. 11 at 4–6). But citing to cases where a creditor lacked
knowledge does not establish that it is a prerequisite for annulment relief.
Cohen also argues that In re Soares sets forth that requirement. (Reply Br. at 2–3).
It does no such thing. Soares only notes that innocent creditors may qualify for
annulment—not the converse. 107 F.3d 969, 977 (1st Cir. 1997) (“When a creditor
inadvertently violates the automatic stay in ignorance of a pending bankruptcy, courts
sometimes have afforded retroactive relief.”). And the cases that follow Soares to which
Cohen also cites—such as Crichlow, 666 B.R. at 450—only affirm the general principle
that “a determination to annul the automatic stay is inherently tied to the facts and
circumstances of the particular situation. That is, ‘[e]ach case is sui generis and must be
judged accordingly.’” Id. (quoting Soares, 107 F.3d at 977) (alteration in original). Under
that standard, having conceded the facts and circumstances found by the Bankruptcy
Court to justify annulment here, Cohen cannot demonstrate that the failure to consider
the U.S. Bank’s knowledge was legal error.
decision granting retroactive relief under Section 362(d)(4)(B) in light of multiple
bankruptcy petitions affecting the same property).
CONCLUSION

For the reasons stated above, the Bankruptcy Court’s November 5, 2024, Order is
affirmed. The Clerk of Court is directed to enter judgment consistent with this opinion
and close this case.

SO ORDERED.

/s/ Sanket J. Bulsara
Dated: August 11, 2025 SANKET J. BULSARA
Central Islip, New York United States District Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11118563. Public record. Not legal advice.