Opinion

UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF NEW YORK

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In re: Chapter 11

NRAD MEDICAL ASSOCIATES, P.C., Case No. 8-15-72898-las

Debtor.

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MEMORANDUM DECISION AND ORDER GRANTING

MOTION TO REOPEN DEBTOR’S CHAPTER 11 CASE

Before the Court is the second motion (the “Motion”) [Dkt. No. 677]1 of Alice Kim,

M.D.; David Kaplan, M.D.; Corrine Tobin, M.D.; Elizabeth Lustrin, M.D.; Jay Bosworth,

M.D.; Jed Pollack, M.D.; Colette Zito, as executor of the estate of Joseph Zito, M.D.; and

Julian Safir, M.D. (collectively, the “Movant Former Shareholders”)2, former shareholders

and creditors of the bankruptcy estate of the debtor, NRAD Medical Associates, P.C. (“NRAD”

or the “Debtor”), to reopen the bankruptcy case of the Debtor pursuant to 11 U.S.C. § 350(b).3

Specifically, the Movant Former Shareholders seek to reopen the bankruptcy case so as to

move the Court for derivative standing4 to bring suit on behalf of NRAD’s bankruptcy estate

against NRAD’s current shareholders, Robert V. Blake, M.D.; Paul D. Cayea, M.D.; Paul S.

1 Unless otherwise stated, court filings cited herein refer to the Chapter 11 bankruptcy case, In re

NRAD Medical Assocs., P.C., Case No. 8-15-72898-las, and citations to docket entries are cited as

“[Dkt. No. ____]”.

2 Alice Kim, M.D. and David Kaplan, M.D., who were among the Movant Former Shareholders, are no

longer being represented in this matter. On May 21, 2026, the Court entered the Order granting the

application of Meyer, Suozzi, English & Klein, P.C., counsel for the Movant Former Shareholders, to

withdraw as counsel of record for Alice Kim, M.D. and David Kaplan, M.D. [Dkt. No. 695]; see also

Mot. to Withdraw [Dkt. No. 690].

3 Hereinafter, title 11 of the United States Code is defined as the “Bankruptcy Code”; the Federal Rules

of Bankruptcy Procedure are defined as the “Bankruptcy Rules”; and the Local Bankruptcy Rules for

the United States Bankruptcy Court for the Eastern District of New York are defined as the “Local

Rules.”

4 In this Memorandum Decision and Order, the Court addresses the threshold issue of whether to

reopen the Debtor’s bankruptcy case and declines to rule on the proposed motion by the Movant

Former Shareholders, requesting derivative standing to sue the Current Shareholders on behalf of the

Debtor, or any issues related to whether the Movant Former Shareholders have waived their claims

to the MLMIC Proceeds.

Lang, M.D.; Robin Ehrenpreis, M.D.; Daniel Benjamin, M.D.; Gene Berkovich, M.D.; Eric

Schnipper, M.D.; and Paul Schorr, M.D. (collectively, the “Current Shareholders”) for

disgorgement of certain proceeds distributed to the Current Shareholders by NRAD in

connection with the demutualization of the Medical Liability Mutual Insurance Company

(the “MLMIC Proceeds”).

In the Motion, the Movant Former Shareholders argue that, in light of the Court’s

holding that the MLMIC Proceeds are property of the bankruptcy estate, “other cause” exists

pursuant to Bankruptcy Code Section 350(b) to reopen the Debtor’s case to enforce the Court’s

order (the “Confirmation Order”) [Dkt. No. 564], confirming the Debtor’s Second Amended

Chapter 11 Plan (the “Plan”) [Dkt. No. 496]. See Mem. of Law in Support of Mot. to Reopen

at 5 [Dkt. No. 677]. In addition, the Movant Former Shareholders argue that reopening the

Debtor’s case is necessary to allow them to bring certain causes of action against the Current

Shareholders to return the MLMIC Proceeds to the Debtor’s estate. Id. On the other hand,

the Debtor argues that its bankruptcy case should not be reopened because (1) the doctrine

of equitable mootness applies; (2) the Movant Former Shareholders waived their claims to

the MLMIC Proceeds because (i) they waived their claims pursuant to the NYU Transaction5,

(ii) they waived their claims by failing to pursue relief after the Court’s Summary Judgment

Decision (defined below), and (iii) they are not eligible to receive the MLMIC Proceeds

because they ceased being shareholders of NRAD before the Debtor’s petition date and the

MLMIC Proceeds are surplus proceeds; and (3) the claims of the Movant Former

5 By the end of 2017, NRAD owned Blue Dot Holdings, LLC, a holding company, which had a 52.8875%

interest in Meridian Imaging Group, LLC (“Meridian”). See JSF ¶ 47. On or about July 25, 2018,

NRAD transferred its ownership interest in Meridian to New York University School of Medicine

(“NYU”), and NRAD received its portion of the proceeds. See id. ¶ 67. “In or about July 2018, the

Former Shareholders each executed and delivered a Declaration and Release agreeing to receive

payment reflecting the 13.33% discount of their Maximum Distribution, and releasing any and all

claims against NYU.” Id. ¶66.

Shareholders are futile because they cannot plead or establish fraud. See Debtor’s Mem. of

Law in Opp. at 11-25 [Dkt. No. 680]. In reply, the Movant Former Shareholders argue, inter

alia, that (1) the Debtor’s plan has not been substantially consummated because a significant

sum of money now deemed by the Court to be property of the estate remains undistributed

in accordance with the Plan; (2) the Movant Former Shareholders have not waived their

claims; (3) the MLMIC Proceeds are not surplus proceeds but rather property of the estate,

and the Movant Former Shareholders are proceeding in their capacity as creditors of the

Debtor; and (4) the claims of the Movant Former Shareholders in a potential second

adversary proceeding are not futile but rather colorable. See Reply Mem. of Law in Further

Support to Reopen at 2-5 [Dkt. No. 684].

The Court has carefully reviewed the parties’ submissions and heard oral argument

on the Motion. For the reasons set forth below, the Court grants the Motion to reopen the

Debtor’s bankruptcy case.6

JURISDICTION

The Court has jurisdiction over this proceeding pursuant to 28 U.S.C. § 1334(b) and the

Standing Order of Reference of the United States District Court for the Eastern District of New

York, dated August 28, 1986 (Weinstein, C.J.), as amended by Order dated December 5, 2012

(Amon, C.J.) entered in accordance with 28 U.S.C. § 157(a).

BACKGROUND

This section incorporates by reference the facts set forth in the Court’s prior

memorandum decision and order dated January 26, 2024 (the “Summary Judgment

6 This Memorandum Decision and Order is consistent with the Court’s ruling on the Motion as set

forth on the record of the hearing held on May 19, 2026.

Decision”) [Adv. Dkt. No. 61]7, which was issued in the adversary proceeding Kim, et al. v.

NRAD Medical Assocs. P.C. within the Debtor’s Chapter 11 case. The facts set forth in the

Summary Judgement Decision were drawn from the Joint Statement of Undisputed Facts

(“JSF”) [Adv. Dkt. No. 47] filed by the parties pursuant to Bankruptcy Rule 7056 and Local

Rule 7056-1. In the Summary Judgment Decision, the Court granted plaintiffs’8 motion and

denied defendant’s motion as to plaintiffs’ first claim for relief, holding that the MLMIC

Proceeds were property of the Debtor’s bankruptcy estate. See Summ. J. Dec. at 18 [Adv. Dkt.

No. 61]. The Court also denied defendant’s motion as to plaintiffs’ second, third, fourth, and

fifth claims for relief, concluding that triable issues of fact exist and that defendant had not

demonstrated that no rational jury could find in favor of plaintiffs. See Summ. J. Dec. at 28

[Adv. Dkt. No. 61]. On February 9, 2024, the defendant filed a notice of appeal and a motion

for leave to appeal the Summary Judgment Decision [Adv. Dkt. Nos. 63-64] to the United

States District Court for the Eastern District of New York (the “District Court”). On March

28, 2024, the District Court entered an order denying the Debtor’s motion for leave to appeal

and remanded the matter to the bankruptcy court [Adv. Dkt. No. 71].9

On April 11, 2024, the Court held a pretrial conference, at which plaintiffs requested

entry of a judgment in accordance with the Summary Judgment Decision, which in their

minds obviated the need for a trial on the remaining counts in their complaint. See April 11

7 Court filings in the adversary proceeding cited herein refer to those made in the adversary proceeding

Kim, et al. v. NRAD Medical Assocs. P.C., Case No. 8-20-08157-las, and citations to docket entries are

cited as “[Adv. Dkt. No. ____]”. Capitalized terms used but not defined in this Memorandum Decision

and Order shall have the meanings assigned to such terms in the Summary Judgment Decision or the

Joint Statement of Undisputed Facts.

8 The plaintiffs in the adversary proceeding Kim, et al. v. NRAD Medical Assocs. P.C. were the Movant

Former Shareholders, and the defendant was NRAD.

9 On April 8, 2024, NRAD filed a motion requesting certification of an appeal and a notice of appeal to

the United States Court of Appeals for the Second Circuit (the “Second Circuit”). See NRAD Medical

Assocs. P.C. et al. v. Kim et al., No. 24-01032-GRB, at Dkt. Nos. 6-7. The District Court denied the

motion requesting certification of an appeal to the Second Circuit, and the parties filed a stipulation

agreeing to a withdrawal of the appeal, which was “So Ordered” by the Second Circuit on August 19,

2024. See [Adv. Dkt. No. 84].

2024 Hr’g Tr. 13:8-15, 15:7-16:13 [Adv. Dkt. No. 78]. Thereafter, plaintiffs filed a motion on

May 30, 2024, seeking entry of a proposed judgment on the first claim for relief, which

included directing the Current Shareholders to return the MLMIC Proceeds to the Debtor

and holding them jointly and severally liable in a money judgment in the amount of the

MLMIC Proceeds with interest. See Proposed J. ¶ 2-3 [Adv. Dkt. No. 79]. Defendant filed

opposition to the entry of plaintiffs’ proposed judgment on July 31, 2024 [Adv. Dkt. No. 82],

and plaintiffs filed a reply to defendant’s opposition on August 14, 2024 [Adv. Dkt. No. 83].

The Court held a hearing on plaintiffs’ motion for entry of judgment on August 22, 2024, and

defendant submitted a counter proposed judgment on September 5, 2024. See Order Entering

J. on Claim 1 [Adv. Dkt. No. 85]. On September 6, 2024, the Court entered a judgment in

plaintiffs’ favor on their first claim for relief, adjudging solely that the MLMIC Proceeds

constitute property of the Debtor’s bankruptcy estate based upon the Summary Judgement

Decision. See id. The adversary proceeding Kim, et al. v. NRAD Medical Assocs. P.C. was

closed on December 18, 2024. On April 23, 2025, the Movant Former Shareholders filed the

second motion to reopen the Debtor’s bankruptcy case. [Dkt. No. 677]. The Debtor filed

opposition to the Motion on July 18, 2025 [Dkt. Nos. 679-80], and the Movant Former

Shareholders filed a Reply Memorandum of Law in Further Support of the Motion on August

1, 2025 [Dkt. No. 684]. Subsequently, the Court heard oral argument on the Motion.

DISCUSSION

I. Legal Standard

Pursuant to Bankruptcy Code Section 350(b), a “case may be reopened in the court in

which such case was closed to administer assets, to accord relief to the debtor, or for other

cause.” 11 U.S.C. § 350(b). Bankruptcy Rule 5010 provides that “[o]n the debtor's or another

party in interest’s motion, the court may, under § 350(b), reopen a case.” Fed. R. Bankr. P.

5010.

“Ultimately, the decision to reopen a case is at the broad discretion of the bankruptcy

court.” In re Mancone, No. 18-36018 (KYP), 2026 WL 467326, at *3 (Bankr. S.D.N.Y. Feb. 18,

2026) (quoting In re HBLS, L.P., 468 B.R. 634, 638 (Bankr. S.D.N.Y. 2012)). “However, it is

an abuse of discretion to deny reopening where there appears to be property of the estate of

such ‘probability, administrability and substance . . . as to make it unreasonable under all

the circumstances for the court not to deal with [such property].’” In re Maeder, No. 8-12-

73429-ast, 2025 WL 3298322, at *3 (Bankr. E.D.N.Y. Nov. 26, 2025) (quoting In re Arana,

456 B.R. 161, 173 (Bankr. E.D.N.Y. 2011)); see also In re Dicks, 579 B.R. 704, 707-08 (Bankr.

E.D.N.Y. 2017) (citation omitted) (“[C]ourts have held that the court ‘has a duty to reopen

the case whenever there is proof that [it] has not been fully administered.’”); In re Riazuddin,

363 B.R. 177, 183-84 (B.A.P. 10th Cir. 2007) (citing In re Mullendore, 741 F.2d 306, 308 (10th

Cir. 1984)) (“[A]lthough the bankruptcy court has discretion in many instances whether to

reopen a bankruptcy case, it is the duty of the court to reopen a case whenever prima facie

proof is made that the estate has not been fully administered.”); 3 COLLIER ON BANKRUPTCY

¶ 350.03[1] (16th ed. 2026) (“Under section 350(b) and Rule 5010, the discovery of

unadministered assets, which was once the sole basis for reopening a case, continues to be a

sufficient reason for the court to exercise its power.”).

However, courts have held that a case should not be reopened if the relief sought from

reopening would be futile, reopening would result in a waste of judicial resources, or where

creditors are unlikely to reap any benefit from the addition of an unadministered asset. See

Gamez v. Lopez (In re Lopez), No. 23-326, 2023 WL 7485464, at *1 (2d Cir. Nov. 13, 2023)

(finding that the bankruptcy court did not abuse its discretion when determining that

reopening the case “would not result in the administration of any asset for the benefit of the

creditors of the estate”); In re Mohammed, 536 B.R. 351, 355 (Bankr. E.D.N.Y. 2015) (citation

omitted) (limiting the exercise of its discretion to reopen a case where relief may ultimately

not be granted and where reopening is futile or a waste of judicial resources); Arana, 456 B.R.

at 173 (“But if creditors are not likely to benefit from the addition of an asset, the balance

tips in the other direction, and relief may not be warranted.”).

Regarding “other cause” in Bankruptcy Code Section 350(b), the term “cause” is not

defined in the Bankruptcy Code, and “reopening a bankruptcy case under section 350(b) of

the Bankruptcy Code ‘invoke[s] the exercise of a bankruptcy court’s equitable powers, which

is dependent on the facts and circumstances of the case.’” In re Jones, No. 14-10143 (MG),

2025 WL 432843, at *2 (Bankr. S.D.N.Y. Feb. 6, 2025) (citation omitted) (quoting Katz v. I.A.

Alliance Corp. (In re I. Appel Corp.), 104 F. App'x 199, 200 (2d Cir. 2004)). “The burden is on

the movant to demonstrate ‘cause’ to reopen the bankruptcy case.” Id. (quoting In re Kim,

566 B.R. 9, 12 (Bankr. S.D.N.Y. 2017)). Courts in the Second Circuit have utilized certain

factors (the “Easley Factors”), when exercising their discretion to determine whether cause

exists to reopen a bankruptcy case:

(1) the length of time that the case was closed; (2) whether a nonbankruptcy

forum has jurisdiction to determine the issue which is the basis for reopening

the case; (3) whether in prior litigation the bankruptcy court determined that

a state court would be the appropriate forum; (4) whether any parties would

suffer prejudice should the court grant or deny the motion to reopen; (5) the

extent of the benefit to the debtor by reopening; and (6) whether it is clear at

the outset that no relief would be forthcoming by granting the motion to

reopen.

Id. (quoting In re Easley-Brooks, 487 B.R. 400, 407 (Bankr. S.D.N.Y. 2013)). “When weighing

these factors, a court should emphasize substance over technical considerations.” Id. (citing

In re Atari, Inc., No. 13-10176 (JLG), 2016 WL 1618346, at *4 (Bankr. S.D.N.Y. Apr. 20,

2016)). In addition, courts have considered the benefit to creditors of the estate. See Arana,

456 B.R. at 172 (considering “the benefit to creditors, the benefit to the debtor, the prejudice

to the affected party, and other equitable factors”). The Second Circuit has held that

bankruptcy courts must “explain what prejudice, if any, would result from reopening a case.”

Harbour Trust Co. v. Aaron (In re Plusfunds Group, Inc.), 589 F. App’x 41, 43 (2d Cir. 2015).

II. Analysis

A. Prima Facie Evidence of an Unadministered Asset of the Debtor’s Bankruptcy

Estate

The Court has ruled that the MLMIC Proceeds are property of the Debtor’s

bankruptcy estate. See Summ. J. Dec. at 18 [Adv. Dkt. No. 61]. “During NRAD’s Bankruptcy

Proceeding, NRAD did not reference MLMIC or the MLMIC Policies,” nor did NRAD’s

Bankruptcy Plan reference MLMIC or the MLMIC Policies. JSF ¶¶ 34-35. In addition, the

Current Shareholders testified that they did not become aware of the MLMIC

Demutualization until August 2018, approximately 5 months after the Debtor’s Chapter 11

case was first closed on March 2018. See id. ¶¶ 38, 87. Thus, according to the Current

Shareholders’ own testimony, these MLMIC Proceeds were not known to the parties at the

time the Debtor’s bankruptcy case was first closed. Furthermore, the MLMIC Proceeds

exceed $3.2 million and were distributed by NRAD to only the Current Shareholders in

March 2020 (after arbitration and litigation concerning whether the MLMIC Proceeds should

be distributed to NRAD as the policy administrator or to individual policyholders) rather

than pursuant to the distribution scheme of the Debtor’s Plan, notwithstanding the issue of

any releases and waiver of the MLMIC proceeds. See id. ¶¶ 103-11. As a result, there appears

to be prima facie evidence of the existence of unadministered estate assets of such

“probability, administrability and substance” that it would be unreasonable for the Court not

to reopen the Debtor’s Chapter 11 case. See In re Stanley, No. 2:17-bk-15178-ER, 2022 WL

256769, at *4 (Bankr. C.D. Cal. Jan. 27, 2022) (quoting Lopez v. Specialty Rests. Corp. (In re

Lopez), 283 B.R. 22, 27 (B.A.P. 9th Cir. 2002) (reopening the debtor’s bankruptcy case and

“only consider[ing] . . . whether ‘assets of such probability, administrability, and substance

appear to exist as to make it unreasonable under all the circumstances for the court not to

deal with them’”).

It must be noted that in making this decision, the Court is not ruling on the proposed

motion for derivative standing by the Movant Former Shareholders, nor is the Court making

any determinations with respect to any causes of action that the Movant Former

Shareholders (on behalf of the Debtor) intend to bring against the Current Shareholders or

any defenses the Current Shareholders may raise in such causes of action. The Court, in its

discretion, is granting the Motion based upon, inter alia, its decision that the MLMIC

Proceeds are property of the estate and because there is prima facie evidence of

unadministered assets of the estate.

B. Reopening of Debtor’s Case Not Futile or a Waste of Judicial Resources.

Courts have held that reopening a debtor’s bankruptcy case is not warranted if such

reopening would be futile, would result in a waste of judicial resources, or where creditors

are unlikely to reap any benefit from the addition of an unadministered asset. See Lopez,

2023 WL 7485464, at *1; Mohammed, 536 B.R. at 355. The Debtor argues, inter alia, that

the Movant Former Shareholders waived their claims to the MLMIC Proceeds and it would

be futile to reopen the Debtor’s bankruptcy case. See Debtor’s Mem. of Law in Opp. at 17-25

[Dkt. No. 680]. The Movant Former Shareholders contest these assertions. See Reply Mem.

of Law in Further Support to Reopen at 3-5 [Dkt. No. 684]. However, whether the Movant

Former Shareholders waived their claims to the MLMIC Proceeds is a matter of dispute with

colorable arguments on both sides. The fact that a finding of waiver is possible or that further

litigation is necessary does not mean that reopening is futile—that is, the vagaries of

litigation do not equate to futility. In addition, the Court finds that there is at least some

reasonable possibility that reopening the Debtor’s bankruptcy case may result in substantial

relief to the creditors of the estate, a re-distribution of over $3.2 million in proceeds.10 For the

same reasons, the Court finds that reopening the Debtor’s bankruptcy case is not a waste of

judicial resources and that the circumstances of this case demonstrate at least some

likelihood of newly discovered estate assets being administered to creditors, notwithstanding

the vagaries of litigation. See Paul v. Yakubova (In re Yakubova), No. 24-10600 (PB), Adv.

Pro. No. 25-01137 (PB), 2026 WL 1246576, at *12 (Bankr. S.D.N.Y. May 6, 2026) (citation

omitted) (reopening debtor’s case because plaintiffs “have shown that a reopening of the case

could potentially benefit creditors,” and the debtor “has not come close to showing that the

plaintiffs’ claims are ‘entirely without merit’”).

C. The Doctrine of Equitable Mootness Inapplicable to the Facts and Circumstances of

this Case.

The Debtor argues that its bankruptcy case should not be reopened because the

doctrine of equitable mootness applies. “Equitable mootness is a prudential doctrine under

which a court may dismiss a bankruptcy appeal ‘when, even though effective relief could

conceivably be fashioned, implementation of that relief would be inequitable.’” GLM DFW,

Inc. v. Windstream Holdings, Inc. (In re Windstream Holdings, Inc.), 838 F. App’x 634, 636

(2d Cir. 2021) (citations omitted). “The doctrine is deployed in a ‘pragmatic’ and flexible

fashion, and must be responsive to the ‘specific factors presented in a particular case.’” Id.

(citing Beeman v. BGI Creditors’ Liquidating Tr. (In re BGI, Inc.), 772 F.3d 102, 107–08 (2d

10 This amount may be reduced by the pro rata share of the MLMIC Proceeds that the Current

Shareholders may be entitled to keep. Per Schedule 1 annexed to the Debtor’s Plan, the Current

Shareholders’ pro rata share of distributions to Class 6 Claims is 31.8182%. See [Dkt. No. 496].

Cir. 2014)). Where a plan has been substantially consummated, there is a presumption that

an appeal is equitably moot. See id. (citations omitted). A party in the Second Circuit seeking

to rebut such a presumption must demonstrate the satisfaction of five factors (the

“Chateaugay Factors”):

(1) the court can still order some effective relief;

(2) such relief will not affect the re-emergence of the debtor as a revitalized

corporate entity;

(3) such relief will not unravel intricate transactions so as to knock the props

out from under the authorization for every transaction that has taken place

and create an unmanageable, uncontrollable situation for the [b]ankruptcy

[c]ourt;

(4) the parties who would be adversely affected by the modification have notice

of the appeal and an opportunity to participate in the proceedings; and

(5) the appellant pursued with diligence all available remedies to obtain a stay

of execution of the objectionable order if the failure to do so creates a situation

rendering it inequitable to reverse the orders appealed from.

Id. (quotation marks omitted) (quoting Frito-Lay, Inc. v. LTV Steel Co. (In re Chateaugay

Corp.), 10 F.3d 944, 952-53 (2d Cir. 1993)). “The Second Circuit has placed ‘special emphasis’

on the fifth factor in considering equitable mootness.” In re Celsius Network LLC, No. 23 Civ.

10368 (LGS), 2024 WL 3376496, at *3 (S.D.N.Y. July 11, 2024) (citing Matter of MPM

Silicones, L.L.C., 874 F.3d 787, 805 (2d Cir. 2017)).

While it is true that the doctrine of equitable mootness is not limited to appeals of

plan confirmation orders and has been applied in a “range of contexts, including appeals

involving all manner of bankruptcy court orders,” In re 307 Assets LLC, 665 B.R. 214, 220

(S.D.N.Y. 2024) (quotation marks and citations omitted), the Court finds that this doctrine is

inapplicable to the circumstances of this case. In particular, the Court finds that the fifth

Chateaugay Factor is inapplicable because the Movant Former Shareholders did not know of

the existence of the MLMIC proceeds until after the Debtor’s bankruptcy case was closed.

Courts have held that in order to reopen a case under Bankruptcy Code Section 350(b) and

Bankruptcy Rule 5010 to administer assets, such assets must not have been known at the

time the case was closed. See In re Lusher, No. 18-71772, 2019 WL 4553432, at *3 (Bankr.

C.D. Ill. Sept. 19, 2019) (citation omitted) (denying trustee’s motion to reopen the bankruptcy

case and holding that an inheritance disclosed on the debtor’s schedules was abandoned when

the case was closed). Consequently, if the Movant Former Shareholders did not know of the

MLMIC Proceeds at the time the Debtor’s bankruptcy case was closed, then they would not

have had a reason to seek a stay of any orders in the bankruptcy case based upon such assets,

including the Confirmation Order and the final decree closing the case. If the doctrine of

equitable mootness applies in this scenario, then this doctrine may possibly prevent any

party in the Second Circuit, who did not seek a stay of a confirmation order, from moving to

reopen a bankruptcy case where there are estate assets newly discovered after the close of

the bankruptcy case and the plan has been substantially consummated—in other words, a

plan will normally be substantially consummated and no stay sought if the reason for an

objection is not known at that time. The Court in its discretion declines to apply the doctrine

of equitable mootness to its consideration of the Motion, finding that its application would be

over-expansive given the circumstances of this case. Cf. R2 Invs., LDC v. Charter Commc’ns,

Inc. (In re Charter Commc’ns, Inc.), 691 F.3d 476, 485 (2d Cir. 2012) (citing Nordhoff Invs.,

Inc. v. Zenith Elecs. Corp., 258 F.3d 180, 192 (3d Cir. 2001) (Alito, J., concurring)) (noting

that “allowing a boilerplate nonseverability clause” to determine the question of equitable

mootness would constrain Article III review and “[g]iven the ubiquity of nonseverability

clauses in prenegotiated plans, such a rule could moot virtually every appeal where a stay

had not been granted”).

D. “Other Cause” Exists to Reopen the Debtor’s Bankruptcy Case.

The Court finds that “other cause” exists under the Easely Factors and other equitable

concerns to reopen the Debtor’s case.

1. The Length of Time the Case was Closed.

Courts have recognized that as the time between the close of a bankruptcy case and

its reopening increases, “so must the cause for reopening increase in weight”; however,

“nothing in the Bankruptcy Code or [the Bankruptcy Rules] proscribes the time within which

a motion to reopen a closed case must be made.” In re Navillus Tile, Inc., 634 B.R. 847, 859

(Bankr. S.D.N.Y. 2021) (quotation marks omitted) (citing Atari, 2016 WL 1618346, at *5); see

also In re Texaco, Inc., 668 B.R. 1, 7 (Bankr. S.D.N.Y. 2025) (reopening debtor’s 37-year-old

closed bankruptcy case because of the “paramount bankruptcy-court and systemic interest in

having bankruptcy courts determine the meaning and impact” of their own orders,

particularly with regard to a plan’s discharge and injunction provisions). “While there is no

time limitation imposed by § 350 or Bankruptcy Rule 5010, the doctrine of laches may be a

basis to deny a motion to reopen.” In re Stein, 394 B.R. 13, 16 (Bankr. E.D.N.Y. 2008)

(citations omitted). “Generally, laches is applied where it is clear that a plaintiff

unreasonably delayed in initiating an action and a defendant was prejudiced by the delay.”

Id. (quoting Robins Island Pres. Fund, Inc. v. Southold Dev. Corp., 959 F.2d 409, 423 (2d Cir.

1992)). However, the length of time a case was closed is “not a meaningful factor” during

time periods when the moving party does “not have any reason to seek reopening.” Navillus

Tile, 634 B.R. at 859 (quotation marks omitted) (citing Atari, 2016 WL 1618346, at *5).

In Navillus Tile, the debtor moved to reopen its bankruptcy case to invoke a plan’s

discharge and injunction provision to bar litigation initiated by the New York City Housing

Authority (“NYCHA”). Id. at 850. The Navillus Tile court found, that similar to the

circumstances in Atari, the debtor “did not have any reason to seek to reopen this case until

NYCHA commenced its action in state court,” which was nine months before the debtor filed

the motion to reopen. Id. at 859 (citing Atari, 2016 WL 1618346, at *5). The Navillus Tile

court found that no caselaw had been presented to show that nine months was a “meaningful

delay”; rather, the contrary was true. Id. (citing Arana, 456 B.R. at 175-76; Stein, 394 B.R.

at 16-18) (referencing cases where courts reopened bankruptcy cases—one almost five years

after closing and another more than eight years after closing because the debtor “did not

realize he owned an interest in [real] property until approximately ten months before he filed

the motion”). Even if the moving party does delay, the opposing party must show some

prejudice from the delay, and the “mere lapse of time [between the closing of a case and its

reopening] does not constitute prejudice.” Id. (citing Atari, 2016 WL 1618346, at *6).

Here, NRAD’s bankruptcy case was first closed on March 15, 2018. See JSF ¶ 38. The

Current Shareholders testified that they did not become aware of the MLMIC

Demutualization until August 2018. See id. ¶ 87. After NRAD informed eligible policyholders

(including certain of the Movant Former Shareholders) of its intention to claim the MLMIC

Proceeds, several months of litigation and arbitration ensued. See id. ¶¶ 95, 104. On October

4, 2019, Arbitrator Erica Garay awarded the MLMIC Proceeds to NRAD, and on October 28,

2019, Justice Timothy Driscoll of the Supreme Court of the State of New York, County of

Nassau, also awarded the MLMIC Proceeds to NRAD. See id. ¶¶ 105-06. In March 2020,

after MLMIC considered those decisions final and non-appealable, the MLMIC proceeds were

distributed to NRAD, which then distributed the proceeds to the Current Shareholders. See

id. ¶¶ 109-10.

On May 8, 2020, the Movant Former Shareholders filed their first motion to reopen

the Debtor’s bankruptcy case [Dkt No. 655], which was approximately 2 years and 2 months

after the case was first closed on March 15, 2018 but approximately 2 months after the

MLMIC Proceeds were distributed to the Current Shareholders in March 2020. See id. ¶¶

110, 117. The Court granted the first motion to reopen the Debtor’s case by order dated

September 17, 2020. [Dkt. No. 665].

On September 24, 2020, the Movant Former Shareholders commenced an adversary

proceeding, seeking, inter alia, a judgment “determining that the MLMIC Proceeds are

property of NRAD’s bankruptcy estate” and “directing NRAD to distribute the MLMIC

Proceeds to creditors whose claims have not been paid in full, in accordance with the Plan . .

. .” See Compl. ¶ 121 [Adv. Dkt. No. 1]. On August 12, 2021, the Debtor moved to close the

bankruptcy case a second time on the grounds that (i) the Debtor’s bankruptcy was fully

administered and reopened solely for the purpose of allowing the adversary proceeding to

commence, (ii) there was no other activity in the bankruptcy case, and (iii) closing the case

was in the best interest of the estate and creditors due to continuing United States Trustee

fees and other administrative costs. See Mot. to Close Reopened Case ¶ 1-2 [Dkt. No. 669].

The Movant Former Shareholders did not oppose this motion “because it was administrative,

without prejudice to reopening, and beneficial to the estate.” See Reply Mem. of Law in

Further Support to Reopen at 1-2 (citation omitted) [Dkt. No. 684]. The Court granted the

motion to close the Debtor’s bankruptcy case a second time on September 3, 2021, “without

prejudice to the rights of any party in interest to seek to reopen the Chapter 11 Case,” and

the case was closed a second time on September 24, 2021. [Dkt. Nos. 674-75].

After several years of litigation, on January 26, 2024, the Court entered the Summary

Judgment Decision in the adversary proceeding, holding that the MLMIC Proceeds constitute

property of the Debtor’s estate. See Summ J. Dec. at 18 [Adv. Dkt. No. 61]. On September 6,

2024, the Court entered a judgment in the plaintiffs’ favor on their first claim for relief,

adjudging solely that the MLMIC Proceeds constitute property of the Debtor’s bankruptcy

estate.11 See [Adv. Dkt. No. 85]. The adversary proceeding was closed on December 18, 2024,

and the Movant Former Shareholders filed the second motion to reopen the Debtor’s

bankruptcy case on April 23, 2025 [Dkt. No. 677].

Consequently, the time elapsed between the second close of the Debtor’s bankruptcy

case on September 24, 2021 and the date when the Movant Former Shareholders filed the

second motion to reopen on April 23, 2025 was approximately 3 years and 7 months.

However, the Movant Former Shareholders first had reason to file the Motion after the Court

entered judgment on their first claim for relief on September 6, 2024 and the adversary

proceeding was closed on December 18, 2024. Thus, the Motion was filed approximately 4

months after the adversary proceeding was closed and approximately 7.5 months after the

Court entered judgment on the first claim for relief—this time, with the stated purpose of

seeking derivative standing to bring suit against the Current Shareholders for the return of

the MLMIC Proceeds to the Debtor’s estate. See Second Mot. to Reopen Ex. 14 [Dkt. No. 677].

Given that timeframe and the facts of this case, the Court finds that the Movant Former

Shareholders did not unreasonably delay in filing the Motion. See In re Congoleum Corp., 149

F.4th 318, 330-31 (3d Cir. 2025) (considering the timeliness of the motion to reopen from the

date the moving party received communication that its adversary refused to dismiss a

pending suit despite a bankruptcy court order, and finding that a 1 month delay was minor

and non-prejudicial); Navillus Tile, 634 B.R. at 859 (finding a 9 month delay to file a motion

to reopen a bankruptcy case to bar state court litigation that had commenced was not a

“meaningful delay”). Moreover, the Court finds the Debtor was not prejudiced by the

approximately 4 to 7.5 month delay because the Debtor was actively involved in the

11 The Court declined to enter a judgment directing the Current Shareholders to return the MLMIC

Proceeds to the Debtor or holding them jointly and severally liable in a money judgment for such

amounts for a variety of reasons, including jurisdictional issues as well as factual and legal issues

surrounding whether the Movant Former Shareholders were entitled to those funds.

proceedings surrounding the motion for entry of judgment—in fact, it was the Debtor who

vigorously argued that the judgment on the plaintiffs’ first claim for relief should be limited

to a declaration that the MLMIC Proceeds are property of the estate without any directives

against the Current Shareholders. See Aug. 22, 2024 Hr’g Tr. 23:1-7 [Adv. Dkt. No. 87]. For

the foregoing reasons, the Court further finds that the Movant Former Shareholders did not

inexcusably sleep on their rights, prejudicing the Debtor, such that the doctrine of laches

would apply. “Accordingly, the Court concludes that the length of time this case has been

closed is ‘not a meaningful factor’ in its analysis.” Navillus Tile, 634 B.R. at 859 (citing Atari,

2016 WL 1618346, at *6).

2. Whether a Nonbankruptcy Forum Has Jurisdiction to Determine the Issue

Which Is the Basis for Reopening the Case.

This factor weighs in favor of reopening the Debtor’s bankruptcy case because there

is currently no nonbankruptcy forum exercising jurisdiction to determine the issues, which

are the basis of reopening the Debtor’s bankruptcy case: namely, how certain newly

discovered property of the estate is to be re-distributed in accordance with the Plan, including

whether re-distribution is appropriate given a claimed waiver of any right to the MLMIC

Proceeds by the Movant Former Shareholders. In October 2018, litigation and arbitration

commenced by NRAD over the MLMIC Proceeds ended, with the holding that NRAD was

entitled to the MLMIC proceeds and not eligible policyholders.12 See JSF ¶¶ 105-06. There

were no appeals taken after these decisions. See id. ¶ 109. There is no pending litigation in

12 In May 2022, the New York Court of Appeals held that eligible policyholders and not the policy

administer who pays the premiums are entitled to the insurance company demutualization proceeds.

See Columbia Memorial Hospital v. Hinds, 38 N.Y.3d 253, 276-77 (N.Y. 2022) (“In sum, we hold that

when an employer pays premiums to a mutual insurance company to obtain a policy of which its

employee is the policyholder, and the insurance company demutualizes, absent contrary terms in the

contract of employment, insurance policy, or separate agreement, the policyholder is entitled to the

proceeds from the demutualization.”).

any state court concerning the issue of whether NRAD, the Current Shareholders, or the

Movant Former Shareholders are entitled to the MLMIC Proceeds.

Furthermore, it is well-settled that a bankruptcy court has “a strong interest in

construing the meaning of its own confirmation orders, which are central to the case and to

[its] institutional role.” Texaco, 668 B.R. at 21 (citing Texaco Inc. v. Sanders (In re Texaco

Inc.), 182 B.R. 937, 947 (Bankr. S.D.N.Y. 1995)); see also In re Jones, 2025 WL 432843, at *3

(citation omitted) (noting bankruptcy courts have jurisdiction and are “undoubtedly the best

qualified” to interpret and enforce their own orders). Here, an issue that will likely arise in

subsequent litigation following the reopening of the Debtor’s case is whether the language of

the Plan, Confirmation Order, and other documents in the case supports a release and/or

waiver of the claims of the Movant Former Shareholders to the MLMIC Proceeds. See Aug.

22, 2024 Hr’g Tr. 30:7-18 [Adv. Dkt. No. 87]. This Court is “undoubtedly the best qualified”

to interpret the Plan, its own Confirmation Order and any other orders or documents in the

Debtor’s bankruptcy case. See Texaco, 668 B.R. at 42 (reopening debtor’s bankruptcy case

for the sole purpose of determining whether the confirmed plan precludes certain plaintiffs

from pursuing pending state court actions). Therefore, this factor weighs in favor of

reopening the Debtor’s bankruptcy case.

3. Whether in Prior Litigation the Bankruptcy Court Determined that a State

Court Would Be the Appropriate Forum.

This factor is inapplicable to this case because the Court has not determined in a prior

litigation that a state court would be the appropriate forum for the Movant Former

Shareholders to seek return of the MLMIC Proceeds from the Current Shareholders.

4. Whether Any Parties Would Suffer Prejudice Should the Court Grant or

Deny the Motion.

In weighing this factor, the Court considers whether NRAD and the Current

Shareholders will suffer any prejudice from the opening of Debtor’s case and whether

creditors, including the Movant Former Shareholders, will suffer any prejudice from the

Court denying the Motion. NRAD, as a corporate entity, will not suffer any legal prejudice

from reopening because (1) NRAD is nominal entity, See Mot. for Entry of J. ¶ 6 [Adv. Dkt.

No. 79], and pursuant to the Plan, “all claims against NRAD’s estate have been satisfied, in

full, except those of the Former Shareholders and Current Shareholders,” JSF ¶ 72, and (2)

NRAD stands to benefit by a possible return of more than $3.2 million13 to its bankruptcy

estate to pay creditor claims.

The Current Shareholders may be disadvantaged by the loss of a certain portion of

the MLMIC Proceeds that was distributed to them in March 2020—if the Movant Former

Shareholders are successful in obtaining derivative standing and in prosecuting certain

causes of action against the Current Shareholders. Assuming there were no waivers of the

MLMIC proceeds by creditors, the Current Shareholders may have to return the portion of

the MLMIC Proceeds that they were not entitled to under the Plan. In addition, the Current

Shareholders will have to expend time and resources to defend against the motion and

adversary proceeding to be brought by the Movant Former Shareholders in the reopened

bankruptcy case. However, these potential losses or disadvantages are not legal prejudice

because (1) it is not prejudice to suffer the loss of property that one is not legally entitled to

keep (assuming the Court finds in favor of the Movant Former Shareholders); and (2) it is

well-settled that having to defend a lawsuit on the merits is not legal prejudice. See Jones,

13 See supra, note 9.

2025 WL 432843, at *4 (citation omitted) (finding that the disadvantage of having to defend

a student loan discharge claim on the merits is not the same as legal prejudice); In re Dicks,

579 B.R. at 709 (observing that it is “well established that the fact that a defendant will be

required to defend a case on the merits does not constitute legal prejudice that weighs against

granting the motion to reopen”); Arana, 456 B.R. at 177 (finding that the disadvantage of

being required to defend against a malpractice action is not the same as legal prejudice).

In addition, the Debtor, Current Shareholders, and Movant Former Shareholders did

not object to the Court’s retention of jurisdiction provisions in the Plan—which included

retention of jurisdiction to “to recover all assets and properties of the Debtor and Reorganized

Debtor wherever located, if any” and “to hear and determine any and all pending applications,

adversary proceedings, contested matters and litigated matters, if any.” See 2d Amended

Plan ¶ 12.01 (f) and (j) [Dkt. No. 496]. Thus, none of them can claim legal prejudice if the

Court reopens the case, after having decided that the MLMIC Proceeds are property of the

estate, to exercise jurisdiction to determine the fate of the MLMIC Proceeds in any

subsequent adversary proceeding, litigation, or contested matter. See Atari, 2016 WL

1618346, at *10 (finding that no party will be prejudiced by the court’s reopening the debtor’s

bankruptcy case because none of the parties “objected to the jurisdiction retention provisions

of the [p]lan and [c]onfirmation order” and that the parties had submitted themselves to the

exclusive jurisdiction of the court with respect to the interpretation and enforcement of the

plan and confirmation order).

The Court notes that, even though the Court did not retain exclusive jurisdiction to

hear disputes concerning property of the estate, there is currently no nonbankruptcy forum

exercising concurrent jurisdiction to hear these matters. Thus, the Movant Former

Shareholders, as creditors of the estate, would be prejudiced by the Court’s not reopening the

Debtor’s case because they would be denied access to the forum that has jurisdiction to hear

these matters and is best-suited to adjudicate any future litigation given this Court’s

knowledge of the case and strong interest in interpreting and enforcing its own orders. See

In re Woldeyohannes, 665 B.R. 543, 575-76 (Bankr. D. Conn. 2024) (observing that

bankruptcy courts consider “whether there would be no relief if the case were not reopened”

and finding that the bankruptcy court was the “right forum” for the court to enforce and

interpret its own orders); cf. In re Otto, 311 B.R. 43, 48 (Bankr. E.D. Pa. 2004) (noting that if

debtors “had no other forum to assert their discharge injunction, the prejudice they would

suffer were relief under section 350(b) denied would outweigh countervailing

circumstances”).14 Moreover, assuming there are no waivers of their claims, the Movant

Former Shareholders and other creditors of the estate would be prejudiced by

unadministered property of estate not being returned to “the pool of funds from which

creditors can be satisfied.” In re Watts, No. 21-10419 (MG), 2023 WL 5525045, at *9, *11

(Bankr. S.D.N.Y. Aug. 25, 2023) (finding that the debtor’s creditors would be prejudiced if the

court did not reopen the case because they would not be able to benefit from the debtor’s

undisclosed discrimination claim).

Accordingly, this factor weighs in favor of reopening the Debtor’s bankruptcy case.

5. Extent of the Benefit to the Debtor by Reopening.

“In considering the benefit to the debtor, courts generally consider whether reopening

the case serves some beneficial purpose, such as allowing claims to proceed in another forum.”

Arana, 456 B.R. at 173 (citing Katz v. I.A. Alliance Corp. (In re I. Appel Corp.), 300 B.R. 564,

571 (S.D.N.Y. 2003), aff'd, 104 F. App’x 199 (2d Cir. 2004)) (finding that reopening the

14 In Crayton v. Otto, the district court for the eastern district of Pennsylvania vacated the bankruptcy

court’s decision to not reopen the Ottos’ bankruptcy case because, inter alia, not all of the claims raised

in the case could be addressed in another forum. See Crayton v. Otto, No. 04-CV-02506, 2005 WL

8153750, at *3 n. 4 (E.D. Pa. March 31, 2005).

bankruptcy case would allow the trustee to proceed with a malpractice claim, with the debtor

possibly recovering a surplus).

Here, reopening the case would allow the Movant Former Shareholders to seek

derivative standing to pursue certain causes of action against the Current Shareholders, and

if successful, the Debtor would stand to benefit by an addition of over $3.2 million to its

bankruptcy estate.15 The Movant Former Shareholders have pointed out that NRAD is a

nominal entity, which is controlled by the Current Shareholders, who are NRAD’s board of

directors and corporate officers. See Mot. for Entry of J. ¶ 6 [Adv. Dkt. No. 79]. The Movant

Former Shareholders have argued that the interests of the Debtor as a corporate entity are

adverse to the personal interests of the Current Shareholders with regard to the MLMIC

Proceeds. See Reply in Further Supp. of Mot. for Entry of J. ¶ 4 [Adv. Dkt. No. 83]. Because

it is unlikely that the Debtor will pursue on its own any claims against the Current

Shareholders—who are its owners, directors, and officers—reopening the bankruptcy case

may allow the claims of the Movant Former Shareholders to proceed and result in a return

of the MLMIC Proceeds to the estate. Cf. Maeder, 2025 WL 3298322, at *3 (quoting Arana,

456 B.R. at 173) (“A bankruptcy case should be reopened to administer newly identified

property of the estate ‘to prevent a windfall’ to the debtor.”); In re Dicks, 579 B.R. at 710

(citation omitted) (finding that if the bankruptcy case is not reopened, defendants in a related

lawsuit may receive “a windfall at the creditors’ expense” by avoiding a decision on the

merits). Accordingly, this factor weighs in favor of reopening the Debtor’s bankruptcy case.

6. Whether No Relief Would be Forthcoming by Granting the Motion.

“Case law does provide that reopening of a case is a ministerial act that, in and of

itself, has no substantive effect.” Roberts v. Vara (In re Roberts), 659 B.R. 271, 280 (Bankr.

15 See supra, note 9.

W.D. Pa. 2024) (citations omitted). “All that reopening of a case provides is an opportunity

for a litigant to seek substantive relief in the context of an open bankruptcy case (with all of

the protections attendant thereto).” Id. (citing In re Congoleum Corp., 636 B.R. 362, 377

(Bankr. D.N.J. 2022)). However, though a “motion to reopen is generally a ministerial act,”

a bankruptcy court may review the underlying claims, and “it is not an abuse of discretion to

deny reopening an action that is completely lacking in merit.” In re Smith, 426 B.R. 435, 440

(E.D.N.Y. 2010), aff’d sub nom., Smith v. Silverman (In re Smith), 645 F.3d 186 (2d Cir. 2011)

(quotation marks and citations omitted); see also In re Duhaney, No. 18-45846-ess, 2025 WL

3510992, at *7 (Bankr. E.D.N.Y. Dec. 5, 2025) (“[A] court may decline to reopen a case where

the claims to be asserted clearly lack merit.”). “A case should not be reopened where doing

so would be futile or a waste of judicial resources.” Roberts, 659 B.R. at 280 (citing Redmond

v. Fifth Third Bank, 624 F.3d 793, 803 (7th Cir. 2010)).

Here, the Debtor argues that there would be no relief forthcoming to the Movant

Former Shareholders if the Debtor’s bankruptcy case is reopened because, inter alia, the

Movant Former Shareholders have waived their claims or are ineligible to receive the

MLMIC Proceeds. See Debtor’s Mem. of Law in Opp. at 17-25 [Dkt. No. 680]. For example,

the Debtor argues that the Movant Former Shareholders waived their claims to the MLMIC

Proceeds by executing and delivering a Declaration and Release agreement, whereby they

consented to a 13.33% reduction of their maximum distribution under the Debtor’s Plan in

exchange for an upfront payout of $6,500,250 from NRAD after the close of the NYU

Transaction. Id. at 17. The Movant Former Shareholders, on the other hand, argue that such

releases only barred claims against NYU, not NRAD or the Current Shareholders. See Reply

Mem. of Law in Further Support to Reopen at 3 [Dkt. No. 684]. The Movant Former

Shareholders also argue that the releases in the Plan contain an exception for the parties’

“right to enforce the performance of their respective obligations, if any, under the Plan.” Id.

Debtor’s counsel, on the other hand, has argued that the releases in the Plan bar the claims

of the Movant Former Shareholders. See Aug. 22, 2024 Hr’g Tr. 23:8-24:7 [Adv. Dkt. No. 87].

The Court, though not deciding on the question of releases and waiver of claims, does

find that there are colorable arguments on both sides, which preclude a finding of futility in

reopening the Debtor’s case. A determination on the scope of the releases in the Plan and

waiver of claims by the Movant Former Shareholders are matters better suited for briefing

after the reopening of the Debtor’s case because it would involve, among other things,

interpretation of language in the Plan and other documents by this Court. In Atari, the

parties agreed to defer consideration of the merits of the issue of whether certain releases in

the plan and confirmation order barred one party’s claims against another until after the

court resolved the threshold question of whether to reopen the bankruptcy cases. See Atari,

2016 WL 1618346, at *12. However, the Atari court noted that “even if the parties had not

agreed to defer consideration of the merits, the [c]ourt would find that it is not clear at the

outset that no relief will be forthcoming if the case is reopened.” Id. Because one party had

“made at least a colorable claim that an antisuit injunction should issue in order to protect

the releases contained in the [p]lan and [c]onfirmation [o]rder . . . it [was] not clear at the

outset that no relief will be forthcoming if these cases are reopened.” Id. at *13. Similarly

here, because the Movant Former Shareholders have made at least a colorable claim that

they have not waived their claims to the MLMIC Proceeds, the Court finds that it would not

be futile to reopen the Debtor’s bankruptcy case. Accordingly, this factor weighs in favor of

reopening the Debtor’s bankruptcy case.

7. Benefit to Creditors.

“Absent countervailing considerations, the court should grant a motion to reopen the

case if doing so is needed to administer estate assets or if there is a reasonable prospect that

creditors would benefit from a reopening of the case.” Yakubova, 2026 WL 1246576, at *11

(citing Zinchiak v. CIT Small Bus. Lending Corp. (In re Zinchiak), 406 F.3d 214, 224 (3d Cir.

2005)). In certain circumstances, such as when administering an undisclosed asset, the

interests of creditors weigh more heavily in the Court’s analysis. See Watts, 2023 WL

5525045, at *11 (citation omitted) (“The Court’s focus in the context of reopening a case to

administer new assets ‘is simply whether the administrative expense and inconvenience

outweighs the potential benefit to the estate’ and ‘debtor's good faith is irrelevant’”); Arana,

456 B.R. at 175 (“The prospect of a benefit to creditors is the most important consideration

in determining whether to reopen a bankruptcy case to add an undisclosed asset.”); In re

Corkran, No. 13-30909, 2019 WL 965102, at *2 (Bankr. N.D.N.Y. Feb. 25, 2019) (citations

omitted) (noting that in determining whether cause exists to reopen a bankruptcy case, “the

primary factor for consideration is the potential benefit to creditors of the estate”).

Here, there is a clear potential benefit to creditors of the Debtor’s estate if the

bankruptcy case is reopened. If the Movant Former Shareholders prevail on their causes of

action after the Debtor’s case is reopened, the MLMIC Proceeds, a substantial sum, may be

returned to the Debtor’s estate to be re-distributed to creditors in accordance with the Plan.

See Arana, 456 B.R. at 176 (finding that “creditors stand to reap a substantial benefit if the

trustee prevails in the [m]alpractice [a]ction” and that the case should be reopened so that

the trustee could “determine how to proceed, based on an investigation of the asset and the

claims that are filed”). Accordingly, this equitable concern weighs in favor of reopening the

Debtor’s bankruptcy case.

CONCLUSION

For the foregoing reasons, the second motion to reopen the Debtor’s bankruptcy case

is granted.

SO ORDERED.

SoZ,

Dated: May 29, 2026 ix ue Fe A. CAA ule

Central Islip, New York a a Louis A. Scarcella

ate United States Bankruptcy Judge

26