The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------------------------x
HONEEDEW INVESTING LLC,
Appellant,
MEMORANDUM & ORDER
- against - 24-CV-6143, 25-CV-0195 (PKC)
BARBARA ABADI,
Appellee.
-------------------------------------------------------x
PAMELA K. CHEN, United States District Judge:
This appeal is the latest chapter of an acrimonious dispute between Barbara Abadi
(“Abadi”), Appellee-Debtor, and Honeedew Investing LLC (“Honeedew”), Appellant-Creditor,
concerning the collection of a $4,603,408.20 judgment that Honeedew obtained in 2017.
Honeedew appeals from two orders entered by the United States Bankruptcy Court for the Eastern
District of New York (Mazer-Marino, Bankr. J.) (“Bankruptcy Court”): one enforcing the
automatic stay and holding Honeedew in contempt for violating the stay (the “Enforcement
Order”); and a second imposing actual and punitive damages for Honeedew’s violation of the
automatic stay (the “Sanctions Order”). (Notice of Appeal, No. 25-CV-0195, Dkt. 1 (appeal of
Enforcement Order); Notice of Appeal, No. 24-CV-6143, Dkt. 1 (appeal of Sanctions Order).1).
For the reasons set forth herein, the Court affirms the Bankruptcy Court’s decision enforcing, and
finding Honeedew in contempt of, the automatic stay, but vacates the Bankruptcy Court’s
calculations of actual and punitive damages, and remands the case for determinations consistent
with this decision.
1 These two appeals have been consolidated by an Order of the Court under docket number
24-CV-6143. (See 04/25/2025 Order Consolidating Cases, No. 25-CV-0195.)
BACKGROUND
I. Factual Background
A. Initial State Court Action
On or about November 9, 2016, Abadi and her husband (the “Abadis”), entered into a
Settlement Agreement (“Agreement”) with Honeedew. (B.R. 405–421.)2 As part of that
Agreement, the Abadis agreed to deliver to Honeedew a promissory note of $4,603,408.20 plus
interest and fees, (B.R. 405, 423), secured by a Confession of Judgment,3 (B.R. 438–39). Under
the terms of the Agreement, if the Abadis failed to make that payment, Honeedew could file the
Confession of Judgment and “proceed to enforce and collect such judgment,” (B.R. 406–07), i.e.
$4,603,408.20 plus interest and fees, (B.R. 438). On April 28, 2017, the Abadis defaulted on the
Agreement, (see B.R. 423 (maturity date); B.R. 402 (default)), and on May 17, 2017, Honeedew
entered the Judgment in State Court, (see B.R. 102). Honeedew then spent over six years
attempting to enforce the judgment. (B.R. 195.)
On April 4, 2024, Justice Nancy Bannon of the New York Supreme Court found the Abadis
in contempt, and ordered them to pay “[Honeedew], within 30 days of the date of the service . . . ,
the sum of $4,603,408.23, plus statutory interest from May 17, 2017.” (B.R. 202–03.) The Abadis
did not comply. (See B.R. 208–09, 211–12.) Thus, on May 20, 2024, Justice Bannon ordered the
Abadis “to be incarcerated for a period of up to four months.” (B.R. 212.) “Incarceration,” Justice
Bannon explained, “is proper where . . . efforts to enforce the judgment have failed.” (B.R. 622.)
2 Throughout this Memorandum and Order, “B.R.” refers to the Notice of Bankruptcy
Record Received, Honeedew Investing LLC v. Abadi, 25-CV-0195, Dkt. 2. The page numbers for
these citations refer to those found in the bottom right corner of each page of the B.R.
3 A confession of judgment is an agreement in which a debtor, upon non-occurrence of a
payment, agrees to allow a creditor to obtain a judgment against them. Confession of Judgment,
Black’s Law Dictionary (12th ed. 2024).
Given the Abadis’ failure to pay the judgment, Justice Bannon concluded that “the only other
option that remains is incarceration until you purge your contempt. That means pay what you
owe.” (Id.) Under Justice Bannon’s May 20, 2024 order (the “Contempt Order”), the Abadis
would be “immediately released” from custody “upon the purging of their contempt”—i.e., by
confirming that they had paid Honeedew “the purge amount of [$]4,603,408.23, plus statutory
interest of 9% from May 17, 2017.” (B.R. 212.)
B. Petition for Bankruptcy
On July 11, 2024, while incarcerated at the Rikers Island jail facility (“Rikers”), Abadi
filed for Chapter 7 bankruptcy in the Eastern District of New York. (B.R. 8–59.) The bankruptcy
petition was filed by Jennifer Polick, (B.R. 57, 60), who claimed that Abadi had given her power
of attorney on June 17, 2024, (B.R. 60–63; see also B.R. 65–71 (power of attorney form)). The
same day, Abadi filed notice of the bankruptcy filing in the New York Supreme Court, stating, in
part, that “any and all actions or proceedings in” the case were stayed “by virtue of 11 U.S.C.
§ 362(a)” (“Section 362”). (B.R. 107.) Attorney David N. Slarskey (“Slarskey”), informed
Honeedew’s counsel, Eric S. Medina (“Medina”), of the bankruptcy filing the same day, asking
“whether you [i.e., Honeedew] acknowledge the automatic stay and that [Abadi] should
accordingly be released.” (B.R. 110.) Medina responded, “I don’t understand what you’re asking
me. Please be specific.” (Id.) Abadi’s “bankruptcy counsel,” Douglas J. Pick (“Pick”)4, replied
to Medina on July 12, 2024, explaining, inter alia, that Abadi “has filed for Chapter 7 relief and,
accordingly, there is now an automatic stay in place . . . .” (B.R. 109.) “Thus, any attempt to
enforce the [May 20, 2024] [C]ontempt Order may, in and of itself, be a violation of the automatic
4 Although Slarskey initially notified Honeedew of the Abadi’s bankruptcy filing, he did
not represent Abadi in that matter. (See B.R. 110, 115, 117.) Rather, Abadi’s “bankruptcy
counsel” is Pick. (B.R. 108–110.)
stay and subject the petitioner (here Honeedew) to sanctions.” (Id.) “[I]naction,” Pick warned,
“can also be considered a violation of the automatic stay.” (Id.) Pick thus sought Honeedew’s
assistance in “having Ms. Abadi immediately released” from Rikers. (Id.)
C. Periodic Review of the Contempt Order (“State Contempt Proceedings”)
On July 15, 2024, Honeedew appeared before Justice Bannon for a periodic review of the
Court’s Contempt Order. (B.R. 115.) The Abadis were also produced from Rikers to attend. (Id.)
Pick argued that, to avoid violating the automatic stay, Abadi had to be released from Rikers. (See
B.R. 129.) Slarskey argued that due to the automatic stay, “[t]here’s no lawful order to enforce
that judgment against M[r]s. Abadi now.” (B.R. 136.) By comparison, Pick asserted, if Justice
Bannon were to “keep the status quo,” doing so would be essentially “taking affirmative action to
maintain an enforcement tool” of the Contempt Order. (B.R. 121.)
Honeedew’s other attorney, Norma Ortiz, explained to Justice Bannon that Honeedew had
not “sought any affirmative relief before [the Supreme Court].” (B.R. 124.) Medina noted that
although Honeedew had “intended to serve an additional subpoena on Mr. Abadi and Mrs. Abadi”
and bring another application “with regards to contempt procedures,” Honeedew did not do so
because the Abadis had threatened Honeedew with sanctions for violating the stay. (B.R. 116.)
Instead, Medina and Ortiz explained to Justice Bannon that Honeedew intended to “move before
the bankruptcy court to clarify that the automatic stay does not apply for the proposition that has
been asserted,” (B.R. 116–17), in part because Honeedew believed Abadi’s bankruptcy petition
was defective, (B.R. 124–26). Ortiz further argued that “it would be a travesty for [Abadi] -- who
my understanding is, based upon the date and time appeared in the case, is possibly a flight risk;
to let her out until we determine if the bankruptcy petition was properly filed does not seem
appropriate under the circumstances.” (B.R. 126.)
Justice Bannon declined to release Abadi. (See B.R. 136.) She explained that “[a] release
is an order, . . . the same thing as an order to produce. It is an order.” (B.R. 130.) “[T]hat would
be in violation” of what Justice Bannon interpreted Abadi to assert, i.e. “that nothing can be done
in this case because there’s a stay. . . . [E]verything is stopped and frozen.” (B.R. 127, 129.)
Justice Bannon directed the parties to reconvene in approximately one month. (See B.R. 136.)
II. Procedural History
Four days after the hearing before Justice Bannon, Abadi moved before the Bankruptcy
Court to enforce the automatic stay in the pending New York Supreme Court case, hold Honeedew
“in contempt for willfully violating the automatic stay,” impose “sanctions against Honeedew on
account thereof,” and “direct[] the immediate release of [Abadi] from incarceration.” (B.R. 146–
47.) Honeedew opposed, contending, inter alia, that Abadi’s bankruptcy case should be dismissed
because Abadi’s power of attorney was not valid under New York Law, did not specifically
authorize Polick to file for bankruptcy, and did not comply with the Bankruptcy Rules of
Procedure. (B.R. 230–34.) Moreover, Honeedew asserted, Abadi’s petition did not trigger an
automatic stay because she was subject to a criminal contempt order. (B.R. 235–39.) On July 22,
2025, Abadi filed an amended petition for bankruptcy, (B.R. 3), and confirmed that she agreed to
proceed through her power of attorney, (B.R. 1221–22).
A. Bankruptcy Court Issues Enforcement Order
On July 22, 2024, Bankruptcy Court Judge Mazer-Marino held that “[t]he filing of the
voluntary petition commenced this case and stayed, pursuant to Bankruptcy Code [S]ection 362(a),
all acts to enforce or collect Honeedew’s Judgment from the Debtor or from assets of the [C]hapter
7 estate.” (B.R. 295.) Judge Mazer-Marino rejected Honeedew’s arguments that Abadi’s petition
did not trigger an automatic stay, concluding that the execution of the power of attorney was
irrelevant to whether a case was commenced or whether an automatic stay applied, (B.R. 1241–
47), and that Abadi was subject to a civil contempt order, not a criminal contempt order, because
she could cure her contempt by paying the debt she owed, (B.R. 1251–55).
Judge Mazer-Marino also found Honeedew in contempt for violating the automatic stay.
(B.R. 1255–56.) “Upon learning of the commencement of this bankruptcy case,” Judge Mazer-
Marino held, “Honeedew was obliged to cease efforts to enforce its Judgment and collect the debt
owed to it by the Debtor, by, among other things, informing [Justice Bannon] that the automatic
stay stayed Honeedew from enforcing or collecting its Judgment.” (B.R. 295.) Abadi’s
“continu[ed] . . . incarceration” after the filing of the petition, and “Honeedew’s appearance at the
July 1[5]th state court hearing in opposition to the debtor’s motion,” violated the automatic stay.
(B.R. 1255–56.)
B. Issuance of Sanctions Order
On December 27, 2024, Judge Mazer-Marino held a hearing to determine the sanctions
that Honeedew would be subject to for violating the automatic stay. 12/12/2024 Hr’g Tr. (“Tr.”),
In re Abadi, No. 24-42873 (JMM) (Bankr. E.D.N.Y. July 22, 2024) (“Bankr.”), Dkt. 122.5 Judge
5 In a bankruptcy appeal, the appellant bears the burden of designating the “items to be
included in the record on appeal” and “order[ing] a transcript of such parts of the proceedings not
already on file as the appellant considers necessary for the appeal.” Fed. R. Bankr.
P. 8009(a)(1)(A), (b)(1)(A). The record transmitted to the Court in this case lacked the Sanctions
Order and the transcript of the 12/27/2024 Sanctions Hearing. See Fed. R. Bankr. P. 8009(a)(4)
(requiring record to include transcripts of oral rulings, as well as transcripts necessary to the
appeal). This failure alone is grounds for the Court to dismiss Honeedew’s appeals. Rivera v. JP
Morgan Chase, No. 20-CV-5436 (JMA), 2021 WL 1999410, at *3 n.6 (E.D.N.Y. May 19, 2021);
Walker v. HSBC Bank USA, Nat’l Ass’n, No. 24-CV-8477 (PKC), 2025 WL 2256654, at *4
(E.D.N.Y. Aug. 7, 2025); In re Hawkins, 295 F. App’x 452, 453 (2d Cir. 2008) (summary order)
(explaining that Bankruptcy Rule 8001 grants a district court discretion to dismiss an appeal for
failure to comply with a procedural requirement). Nonetheless, in the interest of expediting
resolution of this case, the Court takes judicial notice of documents in the Bankruptcy Court’s
docket, even if not part of the designated record on appeal. See In re Abbott, No. 09-CV-9122
(CS), 2010 WL 11712796, at *1 n.1 (S.D.N.Y. Sep. 30, 2010) (taking “judicial notice of
documents on the Bankruptcy Court’s docket, even if not designated as part of the record on
Mazer-Marino again concluded that Honeedew had willfully violated the automatic stay because
it “knew that a bankruptcy petition had been filed,” but “did not take action . . . to inform Justice
Bannon that holding [Abadi] in jail in civil contempt violated the automatic stay.” (Id. at 37.)
Judge Mazer-Marino determined that Honeedew was informed of the applicable law via email, but
“instead of taking affirmative steps to assist the debtor in obtaining release from Rikers, Honeedew
took a hands[-]off approach.” (Id. at 40.) As to Honeedew’s affirmative statements before Justice
Bannon—declaring that the stay was “void ab initio” and that it had its “doubts as to the validity
of the petition”—Judge Mazer-Marino concluded that, “if they didn’t encourage Justice Bannon
to keep the status quo in place, . . . [they] gave her an incorrect statement of the law.” (Id. at 38.)
“[A]s a result of Honeedew’s willful violation of the automatic stay,” Judge Mazer-Marino
imposed “$21,642.50 in attorneys’ fees, plus an additional $110.00 in costs and expenses, as actual
damages incurred by the Debtor.” (Sanctions Order, No. 25-CV-0195, Dkt. 1-1, at 10.6) This sum
represented the 45.1 billable attorney hours Abadi’s attorney spent addressing the automatic stay,
as well as out-of-pocket expenses the attorneys incurred related to this work. Mot. for Sanctions
for Violation of the Automatic Stay (“Sanctions Mot.”), Bankr., Dkt. 67, at 11–13.7 Judge Mazer-
Marino rejected Honeedew’s argument that these fees were “routinely born by debtors,” Mem. of
Law in Opp’n to Sanctions Mot. (“Sanctions Opp’n”), Bankr., Dkt. 94, at 18, because, she
explained, the burden “is never on the debtor to secure the protection of the automatic stay,” Tr. at
appeal”); cf In re Emmons-Sheepshead Bay Dev. LLC, 518 B.R. 212, 217–219 (E.D.N.Y. 2014)
(affording district courts discretion to hear a case in spite of incomplete record).
6 The page numbers for this citation refer to those found in the bottom right corner of each
page.
7 Abadi stated that “she has suffered additional actual damages” in addition to the
attorneys’ fees, but declined to pursue them at the time. Sanctions Mot., Dkt. 67, at 13 n.6.
44:9–22, Bankr., Dkt. 122. Judge Mazer-Marino similarly dismissed Honeedew’s contention that
Abadi had inflated actual costs by delaying seeking relief before the Bankruptcy Court, see
Sanctions Opp’n, Bankr., Dkt. 94, at 15–16, explaining that she did not “see anything in the record
that would support [the] contention that . . . Abadi chose to stay in Rikers longer to make herself
a more sympathetic character,” Tr. at 47:14–16, Bankr., Dkt. 122. Instead, Judge Mazer-Marino
found, the record reflected “how difficult it was [for Abadi] to get paperwork to and from her
attorney[, which] basically caused some delay.” (Id.) The Court also imposed “$75,000.00 as
punitive damages, representing $7,500.00 for each of the ten (10) days [Abadi] was incarcerated
following the July 15, 2024 New York state court hearing at which Honeedew willfully violated
the automatic stay.” (Sanctions Order, No. 25-CV-0195, Dkt. 1-1, at 10.)
C. Appeal and Consolidation
Honeedew timely appealed the Bankruptcy Court’s Enforcement Order. (Notice of
Appeal, No. 25-CV-0195, Dkt. 1.) Separately, Honeedew timely appealed the Bankruptcy Court’s
Sanctions Order. (Notice of Appeal, No. 24-CV-6143, Dkt. 1.) On April 25, 2025, the Court
consolidated the two appeals under the docket number 24-CV-6143. (See 04/25/2025 Order
Consolidating Cases, No. 25-CV-0195.)
STANDARD OF REVIEW
District courts have appellate jurisdiction over “final judgments, orders, and decrees”
entered in bankruptcy court. 28 U.S.C. § 158(a). The Court reviews a bankruptcy court’s legal
conclusions concerning the imposition of an automatic stay de novo. Sharf v. BC Liquidating,
LLC, No. 14-CV-7320 (JMA), 2015 WL 5093097, at *4 (E.D.N.Y. Aug. 28, 2015) (citing In re
Weber, 719 F.3d 72, 75 (2d Cir. 2013), abrogated on other grounds by City of Chicago v. Fulton,
592 U.S. 154, 157 (2021)). Whether a creditor violated an automatic stay is also a question of law
the district court reviews de novo. In re Adomah, 368 B.R. 134, 137 (S.D.N.Y. 2007); In re
Windstream Holdings, Inc., 634 F. Supp. 3d 99, 104 (S.D.N.Y. 2022), aff’d, 105 F.4th 488 (2d Cir.
2024). “A bankruptcy court’s decision to impose sanctions is reviewed for abuse of discretion.”
In re DiBattista, 33 F.4th 698, 702 (2d Cir. 2022) (citing Solow v. Kalikow (In re Kalikow), 602
F.3d 82, 91 (2d Cir. 2010)); In Re Highgate Equities, Ltd., 279 F.3d 148, 151 (2d Cir. 2002). A
bankruptcy court abuses its discretion where “(1) its decision rests on an error of law . . . or a
clearly erroneous factual finding, or (2) its decision—though not necessarily the product of a legal
error or a clearly erroneous factual finding—cannot be located within the range of permissible
decisions.” Zervos v. Verizon New York, Inc., 252 F.3d 163, 169 (2d Cir. 2001) (internal citations
omitted). A factual finding is clearly erroneous where the Court has been left with the “definite
and firm conviction that a mistake has been committed.” Gasson v. Premier Cap., LLC, 43 F.4th
37, 41 (2d Cir. 2022) (citation omitted).
DISCUSSION
I. Effective Date and Scope of the Automatic Stay
Honeedew claims that Abadi’s petition did not trigger an automatic stay because it did not
commence a bankruptcy case, as Abadi’s power of attorney was not validly executed under New
York law, did not explicitly authorize the agent to file a bankruptcy petition, and did not comply
with Bankruptcy Rule 1004.1, which allows infants and incompetent persons to file for bankruptcy
through a power of attorney. (See Appellant’s Br. (“Stay Br.”), Dkt. 12, at 23–26; Appellant’s Br.
(“Sanctions Br.”), Dkt. 10, at ECF8 22–25; Appellant’s Reply Br. (“Sanctions Reply”), Dkt. 9, at
9–10; see also B.R. 230–31.)9 In the alternative, Honeedew argues that the automatic stay did not
8 Because Honeedew’s brief does not provide page numbers, the Court uses the pagination
generated by the Court’s CM/ECF docketing system.
9 Because Honeedew’s brief is not a model of clarity, the Court has construed their
arguments as stated herein.
apply to the proceedings before Justice Bannon because Abadi was incarcerated pursuant to a
criminal contempt order. (Stay Br., Dkt. 12, at 27–29.) For the following reasons, the Court
concludes that, regardless of whether Abadi’s power of attorney was validly executed or compliant
with Rule 1004.1, an automatic stay went into effect when her petition was filed with the
Bankruptcy Court on July 11, 2024.
A. Legal Standard
A voluntary case for bankruptcy is commenced “by the filing with the bankruptcy court of
a petition under such chapter by an entity that may be a debtor under such chapter.” 11 U.S.C.
§ 301(a). Once such a petition is filed, it creates an automatic stay of “the enforcement[] against
the debtor . . . of a judgment obtained before the commencement of the case under this title,” as
well as “the commencement or continuation . . . of a judicial . . . proceeding against the debtor that
was or could have been commenced before the commencement of the case under this title, or to
recover a claim against the debtor that arose before the commencement of the case under this title.”
Id. § 362(a)(1), (2). “Because ‘the automatic stay is imposed by Congressional mandate and not
by court order,’ no court action is needed for the stay to become effective.” In re Fogarty, 39 F.4th
62, 71 (2d Cir. 2022) (quoting In re Colonial Realty Co., 980 F.2d 125, 137 (2d Cir. 1992)).
Certain types of proceedings, however, are not automatically stayed by the filing of a voluntary
petition for bankruptcy. See 11 U.S.C. § 362(b). For example, the automatic stay does not apply
to “the commencement or continuation of a criminal action or proceeding against the debtor,” id.
§ 362(b)(1), such as criminal contempt proceedings.
B. The Automatic Stay Came into Effect Once Abadi Filed Her Petition
1. The Automatic Stay Came into Effect Regardless of Whether Abadi’s
Petition Was Filed Pursuant to a Properly-Executed Power of Attorney and
Bankruptcy Rule 1004.1.
The Court concludes that the automatic stay took effect regardless of whether Abadi’s
power of attorney complied with state law or Bankruptcy Rule 1004.1. The Second Circuit’s
decision in In re Zarnel, 619 F.3d 156 (2d Cir. 2010) compels this conclusion.
In Zarnel, the petitioners had filed for voluntary bankruptcy under 11 U.S.C. § 301
(“Section 301”) but failed to attach the requisite credit-counseling certificate.10 619 F.3d at 158–
59. On appeal, the parties disputed, inter alia, “whether the automatic stay takes effect when a
petition is filed by a debtor ineligible under [11 U.S.C. ]§ 109(h).” Id. at 164–70. The bankruptcy
court had held that by failing to comply with the procedural requirement of credit-counseling and
attaching the credit-counseling certificate, the debtors were “ineligible” for bankruptcy protection
and that the automatic stay should not have taken effect. Id. at 159–60; see also In re Elmendorf,
345 B.R. 486, 491–93 (Bankr. S.D.N.Y. 2006) (observing debtors failed to obtain the requisite
10 An entity “may be a debtor” under Section 301 by complying with various statutory
requirements, see, e.g., 11 U.S.C. § 109 (describing who “may be a debtor”). One such
requirement, set out in 11 U.S.C. §§ 109(h) and 521(b)(1), is obtaining credit counseling prior to
filing a bankruptcy petition. See Zarnel, 619 F.3d at 164; 11 U.S.C. § 109(h)(1) (“[A]n individual
may not be a debtor under this title unless such individual has, during the 180-day period ending
on the date of filing of the petition by such individual, received from an approved nonprofit budget
and credit counseling agency described in section 111(a) an individual or group briefing . . . that
outlined the opportunities for available credit counseling and assisted such individual in
performing a related budget analysis.”). The prospective debtor must provide a credit counseling
certificate, i.e., “a certificate from the approved nonprofit budget and credit counseling agency that
provided the debtor services under section 109(h) describing the services provided to the debtor.”
11 U.S.C. § 521(b)(1); see also Zarnel, 619 F.3d at 158–59 (describing debtor’s failure to comply
with 11 U.S.C. § 521(b) and 11 U.S.C. § 109(h)(3)(A)). Alternatively, the debtor must submit to
the court “a certification” describing, inter alia, exigent circumstances warranting a waiver of the
counseling requirement. 11 U.S.C. § 109(h)(3)(A). An individual who fails to comply with the
requirements of Section 109 is not “eligible” to be a debtor and thus not entitled to relief. See in
re Barnet, 737 F.3d 238, 247–48 (2d Cir. 2013) (compiling authorities); Zarnel, 619 F.3d at 166.
credit-counseling certificates as required by 11 U.S.C. §§ 109(h), 521(b)), aff’d sub nom. Adams
v. Finlay, No. 06-CV-6039 (CLB), 2006 WL 3240522 (S.D.N.Y. Nov. 3, 2006), vacated and
remanded sub nom. Zarnel, 619 F.3d 156. The Second Circuit reversed. It held that the filing of
a bankruptcy petition commenced the case and triggered an automatic stay, even if the petitioner
was not eligible to “be a debtor under the Bankruptcy Code.” Zarnel, 619 F.3d at 166–67, 170
(citing 11 U.S.C. § 362(a)). This conclusion, Zarnel explained, flowed directly from the
Bankruptcy Code: “The term petition means petition filed under [S]ection 301 . . . of this title, as
the case may be, commencing a case under this title.” See id. at 166 (emphasis added) (internal
quotation marks omitted) (quoting 11 U.S.C. § 101(42)). “Section 362(a) of the Code states that
‘a petition filed under [S]ection 301 . . . operates as a stay.’” Id. at 165 (quoting 11 U.S.C. §
362(a)). Section 362(b), which lists the “circumstances under which the filing of a petition does
not operate as a stay,” makes no mention of a “debtor’s ineligibility.” Id. at 170. “Moreover, none
of the mechanisms outlined in the remainder of the statute for confirming the existence of a stay
or for granting relief from one address anything related to the ineligibility of a debtor.” Id. “Thus,
a petition filed under [Section 301] both ‘operates as a stay,’ and commences a bankruptcy case.”
Id. at 166 (internal citations omitted). Here, Zarnel’s reasoning dictates that an automatic stay
went into effect when Abadi filed her petition under Section 301—even if her petition did not
comply with Rule 1004.1 or her power of attorney was improperly executed under state law.
Honeedew argues that Zarnel is inapposite and that In re Vitagliano, 303 BR 292, 293
(Bankr. W.D.N.Y. 2003) establishes that no automatic stay came into effect. (Stay Br., Dkt. 12,
at 23–24; Sanctions Br., Dkt. 10, at ECF 22–23.) This argument fails for two reasons. First,
Vitagliano repudiates Honeedew’s argument that an automatic stay did not come into effect
because Abadi’s power of attorney was not validly executed under New York law. In that case,
the bankruptcy court confronted whether a “person’s attorney-in-fact may effectively commence
a bankruptcy case” for that person. 303 BR at 292. Debtor’s counsel argued that “under state law,
his mother’s signature as his attorney-in-fact suffices to constitute his signature on a document.”
Id. at 292–93. The Vitagliano court determined that “it is not for the State of New York to prescribe
what constitutes the satisfaction of the requirement of [Section] 301” and therefore what
commences a case. Id. at 293. So too here. Honeedew’s reliance on New York law governing
execution of power of attorney agreements does not bear on whether a federal bankruptcy case
commences.
Second, Vitagliano is not distinguishable from Zarnel. Honeedew asserts that Zarnel is
inapplicable because it concerns the “eligibility” of the debtor for relief, whereas Vitagliano and
this instant case concern “the actual authority to commence the case” on behalf of a debtor.
(Sanctions Reply, Dkt. 9, at 9 (first emphasis added); see also Stay Br., Dkt. 12, at ECF 23–27.)
Not quite. Vitagliano, like Zarnel, concerns whether a bankruptcy case is commenced where a
petition fails to comply with procedural requirements as set out in the Bankruptcy Code and Rules.
See Vitagliano, 303 B.R. at 293. The Vitagliano court stated that it would determine whether a
case was commenced if a petition complied with “Bankruptcy Law and Rules.” See id. The
Vitagliano court consulted Bankruptcy Rule 1004.1, which allows a representative to “file a
voluntary petition on behalf of [an] infant or incompetent person,” and Bankruptcy Rule 9010(c),
which discusses the “authority” of an attorney-in-fact “to represent a creditor,” and determined
that a debtor could file a petition through an attorney-in-fact only if he was incompetent or an
infant. See id. (emphasis omitted) (first quoting Fed. R. Bankr. P. 1004.1; and then quoting Fed.
R. Bankr. P. 9010(c)). Because the debtor was not incompetent or an infant, the court concluded,
his petition did not comply with Rule 1004.1, and therefore the case did not commence. See id. at
293–94. Although Zarnel concerned a debtor’s failure to meet a different procedural requirement,
the essential question it addressed was the same as Vitagliano: whether a debtor who fails to abide
by the Bankruptcy Code and its Rules, “and yet files a bankruptcy petition has . . . actually
commenced a case.” See Zarnel, 619 F.3d at 164.11 Zarnel, unlike Vitagliano, answered in the
affirmative. Id. at 166–67. To the extent that Zarnel and Vitagliano are in tension, Zarnel post-
dates Vitagliano, and binds the Court. Zarnel makes clear that a petition’s compliance with the
Bankruptcy Rules or Code has no bearing on whether the petitioner can commence a case and,
thus, trigger an automatic stay. See id. at 166–67, 170.
11 At other points in its briefing, Honeedew appears to conflate Vitagliano with a smattering
of cases suggesting that a case is not commenced where a power of attorney does not explicitly
authorize the attorney-in-fact to file for bankruptcy. (See Sanctions Br., Dkt. 10, at ECF 22–24;
Stay Br., Dkt. 12, at 23–27.) However, the analysis in these cases is divorced from relevant
statutory authority. See In re Morgan, 182 B.R. 4, 5 (Bankr. S.D.N.Y. 1995) (determining that
there was no “voluntary” bankruptcy case before the court, where power of attorney did not
explicitly authorize filing for bankruptcy on behalf of client, but engaging in no analysis of the
meaning of “voluntary” under Section 301 of the Bankruptcy Code); In re Raymond, 12 B.R. 906,
907 (Bankr. E.D. Va. 1981) (acknowledging that “there is no[]” law applicable to the situation and
citing to Virginia agency law); In re Sullivan, 30 B.R. 781, 782 (Bankr. E.D. Pa. 1983) (citing
Raymond, 12 B.R. at 906); In re Ballard, No. I-87-0718, 1987 WL 191320, at *1 (Bankr. N.D.
Cal. Apr. 30, 1987) (basing analysis on “equity” (quoting Sullivan, 30 B.R. at 782)); In re Brown,
163 B.R. 596, 597–98 (Bankr. N.D. Fla. 1993) (citing to caselaw, not the text of the Bankruptcy
Code, in discussing whether to “permit a party other than the debtor to sign and file a petition
under a power of attorney” (citing Ballard, 987 WL 191320, at *1)); in re Curtis, 262 B.R. 619,
622–23 (Bankr. D. Vt. 2001) (taking a similar approach and observing that “[s]ome courts
recognize the effectiveness of a power of attorney only if ratified by the debtor” while others
“scrutinize the empowering document for express language specifically authorizing the filing of
bankruptcy” (citing, inter alia, Raymond, 12 B.R. at 906)). The Court finds these cases
unpersuasive and instead follows Zarnel’s well-reasoned analysis of the statutory text and purpose
of the automatic stay. See Zarnel, 619 F.3d at 171 (explaining that its interpretation of Section
301 and 362 gives meaning to the purpose of the automatic stay); see also Wekell v. United States,
14 F.3d 32, 33 (9th Cir. 1994) (concluding that the automatic stay went into effect even when the
debtor’s petition was filed pursuant to a power of attorney that did not explicitly authorize the
attorney-in-fact to file for bankruptcy because “[i]f such latent defects [in the power of attorney]
could undermine the validity of the stay,” the purpose of the automatic stay would be undermined);
In re Rich, No. 10-64847-B-7, 2012 WL 8249563, at *5 (Bankr. E.D. Cal. Aug. 29, 2012)
(reasoning that the “automatic stay is applicable even though the petition was filed by a person
without authority to do so” (citing Wekell, 14 F.3d at 33)).
A consideration of the “purpose and framework of the stay,” Zarnel, 619 F.3d at 171,
bolsters the conclusion that Zarnel is dispositive. “Nothing is more basic to bankruptcy law than
the automatic stay and nothing is more important to fair case administration than enforcing stay
violations.” In re Lehman Bros. Holdings, Inc., 433 B.R. 101, 112 (Bankr. S.D.N.Y. 2010), aff’d
sub nom. In re Lehman Bros. Holdings Inc., 445 B.R. 130 (S.D.N.Y. 2011); see Fogarty, 39 F.4th
at 80 (describing automatic stay as “one of the fundamental debtor protections” (quoting E.
Refractories Co. Inc. v. Forty Eight Insulations Inc., 157 F.3d 169, 172 (2d Cir. 1998))). An
automatic stay “provid[es] debtors with a fresh start, protect[s] the assets of the estate, and allow[s]
the bankruptcy court to centralize disputes concerning the estate.” MBNA Am. Bank, N.A. v. Hill,
436 F.3d 104, 109 (2d Cir. 2006); In re Colonial Realty Co., 980 F.2d 125, 133 (2d Cir. 1992)
(explaining that an automatic stay aims to “prevent a chaotic and uncontrolled scramble for the
debtor’s assets in a variety of uncoordinated proceedings in different courts” (citation omitted)).
The automatic stay also protects creditors, as, without such a stay, “creditors would be able to
pursue their own remedies against the debtor’s property,” with those “act[ing] first . . . obtain[ing]
payment . . . in preference to and to the detriment of other creditors.” St. Paul Fire & Marine Ins.
Co. v. PepsiCo, Inc., 884 F.2d 688, 701 (2d Cir. 1989) (citation omitted). “If it were unclear
whether the stay was in place immediately following a debtor’s filing for bankruptcy,” creditors
would be incentivized to “continue their collection efforts,” and undermine a “fair distribution of
assets.” Zarnel, 619 F.3d at 171; see Wekell, 14 F.3d at 33–34 (similarly concluding that such
uncertainty as to the stay would place creditors “in a difficult position”: either to “enforce their
claim and risk violating what turns out to be a valid stay,” or “withhold enforcement of their claim
and risk the running of the statute of limitations if it turns out the stay was ineffective”). To avoid
that outcome, the automatic stay is intentionally broad—even petitions filed in bad faith may
shelter under the protections of the automatic stay, which will only be lifted “after notice and a
hearing.” See 11 U.S.C. § 362(d)(1) (directing bankruptcy courts to “terminat[e], annul[],
modify[], or condition[] [an automatic] stay” for cause); see also In re Sonnax Indus., Inc., 907
F.2d 1280, 1286–87 (2d Cir. 1990) (considering “bad faith” in assessing whether there was cause
to lift a stay); Raleigh v. Ill. Dep’t of Revenue, 530 U.S. 15, 25 (2000) (same); Alanis v. Nelson,
No. 11-CV-2583 (JEM), 2011 WL 13220324, at *2 (C.D. Cal. May 11, 2011) (“The automatic
stay applies even if the bankruptcy petition was ultra vires or in bad faith.” (citing Wekell, 14 F.3d
at 33)).12
Thus, even if Abadi’s power of attorney was not properly executed pursuant to New York
law and the Bankruptcy Rules, Abadi’s bankruptcy case still commenced, and an automatic stay
went into effect, when she filed her petition on July 11, 2024. To the extent that defects in the
petitioner’s power of attorney exist, those may serve as reason to dismiss the case or seek relief
from the automatic stay at a later point in the bankruptcy proceeding. See, e.g., Wekell, 14 F.3d
at 32 (explaining that “the Bankruptcy Code provides a relatively simple procedure for resolving
any disputes as to [an automatic stay’s] effectiveness: a relief-from-stay hearing”); see also 11
U.S.C. § 707(a) (allowing a bankruptcy court to dismiss a case for cause after notice and hearing);
In re Scotto, No. 809-75956 (REG), 2010 WL 1688743, at *9 (Bankr. E.D.N.Y. Apr. 26, 2010)
12 Congress protected against such bad-faith filings by providing additional restrictions on
the imposition of an automatic stay for debtors who have filed Chapter 7, 11, or 14 petitions within
the past year that have been dismissed. See 11 U.S.C. § 362(c)(3). For these frequent filers, any
automatic stay will be terminated after 30 days unless the petitioner can show good cause. See id.;
H.R. Rep. No. 109-31, at 70 (2005) (explaining that this provision was enacted pursuant to the
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 to reduce abusive filings);
Laura B. Bartell, Staying the Serial Filer - Interpreting the New Exploding Stay Provisions of S
362(c)(3) of the Bankruptcy Code, 82 Am. Bankr. L.J. 201, 224 (2008) (“The Senate Judiciary
Committee report stated that [Section 362(c)(3)] was intended to ‘reduc[e] abusive uses of the
Bankruptcy Code.’” (alteration in original) (citation omitted)).
(compiling cases dismissing petitions filed under deficient powers of attorney); In re Curtis, 262
B.R. 619, 622–24 (Bankr. D. Vt. 2001) (discussing, on a motion to dismiss, whether a “general
power of attorney is sufficient to authorize the attorney-in-fact to file a petition on behalf of a
debtor”); In re O’Connor, No. 08-16434, 2009 WL 1616105, at *2 (Bankr. N.D. Ohio Feb. 27,
2009) (determining, on a motion to dismiss, “whether the debtor’s power of attorney is specific
enough to authorize her daughter to sign a bankruptcy petition on the debtor’s behalf”); In re
Nakano, No 19-11179 (RK), 2019 WL 2896199, at *5, *10 (Bankr. C.D. Cal. June 26, 2019)
(explaining, in the context of a power of attorney that did explicitly authorize the filing of
bankruptcy, that “[i]f authority to file a bankruptcy petition to commence a Chapter 7 bankruptcy
case is insufficient, this is cause for dismissal of a Chapter 7 bankruptcy”); In re Rice, 521
B.R. 405, 408 (Bankr. N.D. Ga. 2014) (discussing defective power of attorney in the context of a
motion to dismiss a bankruptcy case). But, as Zarnel establishes, such defects do not prevent an
automatic stay from coming into effect once the petition is filed.
The Court therefore concludes that an automatic stay came into effect on July 11, 2024,
when Abadi filed her petition. In so doing, it joins the Second Circuit and a growing consensus of
courts holding that an automatic stay applies “the moment a petition is filed.” See Sotomayor-
Serra v. Swiss Chalet Inc., No. 12-CV-1469 (JAG), 2012 WL 6738310, at *1 (D.P.R. Dec. 28,
2012) (citing Zarnel, 619 F.3d 156); In re Atkinson, No. 22-31746 (KLT), 2022 WL 17722840, at
*3 (Bankr. D. Minn. Dec. 15, 2022) (“[T]he automatic stay went into effect upon the
commencement of this [c]ase.” (citing Zarnel, 619 F.3d 156)); In re Bolling, No. 08-0746, 2009
WL 150629, at *1–2 (Bankr. D.D.C. Jan. 21, 2009) (“[T]he debtor does benefit from the filing of
an invalid petition [for failure to obtain prepetition credit counseling] as it gains the debtor the
benefit of the automatic stay.”); In re Jackson, No. 08-0755, 2009 WL 150628, at *2 (Bankr.
D.D.C. Jan. 21, 2009) (same); Wekell, 14 F.3d at 33 (concluding that “the Bankruptcy Code’s
automatic stay goes into effect [even] when the filing of the petition is ultra vires”).
2. The Automatic Stay Applies to the State Contempt Proceedings
“Generally, actions for civil contempt are considered private collection devices subject to
the automatic stay while criminal contempt proceedings are not.” In re White, 478 B.R. 177, 181
(Bankr. S.D.N.Y. 2012). To determine whether a contempt order is civil or criminal, the Court
looks to the law governing the underlying order, “the provisions of the order itself[,] and its
surrounding circumstances.” See In re Maloney, 204 B.R. 671, 674 (Bankr. E.D.N.Y. 1996).
Relevant here, New York recognizes two kinds of contempt orders, civil and criminal. Under its
civil contempt powers, a New York court may “punish, by fine and imprisonment, or either, a
neglect or violation of duty, or other misconduct, by which a right or remedy of a party to a civil
action or special proceeding, pending in the court may be defeated, impaired, impeded, or
prejudiced.” N.Y. Jud. Law § 753(A). Under its criminal contempt powers, a court may punish
“a person guilty of,” inter alia, “[w]ilful disobedience to its lawful mandate.” Id. § 750(A).
The primary distinction between both forms of contempt is “the rights that are being
vindicated and the level of willfulness of the conduct.” White, 478 B.R. at 181 (citing McCormick
v. Axelrod, 59 N.Y.2d 574, amended, 60 N.Y.2d 652 (1983)). “Civil contempt has as its aim the
vindication of a private right of a party to litigation,” McCormick, 59 N.Y.2d at 582–83; McCain
v. Dinkins, 84 N.Y.2d 216, 226 (1994), and thus “operates to coerce compliance with a court order
for the other party’s benefit,” Maloney, 204 B.R. at 674; see Gompers v. Buck’s Stove & Range
Co., 221 U.S. 418, 442 (1911) (describing “imprisonment for civil contempt” as “coercing the
defendant to do what he had refused to do”). Consistent with this aim, an individual imprisoned
for civil contempt can “discharge himself at any moment by doing what he had previously refused
to do.” See Gompers, 221 U.S. at 442; Rubackin v. Rubackin, 875 N.Y.S.2d 90, 94 (2d Dep’t
2009) (same); White, 478 B.R. at 183 (“The contemnor holds the keys to his jail cell, a sure sign
that the contempt is civil.”); People v. Sweat, 24 N.Y.3d 348, 356 (2014) (similar). Criminal
contempt, by comparison, vindicates “an offense against public justice and is utilized to protect
the dignity of the judicial system and to compel respect for its mandates.” McCormick, 59 N.Y.2d
at 583. Because it primarily aims to “sanction” the offender, criminal contempt is generally
“imposed for a definite term . . . without the possibility of shortening that term by purging the
contempt.” Rubackin, 875 N.Y.S.2d at 94; Maloney, 204 B.R. at 674 (same).
The Court finds that Abadi’s incarceration was the product of civil, not criminal, contempt.
Throughout Justice Bannon’s Contempt Order, she focused on the vindication of Honeedew’s
rights, specifically, its right to the Confession of Judgment and how its ability to collect that
judgment was “prejudiced by the [Abadis’] failure to comply [with court orders].” (B.R. 201); see
N.Y. Jud. Law § 753(A). The Order documented the “extensive enforcement efforts on the part
of [Honeedew],” including “17 motions in the action alone over the course of more than six years
of litigation.” (B.R. 195.) Honeedew, the Order found, incurred “$57,000 in attorney’s fees for
New York counsel, as well as attorney’s fees and costs for Argentine counsel in the sum of
$150,000” in combatting the Abadis’ attempts to nullify the judgment in Argentina. (B.R. 198.)
And when a court in Argentina questioned the validity of the judgment, Honeedew had to “post a
[$ ]14,000 bond to pursue enforcement of the judgment.” (Id.) Although the Order charged the
Abadis with being “willfully contemptuous” of court orders, (see B.R. 200, 202), its “purge”
provision supports the conclusion that its primary goal was to coerce the Abadis’ compliance, not
penalize them for failing to abide by the court’s orders: the Order provided that the Abadis’ four-
month incarceration would end immediately “upon proof of payment to [Honeedew] of the purge
amount of $4,603,408.23, plus statutory interest of 9% from May 17, 2017,” (B.R. 203, 212). “If
the order were ‘simply to punish’ [the] Debtor” for several years of evasion, “it surely would not
have contained a provision by which Debtor could have purged the contempt.” In re Siskin, 231
B.R. 514, 519 (Bankr. E.D.N.Y. 1999).
Because the “provisions of the order itself and its surrounding circumstances” establish
that Abadi was incarcerated to coerce compliance with court orders for Honeedew’s benefit, see
Maloney, 204 B.R. at 674, the Court concludes that the State Contempt Proceedings and the
resulting Contempt Order were civil in nature and were not the “continuation of a criminal action
or proceeding against the debtor,” see 11 U.S.C. § 362(b)(1), and therefore, the automatic stay
applied and should have led to Abadi’s release from prison. 13
II. Sanctions
Having concluded that an automatic stay took effect on July 11, 2024, when Abadi filed
her petition for bankruptcy, the Court next turns to whether actual and punitive damages sanctions
were warranted because Honeedew violated the stay. To obtain damages for a stay violation, there
must be (1) a willful violation of the automatic stay; (2) that caused actual damages; and, if the
plaintiff seeks punitive damages, (3) appropriate circumstances exist to award punitive damages.
See 11 U.S.C. § 362(k); In re Morway, No. 02-10009, 2002 WL 34438674, at *3 (Bankr. D. Vt.
Mar. 8, 2002) (setting out similar elements: a willful violation that injured the individual seeking
damages); In re Crowder, No. 16-20440-PRW, 2016 WL 3453214, at *2 (Bankr. W.D.N.Y. June
16, 2016) (same). For the following reasons, the Court determines that Honeedew willfully
violated the stay because it failed to assist in Abadi’s release from Rikers and, in fact, raised
13 Contrary to what Justice Bannon interpreted Pick and Slarskey to argue, an automatic
stay does not necessarily mean that “everything is stopped and frozen” and, as a result, “nothing
can be done,” including releasing a debtor from contempt-related incarceration. (See B.R. 127.)
Where, as here, the “status quo” would leave Abadi subject to continued enforcement attempts,
the automatic stay required Justice Bannon to take affirmative action. See infra pp. 22–24.
arguments before the State Supreme Court that encouraged it to continue its contempt proceedings.
Although the Court agrees that actual and punitive damages were warranted, for the following
reasons, it must vacate and remand the awards for recalculation.
A. Willful Violation of the Stay
Honeedew first asserts that it did not willfully violate the stay because it “took no position
with respect to the automatic stay” before Justice Bannon. (Sanctions Br., Dkt. 10, at ECF 26–
28.) For example, Honeedew claims that it appeared before Justice Bannon on July 15, 2024, at
the direction of the court pursuant to a previously scheduled appearance, and Justice Bannon made
the decision to continue Abadi’s confinement at Rikers notwithstanding the automatic stay. (See
id. at ECF 25 n.6, 28.) Honeedew also rejects the notion that it violated the stay by failing “to seek
the Debtor’s release.” (Id. at ECF 27 n.7.) For the following reasons, the Court disagrees.
A violation of a stay is willful where a creditor “knew of the automatic stay,” In re
Crysen/Montenay Energy Co., 902 F.2d 1098, 1104–05 (2d Cir. 1990) (quoting In re Bloom, 875
F.2d 224, 227 (9th Cir. 1989)), and had “general intent simply to perform the act found to violate”
the stay, Weber, 719 F.3d at 82. “Not even a good faith mistake of law or a legitimate dispute as
[whether an automatic stay is in effect] relieve a willful violator of the consequences of his act.”
See In re Sullivan, 367 B.R. 54, 62 (Bankr. N.D.N.Y. 2007) (citation omitted); In re Campbell,
398 B.R. 799, 812 (Bankr. D. Vt. 2008) (finding a bank’s violation of the stay to be willful even
where it asserted “it had no reason to believe the automatic stay was still in place”).
As several courts in this Circuit have held, “upon receiving actual notice of the
commencement of a bankruptcy case, a creditor has an affirmative duty under [Section] 362 to
take the necessary steps to discontinue its collection [or enforcement] activities against the debtor.”
See In re Parry, 328 B.R. 655, 659 (Bankr. E.D.N.Y. 2005); In re Wright, 328 B.R. 660, 663
(Bankr. E.D.N.Y. 2005); Siskin, 231 B.R. at 520. Such necessary steps can include “halt[ing] or
revers[ing] pending state court actions,” even those “commenced prior to the filing of a bankruptcy
petition.” See In re Sucre, 226 B.R. 340, 347 (Bankr. S.D.N.Y. 1998) (quoting Matter of Sams,
106 B.R. 485, 490 (Bankr. S.D. Ohio 1989)). Similarly, a creditor’s affirmative efforts to
perpetuate collection and enforcement may violate an automatic stay. See In re Cohoes Indus.
Terminal, Inc., 62 B.R. 369, 377 (Bankr. S.D.N.Y.) (“[C]reditors may not pursue contempt
proceedings to enforce the collection of prepetition claims or to obtain possession of the property
of the estate.”), aff’d, 70 B.R. 214 (S.D.N.Y. 1986), aff’d sub nom. In re Cohodes Indus. Terminal
Inc., 831 F.2d 283 (2d Cir. 1987). And a “failure to act by a creditor . . . where the creditor had
knowledge of the bankruptcy filing,” may also violate the automatic stay. See Wright, 328 B.R. at
663; see also Siskin, 231 B.R. at 520 (explaining that acts in violation of a stay include affirmative
actions as well as “refusal or failure to take action” (citation and internal quotation marks omitted)).
The Court agrees that Honeedew had an “affirmative” obligation to seek the Debtor’s
release. Tr. at 40:19–22, Bankr. Dkt. 122 (reaching this conclusion). Justice Bannon’s Contempt
Order was an effort to enforce—through the coercive measure of incarceration—a judgment. See
11 U.S.C. § 362(a)(2); In re Goodman, 277 B.R. 839, 842 (Bankr. M.D. Ga. 2001) (similarly
making this observation). So long as Abadi’s incarceration continued, so did the enforcement
efforts. Accordingly, to stay enforcement, Honeedew had to “take steps . . . to ensure that the
incarceration for civil contempt [was] no longer enforced and that the Debtor [was] released from
incarceration.” See In re Birchall, No. 07-13232-WCH, 2007 WL 1992089, at *9 (Bankr. D. Mass.
July 3, 2007) (reaching this conclusion based on a similar analysis); Goodman, 277 B.R. at 842–
43 (making a similar observation). Siskin, 231 B.R. 514, well-illustrates this obligation. In that
case, a debtor faced an outstanding Warrant of Arrest and Order of Commitment, both of which
arose out of efforts to enforce two judgments against him. Id. at 517. After filing a petition for
bankruptcy, the debtor was incarcerated pursuant to the Order of Commitment, while the warrant
remained outstanding. Id. Despite knowing that the petition was filed, both creditors did not take
“any affirmative actions to obtain a stay or withdraw the Order of Commitment or the Warrant of
Arrest.” Id. Instead, the creditors “opposed [the] [d]ebtor’s attempt to obtain a stay of the
[w]arrant,” and his “petition for release from jail.” Id. The Siskin court held that the creditors
violated the automatic stay because they failed to abide by their “affirmative obligation” to
withdraw the Order of Commitment and “ensure that the outstanding Warrant of Arrest was not
enforced.” Id. at 520–21. “Once [the d]ebtor filed his petition[,] all actions to collect should have
ceased.” Id.
Honeedew shirked its affirmative obligation to seek Abadi’s release. Honeedew became
aware of Abadi’s petition for bankruptcy on or about July 12, 2024, when informed by Abadi’s
bankruptcy counsel. (B.R. 109.) Despite being asked to cooperate to have Abadi “immediately
released,” (id.), Honeedew did not “tak[e] affirmative steps to assist [Abadi’s counsel] in obtaining
[her] release from Rikers,” Tr. at 40:19–22, Bankr. Dkt. 122. To the contrary—Honeedew actively
discouraged Abadi’s release before Justice Bannon. Id. As the Bankruptcy Court correctly
observed, Honeedew provided Justice Bannon with legal arguments suggesting that the automatic
stay was not in place, such as by informing her that Honeedew had a “fundamental problem with
the actual petition file” and that the power of attorney that Abadi had relied on to file her
bankruptcy petition was not proper, thus rendering the bankruptcy filing a “nullity.” (B.R. 125–
26, 134.)14 Honeedew also reinforced the incorrect notion that ordering Abadi’s release would
14 The Court is unconvinced by Honeedew’s protestations that it did not willfully violate
the stay because it genuinely had “extreme doubt as to the validity of the initial petition.”
(Sanctions Br., Dkt. 10, at ECF 27 n.7.) These doubts do not excuse violations of an automatic
stay. As explained, the automatic stay comes into effect once a bankruptcy petition is filed, even
if that petition is later found to be defective. See supra pp. 11–18. Ignorance of bankruptcy law,
violate the automatic stay. (See B.R. 124 (Honeedew agreeing there was a “conundrum” because,
on the one hand, “one argument is, we’re stayed, you can’t do anything,” and the “other argument
is [Abadi] is asking for relief from your prior order”); B.R. 128 (asserting that “[Abadi] cannot say
[the proceeding] is stayed, but you have to do something at the same time”).) And Honeedew
effectively argued for Abadi’s continued incarceration, asserting that letting “Abadi [out] until [the
Bankruptcy Court] determine[d] if the bankruptcy petition was properly filed does not seem
appropriate under the circumstances.” (B.R. 126 (emphasis added).) Indeed, it appears that
Honeedew, in fact, persuaded Justice Bannon that she lacked the authority to release Abadi
because of the stay. (See B.R. 127, 129, 130 (Justice Bannon explaining, in declining to release
Abadi, that “[a] release is an order, . . . the same thing as an order to produce,” and that “nothing
can be done in this case because there’s a stay. . . . [E]verything is stopped and frozen”).) Because
Honeedew failed to ensure that Justice Bannon’s Contempt Order was not enforced and that Abadi
was released from incarceration, it violated the automatic stay. See In re Valentine, 611 B.R. 622,
651 (Bankr. E.D. Mo. 2020) (determining that, “by not assisting in the release of the Debtor from
incarceration, the Defendants willfully violated the automatic stay”); Siskin, 231 B.R. at 520–21
(“[Creditor], with knowledge of Debtor’s bankruptcy, at the very least had an obligation not to
hinder Debtor’s release.”).
and the failure to educate oneself on the relevant law, does not excuse violations of a stay or render
those violations not willful. See In re Weatherford, 413 B.R. 273, 285 (Bankr. D.S.C. 2009)
(“[I]gnorance of bankruptcy law does not excuse anyone involved in a willful violation.” (citation
omitted)); In re Killmer, 513 B.R. 41, 50–51 (Bankr. S.D.N.Y. 2014) (rejecting argument that stay
violation was not willful because it was “caused by an incorrect interpretation of the law”);
Sullivan, 367 B.R. at 62–63 (citing In re Layton, 220 B.R. 508, 517 (Bankr. N.D.N.Y. 1998)
(holding that “a good faith mistake of law does not relieve a willful violator of the consequences
of the act.” (citations omitted))).
B. Actual Damages
Honeedew next contends that an award of actual damages was improper because Abadi’s
counsel was “overly litigious” in pursuing violations of the automatic stay. (Sanctions Br.,
Dkt. 10, at ECF 28–30.) Specifically, Honeedew contends that Abadi waited until one hour before
the hearing to enforce the stay, on July 22, 2025, to correct the alleged defects related to her
signature on the petition. (See id. at 28–29); Am. Pet., Bankr., Dkt. 16. This delay “caused much
of the cost,” (Sanctions Reply, Dkt. 9, at 14), because Abadi could have “easily
provided . . . information which may have caused Honeedew to affirmatively seek Mrs. Abadi’s
release,” (Sanctions Br., Dkt. 10, at ECF 30). As further evidence of opposing counsel’s excessive
litigiousness, Honeedew points to the amount of time Abadi’s counsel spent on certain tasks, such
as the 2.5 hours it charged for sending an email to Honeedew informing it that a stay was in place.
(Sanctions Reply Br., Dkt. 9, at 13.) These costs, it further maintains, “are routinely born by
debtors.” (Sanctions Br., Dkt. 10, at ECF 30.) For the reasons set forth below, the Court concludes
that actual damages are warranted but finds that Judge Mazer-Marino abused her discretion by
awarding damages that did not occur as a result of Honeedew’s violation of the automatic stay.
Actual damages include compensatory damages for the harm suffered from the violation
of the stay, as well as attorney’s fees. See 11 U.S.C. § 362(k)(1) (providing for recovery of “actual
damages, including costs and attorneys’ fees”); In re Prusan, 495 B.R. 203, 208 (Bankr. E.D.N.Y.
2010) (explaining that “attorneys’ fees and costs are recoverable under [Section] 362(k)”); In re
Beebe, 435 B.R. 95, 101 (Bankr. N.D.N.Y. 2010) (same); In re Sturman, No. 10-CV-6725 (RJS),
2011 WL 4472412, at *3 (S.D.N.Y. Sep. 27, 2011) (same). Attorneys’ fees may qualify as actual
damages, “even in the absence of pecuniary loss to the debtor,” where those fees were reasonable
and where those fees were “necessary to (1) stop an ongoing stay violation, (2) undo the effects of
a stay violation, or (3) recover pre-litigation actual damages.” In re Greene, No. 17-CV-20543
(PRW), 2017 WL 3588627, at *2 (Bankr. W.D.N.Y. Aug. 18, 2017) (citing Crowder, 2016
WL 3453214, at *3); In re Hall, 518 B.R. 202, 208 n.7 (Bankr. N.D.N.Y. 2014) (“[A]ctual
damages for a creditor’s violation of the stay . . . often equates with recovery of the attorney’s fees
and costs incurred to stop the violation.”).15 Awards of such fees are tempered by courts’
“reluctance to foster a ‘cottage industry’ built around satellite fee litigation,” and therefore, a court
may “reduce[] awards of attorneys’ fees in situations where unnecessary costs were incurred.” In
re Robinson, 228 B.R. 75, 85 (Bankr. E.D.N.Y. 1998) (citations omitted).
Here, Abadi’s attorneys sought $21,642.50 for 45.1 billable hours, allocated as follows:
2.5 hours researching automatic stay law and communicating with Honeedew about the effect of
the automatic stay; 4.8 hours preparing for the hearing before the State Supreme Court and
appearing before the State Supreme Court; 1 hour reviewing the transcript of the hearing; 8 hours
drafting the motion to enforce the automatic stay and for sanctions; 10.4 hours preparing for and
appearing at the order to show cause hearing; 2.8 hours securing Abadi’s release from Rikers; 1.6
hours researching Honeedew’s appeal of the Bankruptcy Court’s Enforcement Order; and 14 hours
drafting the motion for sanctions. Sanctions Mot., Bankr., Dkt. 67, at 11–12.16
As a threshold matter, the Court rejects Honeedew’s insistence that the debtor bears “all of
the costs and briefing” and that Abadi caused most of the costs in this case. (See Sanctions Br.
Dkt. 10, at ECF 29–30; Sanctions Reply, Dkt. 9, at 13–14.) It is well established that the party
violating the automatic stay bears the cost of actual damages, not the debtor.17 In re Grinspan,
15 The Court makes no determination as to whether Abadi had pecuniary losses or
compensable harm, as Abadi did not seek—and thus the Bankruptcy Court made no finding as
to—damages related to these harms. Sanctions Mot., Bankr., Dkt. 67, at 13 n.6.
16 Honeedew does not object to the hourly rate charged by Abadi’s attorneys.
17 Honeedew misapplies relevant caselaw when it claims that debtors usually bear these
costs. (Sanctions Br., Dkt. 10, at ECF 29–30.) The cases to which Honeedew cites discuss how
597 B.R. 725, 730 (Bankr. E.D.N.Y. 2019) (“Defendants willfully violated the automatic stay and,
by statute, are liable for actual damages . . . .”). And, in fact, it was Honeedew, not Abadi’s
counsel, that was responsible for much of the fees incurred: Abadi’s counsel, by informing
Honeedew of the automatic stay’s effect, “provided notice to Honeedew [along with] information
which may have caused Honeedew to affirmatively seek Mrs. Abadi’s release.” (Contra Sanctions
Br., Dkt. 10 at ECF 30); see supra p. 11–18 (explaining that the filing of a petition triggers an
automatic stay). Instead, Honeedew incorrectly insisted that the automatic stay did not apply and
encouraged Abadi’s continued incarceration in violation of the stay, thereby forcing Abadi’s
counsel to make further expenditures to affirmatively enforce the stay four days later. (B.R. 146–
47 (declaration supporting Abadi’s motion to enforce stay)); see Sanctions Mot., Bankr., Dkt. 67,
11–12 (documenting fees incurred in enforcing the stay and securing Abadi’s release); In re Voll,
512 B.R. 132, 141–42 (Bankr. N.D.N.Y. 2014) (rejecting argument that debtors’ counsel
“unnecessarily increased the costs of litigation” because creditor’s “elect[ion] to oppose Debtors’
motion on the basis that no violation of the automatic stay occurred . . . requir[ed] Debtors’ counsel
to prove the violation”); Robinson, 228 B.R. at 86 (“Where there is a willful violation, the violator
must compensate a debtor’s counsel for his reasonable response to that violation. To deny fees
incurred litigating the motion would inappropriately saddle a debtor or debtor’s attorney with such
expenses.”).18
civil contempt orders require the contemnor to bear the cost to purge that contempt. See In re
Burgess, 503 BR 154, 158 (Bankr. M.D. Fla. 2014); Maloney, 204 B.R. at 674–75; In re Moon,
201 B.R. 79, 84–86 (Bankr. S.D.N.Y. 1996), rev’d, 211 B.R. 483 (S.D.N.Y. 1997). These cases
do not discuss damages under Section 362(k) and thus do not support the proposition that the
debtor bears the costs related to enforcing a stay.
18 Honeedew’s other allegations of overly litigious conduct are also unsupported by the
record. Judge Mazer-Marino found—and Honeedew does not meaningfully contest—that Abadi
did not wait to amend her bankruptcy petition to make “herself a more sympathetic character”;
Although the Court agrees that Abadi’s counsel is entitled to some measure of actual
damages, it finds that Judge Mazer-Marino erred in one respect in her calculation of actual
damages. It is well-established that the actual damages claimed must be caused by the violation
of the automatic stay. See Morway, 2002 WL 34438674, at *3 (requiring, inter alia, violation to
cause injury); Crowder, 2016 WL 3453214, at *2 (same); In re Sucre, 226 B.R. at 350 (same); see
also In re Laskaratos, 605 B.R. 282, 300 (Bankr. E.D.N.Y. 2019) (describing compensatory
damages as seeking to “reimburse the costs caused by the stay violation”). As Judge Mazer-
Marino found, Honeedew willfully violated the automatic stay based on its conduct at the July 15,
2024 hearing before Justice Bannon. (See, e.g., B.R. 295–96.) However, the 2.5 hours Abadi’s
counsel spent researching automatic stay law and communicating with Honeedew about the effect
of the automatic stay and the 4.8 hours spent preparing for and attending the hearing before the
State Supreme Court occurred before Honeedew willfully violated the stay and cannot be attributed
to Honeedew’s actual violation of the automatic stay.19 Sanctions Mot., Bankr., Dkt. 67, at 11.
Because Judge Mazer-Marino imposed actual damages for costs not caused by the violation of the
automatic stay, she abused her discretion. See Sucre, 226 B.R. at 350 (declining to award damages
for a petitioner’s post-petition late mortgage charges because the petitioner failed to prove that a
willful violation of a stay was the proximate cause of those charges). Accordingly, the Court
rather, the conditions of Abadi’s incarceration made it difficult to sign the requisite paperwork.
Tr. at 47:9–16, Bankr., Dkt. 122; (B.R. 1218–19).
19 While the Court recognizes that the research conducted by Abadi’s counsel regarding
the automatic stay and its effect and scope was arguably related to policing Honeedew’s later
violation of it, that research was not necessitated by Honeedew’s violation, rather it was
necessitated by Abadi’s decision to file for bankruptcy. In other words, regardless of Honeedew’s
actions after Abadi filed for bankruptcy, Abadi’s counsel would have had to do this research.
vacates the award of actual damages and remands this case for proceedings consistent with this
opinion.
Because Abadi does not seek compensatory damages, the Bankruptcy Court should give
particular scrutiny, on remand, to the reasonableness and necessity of the fees sought. As courts
within this Circuit have noted, concerns “about the propriety of awarding fees in the absence of
other actual damages is particularly compelling where . . . the only fees and costs at issue were
expended not in efforts to withdraw the offending judgment or motion or to halt the offending
conduct, but in bringing a motion for damages under [Section] 362.” See, e.g., Sturman, 2011 WL
4472412, at *4; (Sanctions Reply, Dkt. 9, at 13 (same)). At the same time, courts in this Circuit
are split as to whether fees under Section 362(k) only extend to “the efforts necessary to remedy
the [stay] violation (and therefore do not extend to fees incurred to collect damages).” Compare
Surprenant v. Druckman & Sinel, LLP, No. 1:10-CV-0003 (GTS), 2010 WL 11680167, at *2
(N.D.N.Y. Sep. 30, 2010) (agreeing that an “attorney may not recover the fees that were incurred
pursuing the adversary proceeding based on a violation of the stay once the violation of the stay
ended”), with In re Henderson, No. 1-08-48268-JMM, 2026 WL 74742, at *12 (Bankr. E.D.N.Y.
Jan. 9, 2026) (“[A] debtor can also incur attorney’s fees in court by pursuing an action to end a
stay violation and to recover damages.” (citation omitted)), and In re Arcapita Bank B.S.C.(c), 648
B.R. 489, 504 (Bankr. S.D.N.Y. 2023) (“[C]ompensatory damages for violation of the automatic
stay include fees and expenses incurred in trying to enforce the stay . . . as well as in proving and
enforcing a sanction for other damages caused by the violation.” (citation omitted)). The Ninth
and Eleventh Circuits have interpreted Section 362(k) “as authorizing an award of attorney’s fees
incurred in prosecuting an action for damages under the statute.” In re Schwartz-Tallard, 803 F.3d
1095, 1099–101 (9th Cir. 2015) (“Congress could not have expected [Section] 362(k) to serve as
an effective deterrent unless it authorized recovery of the attorney’s fees incurred in prosecuting
an action for damages.”); In re Horne, 876 F.3d 1076, 1080–82 (11th Cir. 2017) (“[N]othing in
the text of Section 362(k)(1) limits the scope of attorneys’ fees to solely ending the stay
violation.”).
Here, although Abadi’s counsel does not seek damages solely for pursuing sanctions,20 a
large portion of the requested fees—approximately 30%—pertain solely to pursuing sanctions.
Sanctions Mot., Bankr., Dkt. 67, at 12 (documenting 14 hours spent on drafting briefing in support
of an award of damages). Because the Court vacates the Bankruptcy Court’s fee award for the
reasons discussed above, it expresses no opinion as to whether the fees Abadi’s counsel incurred
in pursuing sanctions were necessary or reasonable, and leaves that determination to the
Bankruptcy Court on remand.21
C. Punitive Damages
Courts in this Circuit have determined that “[p]unitive damages . . . are only appropriate
where the stay violation was conducted in bad faith, with malice, or in a particularly egregious
manner.” In re Jean-Francois, 532 B.R. 449, 454, 458 (Bankr. E.D.N.Y. 2015) (quoting In re
Ebadi, 448 B.R. 308, 320 (Bankr. E.D.N.Y. 2011)); Laskaratos, 605 B.R. at 300, 313; see
20 Compare Sanctions Mot., Bankr., Dkt. 67, at 11–12 (requesting fees for drafting the
motion to enforce the stay and preparing for Honeedew’s appeal of the Enforcement Order), with
Crowder, 2016 WL 3453214, at *1 (denying fees motion because fees sought were solely for
bringing sanctions motion and were “not necessary to stop an ongoing stay violation, to undo the
effects of a stay violation, or to recover pre-litigation actual damages”), and In re DiPietro, No.
17-CV-9423 (KMK), 2019 WL 457601, at *5 (S.D.N.Y. Feb. 5, 2019) (finding bankruptcy court
abused its discretion by awarding fees that represented only the costs in bringing
contempt/sanctions motion).
21 The number of hours an attorney spends on a particular task is, of course, subject to
review for reasonableness and necessity. See, e.g., Greene, 2017 WL 3588627, at *3–4 (awarding
fees for four hours of attorney time, despite claim that attorney spent five hours litigating a motion,
based on determination that four hours was a reasonable amount of time to spend on the motion).
Crysen/Montenay Energy Co., 902 F.2d at 1105 (“An additional finding of maliciousness or bad
faith on the part of the offending creditor warrants the further imposition
of punitive damages . . . .”). To make this determination, bankruptcy courts look to five factors:
(1) “the nature of the creditor’s conduct,” (2) “the creditor’s ability to pay,” (3) “the motives of
the creditor,” (4) “any provocation by the debtor,” and (5) “the creditor’s level of sophistication.”
Jean-Francois, 532 B.R. at 459 (citing In re Salov, 510 B.R. 720, 734 (Bankr. S.D.N.Y. 2014));
In re Cohen, 279 B.R. 626, 638 (Bankr. N.D.N.Y. 2002). Mistakes of law as to the creditor’s
obligation related to the automatic stay, or even a “callous disregard” for the automatic stay, do
not meet this high threshold. See Adomah, 368 B.R. at 39 (“[E]ven callous disregard is an
insufficient basis upon which to award punitive damages because it does not rise to the level of
bad faith or maliciousness.”); Ebadi, 448 B.R. at 320 (denying punitive damages where stay
violation was not conducted in “bad faith, with malice, or in a particularly egregious manner”);
Grinspan, 597 B.R. at 744 (same).
The amount of punitive damages imposed must be “reasonable in their amount and rational
in light of their purpose to punish what has occurred and to deter its repetition.” Jean-Francois,
532 B.R. at 460 (quoting Vasbinder v. Scott, 976 F.2d 118, 121 (2d Cir. 1992)). “In other words,
punitive damages should be awarded in the amount that is needed to deter future stay violations of
this kind.” Henderson, 2026 WL 74742, at *16 (quoting Jean-Francois, 532 B.R. at 460);
Sturman, 2011 WL 4472412, at *5; see also Crysen/Montenay Energy Co., 902 F.2d at 1105
(explaining that the standard for imposing punitive damages “encourages would-be violators to
obtain declaratory judgments before seeking to vindicate their interests in violation of an automatic
stay”). New York bankruptcy courts “often assess awards of punitive damages that are reasonably
proportionate to the actual damages.” See In re Westridge, No. 07-35257, 2009 WL 3491164, at
*4 (Bankr. S.D.N.Y. Oct. 23, 2009) (compiling cases); cf. State Farm Mut. Auto. Ins. Co. v.
Campbell, 538 U.S. 408, 426 (2003) (“[C]ourts must ensure that the measure of [punitive damages]
is both reasonable and proportionate to the amount of harm to the plaintiff and to the general
damages recovered”); BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 580–82 (1996) (”The principle
that exemplary damages must bear a ‘reasonable relationship’ to compensatory damages has a long
pedigree.”).
The Court rejects Honeedew’s contention that Judge Mazer-Marino’s award did not rest
on a finding of malicious conduct. (See Sanctions Br., Dkt. 10, at 26.) In deciding to award
punitive damages, Judge Mazer-Marino considered the relevant factors. She found that Honeedew
was a sophisticated entity “represented by competent counsel and bankruptcy counsel,” Tr. at
51:10, Bankr., Dkt. 122—in other words, it should have “underst[oo]d the consequences of
violating the automatic stay,” see Jean-Francois, 532 B.R. at 460. While acknowledging that
Abadi “ha[s] a history of avoiding collection efforts,” Judge Mazer-Marino also found that
Honeedew was not provoked by Abadi’s attempts to secure protection from the automatic stay.
Tr. at 50:14–19, Bankr., Dkt. 122. Despite noting that Honeedew did not “go as far as” some
creditors, such as “actively pursuing a lawsuit” in violation of a stay, id. at 49:21–50:1, Judge
Mazer-Marino emphasized her belief that Honeedew “intended to keep the debtor [Abadi] in jail”
solely for the purpose of getting paid and that Honeedew “took this action[, violating the automatic
stay,] because [it] wants to get paid,” id. at 50:8–10. Judge Mazer-Marino concluded that there
was “no reason to believe that [Honeedew] does not have the ability to pay substantive damages”
to Abadi. Id. at 50:6–8.22 Judge Mazer-Marino’s findings were sufficient to establish “malice or
22 The Court accordingly rejects Honeedew’s argument that the punitive damages award is
procedurally improper because the Bankruptcy Court failed to consider Honeedew’s financial
capacity. (Sanctions Br., Dkt. 10, at ECF 32–33.) The record indicates that Honeedew did not
bad faith as such conduct is understood in this Circuit.” See In re Crawford, 476 B.R. 83, 87
(S.D.N.Y. 2012) (citing Adomah, 368 B.R. at 139); see also In re Repine, 536 F.3d 512, 515–17,
521 (5th Cir. 2008) (concluding that attorney’s opposition to the suspension of civil commitment
of a debtor constituted egregious conduct warranting imposition of punitive damages); In re
Goodson, No. 17-41820-JJR, 2018 WL 722461, at *13 (Bankr. N.D. Ala. Feb. 5, 2018) (imposing
$15,000 in punitive damages for creditor’s choice to proceed with a lawsuit “knowing it would
likely conclude with the Debtor’s incarceration”).
However, because the Court is vacating the actual damages award, it also vacates and
remands the award of punitive damages to give the Bankruptcy Court the opportunity to ensure
that punitive damages are reasonably proportionate to the actual damages that Abadi suffered as a
result of Honeedew’s willful violation of the stay. See, e.g., In re Bailey, 518 B.R. 594, 601 (D.
Idaho 2014) (remanding punitive damages award “so that the bankruptcy court can decide punitive
damages after determining the new compensatory damages award”); In re Sallee, 286 F.3d 878,
884 (6th Cir. 2002) (similar); In re Moon, No. 13-BK-12466-MKN, 2021 WL 62629, at *9 (B.A.P.
9th Cir. Jan. 7, 2021) (similar); see also Westridge, 2009 WL 3491164, at *4 (observing that New
York bankruptcy courts “often assess awards of punitive damages that are reasonably
proportionate to the actual damages” (compiling cases)).
On remand, the Court encourages the Bankruptcy Court to clarify how it determined that
punitive damages in the amount of $75,000 was sufficient to deter Honeedew from further stay
violations, as it is not apparent from the record how the Bankruptcy Court reached this conclusion.
argue that it was unable to pay punitive damages to Abadi, nor did Honeedew present Judge Mazer-
Marino with any financial records or information establishing its inability to pay, leading Judge
Mazer-Marino to find that Honeedew had the ability to pay damages to Abadi. Tr. at 50:6–8,
Bankr., Dkt. 122.
The Court notes that, although Judge Mazer-Marino acknowledged that the primary purpose of
punitive damages is to change the creditor’s behavior, see Tr. at 48:10–12, Bankr., Dkt. 122, her
award of $75,000 in punitive damages—calculated at $7,500 for each day Abadi was incarcerated
after the stay came into effect—appears to reflect an assessment of actual damages Abadi
theoretically suffered because of her unlawful continued incarceration. At one point, Judge Mazer-
Marino suggested as much, noting that Rikers, “a jail of particular renown,” “is in danger of being
taken over by Federal receivers or has been taken over by Federal receivers due to the conditions
in the prison” and asking “how much would somebody have to pay you to spend ten days in
Rikers?” Tr. at 46:10–14, 51:2, Bankr., Dkt. 122. Calculating punitive damages in this manner—
by imposing a certain sum for each day incarcerated—is typically a method of assessing
compensatory damages, as it quantifies the harms of each day of incarceration.23 Punitive
damages, however, are not compensation for injury. Int’l Bhd. of Elec. Workers v. Foust, 442 U.S.
42, 48 (1979); see Carver, 1990 WL 10007400, at *6 (explaining that punitive damages “are not
23 See Goodson, 2018 WL 722461 (imposing $5,000 for each day of incarceration as actual
damages, and imposing punitive damages of $15,000 without specifying whether this latter amount
was imposed per day of incarceration); In re Sterling, 140 F.4th 924, 930, 933–34 (7th Cir. 2025)
(affirming compensatory damages award of $6,000 for each day debtor was incarcerated in
violation of a discharge order as a measure of emotional distress); Valentine, 611 B.R. at 651–52
(awarding “$400.00 ($100.00 for each night of incarceration) [as] a reasonable value based on the
limited evidence of the Debtor’s emotional distress related to the violations of the automatic stay”);
In re Carver, No. 89-10203, 1990 WL 10007400, at *6 (Bankr. S.D. Ga. Dec. 28, 1990) (valuing
“loss of freedom” at $1,000 per day).
One bankruptcy case addressing a similar issue, In re Kimbler, imposed punitive damages
“of $1,000.00 for each of the sixteen days that the Debtor was incarcerated,” 618 B.R. 437, 443–
44 (Bankr. E.D.N.C. 2020). However, the bankruptcy court imposed these damages only after
determining debtor was “not able to work and earn income during her time of incarceration” and
suffered “extensive, deep, harmful, and significant emotional distress”—in other words, after
determining the debtor was entitled to compensatory damages. Id. Abadi, in comparison, did not
seek compensatory damages arising out of any emotional distress she suffered while incarcerated.
Sanctions Mot., Bankr., Dkt. 67, at 13 n.6.
intended to compensate victims, but rather are private fines, awarded in addition to what is
necessary to compensate the victim”); In re Spires, No. 90-10115, 1991 WL 11002451, at *2
(Bankr. S.D. Ga. Feb. 21, 1991) (same); In re Pawlowicz, 337 B.R. 640, 648 (Bankr. N.D. Ohio
2005) (same). Because it is not apparent from the record how the Bankruptcy Court determined
that punitive damages in the amount of $75,000 was sufficient to deter Honeedew, the Court
encourages the Bankruptcy Court to clarify the basis for punitive damages on remand. See In re
DiBattista, 615 B.R. 31, 44 (S.D.N.Y. 2020) (encouraging a bankruptcy court, on remand, to
clarify the basis of an award and how the calculation of damages was reached).
III. Honeedew’s Procedural Challenge to the Sanctions Order
Finally, Honeedew contends that the Bankruptcy Court’s imposition of sanctions violated
due process because it “failed to provide Honeedew with an opportunity to present evidence, cross-
examine witnesses, or contest the allegations before imposing punitive damages.” (Sanctions Br.,
Dkt. 10, at ECF 31–32.) Not so. The Second Circuit has repeatedly held that bankruptcy courts
need not provide a “full evidentiary hearing” before imposing sanctions. See In re Stein, 127 F.3d
292, 295 (2d Cir. 1997); In re 60 E. 80th St. Equities, Inc., 218 F.3d 109, 117 (2d Cir. 2000) (same).
All that due process requires is notice and an opportunity to respond. 60 E. 80th St. Equities, Inc.,
218 F.3d at 117. Honeedew does not claim that the Bankruptcy Court otherwise deprived it of
“notice and an opportunity to respond” by denying it the opportunity to brief and argue the punitive
damages issue. See Stein, 127 F.3d at 294.
CONCLUSION
For the forgoing reasons, the Court affirms the Bankruptcy Court’s Enforcement Order but
vacates the Bankruptcy Court’s award of actual and punitive damages in the Sanctions Order, and
remands this case for a re-calculation of damages consistent with this opinion. The Clerk of Court
is directed to enter judgment and close this case.
SO ORDERED.
/s/ Pamela K. Chen
Pamela K. Chen
United States District Judge
Dated: March 30, 2026
Brooklyn, New York