Bavelis v. Doukas

Bavelis sought Chapter 11 bankruptcy relief in 2010, based on debts that he had accumulated from numerous business ventures. Bavelis subsequently brought an adversary proceeding against his friend and business associate Doukas, and businesses owned and controlled by Doukas. One Doukas company responded by filing a proof of claim against the Bavelis bankruptcy estate. The Doukas defendants argued that Doukas had a claim for rescission against Bavelis based on purported violations of Florida’s securities laws related to stock that Doukas had purchased from a Bavelis-run bank holding company. The bankruptcy court concluded that Doukas did not have a viable claim against Bavelis under Florida law. The Bankruptcy Appellate Panel affirmed. The Sixth Circuit affirmed, rejecting an argument that the bankruptcy court acted beyond its constitutional authority in interpreting Florida law and that the interpretations by the bankruptcy court and the BAP were in error. View "Bavelis v. Doukas" on Justia Law