Best Payphones, Inc.

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
---------------------------------------------X
In re: 	:
: 	Chapter 11 (Confirmed)
BEST PAYPHONES, INC., 	: 	Case no. 01-15472 (SMB)
:
Debtor. 	:
---------------------------------------------X
MEMORANDUM DECISION AND ORDER
DENYING MOTIONS FOR RECONSIDERATION
A P P E A R A N C E S:
MICHAEL CHAITE, Pro Se
70 Roselle Street
Mineola, NY 1150
ZACHARY W. CARTER
Corporation Counsel of the City of New York
Attorney for the City of New York and Its Agencies
100 Church Street, Room 5-223
New York, New York 10007
Gabriela P. Cacuci, Esq.
Of Counsel
GEORGE M. GILMER, ESQ.
26 Court Street, Suite 312
Brooklyn, NY 11242
STUART M. BERNSTEIN
United States Bankruptcy Judge:
The City of New York (the “City”) and Best Payphones, Inc. (“Best”) have
separately moved for reconsideration of the Court’s decision and order
memorialized in In re Best Payphones, Inc., 523 B.R. 54 (Bankr. S.D.N.Y. 2015)
(“Decision”). 	(See The City of New York's Motion for Reconsideration of the
Court's January 14, 2015 Memorandum Decision, dated Jan. 28, 2015 (“City
Reconsideration Motion”) (ECF Doc. # 929); Notice of Motion by Debtor Best
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 1 of 32

2
Payphones for Reconsideration of the Court’s Memorandum Decision and Order
Dated January 14, 2015, dated Jan. 28, 2015 and annexed Declaration of
George M. Gilmer, dated Jan. 28, 2015 (ECF Doc. # 930).) 	Best and Michael
Chaite, Best’s sole shareholder, have also moved for reconsideration of the
Court’s Memorandum Decision and Order Denying Motion for Stay or an
Extension, dated February 10, 2015 (“February 10 Order”) (ECF Doc. # 935),
described below. 	(See Notice of Motion by Debtor Best Payphones for
Reconsideration of the Court’s Memorandum Decision and Order Dated February
10, 2015, dated Feb. 24, 2015 (ECF Doc. # 940)); Declaration of Michael Chaite,
dated Feb. 24, 2015 (ECF Doc. # 942).)
This decision will first address the City Reconsideration Motion, which
primarily concerns its claims of waiver and laches, and then deal with Best’s
and Chaite’s reconsideration motions. 	For the reasons that follow, all of the
motions are denied.
BACKGROUND
The factual background to this fourteen year old case is discussed at
length in the Decision. 	The Court assumes familiarity with the Decision,
particularly the history of litigation between the City and Best and limits the
discussion to the facts relevant to the motions before it.
Prior to the filing of this chapter 11 case, Best operated public pay
telephones (“PPTs”) in various locations throughout the City of New York. 	After
Best lost the right to operate the PPTs on City-owned property, the City began
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 2 of 32

3
issuing Notices of Violation (“NOVs”), each carrying a $1,000 penalty. 	Between
May 8 and May 10, 2000, the City issued twenty-three NOVs (the “Prepetition
NOVs”) charging Best with operating PPTs without a permit. 	After Best filed its
chapter 11 case on October 23, 2001, the City issued thirty-six additional
NOVs that were served postpetition (the “Postpetition NOVs”), but Best and
Chaite argue that the Postpetition NOVs related to prepetition violations. 	The
City subsequently filed prepetition and administrative claims corresponding to
the Prepetition and Postpetition NOVs, and in 2002, Best filed objections to the
City’s claims.
While those objections (as well as other litigation) were pending, Best
confirmed the Third Amended Plan of Reorganization Jointly Proposed by Best
Payphones, Inc., Debtor and Debtor-in-Possession, and Michael Chaite, dated
October 8, 2002 ( the “Plan”) (ECF Doc. # 155) on December 26, 2002. 	(See
Order Confirming Third Amended Plan of Reorganization Jointly Proposed by
Best Payphones, Inc., Debtor and Debtor-In-Possession, and Michael Chaite,
Dated October 8, 2002, as Modified, dated Dec. 26, 2002 (“Confirmation Order”)
(ECF Doc. # 219).) The Plan left all classes unimpaired, called for the payment
of administrative claims on the Effective Date and provided that allowed
unsecured claims would be paid in full on the Effective Date together with
postpetition interest computed at the annual rate of 9%. 	Finally, Chaite would
retain his 100% equity interest in Best. 	(Plan at Art. III.) 	The Plan also
provided that the money needed to cover disputed claims would be held in
escrow and paid to the creditor, to the extent the claim was allowed, or to Best
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 3 of 32

4
or Chaite, as the case might be, to the extent the claim was disallowed. 	(See
Plan at Arts. V, VII.) 	George Gilmer, Esq., Best’s current attorney, is presently
holding roughly $76,000 in escrow.
The City’s claims are the only remaining disputed claims. 	During the
years following confirmation, Best and the City litigated the legitimacy of the
NOVs and the allowability of the City’s claims before the New York
Environmental Control Board (“ECB”), the New York state courts, this Court
and the United States District Courts for the Southern and Eastern Districts of
New York. 	Most of the litigation was pending before the United States District
Court for the Eastern District of New York (the “Brooklyn Court”) and
concerned various challenges to the City’s actions under the Constitution and
the Telecommunications Act of 1996 (“TCA”). 	Best also tried to raise the same
Constitutional and statutory claims in this Court, but I abstained from
deciding those claims in favor of the Brooklyn Court and also abstained from
deciding issues before the ECB regarding charges that the City had failed to
follow its own regulations in issuing the NOVs.
The Court retained the bankruptcy-related issues for itself. 	By 2008, it
appeared that the litigation before this Court was complete, and the only
outstanding issues relating to the allowance of the City’s claims were those
pending before the Brooklyn Court.
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 4 of 32

5
A. 	The 2014 Objections
In March 2014, Chaite and Best initiated a new round of objections to
the City’s claims (collectively, the “2014 Objections”). 	Among other things, Best
and Chaite argued that the Postpetition NOVs actually related to prepetition
violations. 	As a consequence, they were served in violation of the automatic
stay, (Memorandum of Law in Support of Motion to Dismiss Administrative Claim
of Claimant City of New York Department of Information Technology and
Telecommunications, dated Mar. 26, 20141 (“Chaite Unfiled Motion”), at 5 (ECF
Doc. # 883-1); Memorandum of Law in Support of Motion to Dismiss
Administrative Claims of Claimant City of New York, dated June 12, 2014
(“Chaite Filed Motion ”), at ¶¶ 4, 14 (ECF Doc. # 889–1); Memorandum of Law in
Support of Motion to Deny Pre–Petition and Administrative Claims of Claimant
City of New York, dated June 26, 2014 (“Best Motion ”), at ¶¶ 6, 19-20 (ECF
Doc. # 890)), and reflected prepetition claims that were filed after the bar date.
(Chaite Unfiled Motion at 2; Chaite Filed Motion at ¶¶ 3, 9; Best Motion ¶ 6, 14.)
These two aspects of the objections ‒ that the Postpetition NOVs were issued in
violation of the automatic stay and the City’s administrative claim was, in
reality, a prepetition claim filed after the bar date ‒ are sometimes referred to
collectively as the “Postpetition NOV Issues.”
1 	The Department of Information Technology and Telecommunications, or DoITT, is the
City agency responsible for administering the PPT regulations.
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 5 of 32

6
The City filed two responses to the 2014 Objections. It initially answered
the Chaite Unfiled Motion. 	(Objection of the City of New York and Its Agencies to
Chaite's Pro Se Motion to Dismiss DoITT's Administrative Claim for Fines, dated
May 15, 2014 (“City Response”), at ¶¶ 36-43 (ECF Doc. # 885).) 2 	The City
Response argued at length that the Court lacked subject matter jurisdiction to
consider the 2014 Objections and the objections were barred by various
doctrines of preclusion, including law of the case, collateral estoppel, judicial
estoppel, waiver and laches. 	(Id.) 	The City did not take issue with the
assertion that the Postpetition NOV’s pertained to prepetition violations; the
City only argued that Best and Chaite were now precluded from litigating the
question.
The City thereafter filed an amended objection that responded to the
Chaite Filed Motion and the Best Motion. 	(See (I) Amended Objection of the City
of New York (“City”) to Chaite’s Pro Se Motion(s) to Dismiss the City's Claims, and
(II) City's Objection to Debtor’s Motion to Deny the City’s Claims for Fines, dated
July 3, 2014 (“City Amended Response”) (ECF Doc. # 892).) 	The City expressly
acknowledged arguments made by Chaite that its administrative claim should
be stricken because it was a prepetition claim and that the service of the
Postpetition NOV’s violated the automatic stay. 	(Id. at 4.) 	The amended
response incorporated the City Response by reference, and reiterated its
jurisdictional objection and its argument that Chaite’s and Best’s “Motions are
2 	The Chaite Unfiled Motion was attached as Exhibit A to the City Response.
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 6 of 32

7
barred by (a) the law of the case doctrine (see City’s Objection at pp. 17-22); (b)
the collateral estoppel doctrine and/or res judicata (see City’s Objection at pp.
23-25); (c) the judicial estoppel doctrine (see City’s Objection at pp. 26-29) and,
with respect to Chaite, lack of standing to litigate Best’s objections to claims
(see City’s Objection at pp. 30).” 	(Id. at 2-3.) 	The City Amended Response did
not mention waiver or laches.
The City also cross-moved for the entry of a final decree. 	(Cross-Motion of
the City of New York and its Agencies for an Order Directing Entry of Final
Decree, dated May 15, 2014 (“Cross-Motion”) (ECF Doc. # 884).)
B. 	The Hearing on the 2014 Objections
In July 2014, the Court received a series of letters in which the parties
argued over adjournment requests and adjournment dates. 	Concluding that
oral argument would not assist the Court, I issued an order on July 15, 2014,
stating that the pending motions were fully briefed, and there would be no oral
argument. 	(Order Regarding Pending Motions, dated July 15, 2014 (“July 15
Order”) (ECF Doc. # 896).) 	In fact, neither Best nor Chaite had filed a reply to
the City Response or the City Amended Response. 	Best moved for
reconsideration of the July 15 Order, explaining that it had always intended to
oppose the Cross-Motion and file a reply in connection with its objection to the
City’s claim. 	(Declaration of George M. Gilmer, dated July 29, 2014, at ¶ 3 (ECF
Doc. # 906).)
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 7 of 32

8
One threshold issue raised by the City in its responses suggested that
the Court lacked post-confirmation jurisdiction to determine the 2014
Objections. 	Chaite and Best had styled their pleadings as motions to dismiss
the City’s claims. 	Art. VIII(e) limited the Court’s post-confirmation jurisdiction
“to determine all applications and adversary proceedings pending on the
Effective Date or filed or commenced within 60 days thereafter.” 	The 2014
Objections were filed more than sixty days after the Effective Date, and Art.
VIII(e) appeared to deprive the Court of jurisdiction. 	Believing that oral
argument might assist the Court on this narrow issue, the Court issued an
order scheduling oral argument limited to two questions:
1. Does this Court have subject matter jurisdiction to determine
the Motions in light of the provision of the debtor’s confirmed plan
under which the Court retained jurisdiction “to determine all
applications and adversary proceedings pending on the Effective
Date or filed or commenced within 60 days thereafter”?
2. If the Court denies the Motions for any reason, on what basis
should the Court decline to grant the Cross-Motion?
(Order Scheduling Oral Argument, dated Aug. 4, 2014 (“August 4 Order”) (ECF
Doc. # 908).)
Oral argument was scheduled for August 19, 2014. 	By letter dated
August 12, 2014, Chaite asked for an adjournment, explaining that the
argument date conflicted with his travel plans. 	(Letter from Michael Chaite to
the Court, dated Aug. 12, 2014 (ECF Doc. # 909).) 	The Court denied the
request for the reasons stated in a memorandum endorsement. 	(Id.) 	One day
later, George Gilmer, Esq., Best’s attorney, also asked for an adjournment.
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 8 of 32

9
(Letter from George M. Gilmer, Esq. to the Court, dated Aug. 15, 2014 (ECF Doc.
# 910).) 	His letter referred to a “medical issue” that rendered him unable to
appear and stated that documentation of his illness would be provided, upon
my request, for in camera review. 	(Id.) 	The Court denied Gilmer’s request in a
memorandum endorsement based on the absence of credible medical evidence
explaining why he could not attend the hearing or an explanation as to why he
had not requested an adjournment until after the Court denied Chaite’s
adjournment request. 	(Memorandum Endorsement and Order, dated Aug. 18,
2014 (ECF Doc. # 911).) 	The Court heard nothing further from either Chaite or
Gilmer regarding an adjournment.
The Court heard oral argument on August 19, 2014. 	The City’s attorney
appeared in person and Chaite appeared by telephone. 	Gilmer did not
participate. 	The Court stated that Gilmer had not provided the medical
evidence referred to in the memorandum endorsement denying his
adjournment request and would proceed without him. 	(Transcript of 8/19/14
Hrg. (“Tr.”), at 3:20-25 (ECF Doc. # 931).)
During the argument, Chaite mentioned that he had emailed a reply
brief.3 	(Tr. at 4:22-24.) 	The Court advised Chaite that it had not requested
additional briefing and would not consider it. 	(Id. at 4:24-5:5.) 	Chaite also
3 	See Reply of Michael Chaite to Objection and Amended Objection of The City of New York
and Its Agencies to Motions of Michael Chaite and Best Payphones, Inc. to Dismiss DoITT'S
Claims, dated Aug. 18, 2014 (“Chaite August 18 Reply”) (ECF Doc. # 913).
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 9 of 32

10
tried to argue the merits of the Postpetition NOV Issues but was steered back
to the issues identified in the August 4 Order. 	(See id. at 6:9-8:12.) 	At the
conclusion of oral argument, the Court reserved decision.
Following the hearing, the Court received more pleadings and letters
from the parties. 	In an August 27, 2014 letter to the Court, Gilmer sought
leave to file Best’s reply to the City’s opposition to the claim objections,4
explaining that he had been ill and under a doctor’s care and could not file the
reply by August 18, 2014. 	(Letter from George M. Gilmer, Esq. to the Court,
dated Aug. 27, 2014 (ECF Doc. # 915).) The City did not file opposition to
Best’s motion for reconsideration or its request for leave to file a reply, and the
Court ultimately accepted Best’s (and Chaite’s) reply in the interest of a
complete record on the underlying claims objections. 	Decision, 523 B.R. at 67
n. 12.
In addition, Chaite filed yet another claims disallowance motion on
October 20, 2014, invoking a different subparagraph of Art. VIII of the Plan.
Art. VIII(c) authorized the Court “to determine all Administrative Claims
including, without limitation, applications for the allowance of compensation
and reimbursement of expenses, provided that applications for allowance of
compensation and reimbursement of expenses shall be filed within 60 days
4 	See Reply of Debtor Best Payphones, Inc. to Objections of the City of New York to Debtor's
Motion Denying the City’s Pre-Petition and Administrative Claims, dated Aug. 27, 2014 (“Best
August 27 Reply”) (ECF Doc. # 916).
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 10 of 32

11
after the Confirmation Date.” 	Chaite contended that the City had failed to file
an application for payment of its administrative claim within sixty days of the
Confirmation Date. 	(Memorandum of Law in Support of Motion to Disallow the
Pre-Petition and Administrative Claims of Claimant City of New York and
Permitting the Release of Funds Held in Escrow by Debtor’s Attorney, dated Oct.
16, 2014, at 4 (ECF Doc. # 918).) 	Consequently, the Court had no jurisdiction
to allow the City’s claims, and the escrow funds should be released,
presumably to Chaite. 	(Id.) The City opposed the new motion on several
grounds and requested that the funds be transferred to the City to be held in
escrow. 	(See Response of the City of New York (the “City”) to Pro Se Motion Filed
by Michael Chaite to Disallow the City's Claims and Release the Funds Held by
Best's Counsel in Escrow on Account of the City’s Disputed Claims and City’s
Motion to Transfer Escrow Funds to City's Counsel as Escrow Agent Under the
Plan, dated Oct. 23, 2014, at ¶ 24 (ECF Doc. # 919).) 	The Court denied
Chaite’s new motion, In re Best Payphones Inc., No. 01-15472, 2014 WL
5507618, at *2-3 (Bankr. S.D.N.Y. Oct. 31, 2014), and rejected the City’s
request regarding the transfer of the escrow funds. 	Id. at *3.
C. 	The Decision
The Court issued its 44-page Decision on January 15, 2015. 	The
Decision first recounted the long and complex history of the case and the
various litigations between the parties. 	523 B.R. at 57-67. 	Deciding the issue
argued on August 19, 2014, the Court then concluded that it had subject
matter jurisdiction because neither Art. VIII(c) nor (e) controlled.
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 11 of 32

12
Notwithstanding their assigned titles, the 2014 Objections were claims
objections, and Art. VIII(a) of the Plan retained post-confirmation to determine
objections to claims without regard to when they were filed. 	Decision, 523 B.R.
at 68-69.
To the extent relevant to the City’s motion for reconsideration, the Court
also rejected the City’s argument that the doctrines of waiver and laches barred
consideration of the Postpetition NOV Issues. 	The City contended that Best
had filed the amended objection to its claim for fines in 2003, sought to
relitigate the same objections in its unsuccessful motion to withdraw the
reference in 2005, all of the litigation between the City and Best had taken
place in the Brooklyn Court since 2008, and finally, Best conceded in 2013
that there were no remaining disputes pending in this Court. 	(City Response at
¶ 43.) 	The laches and waiver arguments were contained in this one paragraph.
The Decision concluded that the City had failed to demonstrate laches or
waiver. 	“The party asserting the defense of laches must establish unreasonable
delay or lack of diligence by the other party and show that it has suffered
prejudice as a result of the delay.” 523 B.R. at 69 (citations omitted). 	Although
the City had satisfied the first prong, it had failed to show legal prejudice. 	Id.
at 69-70. 	It did not point to any change in its position or loss of evidence or
indicate how the delay would affect its ability to defend the claims objections
on the merits. 	In addition, the delay did not affect the City’s ability to receive
payment because the money required to pay its claims, should they be allowed,
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 12 of 32

13
was held in escrow, and the claims could not be allowed and paid, if ever, until
the completion of the litigation in the Brooklyn Court. 	Id. at 70. 	In fact, the
City had represented that it would not attempt to collect its claims until the
completion of that litigation. 	Id.
The Court also concluded that the City had failed to support its claim of
waiver. 	The party asserting waiver must demonstrate a clear manifestation of
an intent to relinquish and abandon a known right. 	Id. 	A waiver could not be
lightly presumed and did not result from negligence, oversight or carelessness.
Id. 	The Court recounted the evidence supporting a claim of waiver:
[T]he defense to the City’s claims was never formally asserted in
any of Best’s objections, and when pressed at the June 2005
hearing, Best’s counsel did not identify the automatic stay or late
claim issues as issues that the Bankruptcy Court must decide. 	In
fact, he stated that the only remaining bankruptcy issue concerned
the failure to attach the NOVs to the claims. 	The absence of an
automatic stay or late claim objection in Best’s Administrative
Objection or Amended Objection and counsel’s concession led the
Court to conclude in the 2005 Abstention Order that the only
remaining bankruptcy issue involved the failure to attach the
NOVs to the claims. 	Furthermore, Best never sought
reconsideration to argue that I had overlooked its other objections.
Id.
Other evidence, however, showed that Best and/or Chaite had raised the
Postpetition NOV Issues at various times over the years:
Nevertheless, Best had raised these issues in pleadings filed prior
to the hearing on the abstention motion in 2005. 	(See Best
Abstention Reply at 4; Chaite Abstention Declaration at ¶ 15.) 	It
also reiterated these arguments after the June 2005 hearing and
prior to the issuance of the 2005 Abstention Order. (Letter from
Charles H. Ryans, Esq. to the Court, dated Nov. 15, 2005, at 3).) 	In
fact, the City replied to these specific contentions, and argued that
the service of the Postpetition NOVs was excepted from the
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 13 of 32

14
automatic stay under 11 U.S.C. § 362(b)(4). 	Letter from Gabriela P.
Cacuci, Esq. to the Court, dated Nov. 18, 2005, at 3.)
Id. at 71. 	The Court concluded in light of this evidence that the City had failed
to establish a clear manifestation of Best’s or Chaite’s intention to waive the
Postpetition NOV Issues. 	Id.
The Court then turned to the merits. 	It rejected Best’s and Chaite’s
argument that the City had failed to prove that Best operated the PPT’s in
violation of the City’s regulations or that the City had violated the Confirmation
Order by trying to collect its administrative claim. 	Id. at 71-72. 	The Court also
identified several questions relating to the Postpetition NOV Issues, and
concluded that it could not decide those issues on the present state of the
record. 	Id. at 73-76. 	Finally, given Best’s and Chaite’s penchant for piecemeal
litigation over the years, the Court imposed a thirty day deadline to submit any
additional objections to the City’s claims that were not pending before the
Brooklyn Court. 	Id. at 76. 	In light of the disposition and the need for further
proceedings, the Court denied the Cross-Motion without prejudice. 	Id.
D. 	The City Reconsideration Motion
The City Reconsideration Motion identifies three reasons to reconsider the
Decision. 	First, it contends that it was blindsided by the Court’s consideration
of the Chaite August 18 Reply and the Best August 27 Reply and denied due
process. 	(See City Reconsideration Motion at 2-6.) 	It argues that the July 15
Order stated that the matter was fully briefed and decision was reserved, but
the Court then “reversed itself” and scheduled oral argument for August 19,
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 14 of 32

15
2014 on the two limited questions described earlier. 	Despite the July 15 Order,
Chaite sent the Chaite August 18 Reply to chambers in the earlier hours of
August 19, 2014. 	As a result, “[t]he City appeared at oral argument without
knowledge of, or an opportunity to review or respond to Chaite's Reply.” 	(City
Reconsideration Motion at 4.) 	In addition, although the Court told Chaite it
would not consider Chaite’s reply and rejected Gilmer’s excuse for not
appearing at the argument,5 (id.; see also Tr. at 3:20-25), it nevertheless heard
Chaite’s argument on the merits, and “the City did not have an opportunity to
respond.” 	(City Reconsideration Motion at 5) (emphasis in original).) 	Moreover,
the Chaite August 18 Reply and the Best August 27 Reply “became central to
the Decision,” (id.), and in fact, the Court never would have focused on the
Postpetition NOV Issues but for the Chaite August 18 Reply. 	(Id. at 20 (“It was
this Reply, emailed to Chambers in the morning of the argument, that made
the Court focus on the Issues of late filed claim and violation of the automatic
stay and go beyond the limited scope of the argument (of subject matter
jurisdiction) outlined in its August 4, 2014 Order.”).) 	The consideration of the
replies as well as any documents filed in violation of the July 15 Order and the
August 4 Order was error, but at a minimum, if the Court was going to consider
these documents, the City should have been informed of the Court’s intention
and given the opportunity to respond. 	(Id. at 5-6.)
5 	Oddly, only one page earlier the City complained that “Mr. Gilmer did not appear at oral
argument but the Court made no mention of this fact, nor chastised counsel in any way.” (City
Reconsideration Motion at 3; see also id. at 11.)
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 15 of 32

16
Second, the City Reconsideration Motion challenges the Court’s
conclusion that the City failed to show a clear manifestation of Best’s and
Chaite’s intention to abandon the Postpetition NOV Issues. 	(Id. at 6-20.) 	It
contends that the Court overlooked certain facts that supported the City’s
waiver argument. 	Most of the “overlooked facts” recount the history that was
set forth in the Decision, including instances in 2003, 2005, 2007 and 2008
when Best failed to raise the Postpetition NOV Issues in its original or amended
claims objections, its representations to the Court that omitted the Postpetition
NOV Issues as issues that remained to be decided, and the long delay in
asserting the objections formally despite the Court’s “invitation” years earlier to
do so.
The City Reconsideration Motion also identified two facts that the Decision
did not mention. 	During a hearing on July 24, 2003, Best’s counsel asserted
that the City’s administrative claim was really a prepetition claim that should
be expunged as a late claim. 	(City Reconsideration Motion, Ex. D, at p. 20 of
48.) 	The Court asked why Best had not made that motion, and an unidentified
speaker (possibly Chaite) responded, “I believe that it is part of our objection.”
(Id., Ex. D, at p. 21 of 48.) 	The Court expressed frustration with the opacity of
Best’s lengthy claims objections, and another Best attorney stated that this
was why Best wanted to “redo” its objections to the later claims. 	(Id.) 	The City
argues that Best never accepted the Court’s “invitation” to file an amended
objection to the administrative claim on the ground that the claim was filed
after the bar date.
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 16 of 32

17
The City also argues that the Decision failed to consider that Best’s
appeal from the Opinion and Order Regarding Motion for Discretionary
Abstention, dated Nov. 29, 2005 (“2005 Abstention Order”) (ECF # 466)) was
dismissed by the District Court for failure to prosecute. 	The events leading up
to the 2005 Abstention Order are discussed at length in the Decision. 	See 523
B.R. at 62-65. 	The order resulted from the Court’s effort to identify the
remaining claims objections that were not the subject of litigation in the
Brooklyn Court. 	The City argued that all of the issues were pending there save
one: Best’s contention that the City’s claims should be expunged because the
City had not attached the corresponding NOVs to the claims. 	Id. at 62-63.
Best responded, identifying, among other issues, that “the Bankruptcy Court is
the proper forum for determination of DoITT’s violation of the automatic stay by
prosecuting prepetition NOVs after the filing date of Best’s bankruptcy petition,
an issue raised in no other proceeding.” 	Id. at 63 (quoting Reply to the
Response of the New York City Department of Information Technology and
Telecommunications (“DoITT”) and the New York City Department of
Transportation (“DOT”) to the Debtor’s Objections to DoITT’s and DOT’s Proofs of
Claim, dated Mar. 30, 2005, at 4 (ECF Doc. # 394).)
During a June 21, 2005 hearing, the Court identified what it understood
to be Best’s list of issues that were not the subject of litigation in other courts.
The list did not include the Postpetition NOV Issues. 	I asked Best’s counsel if I
had missed anything, and he responded that the list was complete. 	The parties
traded more correspondence following the hearing, and Best again raised the
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 17 of 32

18
Postpetition NOV Issues as specific bankruptcy issues pending before the
Court. 	Focusing on counsel’s concession at the hearing and observing that “it
was not the Court’s job to search through the substantial amount of paper in
the case to identify other issues,” the Court concluded in the 2005 Abstention
Order that the only remaining issue for the Court related to the failure to
attach the NOVs to the claims and abstained as to the other issues discussed
at the hearing. 	Id. at 64.
The Decision did not mention that Best had appealed from the 2005
Abstention Order or that its appeal had been dismissed for failure to prosecute.
The City Reconsideration Motion argues that the dismissal of the appeal (as well
as the July 24, 2003 “invitation” that Best ignored) mandated a finding of
waiver.6
Third, the City Reconsideration Motion challenges the Court’s conclusion
that it was unnecessary to decide Chaite’s standing at that time. 	(Id. at 20-21.)
This issue is discussed in more detail below.
6 	See City Reconsideration Motion at 14 (“The City contends that Best’s failure to perfect
this appeal of the 2005 Abstention Order, which order failed to identify the Issues it now claims
have survived, constitutes a knowing waiver and abandonment of those two Issues.”); 15 (“The
Court’s 2005 Abstention Order makes no mention of the Issues yet Best and Chaite made the
decision not to perfect the appeal from the 2005 Abstention Order. This was a deliberate act. .
. .”); 15 (“The Court did not consider the July 24, 2003 transcript of proceedings, nor Best’s
appeal and failure to prosecute the appeal from the 2005 Abstention Order.”); 19 (“[Best,] most
importantly, failed to perfect the 2006 Appeal from that order, in which Best could have fully
litigated the Issues. This certainly shows lack of due diligence.”).
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 18 of 32

19
DISCUSSION
Local Bankruptcy Rule 9023-1(a), Bankr. S.D.N.Y.R. 9023-1(a), governs
motions for reargument,7 and imposes the same standards as motions to alter
or amend judgments under FED. R. CIV. P. 59(e). See In re Bressler, No. 06-
11897, 2007 WL 951661, at *1 (Bankr. S.D.N.Y. Mar. 27, 2007); cf. Greenwald
v. Orb Commc’ns & Mktg., Inc., No. 00 Civ. 1939 (LTS), 2003 WL 660844, at *1
(S.D.N.Y. Feb. 27, 2003) (“The standards governing motions to alter or amend
judgments pursuant to Rule 59(e) and motions for reconsideration or
reargument pursuant to Local Rule 6.3 are the same.”).8 	“[T]he movant must
show that the court overlooked controlling decisions or factual matters ‘that
might materially have influenced its earlier decision.’” 	In re Best Payphones,
Inc., No. 01-15472 (SMB), 2008 WL 2705472, at *3 (Bankr. S.D.N.Y. July 3,
2008) (quoting Anglo Am. Ins. Grp., P.L.C. v. CalFed Inc., 940 F. Supp. 554, 557
(S.D.N.Y. 1996)); accord Banco de Seguros del Estado v. Mut. Marine Offices,
Inc., 230 F. Supp. 2d 427, 428 (S.D.N.Y. 2002), aff’d, 344 F.3d 255 (2d Cir.
7 	Local Bankruptcy Rule 9023-1(a) states:
A motion for reargument of a court order determining a motion shall be
served within fourteen (14) days after the entry of the Court's order determining
the original motion, or in the case of a court order resulting in a judgment,
within fourteen (14) days after the entry of the judgment, and, unless the Court
orders otherwise, shall be made returnable within the same amount of time as
required for the original motion. The motion shall set forth concisely the
matters or controlling decisions which counsel believes the Court has not
considered. No oral argument shall be heard unless the Court grants the
motion and specifically orders that the matter be re-argued orally.
8 	Local Bankruptcy Rule 9023-1(a) is an adaptation of District Court’s Civil Rule 6.3. See
In re Interbank Funding Corp., No. 07-1482 (BRL), 2007 WL 2080512, at *2 n.5 (Bankr.
S.D.N.Y. July 19, 2007); Family Golf Ctrs., Inc. v. Acushnet Co. (In re Randall’s Island Family
Golf Ctrs., Inc.), 290 B.R. 55, 61 n.4 (Bankr. S.D.N.Y. 2003); see also Local Bankruptcy Rule
9023-1 cmt.
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 19 of 32

20
2003); Griffin Indus., Inc. v. Petrojam, Ltd., 72 F. Supp. 2d 365, 368 (S.D.N.Y.
1999); Farkas v. Ellis, 783 F. Supp. 830, 832–33 (S.D.N.Y. 1992), aff’d, 979
F.2d 845 (2d Cir. 1992). 	“Alternatively, the movant must demonstrate the need
to correct a clear error or prevent manifest injustice.” 	Griffin Indus., 72 F.
Supp. 2d at 368 (internal quotation marks and citations omitted); accord Banco
de Seguros del Estado, 230 F. Supp. 2d at 428.
“The rule permitting reargument is strictly construed to avoid repetitive
arguments on issues that the court has already fully considered.” 	Best
Payphones, Inc., 2008 WL 2705472, at *3; accord Griffin Indus., 72 F. Supp. 2d
at 368; Monaghan v. SZS 33 Assocs., L.P., 153 F.R.D. 60, 65 (S.D.N.Y. 1994);
Farkas, 783 F. Supp. at 832. 	“Reconsideration should not be granted where
the moving party seeks solely to relitigate an issue already decided; in addition,
the moving party may not ‘advance new facts, issues or arguments not
previously presented to the Court.’” 	Reich v. Lopez, No. 13–CV–5307 (JPO),
2015 WL 1632332, at *1 (S.D.N.Y. Apr. 13, 2015); Christoforou v. Cadman
Plaza N., Inc., No. 04 Civ. 8403 (KMW), 2009 WL 723003, at *7 (S.D.N.Y.
Mar.19, 2009) (quoting Shamis v. Ambassador Factors Corp., 187 F.R.D. 148,
151 (S.D.N.Y. 1999)). 	The decision to grant or deny reargument lies within the
sound discretion of the court. 	Reich, 2015 WL 1632332, at *1; SEC v.
Treadway, 354 F. Supp. 2d 311, 313 (S.D.N.Y. 2005); Shamis, 187 F.R.D. at
151.
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 20 of 32

21
A. 	The Due Process/Fairness Claim
The City’s due process argument centers on Court’s consideration of the
Chaite August 18 Reply and the Best August 27 Reply despite the July 15
Order, which said that the record was complete and decision was reserved, and
the Court’s statement at the August 19 hearing that it would not consider the
Chaite August 18 Reply. 	According to the City, the Chaite reply in particular
focused the Court on the Postpetition NOV Issues, yet the City never had the
opportunity to respond. 	The argument mischaracterizes the record and ignores
the City’s own submissions.
To begin with, the August 19 hearing was scheduled to hear argument
on a limited threshold issue of whether the objections were filed too late under
Art. VIII(e) of the Plan. 	It was not an argument on the other issues which were
decided on submission per the July 15 Order, and when Chaite tried to argue
the merits of the Postpetition NOV Issues, the Court refocused him on the
jurisdictional issue that it had identified in the August 4 Order. 	The
jurisdictional issue was the reason for the hearing but was not the only issue
raised by the 2014 Objections.
Furthermore, the Court did not consider or credit the Chaite August 18
Reply on the jurisdictional issue. 	Chaite argued without elaboration that the
Court had subject matter jurisdiction over the motions to disallow the City’s
claims and cited to several subparagraphs in Art. VIII of the Plan, including
subparagraph (a). 	(Chaite August 18 Reply at 2-3.) 	He then argued that each
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 21 of 32

22
subparagraph in Art. VIII was distinct, the sixty day limitation appeared in only
two subparagraphs ((c) and (e)), and accordingly, the other subparagraphs
(Chaite referred to (h), (j), (k) and (l)) were not subject to a sixty day limitation.
(Id. at 3-4.) 	He did not, however, identify which of the distinct subparagraphs
of Art. VIII governed the 2014 Objections. 	In rejecting the City’s subject matter
jurisdiction objection, the Court concluded that Art. VIII(a) granted the Court
post-confirmation jurisdiction to determine claims objections without regard to
when they were filed. 	Decision, 523 B.R. at 68.
More troubling, the City completely ignores the record when it argues
that the Postpetition NOV Issues were first raised in the Chaite August 18 Reply
and thereafter in the Best August 27 Reply, 9 and the Chaite August 18 Reply
focused the Court “on the Issues of the late filed claim and violation of the
automatic stay.” 	(City Reconsideration Motion at 20.) 	As noted, the Postpetition
NOV Issues were raised in the initial papers submitted by Best and Chaite.
(See Chaite Unfiled Motion, at 2 and 5; Chaite Filed Motion, at ¶¶ 3, 4, 9 and 14;
Best Motion, at ¶¶ 6, 14 and 19-20.) The Best Motion succinctly summarized
the Postpetition NOV Issue in the following manner:
DoITT’s Administrative Claim should be dismissed because: 1) the
Administrative Claim is not an administrative claim as it arose
prior to the October 23, 2001 Petition and is merely an attempt to
9 	See City Reconsideration Motion at 7 n.2 (stating that the Postpetition NOV issues
“resurfaced after years on the date of the argument”); 19 (“Moreover, the Court (as noted above
in part I) failed to consider that Chaite and Best revisited these old Issues for the first time in six
years in the Chaite Reply (ecf # 913) emailed to Chambers the morning of the August 19. 2014
argument, without notice to the City and an opportunity to be heard, and in the Best filed dated
August 27, 2014 after oral argument.” (Boldface and emphasis in the original).
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 22 of 32

23
circumvent the pre-petition claim bar; . . . and 3) the service of the
Pre-Petition Date August 2001 NOVs, assuming service was good,
which it was not, was in violation of the automatic stay, as is the
continued attempt to collect the Administrative Claim.
(Best Motion at ¶ 6.)
The City acknowledged in its response that the 2014 Objections raised
the Postpetition NOV Issues:
The Chaite Motion makes three arguments:
A. 	DoITT's administrative claim should be stricken because it is
not really an administrative claim because it allegedly arose prior
to the October 23, 2001 Petition Date (see Chaite Memorandum of
Law at ¶ 4 and Argument, point I);
. . . . 	and
C. 	The service of the August 2001 NOVs, assuming service was
good, which Chaite claims it was not, violated the automatic stay
(see Chaite Memorandum of Law at ¶ 4 and Argument, point III).
(City Amended Response at 4.)
In light of the City’s own pre-argument submissions, it is irresponsible to
argue that the Postpetition NOV Issues were first raised in the reply papers, or
that the replies (which aggregated nine pages of argument on the jurisdictional
and collateral estoppel issues) were central to the Decision or focused the Court
on the Postpetition NOV Issues; these issues were front and center from the
beginning. 	Furthermore, except for the limited jurisdictional issue addressed
at the August 19 argument, the Court decided the 2014 Objections on
submission. 	The Court accepted the replies to ensure a complete record, and
even if they had been filed before the August 19 hearing, the City would not
have had a right to file a sur-reply.
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 23 of 32

24
In the end, the City submitted a weak waiver and laches argument, but
not because it lacked adequate notice of the Postpetition NOV Issues or the
opportunity to respond. 	Instead, it relied on its jurisdictional objections and
other doctrines of preclusion, and gave cursory attention to the doctrines of
waiver (and laches) that it now discusses for twenty pages in the City
Reconsideration Motion.
The City also contends that it received “disparate treatment” from the
Court. 	It notes that the Court accepted the replies notwithstanding the July 15
Order but twelve years earlier, rejected the City’s automatic stay defense under
11 U.S.C. § 362(b)(4) because the City had not submitted a supporting
memorandum of law which was required by the Court’s Local Bankruptcy
Rules at the time. 	(City Reconsideration Motion at 11.) 	The City also implies
that the Court unfairly placed the burden of pleading and proving the
automatic stay exception on the City, and instead, should have placed it on
Best because it obviously applies. 	(City Reconsideration Motion at 17 n. 9.)
The Court accepted the replies in the exercise of its discretion and
without formal objection to ensure a complete record. 	The City’s invocation of
the exception to the automatic stay regarding the exercise of police and
regulatory powers, 11 U.S.C. § 362(b)(4), is a different matter that raises
complex questions. 	When the City raised the same exception in opposition to
the 2014 Objections, the Court noted several difficult automatic stay issues: (1)
was the operation of the PPTs without the appropriate authority a continuing
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 24 of 32

25
violation of the City’s regulations that crossed over into the postpetition period,
Decision, 523 B.R. at 72-73, 75; (2) since the operation of an unauthorized PPT
on New York City property is a misdemeanor under New York City
Administrative Code § 23-408(a), if unauthorized PPTs are subject to removal
conditioned on the issuance of an NOV, did the service of the Postpetition
NOVs fall within the automatic stay exception under 11 U.S.C. § 362(b)(4),
Decision, 523 B.R. at 75; and (3) since the City’s remedies for the unauthorized
operation of PPTs are cumulative, was the service of the Postpetition NOVs even
necessary to recover a fine? 	Id.10
The party asserting an exception to the automatic stay bears the burden
of proving that the exception applies. 	Speth v. 21st Mortg. Corp. (In re Nulik),
Adv. No. 08–5257, 2010 WL 5114734, at *4 (Bankr. D. Kan. Dec. 8, 2010);
Pearce v. E.L.W. Corp. (In re Pearce), 400 B.R. 126, (Bankr. N.D. Iowa 2009); In
re Reisen, No. 03–01999, 2004 WL 764628, at *3 (Bankr. N.D. Iowa Mar. 4,
2004); Westman v. Andersohn (In re Westman), 300 B.R. 338, 342 (Bankr. D.
Minn. 2003). 	In addition, a party asserting an administrative claim must
demonstrate by a preponderance of the evidence that its administrative claim
should be allowed. 	In re Appalachian Fuels, Inc., 493 B.R. 1, 14 (B.A.P. 6th Cir.
2013). 	The City’s mere incantation of 11 U.S.C. § 362(b)(4) or its “police and
10 	The Court also questioned whether the disallowance of the City’s administrative claim
and resulting payment of the escrow to Chaite would violate the best interest of creditors test
under 11 U.S.C. § 1129(a)(7). Decision, 523 B.R. at 75-76.
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 25 of 32

26
regulatory powers,” (see City Reconsideration Motion at 16-17 & n.9), does not
carry that burden. 	Furthermore, even if the exception to the automatic stay
applies in this case, the City must also show that its claim is a timely
administrative claim or a late prepetition claim that is nonetheless entitled to
allowance and payment.
In short, the 2014 Objections gave the City notice of the Postpetition
NOV Issues, the City had an adequate opportunity to respond to the 2014
Objections, the Court exercised its discretion to consider Best’s and Chaite’s
replies and the City had no right to submit a sur-reply.
B. 	The Merits
The City spends most of the City Reconsideration Motion arguing with the
Court’s conclusion that it failed to show a clear manifestation of Best’s
intention to waive or abandon the Postpetition NOV Issues. 	However, the City
Response limited its waiver and laches arguments to one paragraph in which it
contended that (1) Best filed its amended objections to the City’s claims for
fines in 2003, (2) it attempted to “relitigate” the same objections in its
unsuccessful motion in 2005 to withdraw the reference, (3) from 2008 until
2014, it never took the position that other “bankruptcy law” issues remained to
be decided, (4) after 2008, it litigated exclusively in the Brooklyn Court, (5) it
conceded in 2013 that the City was the only unpaid creditor, and (6) it
conceded that there was no matter pending before this Court that it had not
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 26 of 32

27
decided or abstained from deciding in favor of the Brooklyn Court. 	(City
Response at ¶ 43.)
The Court considered these arguments, concluded that the Postpetition
NOV Issues had never been decided (although the City insisted that they had
been decided by the ECB) and the evidence did not show a clear manifestation
of Best’s intent to abandon the issues. 	Although Best had represented,
implicitly and explicitly, that there was nothing left for this Court to decide, at
the same time, it raised the Postpetition NOV Issues in pleadings and letters to
the Court. 	In addition, although it had failed to pursue these objections
diligently, the City had not shown prejudice to support a defense of laches.
The City Reconsideration Motion attempts to marshal evidence that its
prior submissions ignored or mentioned in only a cursory fashion. 	The
Decision acknowledged that many of the facts supported a finding of a waiver
but others supported a finding that Best did not intend to waive the
Postpetition NOV Issues. 	Because a waiver “cannot be lightly presumed,”
“requires a clear manifestation of intent” and “cannot be created through
negligence, oversight or thoughtlessness,” Decision, 523 B.R. at 70, the Court
concluded that the City had failed to demonstrate a waiver. 	In short, the Court
did not overlook the facts mentioned by the City
The City also contends that the Court “overlooked” two facts that were
mentioned for the first time in the City Reconsideration Motion. 	Specifically, the
“Court did not consider the July 24, 2003 transcript of proceedings,” (City
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 27 of 32

28
Reconsideration Motion at 15), or “Best’s appeal and failure to prosecute the
appeal from the 2005 Abstention Order.” 	(Id.) 	The City did not mention these
facts in the City Response or the City Amended Response, and the Court
cannot overlook facts that the City never brought to its attention.
C. 	Chaite’s Standing
Lastly, the City contends that the Court erred in concluding that it was
not necessary to decide whether Chaite lacked standing to pursue his own
claim objection. 	The City did not contend that Chaite lacked Article III
standing; Chaite will be entitled to the balance of the escrow if the City’s claims
are expunged. 	Instead, the City argues that Chaite lacks standing because he
is bound by the rejection of Best’s claim objection. 	(See City Reconsideration
Motion at 20-21 (“If, arguendo, [Best’s] failure to perfect this appeal and all the
other facts set forth above, in their totality, amount to a waiver of the Issues,
what right does Chaite have, to revisit these issues in 2014, in his Reply? . . .
The City respectfully requests the Court to address the issue whether Chaite
even had standing to raise the Issues, in light of Best’s waiver and
abandonment of those Issues, years before.”). In other words, Chaite should be
collaterally estopped by virtue of the denial of Best’s objection.
The argument assumes that Best has lost. 	Whether Chaite is collaterally
estopped by Best’s loss is an issue that the Court did not have to reach
because the Court concluded that Best (and Chaite) could pursue their
objections based on the Postpetition NOV Issues.
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 28 of 32

29
For all of the foregoing reasons, the City Reconsideration Motion is
denied.
D. 	Best’s and Chaite’s Reconsideration Motions
Best also moved for reconsideration of so much of the Decision as
imposed a thirty day deadline to file any additional bankruptcy-related
objections. 	It argued that it had pending requests for relief in the Brooklyn
Court, including claims that a prior decision of the New York Appellate Division
was pre-empted by the TCA and violated Best’s rights under the Fourteenth
Amendment. 	In addition, it had submitted pre-motion letters to the Brooklyn
Court seeking permission to file a new adversary proceeding in this Court and
a new complaint in the Brooklyn Court. 	(Declaration of George S. Gilmer, dated
Jan. 28, 2015, at ¶ 4.) 	In the alternative, Best requested that the thirty day
deadline start running from the decision on Chaite’s appeal from the Decision,
(id. at ¶ 5), or at the earliest, from the decision on the City Reconsideration
Motion. 	(Id. at ¶ 6.)
Before the City even responded, Best’s counsel wrote to the Court asking
for the same relief sought in the reconsideration motion. 	(See Letter from
George S. Gilmer, Esq. to the Court, dated Feb. 6, 2015 (ECF Doc. # 932).) 	The
City opposed the request, (Letter from Gabriela P. Cacuci, Esq. to the Court,
dated Feb. 9, 2015 (ECF Doc. # 934)), and the Court denied it in the February
10 Order for two reasons. 	First, the Court would not grant contested relief
sought by letter rather than by motion. 	Second, the statutory and
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 29 of 32

30
Constitutional issues that Best was seeking to raise had to be asserted in the
Brooklyn Court, where Best was already litigating Constitutional and non-
bankruptcy federal issues. 	The Court had previously abstained from hearing
such issues under the 2005 Abstention Order and would only entertain
“bankruptcy-related objections.” 	Three days later, Best and Chaite filed timely
supplemental objections pursuant to the Decision. 	(See Supplemental Objection
of Debtor Best Payphones, Inc. to: (1) Administrative Proof of Claim Filed by New
York City Department of Information Technology and Telecommunications; and
(2) Proof of Claim of New York City Department of Information Technology And
Telecommunications, dated Feb. 13, 2015 (ECF Doc. # 939); Objection of
Michael Chaite, Co-Proponent of the Reorganization Plan of Debtor Best
Payphones, Inc., to: (1) Administrative Proof of Claim Filed by New York City
Department of Information Technology and Telecommunications; and (2) Proof of
Claim of New York City Department of Information Technology and
Telecommunications, dated Feb. 13, 2015 (ECF Doc. # 941).)
Despite their timely supplemental objections, Best and Chaite moved for
reconsideration of the February 10 Order. 	(Declaration of George S. Gilmer,
dated Feb. 24, 2015 (“Best Feb. Reconsideration Motion”) (ECF Doc. # 940);
Declaration of Michael Chaite, dated Feb. 24, 2015 (ECF Doc. # 942).) 	They
made an argument that struck the Court as odd. 	The February 10 Order had
stated that Best’s Constitutional and non-bankruptcy claims should be
asserted in the Brooklyn Court. 	In the interim, Magistrate Judge Scanlon of
the Brooklyn Court had issued a Report and Recommendation, dated Feb. 17,
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 30 of 32

31
2015 (“R&R”).11 	According to Best and Chaite, Judge Scanlon had
recommended to Judge Gleeson that he deny Best’s request to amend its
complaint to assert that the Appellate Division’s decision was pre-empted by
the TCA and violated Best’s Fourteenth Amendment rights.12 	Best and Chaite
contended that if the R&R were adopted, “and unless Best is permitted to raise
these issues in this Court in response to the City’s proof of claim, Best could be
left without a forum in which to have its objections heard.” 	(Best Feb.
Reconsideration Motion at ¶ 6; Declaration of Michael Chaite, dated Feb. 24,
2015, at ¶ 6.)13
If Best lacks standing to assert its TCA or Constitutional claims in
Brooklyn, as the Brooklyn Court has now concluded, or the claims are moot or
futile, as the Brooklyn Court has also concluded, it also lacks standing to
assert the same moot, futile claims in this Court. 	In any event, because both
Chaite and Best filed timely supplemental objections (in which they raised TCA
11 	A copy of the R&R is annexed to the Letter from Gabriela P. Cacuci, Esq. to the Court,
dated March 3, 2015 (ECF Doc. 943).)
12 	Judge Scanlon’s recommendation appears to be limited to the TCA issues. (See R&R at
1-2.) Based in part on an earlier report and recommendation of then-Magistrate Judge
Matsumoto that was adopted by the Brooklyn Court, Judge Scanlon concluded that Best’s TCA
claims for declaratory and injunctive relief were moot because Best had sold its PPTs, (id. at
17), the relevant provisions in the TCA did not provide a private right of damages, (id. at 19),
Best lacked standing to bring its proposed TCA, (id. at 47), and its TCA claims were futile. (Id.)
13 	Judge Gleeson subsequently adopted the R&R in its entirety and denied Best’s motion
to file a fourth amended complaint. (See Order Adopting Report and Recommendations, dated
Sept. 18, 2015 (Docket Entry), Best Payphones v. City of New York, Nos. 01-CV-3934, 01-CV-
8506, 03-CV-0192 (E.D.N.Y.).)
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 31 of 32

32
and Fourteenth Amendment claims) their motions for reconsideration of the
Decision and the February 10 Order are denied as moot.
The parties are directed to contact chambers to schedule a status
conference.
So ordered.
Dated: 	New York, New York
January 13, 2016
/s/ Stuart M. Bernstein
STUART M. BERNSTEIN
United States Bankruptcy Judge
01-15472-dsj Doc 953 Filed 01/13/16 Entered 01/13/16 07:13:35 Main Document
Pg 32 of 32