I still have to read up on these “Orders authorizing the sale of “Eligible Systems Assets” and “New Homes Assets” free and clear of liens, claims, offsets, recoupment rights, and other interests.”
Will update as time permits.
2025-6-27–Frank Dean Soto Jr Motion to Amend Orders
Frank Dean Soto Jr. (“Movant”), a consumer party in interest, respectfully moves for reconsideration and limited modification of this Court’s Orders [Dkt. 109 & 124], and would show:
1. Background.
On June 11 and 12, 2025, the Court entered Orders authorizing the sale of “Eligible Systems Assets” and “New Homes Assets” free and clear of liens, claims, offsets, recoupment rights, and other interests.
2. Grounds for Reconsideration.
The Orders, as drafted, appear to extinguish all consumer defenses, set-off, and recoupment rights-contrary to the Federal Trade Commission’s Holder Rule (16 C.F.R. §433), which provides that any assignee of a consumer credit contract is subject to all claims and defenses the consumer could assert against the seller.
3. Preservation of Consumer Protections Required.
It is well-established that bankruptcy sales under 11 U.S.C. §363 do not eliminate valid, non-waivable consumer defenses, and courts routinely clarify that such sales remain “subject to all valid defenses and rights of recoupment and set-off.” See, e.g., In re Grayson, 199 B.R. 397 (Bankr. W.D. Mo. 1996); In re Pharmhouse, Inc., 2002 WL 31961401 (Bankr. D. Del. Nov. 7, 2002).
4. Relief Requested.
Movant respectfully requests the Court amend Orders 109 and 124 to clarify as follows:
“For the avoidance of doubt, nothing in this Order shall impair or extinguish any consumer claims, defenses, set-off, or recoupment rights that exist under non-bankruptcy law, including but not limited to those preserved by the Federal Trade Commission Holder Rule (16 C.F.R. §433), and applicable state law. The
transferee shall take such contracts and obligations subject to all such rights and defenses.”5. Conclusion.
Movant requests expedited consideration, as the sale orders’ 14-day period to appeal is running, and the absence of this clarification would prejudice the rights of
affected consumers, including the undersigned. …
