Lehman Brothers Holdings Inc.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
JOSEPH WASKE,
Appellant,
v.
LEHMAN BROTHERS HOLDINGS INC.,
Appellee.
20-CV-5083 (RA)
MEMORANDUM
OPINION & ORDER
RONNIE ABRAMS, United States District Judge:
This appeal arises from a group of pro se litigants’ novel reading of a trust prospectus that they
maintain entitles them to recover from the dwindling pool of assets in the Lehman Brothers bankruptcy
filed thirteen years ago. 	These individuals own shares of trusts that in turn own Lehman Brothers
Holdings Inc. (“LBHI”) subordinated debt. 	For nearly a decade, that subordinated debt has ranked
behind billions of dollars owed to creditors, but Appellant Joseph Waske and others argue their
interpretation of the trusts’ guarantees entitles them to leapfrog ahead of countless unpaid creditors. The
bankruptcy court (Chapman, J), explaining that the time for such arguments had “long since passed,”
denied all of Mr. Waske’s motions. 1 Mr. Waske now appeals that decision, and also alleges that the
bankruptcy court violated his due process rights and was biased against him. For the reasons that follow,
the bankruptcy court’s decision is affirmed, and Mr. Waske’s appeal is denied.
BACKGROUND 2
In the years preceding its bankruptcy, LBHI borrowed billions of dollars of subordinated debt,
some of which was purchased by trusts that issued securities based on that debt. 	The dispute here
1 The bankruptcy court also denied substantively similar requests by Mr. Rex Wu six months before
the events of this case. See Dkt. 5-2, A702–A736 (transcript of Wu hearing, denying similar motion).
2 The Court recites only the history of the Lehman bankruptcy that is relevant to the appeal.
USDC-SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC#:
DATE FILED:
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concerns securities issued by four trusts: Lehman Brothers Holdings Capital Trusts III, IV, V, and VI.
See Appellant’s Statement of Issues, Dkt. 2 ¶¶ 6, 12–14 (“Stmt. Issues”). Each trust’s only asset was a
different issuance of LBHI subordinated debt, and the trusts would make payments to security holders
only if LBHI made a payment on the underlying debt. See In re Lehman Brothers Holdings Inc., et al.,
No. 08-13555, Dkt. 20107, Exs. B–G (Bankr. S.D.N.Y. Sept. 16, 2011) (hereinafter “Lehman Dkt.”).
Mr. Waske now alleges the trust securities rank higher than the subordinated debt held by the trusts, and
that as a result, he, as a security holder, is entitled to payment. 3
LBHI filed for bankruptcy in September 2008. 	In July 2009, the bankruptcy court designated
September 22, 2009 as the deadline to file proofs of claim (the “Bar Date”). Lehman Dkt. 4271 at 2.
The indenture trustees for each trust filed timely proofs of claim on behalf of the trusts and the securities
holders. See App. Part II to Appellee’s Brief, Dkt. 5-2 at A738–A764 (“App. 2”). These timely proofs
of claim amounted to over one billion dollars in allowed claims and encompassed the interests of the
beneficial owners of the debt. The bankruptcy court subsequently rejected as duplicative hundreds of
claims based on the same subordinated debt because those claims were already represented by the claims
filed by the indenture trustees. 4 In December 2011, the bankruptcy court entered an order confirming
the Chapter 11 Plan (“the Plan”). See Lehman Dkt. 23023. Under the Plan, claims based on LBHI’s
subordinated debt were classified in Classes 10A, 10B, and 10C. See Lehman Dkt. 23023-1 at 17–18,
41–42. In the order confirming the Plan, the bankruptcy court also prohibited filing or amending proofs
of claim without “the authority of the Court.” See Lehman Dkt. 23023 at 60.
3 Rex Wu is appealing the same ruling in a separate case before this Court. See Wu v. Lehman Brothers
Holdings Inc., No. 20 Civ. 5823.
4 See, e.g., Lehman Dkt. Nos. 12671, 12676, 12835, 12893 (orders disallowing claims as duplicative of
indenture trustee claims); see also Lehman Dkt. 20107 (Plan Administrator’s objection to claims
related to trust securities issued by Capital Trusts III, IV, V, VI).
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PROCEDURAL HISTORY
Mr. Waske alleges that the trustees failed to enforce the original “covenants” set forth in the
prospectuses of Capital Trusts III, IV, V, and VI, and that the equity issued by the trusts is actually in
parity with preferred equity of LBHI affiliates who received payments under the Plan. See, e.g., Dkt. 4,
12–13. He filed three motions in the bankruptcy court seeking to vindicate this guarantee: (1) a Motion
to Reclassify, Lehman Dkt. 60337; (2) a Motion to Reserve for Motion to Reclassify, Lehman Dkt.
60448; and (3) a Motion for Summary Judgment, Lehman Dkt. 60484. The Motion to Reclassify and
Motion to Reserve contained the substantive arguments regarding classification of his claims, while the
Motion for Summary Judgment amounted to a request that the substantive motions be deemed unopposed
and granted because the Plan Administrator had not yet responded.
On March 24, 2020, the Plan Administrator filed an objection to Mr. Waske’s motions. Lehman
Dkt. 60482. In April 2020, the bankruptcy court scheduled a hearing for June 3, 2020 on the Motion to
Reserve for the Motion to Reclassify and the Motion for Summary Judgment, but not the Motion to
Reclassify itself. Lehman Dkt. 60498. The notice of hearing required any objections to be submitted by
May 18, 2020. Id. Five days after the notice of hearing, Mr. Waske wrote an email to the court stating
he only wanted the hearing to address the Motion for Summary Judgment, not the Motion to Reserve for
the Motion to Reclassify. Lehman Dkt. 60507. The court denied Mr. Waske’s request. Lehman Dkt.
60508. On May 18, 2020, the Plan Administrator timely filed another objection, specifically addressing
Mr. Waske’s Motion for Summary Judgment. Lehman Dkt. 60641.
At the June 2020 hearing, the court considered all three motions, not just the Motion for Summary
Judgment and Motion to Reserve that were listed on the agenda. 	See generally, App. 2 A623–A646
(“Hearing”). The court explained that it held a single hearing “to dispose of all three motions,” because
they are “all related” and “all seeking, in essence, the same relief.” 	Hearing 12:19–23. 	Mr. Waske
likewise stated that “all of my motions, essentially, center around the prospectus contract language.”
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Hearing 6:6–10. Following a hearing at which Mr. Waske, Rex Wu, and LBHI were given opportunities
to be heard, the court denied each of Mr. Waske’s motions and relief sought by the joinders. See Lehman
Dkt. 60678.
Mr. Waske now appeals the bankruptcy court’s rulings on each of the motions. Dkt. 1. In addition
to legal error, Mr. Waske objects to the manner in which the court conducted the hearing, which he
characterizes as amounting to a due process violation. See Stmt. Issues ¶¶ 1–11.
STANDARD OF REVIEW
District courts have appellate jurisdiction over “final judgments, orders, and decrees” of
bankruptcy courts under 28 U.S.C. § 158(a). “A district court reviews a bankruptcy court’s findings of
fact for clear error and reviews its legal conclusions de novo.” Davidson v. AMR Corp., 566 B.R. 657,
663 (S.D.N.Y. 2017). 5 “Matters left to the [bankruptcy] court’s discretion are reviewed for abuse of
discretion.” In re Adelphia Commc’ns Corp., 342 B.R. 122, 126 (S.D.N.Y. 2006). A bankruptcy court
abuses its discretion where its ruling is based on an error of law or clearly erroneous finding of fact, or
where the decision “cannot be located within the range of permissible decisions.” In re Dana Corp.,
574 F.3d 129, 145 (2d Cir. 2009). “A district court may affirm, modify, or reverse a bankruptcy
judge’s judgment, order, or decree or remand with instructions for further proceedings.” Margulies v.
Hough (In re Margulies), 566 B.R. 318, 328 (S.D.N.Y. 2017). “A district court should not overturn a
bankruptcy court decision if an error is harmless, meaning the error is not inconsistent with substantial
justice or does not affect the substantial rights of the parties.” Morse v. Rescap Borrower Claims
Trust, No. 14 Civ. 5800 (GHW), 2015 WL 353931, at *3 (S.D.N.Y. Jan. 26, 2015).
Throughout the adversarial process, a party appearing without counsel is typically afforded
leniency. Pleadings or motions submitted by pro se litigants “must be construed liberally,” and read
5 Unless otherwise indicated, case quotations omit all internal citations, quotations, footnotes, and
alterations.
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“to raise the strongest arguments that they suggest.” Triestman v. Fed. Bureau of Prisons, 470 F.3d
471, 474 (2d Cir. 2006); see also In re Motor Liquidation Co., No. 11 Civ. 7893 (DLC), 2012 WL
398640, at *2 (S.D.N.Y. Feb. 7, 2012) (applying liberal reading principle to pro se bankruptcy
appellant). It is nonetheless well established that pro se litigants, including litigants in bankruptcy
proceedings, are “required to learn and comply with procedural rules.” In re Truong, 388 B.R. 43, 45
(S.D.N.Y. 2008) (citing Edwards v. I.N.S., 59 F.3d 5, 8 (2d Cir. 1995)).
DISCUSSION
The Court will address each of Mr. Waske’s three motions in turn, as well as his allegations
related to due process violations and judicial bias.
I. 	Motion to Reclassify
The Motion to Reclassify sought to enforce a guarantee of Lehman Brothers Holdings Capital
Trusts III, IV, V, and VI that Mr. Waske alleged was not properly enforced by the trustees who filed the
timely claims. Lehman Dkt. 60337 at 1–2. Mr. Waske argued that based on language in the prospectuses
for these trusts, he has standing to enforce the guarantee as if he were the trustee, and that the trustee
failed trust securities holders by not raising the issue earlier. Id. at 3–6. Mr. Waske contended that if
properly understood, his trust equities are in parity with “LBIE senior preferred shares A or B.” Id. at
3–4. 	He thus maintained that this error should be rectified by a reclassification of the shares of the
Capital Trusts, moving them from Class 10B to Class 4. Id. at 4.
The bankruptcy court rejected Mr. Waske’s claims due to his lack of standing to modify the plan,
and the untimeliness of his claims.
A. 	Standing
The bankruptcy court rightly held that Mr. Waske did not have standing to modify the Plan. See
Hearing at 21:2–22:3 (“Mr. Waske is not a plan proponent and, indeed, has no standing to seek to modify
the Lehman Plan at all, let alone at this late date.”). Although Mr. Waske termed his motion as one to
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“reclassify,” because Mr. Waske sought to substantively modify the established payment rights, the court
correctly analyzed his request under 11 U.S.C. § 1127(b). See In re Indu Craft Inc., No. 11 Civ. 5996
(JMF), 2012 WL 3070387, at *9 (S.D.N.Y. July 27, 2012) aff’d, 580 F. App’x 33 (2d Cir. 2014) (“It is
well established that Section 1127(b) of the Bankruptcy Code provides the sole means for modification
of [a] plan of reorganization after it has been confirmed.”); see also In re Joint Eastern & Southern
District Asbestos Litigation, 982 F.2d 721, 748 (2d Cir.1992), as modified, 993 F.2d 7 (2d Cir.1993)
(finding parties could not avoid restrictions of 1127(b) where proposed change altered substantive
rights). 	Confirmation of a plan is the equivalent of a final judgment in civil litigation, and Section
1127(b) enforces this finality. In re Rickel & Assocs., Inc., 260 B.R. 673, 677 (Bankr. S.D.N.Y. 2001)
(citing 7 Lawrence P. King, et al., Collier on Bankruptcy ¶ 1127.04 [3], at 1127–9 (15th rev. ed. 2000))
(“Collier”). Under Section 1127(b), only plan proponents or the reorganized debtor can modify the plan,
and they may do so with court approval “only if circumstances warrant such modification.” 	See 11
U.S.C. § 1127(b); see also In re Boylan Int’l, Ltd., 452 B.R. 43, 48 (Bankr. S.D.N.Y. 2011) (“[O]nly the
proponent of a plan or the reorganized debtor may modify a confirmed plan.”). The bankruptcy court
also correctly concluded that even parties with standing are not permitted to modify the plan if doing so
would upset the expectations of creditors. See id. at 50 (citing 7 Collier ¶ 1127.03 [4]); see also Hearing
21:10–19.
Mr. Waske, who did not participate in any capacity in the formation of the Plan, is not a plan
proponent and does not point to any evidence that would imbue him with standing to reclassify the
claims. 6 Even if he were a plan proponent, Mr. Waske’s effort to reclassify certain Class 10B claims to
6 Mr. Waske cites to the following language in the prospectus that he maintains gives him standing: “If
the guarantee trustee fails to enforce the guarantee trustee’s rights under the guarantee, any holder of
preferred securities may directly sue Lehman Brothers Holdings to enforce the guarantee trustee’s
rights under the guarantee.” Lehman Dkt. 60542-1 at 62; See also, Stmt. Issues ¶ 9 (“Joseph Waske
and the Joinders have the standing and rights to file a lawsuit against LBHI to enforce the guarantee as
if they are the Trustee upon the Trustee failing to enforce the Guarantee.”). This language in the trust
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Class 4 almost ten years after the Plan was finalized would upset the expectations of creditors. 7
Accordingly, there was no error in the bankruptcy court’s legal analysis, nor were there any clearly
erroneous findings of fact.
B. 	Timeliness of the Claim
The bankruptcy court devoted the majority of its oral ruling to the untimeliness of Mr. Waske’s
claim. As the court explained:
The time for seeking this relief has long been past. The bar date for filing
claims in the Lehman Chapter 11 cases was September 22, 2009. Lehman
Dkt. 4271. Indeed, the indentured trustees of Capital Trust Three, Four,
Five and Six, timely filed global proofs of claim on behalf of the trust. See
Claim Numbers 21805, 22122, 22123 and 67753. 	These claims were
classified in LBHI Class 10B under the Lehman plan…This Court entered
an order confirming the Lehman Plan on December 6, 2011. Lehman Dkt.
23023.
Hearing 17:2–17 (citations formatted). 8 The court further explained the significance of the Bar Date:
Bankruptcy Rule 3030(c)(3) 9 requires that the bankruptcy court establish
a deadline for filing proofs of claim in a Chapter 11 case. 	Claims filed
after the bar date shall be disallowed. A bar date is “critically important
to the administration of a Chapter 11 case as it is intended to be a
mechanism providing the debtor and its creditors with finality.” See Enron
Creditors Recovery Corporation, 370 B.R. 90, 94 (S.D.N.Y. 2007).
prospectus, however, does not change whether Mr. Waske was a plan proponent, nor does it affect the
timeliness of his claims.
7 Not only was the Plan confirmed in 2011, but by 2014, it was apparent that the securities issued by
Capital Trusts III, IV, V, and VI would not receive payment from LBHI. See “LBHI, As Plan
Administrator, Response to Questions Received from Creditors,” (February 26, 2014) available at:
https://document.epiq11.com/document/getdocumentbycode/?docId=2465387&projectCode=LBH&so
urce =dm.
8 Mr. Waske repeatedly asserted that he was not seeking to file a “late claim,” but merely seeking to
“reclassify” the “fractional shares” of the Capital Trusts that he owned. See, e.g., Lehman Dkt. 60403,
¶¶ 4–18. As with Section 1127(b), the requirements of the Bar Date cannot be avoided by titling a
motion as one to reclassify rather than a new, untimely claim. It is, rather, the substance of the relief
requested that controls. See Matter of All. Operating Corp., 60 F.3d 1174, 1175 (5th Cir. 1995)
(“Amendments to proofs of claim that change the nature of the claim from an unsecured status to a
priority status set forth a new claim.”). The bankruptcy court properly analyzed Mr. Waske’s motion,
which sought to dramatically alter the status of the claim, as a request to file a late claim.
9 The Court presumes this is a reference to Fed. R. Bankr. P. 3003(c)(3), not 3030 (which does not
exist). Whether this was an error in the transcript or not is immaterial, as the error did not affect any
substantial rights.
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Hearing 18:17–25 (citations formatted).
A bankruptcy court’s decision to deny an untimely proof of claim is reviewed for abuse of
discretion. See, e.g., In re Enron Corp., 419 F.3d 115, 124 (2d Cir. 2005) (“Discretion of a bankruptcy
court to allow or disallow late-filed claims is well-established.”). As stated previously, only decisions
based on an error of law, a clearly erroneous finding of fact, or those outside the realm of permissible
decisions will be overturned under this standard. In re Dana Corp., 574 F.3d at 145. That the Lehman
Brothers Chapter 11 case is now in its second decade highlights the importance of this deferential
standard. Judge Chapman is steeped in the procedure, history, and facts of this bankruptcy, and her
knowledge and experience properly informed her well-reasoned choices here regarding how to
schedule, hear, and resolve Mr. Waske’s untimely claims. 10
The Bar Date for claims in this case was September 22, 2009. Lehman Dkt. 4271. The parties
responsible for the subordinated debt held by the trusts at issue here filed timely proofs of claim and had
those claims adjudicated. See App. 2 at A738–A764. Bankruptcy Rule 3003(c)(3) requires a deadline
for proofs of claim in a Chapter 11 case because achieving finality for both the debtors and creditors is
critical to the bankruptcy process. See Fed. R. Bankr. P. 3003(c)(3). The bankruptcy court explained
these concepts in its denial of Mr. Waske’s motions, which came more than ten years after the Bar Date.
Accordingly, the bankruptcy court did not abuse its discretion in denying these untimely claims.
II. 	Motion to Reserve
Roughly a month after filing the Motion to Reclassify, Mr. Waske filed a “Motion to Reserve for
Motion to Reclassify,” which sought to set aside $71 million dollars to pay his claim. 	Lehman Dkt.
60448 at 10. Read to make its strongest argument, Mr. Waske’s Motion to Reserve requested that LBHI
10 Judge Chapman had previously ruled on a prior set of motions in which Mr. Wu made substantively
the same arguments based on the same prospectuses of the same trust securities. See App. 2, A702–
A736 (transcript of Wu hearing, denying similar motion).
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establish a reserve under Section 8.4 of the Plan. 11 See Lehman Dkt. 23023-1 at 88–89. 	Section 8.4
allows for funds to be set aside for “disputed claims” that may become allowed claims. Id. Given that
the court denied the Motion to Reclassify, there were no disputed claims, and accordingly there was no
error in denying the Motion to Reserve.
III. 	Motion for Summary Judgment
Mr. Waske filed his Motion for Summary Judgment a month after filing his Motion to Reserve.
See Lehman Dkt. 60484. At the time he filed the motion, it had been more than 21 days since the Plan
Administrator had been served with his Motion to Reserve, and on that basis, Mr. Waske requested the
bankruptcy court grant the motions to reclassify and reserve. 	See id. 	In making this argument, Mr.
Waske relied on the pleading deadlines set forth in Fed. R. Civ. P. 12. Id. at 2. Briefing schedules in
the underlying bankruptcy, however, have been governed by the bankruptcy court’s Case Management
Order since 2010. 	See Lehman Dkt. 9635. 	That scheduling order provides that LBHI may file any
objection seven days before the scheduled hearing or at any other date ordered by the court. See id. at
¶ 32. 	A month after Mr. Waske filed his Motion for Summary Judgment, the bankruptcy court set a
hearing date in June 2020 and directed that all objections be filed by May 18, 2020. See Lehman Dkt.
60498. This order dictated the deadlines LBHI was required to meet. LBHI had filed an objection on
March 24, 2020, and filed another objection on May 18, both of which were timely. 12
Accordingly, the bankruptcy court did not commit legal error or abuse its discretion by
considering the objections and denying the Motion for Summary Judgment.
11 Mr. Waske’s initial motion stated that there was no provision governing a reserve in the Plan, and
instead cited a series of provisions regarding the court’s inherent powers. Lehman Dkt. 60448 at 1
(citing Section 13.10 of the Plan and 11 U.S.C. §§ 105(a), 502(c) and 1142(b) as authority for the
funds to be set aside).
12 Even if the objections were untimely, the bankruptcy court has the discretion to consider a late
motion or objection. Judge Chapman did not abuse her discretion by considering the objection. See In
re Fletcher Int’l, Ltd., 536 B.R. at 557.
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IV. 	Agenda of Hearing, Due Process, and Bias
In addition to appealing the bankruptcy court’s decision on the merits, Mr. Waske also raised the
following issues regarding perceived unfairness of the hearing:
x 	He and others were not given adequate notice of the motions on the agenda at the
hearing. Stmt. Issues ¶ 2 (stating Mr. Waske was not “served on the hearing agenda
with the Motion to Reclassify on it.”). The bankruptcy court heard all three motions
together, even though Mr. Waske requested the hearing only resolve the Motion for
Summary Judgment. Id. ¶ 1. Furthermore, the bankruptcy court devoted the majority of
the hearing to arguments regarding the Motion to Reclassify, not the two motions that
were on the notice of hearing. Id. ¶ 3.
x 	The bankruptcy court refused to hear argument on the “Neuberger Berman” issue. Id. ¶
4, 11.
Mr. Waske further contends that the order issued following the hearing was invalid due to these
violations of Waske’s due process rights. Id. ¶ 7. He further argues that Judge Chapman was biased
against him and that the case should be thus remanded to a different judge. 	Id. ¶ 4, 8. 	There is no
evidence in the record from which the Court can conclude that Judge Chapman was biased or that her
handling of this case was at all improper.
A bankruptcy court, like a district court, has wide latitude in determining how to manage its
docket most efficiently. 	See In re Fletcher Int’l, Ltd., 536 B.R. 551, 560 (S.D.N.Y. 2015), aff’d sub
nom., 661 F. App’x 124 (2d Cir. 2016); see also 11 U.S.C. § 105(d). Case management decisions are
thus reviewed for abuse of discretion. 13 Id.
Turning to the issues raised, Mr. Waske first contends he was not given adequate notice of the
issues that would be argued at the hearing. The notice of hearing issued in April listed the Motion for
Summary Judgment and the Motion to Reserve as the motions to be argued at the June hearing. Lehman
Dkt. 60498. Mr. Waske requested that the Court amend the agenda such that the hearing only concerned
13 The oral argument Mr. Waske objects to was itself not obligatory; indeed, to the extent he was
granted an opportunity for oral argument at all, that was within the court’s discretion. See Bernheim v.
Damon & Morey, LLP, No. 06-3386-BK (LEAD), 2007 WL 1858292, at *2 (2d Cir. June 28, 2007)
(summary order) (“Bankruptcy judges enjoy broad discretion as to the type of hearing to conduct.”).
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Motion for Summary Judgment. See Lehman Dkt. 60507. The court denied this request. Lehman Dkt.
60508. 	At the hearing, the bankruptcy court heard argument and ruled on not only the two motions
previously listed in the notice of hearing, but also on Mr. Waske’s Motion to Reclassify, which was not
mentioned in the notice of hearing. Mr. Waske alleges that this deprived him of time to prepare, and
that the lack of notice was especially harmful because the majority of the hearing concerned the Motion
to Reclassify. The Court disagrees. Even if it did not list every motion that would be discussed at the
hearing, the bankruptcy court’s notice here was adequate. See Bernheim v. Damon & Morey, LLP, No.
06-3386-BK (LEAD), 2007 WL 1858292, at *2 (2d Cir. June 28, 2007) (stating that bankruptcy judges
have broad discretion to determine the “notice and hearing” appropriate to a particular case). Given that
all three motions are related and concern the same relief, and given that the notice of hearing indicated
that the substantive legal issues would be discussed, the bankruptcy court did not abuse its discretion in
deciding all three motions at the June hearing.
Mr. Waske next alleges that he was prejudiced by the bankruptcy court’s refusal to hear argument
on the “Neuberger Berman Issue.” As with the decision to hold oral argument at all, a court’s decision
to hear particular arguments is entitled to great deference, and it was not an abuse of discretion for Judge
Chapman to refuse to hear further argument on the “Neuberger Berman Issue” from Mr. Wu, as it was
adequately described in Mr. Waske’s briefs. See, e.g., Lehman Dkt. 60542, ¶ 4, 7–9. Indeed, the manner
in which the bankruptcy court chose to limit argument reflected its considerable existing knowledge.
Although Mr. Waske takes issue with how the bankruptcy court handled his case, nothing the
court did in adjudicating Mr. Waske’s motions constitutes a deprivation of due process. Due process is
satisfied when a litigant is given an opportunity to be heard. See In re Gordon, 577 B.R. 38, 50 (S.D.N.Y.
2017) (finding due process was not violated where litigant was given “an opportunity to be heard by
filing opposition papers and presenting oral argument at the hearing”); see also In re AMR Corp., 490
B.R. 470, 479–80 (S.D.N.Y. 2013) (finding no violation of due process where the party was heard based
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on motions and appearance at a hearing). It is undisputed that Mr. Waske was given the opportunity to
both argue his case in his motion papers and be heard at the hearing.
Finally, the allegations of bias are cursory, unsupported, and entirely without merit. 	Given a
generous reading, Mr. Waske alleges bias based on (1) his belief that ex parte communications took
place between the Plan Administrator and Judge Chapman, which led to the decision to consider all three
motions at one hearing, and (2) the judge’s adverse rulings against him and the other pro se litigants over
this trust securities issue and on his Motion for Summary Judugment. See Stmt. Issues ¶ 4, 8. 	Such
baseless accusations of judicial bias are routinely dismissed. See In re Uppal, No. 17-AP-01026 (CGM),
2018 WL 4521215, at *4 (S.D.N.Y. Sept. 20, 2018) (dismissing “unsupported allegations” of due process
violations and bias as frivolous); In re Amelio, 857 F. App’x 665, 668 (2d Cir. 2021) (affirming dismissal
of motions for recusal based on alleged collusion and adverse rulings).
The record does QRW allege any actual ex parte communications. 	Instead, Mr. Waske’s
allegations require an inference from the following set of circumstances: he initially requested hearing
only on the summary judgment motion, not on the merits, see Lehman Dkt. 60507, and the bankruptcy
court’s notice of hearing “added the Motion to Reserve for the Motion to Reclassify over [his]
objection,” Stmt. Issues ¶ 4. Mr. Waske states this was done “to aid the Plan Administrator by giving
the Plan Administrator a legal avenue to defeat the Motion for Summary Judgment.” Id.
Mr. Waske infers that some ex parte dealings must have taken place based on this sequence of
events. This conclusion is unsupported by the evidence—the record as a whole demonstrates that Judge
Chapman chose to decide all three of Mr. Waske’s motions at the same time for purposes of judicial
economy, not because it was requested by the Plan Administrator. Moreover, the allegations rely on the
faulty premise that the Plan Administrator needed judicial intervention to timely oppose Mr. Waske’s
motions. 	But, the Plan Administrator had already timely filed an objection to Mr. Waske’s motions.
While Mr. Waske’s arguments must be liberally construed, the Court need not accept as true his
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“conclusions of law or unwarranted deductions of fact.” In re Motors Liquidation Co., No. 12 Civ. 4138
(RA), 2013 WL 143805, at *2 (S.D.N.Y. Jan. 10, 2013). There is thus no basis to conclude any ex parte
communications took place.
Even assuming there were ex parte communications in violation of Fed. R. Bankr. P. 9003(a),
they were harmless. The only prejudice alleged by Mr. Waske is a lack of time to prepare for argument
on the Motion to Reclassify. While this can constitute prejudice under some circumstances, here, Mr.
Waske had several months to prepare and was on notice that the substance of his motions would be
discussed at this hearing. Accordingly, he suffered no prejudice.
Furthermore, neither the scheduling of the case nor the decisions exhibit any bias. As discussed
above, hearing three motions in the same case on the same substantive issue was plainly sensible, and it
is well established that “[d]isagreement with a litigant’s legal position is not an indication of improper
bias on the part of the Court.” Yi Sun v. New York City Police Dep’t, No. 18 Civ. 11002 (LTS) (SN),
2020 WL 6820824, at *1 (S.D.N.Y. Oct. 9, 2020); see also Liteky v. U.S., 510 U.S. 540, 555 (1994)
(“[J]udicial rulings alone almost never constitute a valid basis for a bias or partiality motion.”). There
is no evidence that Judge Chapman’s rulings were motivated by bias; rather the evidence suggests that
they were the product solely of her evaluation of the merits and timeliness of Mr. Waske’s motions.
Accordingly, Mr. Waske’s request that the decision be reversed due to “due process violations”
and remanded to another judge is denied.
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CONCLUSION
For the foregoing reasons, the bankruptcy court’s decision is affirmed, and Mr. Waske’s appeal
is denied in its entirety. The Clerk of Court is respectfully directed to close this case.
LBHI is directed to serve a copy of this order on Mr. Waske and to file proof of service on the
docket.
SO ORDERED.
Dated: 	September 30, 2021
New York, New York
RONNIE ABRAMS
United States District Judge
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