Old CP, Inc. v. Novo Advisors, LLC

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UNITED STATES BANKRUPTCY COURT
DISTRICT OF CONNECTICUT
HARTFORD DIVISION
____________________________________
IN RE: 	) 	CASE No. 	21-20111 (JJT)
)
OLD CP, INC. & 	)
SURI REALTY, LLC, 	)
DEBTORS 	) 	CHAPTER 	11
____________________________________)
OLD CP, INC. 	)
PLAINTIFF 	) 	ADV. PRO. No. 	23-02020
V. 	)
)
NOVO ADVISORS, LLC, 	) 	March 17, 2026
DEFENDANT 	)
____________________________________)
MEMORANDUM OF DECISION AND THE TRIAL
COURT’S FINDINGS OF FACTS AND CONCLUSIONS OF LAW
Appearances
Jeffrey M. Sklarz, Esq.
Kellianne Baranowsky, Esq.
Green & Sklarz, LLC
One Audubon Street
Third Floor
New Haven, CT 06511
Counsel for Old CP, Inc.
Jeffrey A. Fuisz, Esq. (pro hac vice)
Robert Franciscovich, Esq. (pro hac vice)
Rebecca Maller-Stein, Esq. (pro hac vice)
Arnold & Porter Kaye Scholer, LLP
250 West 55th Street
New York, NY 10019-9710
Counsel for Novo Advisors, LLC
James M. Nugent, Esq.
Harlow, Adams & Friedman, P.C.
One New Haven Avenue, Suite 100
Milford, CT 06460
Counsel for Novo Advisors, LLC
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1. 	Introduction
On December 22, 2023, Old CP, Inc. (“Old CPI”) commenced this Adversary
Proceeding against Novo Advisors, LLC (“Novo”). (ECF No. 1) Old CPI alleged
therein that it was entitled to judgment against Novo on seven counts of its
Complaint:
1) Preferential Transfer Pursuant to 11 U.S.C. §§ 547, 550, and 551;
2) Constructive Fraudulent Transfer Pursuant to 11 U.S.C. §§ 548(a)(1)(B),
550, and 551;
3) Constructive Fraudulent Transfer Pursuant to the Connecticut Uniform
Fraudulent Transfer Act (CUFTA), Conn. Gen. Stat. §§ 52-552e(a)(2) and
52-552f(a);
4) Breach of Fiduciary Duty as to the Pre-Petition BMO Payment;
5) Breach of Fiduciary Duty as to the Novo/CPI Engagement;
6) Breach of the Implied Covenant of Good Faith and Fair Dealing; and
7) Violation of the Connecticut Unfair Trade Practices Act (CUTPA), Conn.
Gen. Stat. § 42-110b, et seq.
A trial was held on August 11–14, 2025. During the trial, Novo moved for a
directed verdict on all counts. The Court granted the motion solely as to Count One,
but declined to grant a directed verdict as to the other six counts. (Memorandum of
Decision Granting Judgment on Partial Findings as to Count One, ECF No. 120;
8/13/25 Transcript at page 107, line 24, through page 133, line 191) Having reviewed
1 Henceforth, references to one page of a transcript will be cited as: “[Date] Tr. [Page Number]:[Line
Number]–[Line Number].” Where multiple pages of transcripts are referenced, they will be cited as:
“[Date] Tr. [Page Number]:[Line Number] –[Page Number]:[Line Number].”
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the remaining six counts, the docket2 of this Adversary Proceeding and the docket of
the Main Case, Case No. 21-20111, the evidence adduced at trial through the
witnesses and exhibits, and the parties’ briefs, including their post-trial proposed
findings of fact and conclusions of law, the Court concludes that Old CPI is not
entitled to judgment on Counts Two, Three, and Four, but is entitled to judgment in
its favor on Counts Five, Six, and Seven. The rationale for this determination and
the terms of the judgment are embodied herein.
2. 	Findings of Fact3
2.1 Pre-Bankruptcy Filing – Novo’s Engagement with BMO
Carla’s Pasta, Inc. (“CPI”) was a business owned and operated by its founder,
Carla Squatrito, an Italian-American entrepreneur, with the assistance of her two
sons, Sergio and Sandro Squatrito. (Main Case – ECF No. 14) Mrs. Squatrito formed
CPI on November 9, 1978, and markedly grew the business over more than four
decades. (MC – ECF No. 4, ¶ 4) CPI manufactured and distributed a wide variety of
pastas and related food products. (ECF No. 1; 8/11/25 Tr. 78:18–22; 8/12/25 Tr. 8:3–
5) Suri Realty, LLC (“Suri”) was a wholly owned subsidiary of CPI. (MC – ECF No.
4, ¶ 19) Suri owned two adjoining parcels of real property in South Windsor,
Connecticut, whereupon CPI operated its business. (Id., ¶ 15, 19)
2 The Court has taken judicial notice of the entire docket in this Adversary Proceeding (8/13/25 Tr.
184:24–185:4); and takes judicial notice of the entire docket of the Main Case, Case No. 21-20111.
3 To the extent that any Findings of Fact stated herein are considered Conclusions of Law, they are
adopted as such. To the extent any Conclusions of Law stated herein are considered Findings of Fact,
they are adopted as such.
4 Henceforth, any references to the docket in the Main Case (CPI’s bankruptcy filing, Case No. 21-
20111) will be cited as “MC – ECF No. X.” References to the docket of this Adversary Proceeding will
be cited as “ECF No. X.”
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BMO Harris Bank, N.A. (“BMO”) and People’s United Bank, National
Association (“PUB”), served as CPI’s Senior Lenders (and will be collectively
referred to as the “Senior Lenders”). (Stip. ¶ 11) On October 4, 2017, CPI and Suri
entered into the Third Amended and Restated Credit Agreement (“Third Credit
Agreement”) with the Senior Lenders, with BMO serving as a lender and PUB as an
administrative agent, lender, and letter of credit issuer. (Id.) Together, “the Senior
Lenders held a first priority security interest in, and lien on, substantially all of
[CPI’s and Suri’s] assets, including a first priority mortgage on all properties,”
which included Suri’s real estate. (Id., ¶ 12)
In the Third Credit Agreement, CPI and Suri expressly agreed to reimburse
BMO for certain expenses incurred in connection with the Senior Lenders’
administration of the Agreement and with loans made thereunder. Specifically,
Section 11.4(a) of the Agreement regarding these expenses and fees states:
The Loan Parties shall pay . . . all out-of-pocket expenses incurred by . . .
any Lender . . . (including the fees, charges and disbursements of any
counsel for . . . any Lender . . . and shall pay all fees and time charges
for . . . any Lender . . . in connection with the enforcement or protection
of its rights (A) in connection with this Agreement and the other Loan
Documents, including its rights under this Section, or (B) in connection
with Loans made . . . hereunder, including all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in
respect of such Loans . . . .
(Exh. D1, p. 133–34) Accordingly, CPI and Suri were contractually required to
reimburse BMO – one of the two Senior Lenders – for all expenses and fees that
BMO incurred in enforcing its rights under the Third Credit Agreement. (Id.; Exh.
P1, p. 2)
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CPI and Suri ultimately “defaulted on their obligations under the [Third]
Credit Agreement, which led to a series of forbearance agreements and
modifications between [CPI, Suri,] and the Senior Lenders; the first of which was
entered into on or about June 8, 2018.” (Stip. ¶ 13)
By the summer of 2020, CPI was facing significant operational and financial
difficulties. First, Mrs. Squatrito was less able to devote her time and attention to
CPI due to her advanced age and health issues, as well as the advanced age and
failing health of her husband, who was seriously ill and required her care and
attention. (8/12/25 Tr. 13:2–5; 8/13/25 Tr. 151:13–17, 178:6–10) Second, although
Sergio and Sandro worked at CPI and were heavily involved in CPI’s operations, the
brothers unfortunately had a tense relationship that limited their ability to
communicate and collaborate when at work, and, thereby, fully assist Mrs.
Squatrito. (8/12/25 Tr. 13:12–14) Third, the company encountered numerous and
significant financial setbacks: it embarked on a costly manufacturing plant
expansion (8/11/25 Tr. 187:11–14; 8/13/25 Tr. 157:5–10); but thereafter lost two key
customers, Panera Bread and Applebee’s, resulting in a staggering 50 percent
deterioration in its top line revenues, (8/11/25 Tr. 187:7–10); and it faced profound
business disruptions from the outbreak of the COVID-19 pandemic. (Id., 188:23–25)
As a result of these setbacks, CPI’s capital needs expanded while its operational
revenues precipitously shrunk. (Id., 187:15–17) Accordingly, CPI began to
experience a period of severe and mounting financial distress while its leadership
deteriorated. (Id., 44:13–25, 47:22–48:9; Stip. ¶ 13; Exh. D14)
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On or about June 30, 2020, BMO’s counsel, Chapman and Cutler LLP,
engaged Novo on behalf of the Senior Lenders to perform a financial assessment of
CPI. (Stip. ¶ 16) BMO sought to assess CPI’s ongoing viability in relation to its
exposure as one of CPI’s Senior Lenders, given the financial distress CPI was
experiencing. (Exh. P1, p. 2; Exh. P19, p. 15; Exh. D14; 8/11/25 Tr. 38:14–39:16)
“Novo is a financial advisory firm that specializes in turnaround advisory,
restructuring advisory[] services, chief restructuring officer (‘CRO’) services, interim
CRO and interim chief executive officer services, crisis management, insolvency
advisory, and various other restructuring and insolvency issues.” (Stip. ¶ 15; 8/11/25
Tr. 36:6–24)
A retention letter (the “BMO/Novo Retention Agreement”), dated June 30,
2020, set forth the terms of its engagement. (Stip. ¶ 17) The BMO/Novo Retention
Agreement was signed by Mr. Sandeep Gupta, Novo’s Managing Partner and one of
Novo’s founding partners. (Exh. P1, p. 7; 8/11/25 Tr. 35:17–25) Therein, Novo agreed
to provide the Senior Lenders with “certain financial advisory and consulting
services . . . in relation to [CPI] and [Suri] . . . .” (Exh. P1, p. 2) Specifically, the
scope of Novo’s services included reviewing CPI and Suri’s historical financial
performance for 2018 and 2019, performing an assessment of the companies’ 2020
business plans, determining the companies’ viability and risks, and conducting a
Liquidation Analysis of CPI.5 (Id.) Mr. Gupta testified at trial that BMO engaged
Novo “to assess whether there was an opportunity for there to be a viable business.”
5 Although Novo was hired to assess both CPI and Suri (Exh. P1, p, 2), the Liquidation Analysis and
Lender Report appear to have focused primarily or solely on CPI. (Exh. D14)
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(8/11/25 Tr. 38:14–22) Because BMO hired Novo to assess the Senior Lenders’
interest in CPI and Suri and protect its rights under the Third Credit Agreement,
CPI was contractually obligated to reimburse BMO for the expenses it incurred in
securing Novo’s services pursuant to § 11.4(a) of the Third Credit Agreement. (Id.)
A material term of the BMO/Novo Retention Agreement was that both BMO
and Novo would be subject to a continuing confidentiality covenant. (Id., 6–7;
8/11/25 Tr. 204:18–22) Attached to the Retention Agreement was Novo’s Standard
Terms and Conditions. (Exh. P1, p. 6) Section 4 of the Standard Terms and
Conditions stated:
Both parties agree that any confidential information received from the
other party shall only be used for the purposes of providing or receiving
Services under this or any other contract between us. Except as provided
below, 	neither 	party 	will 	disclose 	the 	other 	party’s 	confidential
information to any third party without the other party’s written consent.
(Id., 7) The Standard Terms and Conditions contain no provision indicating when
the parties would be free from these confidentiality restrictions, nor does the
BMO/Novo Retention Agreement provide any such expiration date. (Id.) Mr. Gupta
testified at trial that he remains subject to the confidentiality restrictions thereby
imposed. (8/13/25 Tr. 176:7–17)
In July of 2020, Novo was onsite at CPI’s facilities to perform its financial
assessment for the Senior Lenders. (Stip. ¶ 19) CPI was aware that Novo was a
financial advisory consultant for the Senior Lenders and that Novo was preparing a
report on its assessment for the Senior Lenders. (Id.) Novo completed its
assessment and compiled its findings in a report (“Lender Report”), dated July 29,
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2020, which included its completed Liquidation Analysis. (Id., ¶ 20; Exh. D14;
8/11/25 Tr. 46:22–24) In producing the Lender Report, Novo relied on information
that CPI provided and its interviews with CPI’s personnel. (8/11/25 Tr. 39:2–9)
The Lender Report opened with a disclaimer that it was prepared exclusively
for the benefit of the Senior Lenders and that “[d]istribution of this report to
persons other than the Senior Lenders and its affiliates is prohibited, except” when
permitted by the Senior Lenders upon written request. (Exh. D14, p. 2) The Lender
Report included an Executive Summary, in which Novo reported that CPI was
facing “a steady decline in sales,” declining margins, a strained vendor base, a lack
of leadership within the organization, and disagreements on strategic direction
among ownership. (Id., 5) Novo concluded that “[d]espite these challenges, [CPI] has
a viable baseline business and has numerous opportunities for near-term
performance improvement.” (Id., 6) As mentioned, the Lender Report also included
the completed Liquidation Analysis, which stated that CPI’s “orderly liquidation
value is projected at between $16.3 million and $22.3 million, with forced
liquidation value projected at $14.1 million.” (Id., 7) Ultimately, Novo’s assessment
revealed that “under any type of liquidation,” the Senior Lenders “stood to lose
between” $16 and $24 million. (Id.; 8/11/25 Tr. 49:18–50:7) Unmistakably, the
Lender Report did not reference any strategy for a reorganization under the
ownership or management of any of the Squatritos.
For the services it performed for BMO in connection with this engagement,
Novo contemporaneously issued three invoices to BMO through its counsel. (Stip.
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¶ 22–23) Those invoices totaled $273,616.25 for services performed from June 12,
2020, to August 6, 2020. (Id., ¶ 23) BMO did not pay Novo for those services until
January 28, 2021. (Id., ¶ 23, 41)
2.2 Pre-Bankruptcy Filing – Novo’s Subsequent Engagement with
CPI
In the early summer of 2020, Daniel Bender, another financial advisor,
served as CPI’s interim Chief Restructuring Officer (CRO)6 and helped CPI
navigate the serious financial distress it was experiencing. (Id., ¶ 24; 8/12/25 Tr.
10:8–13, 25:25–26:9; 8/13/25 Tr. 219:13–16) As CPI’s Interim CRO, Mr. Bender
familiarized himself with CPI, started imposing more discipline in its operations,
and helped CPI develop a restructuring plan while working with its attorney
advisors. (8/12/25 Tr. 13:18–15:24)
During this time, CPI’s restructuring and potential bankruptcy counsel was
Attorney Eric Henzy of Zeisler & Zeisler, P.C. (Stip. ¶ 25) Attorney Henzy began
representing CPI in October of 2019. (8/11/25 Tr. 7:18–22) Based in Connecticut, he
is recognized as a leading restructuring attorney of wide and deep experience in
6 “While not contemplated by the Bankruptcy Code, distressed companies often hire a chief
restructuring officer or some other form of crisis management team as part of their restructuring.
Often this is done in consultation with, or at the behest of, a distressed company’s secured lenders. A
chief restructuring officer generally serves in an officer capacity and reports to a company’s chief
executive officer or the board of directors. A chief restructuring officer also may possess
responsibilities to report to creditor constituents and other stakeholders on a less formal basis.
The hiring of a chief restructuring officer, also referred to as a CRO, is now common in complex
chapter 11 cases.” Who’s Running the Company? Corporate Governance in the New Era of Chapter
11 (May 16, 2013), at A M . B ANKR . I NST . 15 TH A NN. N.Y.C. B ANKR. C ONF . (2013).
“With the advent of the chief restructuring officer (CRO) role during the 1990s, the industry
developed a point of view that management should focus intently on running the business during the
restructuring process and let outside professionals, a CRO or advisers, handle the specialized aspects
of the turnaround and legal processes.” Martha E. M. Kopacz, The Missing Link to Successful
Company Turnarounds Balance Sheet Management Is Only Part of the Story, A M . B ANKR. I NST . J. at
32 (Mar. 2014).
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commercial bankruptcy matters and workouts. (8/12/25 Tr. 6:15–7:12) Attorney
Henzy “typically represent[s] borrowers” and is familiar with the requirements for
the retention of professionals in bankruptcy cases. (Id.) While he was retained,
Attorney Henzy demonstrated a profound resolve to pursue bankruptcy strategies,
if feasible, to save CPI, in whole or in part, for the Squatritos. (Id., 21:4–23:21) He
was equally interested in a potential restructuring of CPI, as opposed to its
liquidation. (Id., 18:7–19:14; 21:4–23:21) He worked confidently with Mr. Bender to
stabilize CPI and formulate its strategy forward. (Id., 12:4–15:24)
Mr. Bender, however, resigned on July 24, 2020. (Stip. ¶ 24) Attorney Henzy
testified that Mr. Bender resigned due to the stress and difficulty that working with
the Senior Lenders as CPI’s Interim CRO entailed and also in response, in part, to
criticism he received from the Senior Lenders and to the ongoing discussions the
Senior Lenders had regarding whether he would be replaced as CRO with Novo.
(8/12/25 Tr. 26:10–28:1) According to Attorney Henzy, Mr. Bender simply “had had
enough.” (Id., 27:25)
Once Mr. Bender resigned, a foreseeable melee ensued as CPI sought to
quickly secure a new CRO. The Senior Lenders urged CPI to expeditiously find a
new CRO, subject to their approval. (Id., 29:20–31:10, 33:23–34:8) The stakes were
high, as CPI was still experiencing severe financial distress at this time, and as
BMO decided it was “not in a position to consider providing additional funding [to
CPI] and/or extend payment relief unless and until an acceptable CRO candidate is
identified by [CPI] and an acceptable turnaround plan is in place.” (Exh. P86, p. 1)
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CPI’s management alone did not possess the experience or strategic acumen to
navigate a potential restructuring. Consequently, Attorney Henzy was “tasked with
going out and finding a CRO.” (8/12/25 Tr. 37:17) He took on this task quickly,
finding CPI multiple CRO candidates the week of July 26 and scheduling interviews
with each to take place early the following week. (Id., 37:17–20; 8/13/25 Tr. 24:12–
21; Exh. P34, p. 1) One candidate scheduled for an interview was Phoenix Executive
Services, LLC (“Phoenix”) – the company that CPI would later hire to replace Novo
as its financial advisor and CRO.7 (8/12/25 Tr. 53:8–17; 8/13/25 Tr. 24:12–21)
Somewhere along the way, however, the idea of hiring Novo as CPI’s CRO swiftly
took hold and gained firm traction.
Evidence was adduced at trial demonstrating that it was originally CPI’s idea
to hire Novo as its new CRO. The same day that Mr. Bender resigned – July 24,
2020 – BMO’s counsel sent an email to Attorney Henzy, copying PUB’s counsel,
stating:
BMO understands that [CPI] has expressed interest in making a change
with 	respect 	to 	[CPI’s] 	CRO, 	and 	specifically 	is 	considering 	Novo
Advisors for the position. To the extent that [CPI] might be seeking
input from the Lenders on this issue, while BMO cannot speak for
[PUB], please be advised that BMO is supportive of the proposed change
. . . .
(Exh. P83, p. 4)
In a second email, sent the following week on August 5, 2020, BMO’s counsel
stated:
7 As noted later in this Memorandum of Decision, when CPI had to find a new financial advisor and
CRO after Novo terminated its engagement with CPI, CPI filed an application to hire Phoenix (MC –
ECF No. 194) which this Court approved. (MC – ECF No. 326)
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At this juncture, based on the recent projections tendered by [CPI], BMO
does not believe [CPI] has the liquidity to sustain itself through the
process of interviewing and appointing a new CRO, let alone providing
time for such a candidate to get up to speed and develop a viable plan
for [CPI]. Consequently, following a request made by [CPI] that [CPI] be
permitted to retain Novo, BMO advised that it would consent to [CPI’s]
request, as BMO finds Novo to be an acceptable CRO candidate and this
would allow [CPI] to address its liquidity issues on a timely basis.
(Exh. P86, p. 1) (emphasis added)
Similarly, Mr. Gupta testified that “[a]t one point[,] [Mrs. Squatrito] had
approached [him] directly and she had asked [whether he could] be [CPI’s] CRO,” to
which he replied that Novo “would consider it, but [that] it wasn’t [his] decision to
make,” and “that she needed to clear that [decision with] her counsel and the
[L]enders.” (8/13/25 Tr. 140:13–141:4)
Additionally, the Eighth Forbearance Agreement and Fourth Modification to
Credit Agreement (which CPI and the Senior Lenders later entered into and which
went into effect on November 1, 2020), in Section 7.8 entitled “Chief Restructuring
Officer,” stated that CPI “has determined, freely and voluntarily, in the exercise of
its independent business judgment that the selection of Novo Advisors is in the best
interest of [CPI as] the Borrower. Lenders give their consent to the retention of
Novo Advisors.” (Exh. D43, p.7) (emphasis added)
More abundant, credible, and compelling evidence was adduced at trial,
however, conversely indicating that it was not entirely CPI’s idea to hire Novo and
that BMO instead adeptly pressured CPI to hire Novo. (8/12/25 Tr. 26:10–28:1,
46:17–47:7; 8/13/25 Tr. 24:11–21, 45:19–46:3, 97:17–98:19; 8/14/25 Tr. 25:25–26:12;
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Exh. P84, p. 2; Exh. P91, p. 5, 7; Exh. D86 at 20:4–22:13 (ECF No. 111, Appx. A)
(Deposition of Sandro Squatrito))
First, recall that Attorney Henzy asserted that the Senior Lenders, including
BMO, had somehow already made it known to Mr. Bender that they wanted Novo
installed as CPI’s CRO prior to Mr. Bender’s departure, indicating that BMO’s
interest in hiring Novo predated that of CPI. (8/12/25 Tr. 26:10–28:1)
Second, counsel for PUB and Attorney Henzy both stated that CPI had not
informed them that it planned to hire Novo as its new CRO. Counsel for PUB
received the email from BMO on July 24, too, and replied before Attorney Henzy,
writing: “[CPI] has not expressed any interest to PUB regarding a change of CRO.”
(Exh. P83, p. 3) Similarly, Attorney Henzy testified that he “didn’t know what
[BMO’s counsel] was talking about” when he received the July 24 email from BMO.
(8/12/25 Tr. 31:6–8) Accordingly, he wrote in reply to BMO’s original email and
PUB’s response that the emails “have created great confusion for [CPI]” and
requested a meeting to be held for CPI’s management and the Senior Lenders to
confer on the issue. (Exh. P83, p. 2) These statements, consistently expressing a
disturbing confusion and disbelief regarding BMO’s assertions, cast doubt on
whether it was truly CPI’s “idea” to hire Novo as its new CRO. CPI apparently did
not share this idea with its own counsel or PUB, and the idea itself caused CPI
confusion according to Attorney Henzy. (Id.)
Third, when asked about the process CPI undertook to secure a new CRO
upon Mr. Bender’s resignation, Sandro Squatrito stated that, although CPI was
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ready to “interview other potential CROs,” it soon “felt like [CPI] really needed to
hire Novo” and like “[BMO] wanted Novo” to be CPI’s new CRO. (Exh. D86 at 20:4–
22:13) Sandro stated that he believed BMO supported Novo’s retention because
BMO and Novo “had a working relationship” and because “Novo had already had
the ability to deeply dive into [CPI].” (Id., 20:6–19) Additionally, in his deposition,
when discussing the process through which CPI ultimately hired Novo, Sandro gave
no indication that it was CPI who first suggested hiring Novo.
Sandro did note that certain practical factors weighed heavily in favor of
hiring Novo. For example, he stated that hiring Novo seemed like “the best path
forward to save [CPI]” because Novo “already had a chunk of time in the building”
and because Novo “appeared [to have] a better working relationship with the
[Senior Lenders] than [Mr.] Bender did.” (Id., 21:10–22:6) Nevertheless, these
statements illustrate the inevitable pressure that BMO’s close ties to Novo imposed
on CPI. They equally demonstrate CPI’s inexperience and resulting
underappreciation of the potential utility and centrality of the leadership of
professional advisors besides Novo, who, if independent, would have been better
situated to leverage or push back on the positions and strategies of the Senior
Lenders.
Fourth, both Attorney Henzy and Mr. Craig Jalbert (who was later
designated as CPI’s Liquidating Custodian in its Chapter 11 Plan8 and who
therefore investigated CPI’s decision to retain Novo) stated that they believed BMO
8 See Part 2.3 of this Memorandum of Decision.
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had pressured CPI to hire Novo. Attorney Henzy vehemently opposed Novo’s
retention, believing Novo was simply too conflicted to work for CPI following its
work assessing CPI and advising the Senior Lenders. (8/12/25 Tr. 64:2–15; 34:11–
35:19; 66:16–21) Nevertheless, in an email sent to counsel for BMO and PUB,
Attorney Henzy wrote, “My client has decided to accede to the banks’ demand that
Novo be the CRO . . . .” (Exh. P84, p. 2) (emphasis added) Similarly, Mr. Jalbert
testified that he thought “that [CPI’s] shareholders and executives felt like they
were being forced to take Novo.” (8/13/25 Tr. 24:11–14) He continued, “[M]y feeling
is that . . . [BMO] . . . was driving Novo at [CPI] and [CPI] felt like [it] had no
choice.” (Id., 24:19–21, 97:21–98:5) Mr. Jalbert also stated at trial, “I think there
was a lot of conversations going on and I think BMO was kind of forcing Novo on to
the debtor, Carla’s Pasta.” (Id., 20:4–6) (emphasis added)
Fifth and finally, the evidence illustrated that the Senior Lenders outright
rejected the alternative CROs that Attorney Henzy had proposed – even though one
of them was later approved to serve as CPI’s CRO once Novo terminated the
Novo/CPI Engagement in February of 2021. As noted above, BMO’s counsel stated
that it would readily consent to Novo’s engagement as CRO and that it believed CPI
did not have “the liquidity to sustain itself through the process of interviewing and
appointing a new CRO” other than Novo, nor through the process of that new CRO
“develop[ing] a viable plan for [CPI].”9 (Exh. P86, p. 1)
9 Despite BMO’s assertions that CPI did not have sufficient liquidity, Attorney Henzy’s
recommendation that CPI hire a different firm evidences his belief that CPI had enough liquidity to
do so. (8/12/25 Tr. 65:4–24; Exh. D13, p. 2)
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At trial, Mr. Jalbert testified that CPI “had three suggested [replacement]
CROs” in addition to Novo, including Phoenix, but “BMO and PUB rejected at least
two of them, [and they never got] to the third.” (8/13/25 Tr. 24:12–21) Mr. Jalbert’s
assessments are echoed in his Expert Report, in which he wrote, “With its financial
condition worsening and with BMO rejecting out of hand other CRO candidates, CPI
relented to BMO and retained Novo.” (Exh. P91, p. 5) (emphasis added) Similarly,
Attorney Henzy stated that he “believed very strongly that there were alternatives
[to Novo] that would have been much better for the Squatritos and for [CPI] and
probably for other constituencies.” (8/12/25 Tr. 53:8–17) Attorney Henzy further
even testified that, “from [his] perspective, [the Senior Lenders] were not working in
good faith” to identify an acceptable firm to serve as CPI’s CRO. (Id., 42:20–43:4)
This evidence illustrates BMO’s adept manipulation of the financial dynamics and
time constraints that CPI was under. The potential alternative CROs that Attorney
Henzy proposed were swiftly rejected as BMO increasingly pressured CPI to retain
Novo.
The abundantly clear and convincing evidence presented at trial regarding
these relational and financial dynamics that led CPI to hire Novo leads the Court to
conclude that, even if Mrs. Squatrito may have first had the idea that CPI should
hire Novo as its new CRO, and even if CPI preferred Novo because Novo had
already gained some baseline knowledge about CPI and had a working relationship
with the Senior Lenders, CPI was indeed pressured or indirectly manipulated by
BMO, to a significant degree, to hire Novo as its CRO. The statements made by
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BMO’s counsel and by Mr. Gupta asserting that CPI sought out Novo were not
corroborated by Sandro Squatrito, nor Attorney Henzy, nor Mr. Jalbert, all of whom
were intimately familiar, or became intimately familiar, with CPI’s transition
process.
Attorney Henzy so strongly advised CPI that it should not hire Novo as its
CRO because he was aware that Novo maintained close ties to BMO. (8/12/25 Tr.
34:11–35:19, 64:2–15, 66:16–21) Attorney Henzy knew that Novo had not been hired
by BMO to merely assess CPI as a stand-alone, one-off engagement, but that Novo
also had an ongoing relationship with BMO as one of its approved financial
advisors. BMO typically provided its borrowers with a list of two to three pre-
approved financial advisors. (8/13/25 Tr. 136:21–137:16) When one of BMO’s
borrowers needed financial advice, they would select a financial advisor from that
list to work with. (Id.) Novo was one such approved financial advisor.10 (Id.)
Through this arrangement, Novo had worked with BMO’s borrowers on “five or six
prior engagements” before working with CPI. (Id., 136:21–137:2; 8/11/25 Tr. 38:10–
13) Furthermore, in CPI’s later filed Application to Employ Novo Advisors, LLC as
Financial Advisor and CRO to Debtors, dated February 16, 2021, Mr. Gupta’s
declaration stated that Novo maintained an “institutional relationship with BMO
. . . .” (MC – ECF No. 123-2, p. 5) Mr. Gupta further declared that “Novo is not
providing any further services to BMO in connection with [CPI] or these Chapter 11
10 It is logical and common sensical that, aside from competence, the Senior Lenders would approve
advisors with which they could likely work with, as opposed to fight with, because of the debtors’
competing reorganization goals.
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cases, and Novo’s fees and expenses for work done for [CPI] is paid solely by [CPI].”
(Id.) Mr. Gupta did not declare, however, that Novo would not provide any further
services to BMO in connection with other borrowers while simultaneously
representing CPI. (Id.) Accordingly, this Court finds that Novo maintained, and
understandably sought to preserve, its close ongoing business relationship with
BMO.
Attorney Henzy was adamant that it was incredibly problematic for Novo,
who enjoyed this close “institutional relationship” with BMO, to then represent CPI
and serve as its officer, thereby captaining its strategies through financial shoals.
(MC – ECF No. 123-2, p. 5) He thought that the naturally adverse interests between
BMO and CPI created a conflict of interest for Novo in accepting the Novo/CPI
Engagement, as Novo would simultaneously be beholden to BMO (due to their
ongoing relationship and prior work product (including its Liquidation Analysis),
and the duty of confidentiality it owed to BMO) while guiding CPI (as its financial
advisor and CRO). (8/12/25 Tr. 34:11–17, 65:4–24; Exh. D13, p. 1–3)
Further, Attorney Henzy believed that hiring Novo was manifestly
problematic because Novo could not serve as CPI’s CRO if CPI ultimately had to file
for bankruptcy relief – an outcome that was not unforeseeable or unlikely – due to
that same conflict of interest. (8/12/25 Tr. 34:11–35:19, 66:16–21; Exh. D13, p. 1–3)
Specifically, Attorney Henzy concluded that the Jay Alix Protocol would prohibit
Novo’s employment as CPI’s CRO in a Chapter 11 in the Second Circuit.11 (8/12/25
11 “[T]he core requirements of the [Jay Alix] Protocol include the following:
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Tr. 35:3–19; Exh. D19, p. 1) Attorney Henzy expressed these concerns to CPI on
more than one occasion (8/12/25 Tr. 51:4–6, 64:2–15; Exh. P88, p. 1); and other
parties shared his concerns.12 (Exh. P83, p. 1) Vulnerable and trusting, but deeply
motivated by its strong desire “to keep their business and to [continue to] run their
business,” CPI engaged Novo as its CRO and financial advisor, despite these
admonitions, to appease BMO.13 (8/12/25 Tr. 16:3–7; Exh. D86, 17:3–4)
On August 7, 2020, CPI contracted with Novo for it to provide financial
advisory services, and, through Mr. Gupta, Novo’s principal, to serve as its new
CRO.14 (Stip. ¶ 26, 29; 8/11/25 Tr. 67:4–10) CPI and Novo accordingly signed a
(a) the firm sought to be retained must serve in only one capacity (i.e., as either a
financial advisor, crisis manager, claims agent, or investor);
(b) the firm’s retention application must be filed under section 363 of the Bankruptcy
Code and the application must disclose the firm’s relationships with interested
parties and make other disclosures showing the firm is otherwise disinterested;
(c) the firm must file monthly staffing reports, which must be subject to Court review;
and
(d) retention of persons furnished by the firm must be approved by and act under the
direction of an independent board of directors.”
In re Nine West Holdings, 589 B.R. 679, 688 (Bankr. S.D.N.Y. 2019).
The Jay Alix Protocol is not a law or “a provision of the Bankruptcy Code,” nor is it “binding
on this Court or any other Court.” Id., 687–88. Nevertheless, “[r]equiring parties to comply with the
[Jay Alix] Protocol has served as a way to avoid conflicts of interest.” Id., 688.
Accordingly, the Protocol has been consistently applied in the Second Circuit. Id., 687–88; In
re K.G. IM, LLC, 620 B.R. 469, 486 (Bankr. S.D.N.Y. 2020); In re Genever Holdings, LLC, No. 20-
12411-JLG, 2021 WL 3919826, at *13 (Bankr. S.D.N.Y. Sept. 1, 2021); In re Saint Vincents Cath.
Med. Ctrs. of N.Y., No. 05 B 14945 (ASH), 2007 WL 2492787, at *14 (Bankr. S.D.N.Y. Aug. 29, 2007).
12 On July 24, 2020, Attorney Henzy sent an email to counsel for PUB stating that, should a Chapter
11 reorganization take place, “it should not be Novo” that “takes Dan Bender’s place” as CRO. (Exh.
P83, p. 1–2)
PUB’s counsel replied that same day, writing, “I think an 11 is inevitable. There’s no way
Novo can get approved to run [CPI] in an 11. I don’t see how they can possibly get over the conflict of
interest issue.” (Id., p. 1)
13 Attorney Henzy further testified that the Squatritos’ objective “continued to be to try to keep the
company. That . . . was a driver in some of the decisions that . . . were made. I think they still had a
hope – I know Carla did, very, very strongly want . . . to try to keep the company.” (8/12/25 Tr. 28:19–
29:1)
14 No distinct retention agreement was signed between Mr. Gupta and CPI. At all times, Mr. Gupta
served under the Novo/CPI Engagement Contract on Novo’s behalf as its principal and Managing
Partner.
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written agreement (the “Novo/CPI Engagement Contract”) memorializing the terms
of the retention. (Exh. P4) Therein, Mr. Gupta was authorized to serve as CPI’s
CRO, to exercise “his business judgment” on CPI’s behalf, “to hire and terminate
employment that leads to improved and sustained business performance,” and to
“[d]evelop a long-term business plan and strategy for the Company,” among other
things. (Id., 1) While Mrs. Squatrito still “had final say on things” on behalf of CPI
(8/12/25 Tr. 12:25–13:5); Mr. Gupta, as CRO, “became an officer of [CPI]” and
received “specific authority to take actions on behalf of [CPI] . . . .” (8/11/25 Tr.
56:21–57:4) Novo, similarly, was authorized to “[m]ake personnel changes and
adjustments based on [its] business judgment to improve . . . operating costs,”
“[w]ork closely with the sales organization to develop [CPI’s] sales pipeline,” and
“[p]erform an assessment of the outstanding accounts payable, identify all critical
vendors, and develop payment plans for continued support of [CPI],” among other
things. (Exh. P4, p. 2)
Despite Attorney Henzy’s concerns that Novo could not serve as CRO should
CPI file for bankruptcy relief, the Novo/CPI Engagement Contract also provided
that Novo would assist CPI “in developing a proactive public relations and
communications program to ensure an orderly Chapter 11 process.” (Id., 3, 5–6) The
Engagement Contract expressly contemplated how Novo would be compensated in
the event of a bankruptcy filing.15 (Id., 5–6) No admonitions, cautions, or warnings
15 The Contract states:
In a case under the Bankruptcy Code, fees and expenses may not be paid without the
express prior approval of the bankruptcy court. In most cases of this size and
complexity, on request of a party in interest, the bankruptcy court permits the payment
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concerning Novo’s ability to continue to serve in any foreseeable Chapter 11 appear
in the Engagement Contract.
Remarkably, Mr. Gupta made no effort to directly address or forthrightly
confront with CPI (or Attorney Henzy) these specific concerns regarding a potential
Chapter 11 case, nor broader concerns about an actual, potential, or perceived
conflict of interest. When asked at trial whether he would have answered CPI’s
questions about any potential conflicts if asked, Mr. Gupta replied, “Of course,” but
he went on to state that he was never asked any such questions. (8/13/25 146:8–12)
Furthermore, when asked at trial whether any “supplemental disclosures . . . were
made to the Squatritos” regarding the Lender Report or Novo’s relationship with
and work for BMO, Mr. Gupta replied “the answer is no[,] . . . there was nothing
else.” (Id., 178:24–179:9) Additionally, Mr. Gupta stated that, after CPI retained
Novo and as “bankruptcy became more probable,” he had discussions with those at
CPI “concerning [his] ability to be retained as a professional in a bankruptcy,” but
that no “additional disclosures concerning any conflicts of interest” were made to
CPI at that time. (8/11/25 Tr. 131:19–132:12) Accordingly, Novo and Mr. Gupta
appear to have comfortably given scant substantive direction to CPI regarding any
of interim fees during the case. The Company agrees that, if asked to do so by us, the
Company will request the bankruptcy court to establish a procedure for the payment
of interim fees during the case that would permit payment of interim fees. If the
bankruptcy court approves such a procedure, we will submit invoices on account
against our final fee. These interim invoices will be based on such percentage as the
bankruptcy court allows of our internal time charges and costs and expenses for the
work performed during the relevant period and will constitute a request for an interim
payment against the reasonable fee to be determined at the conclusion of our
representation.
(Id., 5–6) Three more paragraphs follow discussing in detail how Novo will be compensated in the
event that CPI files for bankruptcy.
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conflicts of interest that would have affected their services as CPI’s financial advisor
and CRO, either before or after CPI retained Novo.
Instead, Novo has wholly relied on a conclusory waiver of conflict clause
contained within the Novo/CPI Engagement Contract to ward against any conflict-
of-interest issues. (Id., 132:5–12; 8/13/25 Tr. 145:20–146:12) Attorney Henzy had
previously advised CPI against signing such a waiver or release of claims against
Novo or the Senior Lenders, but the Novo/CPI Engagement Contract contained such
language. (8/12/25 Tr. 64:9–15; Exh. D13, p. 1–3) The alleged conflict waiver
contained within the Novo/CPI Engagement Contract merely stated:
Notwithstanding anything set forth in this section or any other sections
or provisions of this Engagement Contract, Novo and [CPI] agree and
acknowledge 	that 	Novo 	may 	fully, 	independently, 	and 	directly
communicate with [CPI’s] senior secured lenders and will share such
communications with the Board of Directors as described in the Scope of
Services. [CPI] acknowledges that Novo previously represented the
senior secured lender(s) (Bank of Montreal and People’s United Bank)
of CPI, and agrees to waive all previous conflicts16 related to the prior
lender engagement between Novo and the lender(s).
(Exh. P4, p. 3) (emphasis and footnote added)
The same day that CPI retained Novo, illustrating his steadfast belief that
Novo could not serve as CPI’s CRO (due to its disabling conflict of interest) through
CPI’s financial distress and a potentially adversarial restructuring, Attorney Henzy
resigned as CPI’s legal counsel. (Stip. ¶ 25; Exh. P88, p. 1) In an email sent to
explain his reasons for withdrawing, Attorney Henzy wrote, “BMO want[ed] Novo in
[as CPI’s financial advisor and CRO] because BMO believe[d that the] only viable
16 The waiver notably does not waive current or future conflicts.
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alternative here [to a proposed sale of debt was] liquidation” and thus, that Novo
had only been hired “to wind [CPI] down.” (Exh. D20, p. 1) According to Attorney
Henzy, by agreeing to Novo’s representation, CPI was “signing [its] own death
warrant,” and he “[could not]/[would not] represent [CPI] in signing [its] own death
warrant.”(Id.) Thus, consistent with his duties to CPI’s goals and his ethical
compass, he resigned. Novo made no independent inquiry of Attorney Henzy
regarding the reasons for his resignation, nor did it seek to meet with him in that
regard. (8/13/25 Tr. 161:5–20)
Nonetheless, from August 7, 2020, to March 1, 2021, Novo provided CPI with
financial advisory services and the services of Mr. Gupta as its CRO. (Stip. ¶ 29)
Novo and CPI were the contract parties and Novo issued CPI weekly invoices. (Exh.
P4, p. 2, 5; Supp. Stip. ¶ 1–50) Throughout that time, Novo implemented
performance improvements and helped further stabilize CPI. (8/11/25 Tr. 72:20–24,
108:2–11; 8/13/25 Tr. 162:1–13) Throughout Novo’s engagement with CPI, however,
Novo never shared the Lender Report with CPI. (8/11/25 Tr. 61:1–4, 180:17–22,
201:16–22; 8/13/25 Tr. 175:16–25, 223:25–224:6) Moreover, no evidence was
adduced that Novo further explored or generated any potential refinancing or
restructuring strategies for CPI.
During this time, CPI entered into three more forbearance agreements with
its Senior Lenders:
1) the Sixth Forbearance Agreement, effective September 1, 2020;
2) the Seventh Forbearance Agreement, effective October 1, 2020; and
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3) the Eighth Forbearance Agreement and Fourth Modification to Credit
Agreement, effective November 1, 2020.
(Stip. ¶ 31–37) The Eighth Forbearance Agreement and Fourth Modification to
Credit Agreement (the “Eighth Forbearance Agreement”) was the operative
agreement between CPI and the Senior Lenders on CPI’s Petition Date. (Id., ¶ 37;
Exh. D43) Although the agreement was effective as of November 1, 2020, the Senior
Lenders and Debtors entered into the agreement on January 5, 2021. (Stip. ¶ 36)
Pursuant to that agreement, the Senior Lenders advanced CPI $700,000 and
granted CPI additional forbearance of their remedies, among other things. (Exh.
D43, p. 4–6; 8/12/25 Tr. 166:17–167:7) CPI, in turn, “reaffirm[ed] its agreement
under the applicable loan documents,” including the Third Credit Agreement, “to
pay or reimburse” the Senior Lenders for certain costs and expenses, among other
things.17 (8/13/25 Tr. 85:6–86:13; Exh. D43, p. 15, § 13.14; 8/14/25 Tr. 48:20–49:19)
Although CPI and its counsel were principally involved in negotiating the terms of
these agreements with the Senior Lenders, Novo was involved “to the extent that
17 Specifically, section 13.14, titled “Reimbursement of Costs and Expenses,” states:
Borrower agrees to pay all reasonable costs, fees, and expenses of Administrative
Agent and any Lender (including reasonable attorneys’ fees), expended or incurred by
Administrative Agent or any Lender in connection with the negotiation, preparation,
administration, and enforcement of this Agreement, the Loan Documents, the
Obligations, any of the Collateral and all fees, costs, and expenses incurred in
connection with any proceeding under any Debtor Relief Law (including, without
limitation, any adversary proceeding, contested matter, or motion brought by
Administrative Agent or any other Person). Without in any way limiting the foregoing,
Borrower hereby reaffirms its agreement under the applicable Loan Documents to
payor reimburse Administrative Agent and Lenders for certain costs and expenses
incurred by Administrative Agent and Lenders in connection with the Loans. Carla’s
Pasta and Suri Realty are jointly and severally liable for their obligations under this
Section 13.14.
(Exh. D43, p. 15, § 13.14)
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[it] provided operating budgets and forecasts in support of” the negotiations.
(8/11/25 Tr. 122:12–18; 8/13/25 Tr. 146:13–147:2)
Thus, under the Eighth Forbearance Agreement, CPI received additional
funding and BMO’s extended forbearance from exercising its rights and remedies
against CPI. (8/13/25 Tr. 149:3–11; 8/14/25 Tr. 46: 8–11) Attorney Marc Heimowitz,
who testified as an expert in strategic and financial consulting on Novo’s behalf,
when asked why CPI entered into the Eighth Forbearance Agreement, replied that
CPI “would have likely [been] liquidated if they hadn’t agreed to a forbearance
agreement.” (8/14/25 Tr. 45:24–46:17) Mr. Jalbert, when testifying on behalf of Old
CPI as a fact witness in his capacity as Liquidating Custodian, simply
acknowledged that he believed “that the [E]ighth [F]orbearance [A]greement was
beneficial to CPI . . . .” (8/12/25 Tr. 167:20–168:3)
For its work as financial advisor and CRO during this timeframe, CPI paid
Novo $1,167,036.00 (henceforth referred to collectively as the “CRO Payments”).
(Stip. ¶ 30) CPI also made two payments to BMO via wire transfer for “payments
related to bankruptcy” on January 28, 2021. (Id., ¶ 38–40) The first payment was
$164,169.75, and the second payment was $109,446.50, totaling $273,616.25
(henceforth referred to collectively as the “Pre-Petition BMO Payment”). (Id., ¶ 38–
39) Before CPI made the Pre-Petition BMO Payment, a $273,616.25 payment entry
to Novo appeared on CPI’s Accounts Payable Aging Spreadsheet. (Exh. P11, p. 11;
8/13/25 Tr. 171:1–13) When CPI ultimately made the Pre-Petition BMO Payment,
Novo’s Managing Director, Stefan Piotrowski, supervised and facilitated CPI in
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making the payment. (Exh. P27; Exh. P44; Exh. P45; 8/11/25 Tr. 110:12–120:24
(discussing the email correspondence shown in Exhibits P27 and P44 and
illustrating that Mr. Piotrowski coordinated the payment by conferring with Ms.
Claudia McCann, CFO18 of CPI, and Mr. Danish Khan, a Senior Servicing Analyst
of BMO19))
Novo had previously sent BMO three invoices pertaining to the services it
performed under the BMO/Novo Engagement in the summer of 2020. (Stip. ¶ 23)
The total amount that BMO owed to Novo for those services totaled $273,616.25 –
the same amount as the Pre-Petition BMO Payment. (Id., ¶ 38–41) BMO, however,
did not pay Novo for the services it performed in the summer of 2020 until January
28, 2021 – the same day BMO received the Pre-Petition BMO Payment from CPI to
reimburse BMO for incurring those advisory expenses. (Id., ¶ 23, 41)
2.3 The Bankruptcy Filing
On February 8, 2021, CPI filed its Chapter 11 Voluntary Petition (MC – ECF
No. 1), commencing bankruptcy Case No. 21-20111. That same day, CPI also filed a
Motion for Joint Administration With 20-21270 (MC – ECF No. 2), requesting its
case be jointly administered with prior pending Case No. 20-21270, the bankruptcy
filing of Suri, CPI’s real estate affiliate.20 On February 12, 2021, the Court granted
18 8/11/25 Tr. 68:2–6.
19 Exh. P27, p. 3.
20 On October 29, 2020, an involuntary petition for relief under Chapter 7 of the Bankruptcy Code
was filed against Suri. (Stip. ¶ 6–7) On December 17, 2020, Suri’s involuntary Chapter 7 bankruptcy
case was later converted to a voluntary case under Chapter 11 of the Bankruptcy Code. (Id., ¶ 8)
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the Motion for Joint Administration of the two cases in Chapter 11. (MC – ECF No.
91)
Alongside its bankruptcy petition, CPI filed a Statement of Corporate
Resolution (MC – ECF Nos. 1 & 31), titled “Action by Unanimous Written
Consent of the Board of Directors of Carla’s Pasta, Inc.,” dated February 5,
2021. Therein, the Board of Directors of CPI resolved that the Authorized
Officers of CPI were:
[A]uthorized and directed to continue to employ and seek to engage in
the Chapter 11 Case Sandeep Gupta of [Novo] as its [CRO] to hold a
senior managerial role in facilitating [CPI’s] Chapter 11 Case, and Novo
as its financial restructuring advisor to, among other things, assist [CPI]
in 	evaluating 	its 	business 	and 	prospects, 	developing 	a 	long-term
business plan, developing financial data for evaluation by its Board,
creditors, or other third parties, in each case as requested by [CPI],
evaluating [CPI’s] capital structure, responding to issues related to
[CPI’s] financial liquidity, and in any sale, reorganization, business
combination, or similar disposition of the Company’s assets . . . .
(Id.) (emphasis added) On February 16, 2021, CPI filed an Application to Employ
Novo Advisors, LLC as Financial Advisor and CRO to the Debtors, seeking to have
Novo’s continued assistance throughout the Chapter 11 bankruptcy. (MC – ECF No.
123)
Shortly thereafter, however, on February 28, 2021, Novo sent a letter to CPI
stating that it was terminating its engagement with CPI as of March 1, 2021. (Stip.
¶ 43) Novo terminated the engagement because it belatedly acknowledged and
manifested “concerns” about the conflict of interest Novo faced having previously
worked for BMO and having ongoing obligations to BMO while representing CPI.
(Exh. P36; 8/11/25 Tr. 175:1–11; 8/13/25 Tr. 161:21–162:13) In the Chapter 11
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context, Novo could no longer hide nor minimize the impediments to its unfettered
allegiance to the Debtors. In its termination letter, Mr. Gupta stated that CPI’s
then-current restructuring counsel21 had informed Novo that its inability to share
the Lender Report with CPI “creates a conflict of interest that would impede [Mr.
Gupta’s] appointment as [CPI’s] chief restructuring officer and Novo’s appointment
as [CPI’s] financial advisor in [CPI’s] Chapter 11 bankruptcy case . . . .” (Exh. P25,
p. 1) Novo also began to fear that other parties in interest – particularly the Official
Committee of Unsecured Creditors and the U.S. Trustee – would object to Novo’s
retention as CRO due to the conflict-of-interest issues from Novo’s work for and
ongoing relationship with BMO.22 (Exh. P36; 8/11/25 Tr. 175:1–11; 8/13/25 Tr.
161:21–162:13) Novo decided that its employment likely could not, or would not, be
approved by the Court considering these anticipated objections. (Exh. P25, p. 1) The
advice of CPI’s then-current restructuring counsel echoed the concrete fears and
consequences previewed by Attorney Henzy at the inception of CPI’s pre-
bankruptcy engagement of Novo and Mr. Gupta. Mr. Gupta also testified at trial
that Novo decided to terminate the engagement not only because the conflict-of-
interest issues arose and a backlash was anticipated concerning Novo’s retention,
but also because Novo had already “implemented so many performance
21 CPI’s counsel at the time was Adrienne Walker of Locke Lord LLP. (8/12/25 Tr. 139:24–140:3)
22 The termination letter continued, “We also understand that the official committee of unsecured
creditors recently appointed in [CPI’s] Bankruptcy Case intends to oppose these appointments based
on Novo’s prior representation of the [Senior] Lenders. Although we believe that our engagement as
requested in the current retention application can be approved by the Bankruptcy Court, any
litigation of this issue would be costly, time-consuming and disruptive to [CPI] and Novo. As such,
Novo believes that it is in the best interest of [CPI] and Novo to terminate the Engagement . . . so
that [CPI] can immediately hire a replacement financial advisor and [CRO].” (Exh. P25, p. 1)
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improvements” and felt as though it “had added as much value as possible . . . .”
(8/13/25 Tr. 162:1–13) Novo resigned (reserving its right to payment) before any
substantive objections to its retention were filed. When Novo unapologetically
terminated its engagement with CPI, CPI then withdrew its application to employ
Novo on March 1, 2021. (MC – ECF No. 193) Remarkably, Novo nonetheless
persisted in endeavoring to seek payments from CPI for its interim services. (ECF
No. 540) That Application was also withdrawn (MC – ECF No. 757; MC – ECF No.
759) in the face of imminent objections from the Court and the Official Committee of
Unsecured Creditors. (ECF No. 653)
On February 24, 2021, CPI filed Schedule D upon the Court’s docket, listing
its secured creditors. (MC – ECF No. 161) There, CPI listed PUB and BMO as
together holding a secured claim of $37,741,929.00. (Id.)
On March 1, 2021, CPI filed its Application to Employ Phoenix Executive
Services, LLC as Financial Advisor and CRO. MC – ECF No. 194) On March 22,
2021, this Court entered its Order authorizing CPI to employ and retain Phoenix.
(ECF No. 326) Joseph C. Nappi of Phoenix was therein designated as CPI’s new
CRO. (Id.)
On April 30, 2021, after an expeditious Section 36323 sale process, CPI closed
on an orderly liquidation sale of substantially all of its assets to CP Foods LLC and
NFP Real Estate LLC for a base price of $24,891,123, subject to various
adjustments, with this Court’s approval. (MC – ECF No. 486, Exh. A, p. 18) The sale
23 See 11 U.S.C. § 363.
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left no operating business, no remaining ownership interests for the Squatritos, and
obviously no restructuring of their business. After the sale closed, the proceeds were
distributed in accordance with the Revised Sale Order (ECF No. 486), which
included significant disbursements of the sale proceeds to the Senior Lenders. (Id.;
MC – ECF No. 1658, p. 9)
On August 2, 2021, CPI’s First Amended Chapter 11 Plan (MC – ECF No.
801) was confirmed. (MC – ECF No. 1054) Pursuant to the terms of the Plan, Craig
Jalbert, a principal of Verdolino & Lowey, P.C. (a financial advisory and accounting
firm) was appointed the Liquidating Custodian of the reorganized debtor (deemed
Old CP, Inc.) and succeeded to substantially all the rights, powers, and duties of
CPI.24 Mr. Jalbert serves as Managing Partner at Verdolino & Lowey, where he
works in the Distressed Business Area, assisting financially distressed individuals
and companies, and also runs the firm’s day-to-day operations. (8/12/25 Tr. 85:18–
86:10)
The Plan authorized Mr. Jalbert, as Liquidating Custodian, to ”investigate
and prosecute any remaining Causes of Action, including Retained Causes of Action
(as defined in the Plan), on behalf of the Debtors and their estates . . . .” (Stip. ¶ 50)
Pursuant to those duties, Mr. Jalbert and his counsel investigated Old CPI’s various
24 On June 18, 2021, CPI filed its First Amended Chapter 11 Plan Before Confirmation. (MC – ECF
No. 801) Therein, CPI provided that “[o]n the Effective Date, Craig Jalbert shall be designated as the
Liquidating Custodian.” (Id., 22) On August 2, 2021, the Court entered its Findings of Fact,
Conclusions of Law, and Order Confirming First Amended Joint Chapter 11 Plan of Liquidation of
the Debtors. (MC – ECF No. 1054). In accordance with that Order, the Liquidating Custodian
succeeded to substantially all rights, powers, and duties of CPI upon the Effective Date of the Plan.
(Stip. ¶ 48) On August 17, 2021, the Effective Date of the Plan occurred, and Old CPI filed and
service a notice thereof. (Id., ¶ 49)
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potential causes of action and commenced this Adversary Proceeding. (ECF No. 1)
Mr. Jalbert’s investigation into other potential causes of action has now concluded.25
This Adversary Proceeding is the last residual asset of Old CPI that could be
monetized for distribution to creditors under the Confirmed Chapter 11 Plan.26
2.4 History of the Adversary Proceeding
On December 22, 2023, the Liquidating Custodian commenced this Adversary
Proceeding against Novo. (ECF No. 1)
On March 25, 2024, Novo filed a Motion to Dismiss. (ECF No. 21) Therein,
Novo contended inter alia that:
1. 	Old CPI’s claims were barred by the doctrines of judicial and equitable
estoppel;
2. 	Old CPI affirmatively waived and released the alleged conflicts and issues
underpinning its claims; and
3. 	Old CPI failed to state a claim under any of its asserted theories.
On August 29, 2024, this Court denied Novo’s Motion to Dismiss because Old CPI’s
claims were not barred by doctrines of estoppel, the alleged conflicts had not been
definitively waived and released (particularly given that the Novo/CPI Engagement
Contract refers solely to previous conflicts and did not “release Novo from its
fundamental fiduciary duties to CPI as a company officer”), and Old CPI’s
Complaint was factually sufficient to support its claims. (ECF No. 38)
25 See PDF with Attached Audio File (ECF No. 13 at 05:22:00–05:28:00)) documenting where, at a
Pre-Trial Conference held on February 29, 2024, counsel for the Debtor stated before the Court,
“This is the last substantive item in this case other than distributions.”
26 Id.
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On October 7, 2024, Novo filed its Answer to Complaint (ECF No. 46)
wherein it largely denied the allegations and raised sixteen (16) affirmative
defenses. The affirmative defenses raised were:
1. 	The complaint fails to state a claim upon which relief can be granted;
2. 	Plaintiff’s claims are barred as the transfers were contemporaneous
exchanges for value within the meaning of 11 U.S.C. § 547(c)(1);
3. 	Plaintiff’s claims are barred, under 11 U.S.C § 547(c)(2), as Plaintiff
cannot avoid any transfer by CPI to the extent that such transfers were in
payment of debts incurred by CPI in the ordinary course of business;
4. 	Plaintiff’s claims are barred because CPI received new value within the
meaning of 11 U.S.C. § 547(c)(4);
5. 	Plaintiff is barred from avoiding any transfer made by CPI to the extent
that such transfer did not allow another party to receive more than that
party would have received in a case under chapter 7 of title 11 of the
United States Code if the transfer had not been made;
6. 	Plaintiff’s claims are barred to the extent the transfers were accepted for
value and in good faith on account of debt validly owed within the
meaning of 11 U.S.C. § 548(c);
7. 	Plaintiff’s claims are barred because CPI received reasonably equivalent
value in return for the alleged transfers within the meaning of 11 U.S.C.
§ 548(a);
8. 	Plaintiff’s claims are barred because CPI suffered no damage, injury, or
otherwise as a result of the transfers;
9. 	Plaintiff’s claims are barred by the doctrines of waiver, release, equitable
estoppel, judicial estoppel, and/or laches;
10. Plaintiff’s claims are barred by the doctrine of earmarking;
11. Plaintiff’s claims are barred by ratification;
12. Plaintiff’s claims are barred by the doctrines of in pari delicto and
equitable defenses;
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13. Plaintiff’s claims are barred because any recover[y] would constitute
unjust enrichment;
14. If CPI suffered any damages (which Novo denies), such damages were
caused or contributed to, in whole or in part, by CPI’s own actions and/or
omissions;
15. Plaintiff’s claims are barred because Novo at all times acted in good faith
and without malice, willfulness, recklessness, or evil intent; and
16. To the extent the Court finds that Novo is liable to Plaintiff, Novo is
entitled to set-off for any and all amounts owed by CPI to Novo.
(ECF No. 46, p. 18–20) These defenses – excluding those that were already
addressed in this Court’s Memorandum of Decision and Ruling on Novo Advisors,
LLC’s Motion to Dismiss (ECF No. 38) and in this Court’s Memorandum of Decision
Granting Judgment on Partial Findings as to Count One (ECF No. 120) – will be
addressed and largely rejected by this Court in the body of this Memorandum of
Decision where appropriate and relevant.27
On October 30, 2024, Old CP filed its Response (ECF No. 48), responding to
Novo’s affirmative defenses, denying the allegations raised therein, and arguing
that the defenses are meritless.
27 The Court notes that Novo did not brief all its affirmative defenses. Accordingly, only those that
were briefed will be addressed, as the Court deems the other defenses to have been abandoned. See
Francis v. Maldonado, No. 3:14-CV-1875 (SRU), 2016 WL 30652, at *2 (D. Conn. Jan. 4, 2016)
(deeming as abandoned claims that were not briefed throughout the duration of the case);
Burnette v. Carothers, No. 3:94-CV-00420 (EBB), 1998 WL 136177, at *3 n.1 (D. Conn. Mar. 11, 1998)
(same); Clayton Servs. LLC v. Sun W. Mortg. Co., Inc., No. 3:17-CV-00172 (KAD), 2021 WL 2376619,
at *12 n.15 (D. Conn. June 10, 2021), aff’d, No. 22-511, 2023 WL 2781294 (2d Cir. Apr. 5, 2023), and
aff’d, No. 22-511, 2023 WL 2781294 (2d Cir. Apr. 5, 2023).
The Court considers Novo to have sufficiently briefed defenses 1, 6, 7, 8, 9, 10, 11, 12, 14,
and 15 relating to the trial of the Counts addressed herein. To the extent not explicit herein, the
defenses relating to Counts 5, 6, and 7 are herein rejected as overruled.
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On March 28, 2025, in anticipation of trial, Novo filed six Motions in Limine.
(ECF Nos. 64, 65, 66, 67, 68, 69) On May 20, 2025, after hearing and argument, the
Court denied the Motions in a written ruling. (ECF No. 94)
2.5 Trial Testimony and Exhibits
The trial in this Adversary Proceeding was held from August 11 to 14, 2025,
wherein the parties’ arguments and evidence were presented to this Court. The
Court admitted into evidence 49 exhibits proposed by the Plaintiff, and 48 exhibits
proposed by the Defendant, in full or in part.28 Prior to trial, the parties also
submitted two sets of stipulated facts. (See Filing Parties’ Joint Pretrial Statement
(ECF No. 100, Exh. A, also ECF No. 60, Exh. A)29; Filing Parties’ Supplemental
Stipulated Facts (ECF No. 103)30) The stipulated facts were duly admitted into
evidence and are expressly relied upon by this Court in its decision herein.31
Further, the Court has taken judicial notice of the entire docket in this
Adversary Proceeding, as well as the entire docket of the Main Case, Case No. 21-
20111. The Court is intimately familiar with the docket of both cases, the First
28 The Plaintiff submitted a proposed list of exhibits. (ECF No. 99) The Court admitted exhibits: P1,
P2, P3, P4, P5, P6, P7, P8, P9, P10 (for a limited purpose), P11, P12, P13, P14, P15, P18, P19, P20,
P21, P22, P23, P25, P26, P27, P31, P32, P33, P34 (in part), P36, P40, P44, P45, P46, P48 (in part),
P49, P57, P75, P76, P78, P83 (in part), P84, P86, P88, P91, P92, P93, P94, P97, and P98. (ECF No.
123)
The Defendant submitted a proposed list of exhibits. (ECF No. 98) The Court admitted
exhibits: D1, D2, D4, D5, D6, D7, D8, D9, D10, D11, D12, D13, D14, D15, D16, D18, D19, D20, D21,
D22, D23, D35 (in part), D38, D40 (in part), D43, D45, D46, D47, D48, D54, D55, D57, D68, D75,
D76, D77, D78, D79, D80, D81, D82, D83, D84, D85, D86, D90, D91, and D92. (ECF No. 124; ECF
No. 111 (containing Exh. D86))
29 When cited, this document is cited as “Stip. ¶ #.”
30 When cited, this document is cited as “Supp. Stip. ¶ #.”
31 The parties’ stipulated findings of fact (contained in ECF No. 100 and ECF No. 103) are deemed, in
their entirety, to be part of the record and accepted as findings of fact by this Court. Where material,
certain stipulated facts are cited in the body of this Memorandum of Decision.
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Amended Plan (MC – ECF No. 801) that this Court confirmed (MC – ECF No.
1009), and the Section 363 sale and liquidation process that CPI underwent and
that this Court approved.
In its affirmative case, Old CPI called as a witness:
1. 	Old CP, Inc., by and through Craig Jalbert in his capacity as Liquidating
Custodian, who testified credibly first as a fact witness, explaining his
involvement and role with Old CPI as its Liquidating Custodian, the
history of the bankruptcy filing and Chapter 11 case, and his knowledge of
the books and records and operations of CPI and Old CPI;
2. 	Sandeep Gupta, who testified somewhat credibly about his role at Novo,
his experience working as a consultant for BMO, the assessment of CPI
that Novo conducted while consulting for BMO, and Novo’s role as CPI’s
financial advisor and CRO prior to its bankruptcy filing;
3. 	Attorney Eric Henzy, who testified credibly about his experience serving
as CPI’s restructuring counsel until August 7, 2020, the actions he and
CPI took in relation to that role, and his experience and opinions as a
restructuring lawyer concerning Novo’s retention; and
4. 	Craig Jalbert, who again testified credibly in his capacity as a financial
restructuring expert on his Expert Report (Exh. P91), in which he opined
on CPI’s relationship with Novo, whether an actual conflict of interest
existed between BMO and CPI, and whether (a) Novo’s receipt of the Pre-
Petition BMO Payment, and (b) the Novo/CPI Engagement, were
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objectionable and impermissible due to the actual conflict of interest that
he concluded existed.32
Mr. Jalbert was qualified as an expert financial advisor of distressed
businesses and has consulted innumerable clients in the insolvency environment for
over 35 years. (8/13/25 Tr. 7:19–8:8) Mr. Jalbert’s expert opinion relied on his
“education[,] training[,] and experience” as a principal of Verdolino & Lowey, P.C.
and as a certified insolvency and restructuring advisor,33 after “a detailed review of
the records made available to date,” including “a review of the docket of both the
Bankruptcy Case and the Adversary Proceeding, a review of publicly available
materials[,] and [his] discussions with [his] attorneys . . . .” (Exh. P91, p. 3) In
considering whether a conflict of interest existed in Novo’s engagement, Mr. Jalbert
reviewed and cited various ethical standards, including the Model Rules
promulgated by the American Bar Association,34 the Rules promulgated by the
American Institute of Certified Professional Accountants,35 the Financial Industry
32 Novo did not object to Mr. Jalbert’s certification as an expert (8/13/25 Tr. 17:11–24); nor to the
admission of his Expert Report. (Exh. P91; 8/13/25 Tr. 4:19–5:9)
33 At trial, Mr. Jalbert attested that he has spent “35 or more [years] in the solvency/distressed
business environment” and that he “ha[s] worked on thousands of bankruptcies, numerous federal
and state receiverships, assignments for the benefit of creditors or assignee, and . . . hundreds of
corporate winddowns.” (8/13/25 Tr. 7:19–8:8)
34 The American Bar Association states that a conflict of interest exists if “there is a significant risk
that the representation of one or more clients will be materially limited by the lawyer’s
responsibilities to another client, a former client or a third person or by a personal interest of the
lawyer.” A.B.A. 1.7, Conflicts of Interest.
35 The Code of Professional Conduct promulgated by the Association of International Certified
Professional Accountants (AICPA), section 1.100.01 (.01) states that “In the performance of any
professional service, a member shall maintain objectivity and integrity, shall be free of conflicts of
interest, and shall not knowingly misrepresent facts or subordinate his or her judgment to others.”
Ass’n Int’l Certified Pro. Accts. Code of Pro. Conduct (Dec. 15, 2014), p. 52 (emphasis in original).
Thereafter, section 1.110.010 (.02) states, “A conflict of interest creates adverse interest and self-
interest threats to the member’s compliance with the” aforementioned requirement of 1.100.01 (.01)
to maintain objectivity and integrity, to be free of conflicts of interest, and to not knowingly
misrepresent facts or subordinate one’s judgment to others. Id., 53 (emphasis in original) The Code
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Regulatory Authority’s October 2013 report on conflicts of interests,36 and the Code
of Ethics issued by the Turnaround Management Association.37 (Id., 5–6) Mr.
Jalbert relied on these standards for guidance in concluding that a conflict of
interest “involves, inter alia, situations where the interests of two parties differ and
can impair objectivity” and in further concluding that the Novo/CPI Engagement
involved a conflict of interest. (Id., 5, 7)
Mr. Jalbert ultimately concluded in his Expert Report that “BMO and CPI
had clear adverse interests – a major conflict – because Novo was representing
BMO in connection with the restructuring of CPI and, inter alia, had issued a report
to BMO which it never shared with Novo, even after it [became] CPI’s CRO.” (Id., 7)
Mr. Jalbert further opined, “based on correspondence among CPI, BMO, [PUB,] and
[Attorney Henzy,] CPI’s then counsel,” that “BMO made clear that Novo was
effectively the only financial advisor that it would accept, and which CPI could hire
given the time frames involved.” (Id.) Mr. Jalbert finally opined that “Novo had a
duty to disclose actual or perceived conflicts of interest to CPI,” that the disclosure
cites, as an example of a situation wherein adverse interest and self-interest threats may arise, “the
member or the member’s firm provides a professional service related to a particular matter involving
two or more clients whose interests with respect to that matter are in conflict.” Id.
36 An October 2013 report on Conflicts of Interest issued by the Financial Industry Regulatory
Authority (FINRA), which addressed member firms’ codes of conduct, cited one member firms’ code
approvingly. Report on Conflicts of Interest, FINRA (Oct. 2013) at p. 9. The member firms’ code
stated that staff “[s]hould avoid even the appearance of a conflict of interest and should disclose all
material facts concerning any conflict that does arise with a client.” Id.
37 The standard of the Turnaround Management Association states that “a member’s duty is solely to
the client and he or she should strive to remain independent of other affiliations that could
compromise his or her judgment or result in the appearance of compromise. Prior to accepting an
engagement, a member shall disclose to his or her client all financial relationships which may cloud,
or give the appearance of clouding, his or her judgment. If the client is the troubled business or
organization, disclosure shall be made of any past referrals from, prior work for, or an ownership
interest in, any owner, creditor or customer of the client and any party offering appearance of
conflicts of interest.” Turnaround Mgmt. Ass’n, Code of Ethics, Canon II, Sec. 2.2.
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contained in the Novo/CPI Engagement Contract was “insufficient and one-sided,”
and that, regardless, “[g]iven the nature of the conflict, which contemplated an
overlapping or consecutive representation of adverse parties coupled with the close
professional and significant financial relationship between BMO and Novo, the
conflict could not be waived.” (Id., 10) Mr. Jalbert concluded that “Novo was not
acting in the best interest of CPI but rather in its own self interests.” (Id., 9)
In its defense, Novo called as a witness:
1. 	Sandeep Gupta, who again testified somewhat credibly about his role at
Novo, his experience working with both BMO and CPI, the ethical
obligations he owed to CPI, and his dismissive conclusions about whether
a conflict of interest existed during his service to CPI as CRO and Novo’s
service generally as CPI’s financial advisor; and
2. 	Marc Heimowitz, JD, CFA who testified somewhat credibly in his capacity
as an expert about the Expert Report he created (Exh. D90), wherein he
opined on Novo’s relationship with BMO and CPI, the information CPI
had about Novo’s relationship with BMO, and the ultimate propriety of
Novo’s receipt of the Pre-Petition BMO Payment and decision to enter into
the Novo/CPI Engagement.38
Attorney Heimowitz was qualified as Novo’s expert with expertise in
strategic and financial consulting to offer his opinion on five different areas: 1) to
rebut the expert testimony of Mr. Jalbert; 2) to attest to the customs and standard
38 Old CPI did not object to Attorney Heimowitz’s certification as an expert (8/13/25 Tr. 208:8–10);
nor to the admission of his Expert Report. (Exh. D90, D91, D92; 8/13/25 Tr. 182:15–183:4)
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industry practice for financial restructuring advisory firms during the relevant time
period; 3) to address the Lender Report; 4) to discuss Novo’s conduct related to the
Novo/CPI Engagement and Mr. Gupta’s conduct as CRO; and 5) to opine on certain
of CPI’s conduct before and during its bankruptcy filing. (8/13/25 Tr. 207:12–208:12)
Attorney Heimowitz’s expert opinion relied on his review of the depositions of
Mr. Gupta, Mr. Jalbert, and Sandro Squatrito, Mr. Jalbert’s Expert Report, and
over 60 other documents, as well as a conversation he had with Mr. Gupta. (Exh.
P92, Appx. B to Heimowitz Expert Report) Based on his review of those materials,
Attorney Heimowitz disingenuously concluded that “CPI had sufficient information,
and good reasons, to give informed consent to the” waiver contained in the
Novo/CPI Engagement Contract. (Exh. P91, p. 35) Attorney Heimowitz further
dismissively opined that “Novo and Mr. Gupta were permitted to accept the
[Novo/]CPI [E]ngagement under applicable ethical guidelines and fiduciary
doctrines” after reviewing, in conclusory fashion, the ethical guidelines and
doctrines Mr. Jalbert cited in his own Expert Report. (Id., 26–27) Therein, Attorney
Heimowitz contends that the various ethical guidelines and doctrines cited by Mr.
Jalbert are simply aspirational, inapplicable, or met by Novo in the CPI/Novo
Engagement. (Id.) Attorney Heimowitz, again disingenuously, asserted, despite the
facts and circumstances of Novo’s work for BMO, that “[n]either Novo nor Mr.
Gupta were adverse to CPI at the time of the [Novo/]CPI [E]ngagement,” which,
Attorney Heimowitz contended, “was not concurrent with the BMO[/Novo]
[E]ngagement.” (Id., 33)
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Underlying Attorney Heimowitz’s conclusion that Novo and Mr. Gupta were
permitted to accept the Novo/CPI Engagement under applicable ethical guidelines
is his opinion that the ethical standards cited by Mr. Jalbert are mere frameworks
rather than required, dispositive standards. (Id., 26–27) He acknowledges that Mr.
Jalbert’s Expert Report “refers to ethical rules and guidelines concerning conflicts of
interest,” but concludes that those rules and guidelines “are not applicable to
financial restructuring advisory firms or corporate fiduciaries” and thus did not bar
Novo nor Mr. Gupta from accepting the Engagement. (Id., 28) Relying instead on
the anemic conflict waiver contained in the Novo/CPI Engagement Contract and
Attorney Henzy’s extensive warnings to CPI regarding the potential conflict of
interest, Attorney Heimowitz concludes CPI’s management simply made an
informed business decision to engage Novo despite the known risks. (Id., 26–32, 35)
In their stark denial of ethical or fiduciary tensions, the Court does not credit these
opinions and conclusions as meritorious.
At the close of Old CPI’s case-in-chief, Novo moved for a directed verdict on
all counts. (8/13/25 Tr. 107:24–133:19) The Court granted the motion as to Count
One, in which Old CPI alleged, pursuant to 11 U.S.C. § 547, that the Pre-Petition
BMO Payment39 was an avoidable preference transfer as to Novo. (Id.) The Court
issued a Memorandum of Decision Granting Judgment on Partial Findings as to
Count One on September 17, 2025. (ECF No. 120), relying principally upon the fact
39 Recall that the Pre-Petition BMO Payment refers to the sum that CPI paid to BMO on January 28,
2021, related to expenses BMO incurred in hiring Novo to assess CPI and Suri. (Stip. ¶ 22–23) The
sum was transferred to BMO in two separate payments, which together totaled $273,616.25. (Id.,
¶ 23)
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that the Transfer was owed and properly paid to BMO as the initial transferee. The
Court declined to grant the Motion as to the other six counts of the Complaint and
accordingly will address them herein.
After trial, the parties submitted Post-Trial Findings of Fact and Conclusions
of Law.40 Old CPI filed a Response (ECF No. 127) to Novo’s Post-Trial Findings of
Fact and Conclusions of Law, to which Novo filed a Rebuttal. (ECF No. 128)
Thereafter, the Court took all of these matters under advisement.
3. 	Conclusions of Law41
3.1 Jurisdiction
The United States District Court for the District of Connecticut has
jurisdiction over the instant proceedings under 28 U.S.C. § 1334(b), and the
Bankruptcy Court derives its authority to hear and determine this matter on
reference from the District Court under 28 U.S.C. § 157(a) and (b)(1) and the
General Order of Reference of the United States District Court for the District of
Connecticut dated September 21, 1984. The fraudulent transfer claims brought are
core claims under 28 U.S.C. § 157(b)(2)(H), but may be Stern claims.42 The
remaining claims are non-core claims, as they set forth claims for relief under
common law and statutes of the State of Connecticut and are “related to” claims.
The parties have expressly or impliedly consented to this Court’s jurisdiction over
all the claims brought. (ECF No. 1, p. 22; ECF No. 58)
40 Old CPI’s Post-Trial Brief (ECF No. 127) will be cited as “Plntff. Post-Trial Brief.” Novo’s Post-
Trial Brief (ECF No. 128) will be cited as “Def. Post-Trial Brief.”
41 Additional material facts found by this Court are addressed herein.
42 See Stern v. Marshall, 564 U.S. 462 (2011).
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Each of the parties has admitted to the jurisdiction of this Court and CPI has
waived its prior claim to a jury trial. (Stipulation with Withdrawal of Jury Demand
and Stipulation to Proceed as Non-Jury Trial (ECF No. 61); Order Approving
Stipulation (ECF No. 63))
3.2 Discussion
a. Count Two: Constructive Fraudulent Transfer Pursuant to 11
U.S.C. §§ 548(a)(1)(B), 550, and 551
In Count Two, Old CPI alleges that it is entitled pursuant to 11 U.S.C.
§ 548(a)(1)(B) to avoid against Novo the Pre-Petition BMO Payment – again, the
$273,616.25 payment that CPI made to BMO on January 28, 2021. Specifically, Old
CPI alleges that 11 U.S.C. § 548(a)(1)(B) applies because the transfer of funds was
made on or within two (2) years of the Petition Date and while the Debtor was
insolvent, and because the Debtor did not receive reasonably equivalent value in
exchange for the Payment. To prevail on this claim, Old CPI alleges that Novo “was
the initial transferee of the transfer(s) or the immediate or mediate transferee of
such initial transferee or the person for whose benefit [the Pre-Petition BMO
Payment was] made.” (ECF No. 1, p. 15)
In response, Novo argues that the Debtor did receive reasonably equivalent
value in exchange for the Pre-Petition BMO Payment, as CPI reaffirmed its
obligation to reimburse BMO for the expenses it incurred in hiring Novo in
exchange in part for BMO’s assent to enter into and fund the Eighth Forbearance
Agreement. (Def. Post-Trial Brief, p. 21)
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As already concluded in the Court’s Memorandum of Decision Granting
Judgment on Partial Findings as to Count One, here “the evidence demonstrates
that BMO clearly constitutes the initial transferee under 11 U.S.C. § 550 rather
than a mere conduit.” (ECF No. 120, p. 10) “BMO enjoyed an absolute legal
entitlement, as the Debtor’s obligee, to the transferred funds pursuant to the loan
documents and the Eighth Forbearance Agreement.” (Id.) Consequently, while BMO
was the initial transferee, Novo at best might constitute an immediate or mediate
transferee of the initial transfer under 11 U.S.C. § 550. Because BMO had a
separate contractual obligation to pay Novo pursuant to the BMO/Novo Retention
Agreement, however, this subsequent transfer is more accurately characterized as a
distinct and separate transaction. Regardless, the transfer at issue here is strictly
the Pre-Petition BMO Payment from CPI to BMO and, accordingly, therefore, the
analysis hinges on whether CPI received reasonably equivalent value from Novo or
BMO in exchange for the Payment.
“Outside of the foreclosure context, the term ‘reasonably equivalent value’
will ‘ordinarily [have] a meaning similar to fair market value.’” BFP v. Resolution
Tr. Corp., 511 U.S. 531, 545 (1994). “To determine whether reasonably equivalent
value was provided, ‘the Court must ultimately examine the totality of the
circumstances, including the armslength nature of the transaction; and the good
faith of the transferee.’” In re Wade Park Land Holdings, LLC, 2024 WL 3024648 at
*4 (2d Cir. 2024) (citing In re Tribune Co. Fraudulent Conv. Litig., 10 F.4th 147, 172
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(2d Cir. 2021) and In re Bernard L. Madoff Inv. Sec. LLC, 454 B.R. 317, 334 (Bankr.
S.D.N.Y. 2011)).
Accordingly, while forbearance of foreclosure on BMO’s defaulted loan may
constitute reasonably equivalent value in the Second Circuit, this Court must
assess the totality of the circumstances to determine whether BMO’s forbearance on
its defaulted loan here indeed did constitute reasonably equivalent value.
Having reviewed the totality of the facts and circumstances of CPI’s pre-
petition defaults and distress, the Court concludes that CPI did receive reasonably
equivalent value in exchange for the Pre-Petition BMO Payment. By January 5,
2021, when the Senior Lenders and Debtors entered into the Eighth Forbearance
Agreement, the Senior Lenders had “agreed to make Loans and other financial
accommodations to [CPI] in an aggregate amount of up to $62,000,000, comprising
of a $15,000,000 Revolving Facility, a $28,000,000 Equipment Facility, and a
$19,000,000 Construction Facility.” (Exh. P19, p. 1; Stip. ¶ 36) Pursuant to that
Agreement, BMO “agree[d] to forbear from exercising [its] rights and remedies
against [CPI] under the Loan Documents with respect to the Existing Defaults” for
a period of time. (Id., 4) In return, among other things, CPI reaffirmed that BMO
had the right to hire a third party to conduct a financial assessment of CPI to
enforce its rights under the Third Credit Agreement, and the right to be reimbursed
for any expenses it incurred in exercising that right. (Id., 15) BMO had expended
$273,616.25 to hire Novo to conduct a financial assessment of CPI in the summer of
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2020, and CPI accordingly reimbursed BMO for that expense, as promised, via the
Pre-Petition BMO Payment less than three weeks later.43
BMO’s assent to the Eighth Forbearance Agreement was of material and
substantial value to CPI, as it allowed CPI to continue operating. Had BMO not
agreed to forbear from exercising its rights and remedies against CPI, CPI might
then have been liquidated. (8/14/25 Tr. 46: 8–11) Attorney Heimowitz, when asked
why CPI entered into the Eighth Forbearance Agreement, opined that CPI “would
have likely liquidated if they hadn’t agreed to a forbearance agreement.” (Id.,
45:24–46:17) Attorney Heimowitz further testified that, generally, when a lender
doesn’t “agree with the borrower as to what to do, [an officer or director of the
borrower is] basically setting the company up . . . for a freefall bankruptcy or an
absolute disaster.” (Id., 46:2–7) Even Mr. Jalbert, when testifying on behalf of Old
CPI as Liquidating Custodian, acknowledged that he indeed believes “that the
[E]ighth [F]orbearance [A]greement was beneficial to CPI . . . .” (8/12/25 Tr. 167:20–
168:3)
Thus, having reviewed the aforesaid totality of the facts and circumstances,
the Court concludes that CPI received reasonably equivalent value from BMO
through the Eighth Forbearance Agreement to the value CPI transferred in making
the Pre-Petition BMO Payment. Accordingly, the Court concludes that this transfer
43 It is of no matter that BMO had already incurred the cost of hiring Novo, as CPI expressly
promised in § 13.14 of the Eighth Forbearance Agreement to reimburse BMO for “all reasonable
costs, fees, and expenses” incurred “in connection with the negotiation, preparation, administration,
and enforcement of this Agreement” and further expressly “reaffirm[ed] its agreement under the
applicable Loan Documents to pay or reimburse . . . Lenders for certain costs and expenses incurred
by . . . Lenders in connection with the Loans.” Exh. D43, p. 15, § 13.14.
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cannot be avoided under 11 U.S.C. § 548(a)(1)(B). The fact that BMO then paid
Novo, a third party to which it was independently legally obligated, and perhaps
even an immediate transferee under 11 U.S.C. § 550, is of no matter. It does not
impact or alter the Court’s analysis because Old CPI has not met its burden to
establish that a fraudulent transfer occurred in the first instance.
b. Count Three: Constructive Fraudulent Transfer pursuant to
the Connecticut Uniform Fraudulent Transfer Act (CUFTA),
Conn. Gen. Stat. §§ 52-552e(a)(2) and 52-552f(a)
In Count Three, Old CPI alleges that it is entitled pursuant to CUFTA, Conn.
Gen. Stat. §§ 52-552e(a)(2) and 52-552f(a), to avoid the Pre-Petition BMO Payment
as the Payment was made on or within four years of the Petition Date and while the
Debtor was insolvent, and the Debtor did not receive reasonably equivalent value in
exchange for the Payment.
For the same reasons stated in Part 3.2(a) above, the Court concludes and
adjudges that (1) Old CPI has not met its burden to establish that a fraudulent
transfer occurred in the first instance, and (2) the Debtor did receive reasonably
equivalent value from BMO in exchange for the Pre-Petition BMO Payment.
Accordingly, CPI cannot prevail on this Count.
c. 	Count Four: Breach of Fiduciary Duty as to the Pre-Petition
BMO Payment
In Count Four, Old CPI alleges that Novo owed fiduciary duties to CPI as its
CRO and financial advisor because Novo “undertook a duty to act on behalf of CPI
for its benefit with respect to the most critical functions of its business and to take
steps to ensure its financial survival,” and “[t]hus, a fiduciary relationship was
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created.” (Plntff. Post-Trial Brief, p. 30) CPI alleges that Novo breached those
fiduciary duties “by causing CPI to borrow funds from its Lenders, thereby
increasing its indebtedness to such Lenders at a time when CPI was already in
default of its Pre-Petition Obligations and was unable to pay critical trade vendors
and creditors,” to enable CPI to make the Payment. (ECF No. 1, p. 17)
In response, Novo asserts that there is no evidence that Novo or Mr. Gupta
breached any fiduciary duties owed by causing CPI to borrow the funds that
enabled it to make the Payment to BMO because CPI was contractually obligated to
make the Payment and received reasonably equivalent value from vendors and
creditors for the Payment. (Def. Post-Trial Brief, p. 21–22)
In Connecticut, “[w]hether a fiduciary duty exists in any particular case, and
the nature of that duty, is context dependent and ‘fact driven . . . .’” Barash v.
Lembo, 348 Conn. 264, 297, 303 A.3d 577, 598 (2023) (citing Iacurci v. Sax, 313
Conn. 786, 795, 99 A.3d 1145, 1151 (2014)). A breach of fiduciary duty claim
requires: (1) the existence of a fiduciary relationship, giving rise to a duty, (2)
breach of that duty, (3) causation, and (4) damages. Id., 302–03.
“[A] fiduciary or confidential relationship is characterized by a unique degree
of trust and confidence between the parties, one of whom has superior knowledge,
skill or expertise and is under a duty to represent the interests of the other.”
Sherwood v. Danbury Hosp., 278 Conn. 163, 195, 896 A.2d 777, 796 (2006) (quoting
Biller Assocs. v. Peterken, 269 Conn. 716, 723, 849 A.2d 847, 851 (2004)). “[T]he law
will imply [fiduciary responsibilities] only where one party to a relationship is
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unable to fully protect its interests [or where one party has a high degree of control
over the property . . . of another] and the unprotected party has placed its trust and
confidence in the other.” Mangiante v. Niemiec, 82 Conn. App. 277, 282, 834 A.2d
656, 659 (2004) (citing Hi-Ho Tower, Inc. v. Com-Tronics, Inc., 255 Conn. 20, 38, 761
A.2d 1268, 1280 (2000)). “The defining characteristic of a fiduciary relationship is
the special relationship of confidence or trust imposed by one in another who
undertakes to act primarily for the benefit of the principal in a particular endeavor.
A fiduciary relationship allows the trusting party, the principal, to relax the care
and vigilance ordinarily exercised.” 2A C.J.S. Agency § 262. However, “[t]he
superior position of the fiduciary or dominant party affords him great opportunity
for abuse of the confidence reposed in him.” Sherwood, supra, 278 Conn. at 195, 896
A.2d at 796–97 (quoting Cadle Co. v. D’Addario, 268 Conn. 441, 455, 844 A.2d 836,
847 (2004)).
Connecticut law has not “defined [the fiduciary] relationship ‘in precise detail
and in such a manner as to exclude new situations, choosing instead to leave the
bars down for situations in which there is a justifiable trust confided on one side
and a resulting superiority and influence on the other.’ . . . The relationship
between sophisticated partners in a business venture may differ from the
relationship involving lay people who are wholly dependent upon the expertise of a
fiduciary. Fiduciaries appear in a variety of forms, including agents, partners,
lawyers, directors, trustees, executors, receivers, bailees and guardians.” Falls
Church Grp., Ltd. v. Tyler, Cooper & Alcorn, LLP, 281 Conn. 84, 108–09, 912 A.2d
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1019, 1034–35 (2007) (quoting Konover Dev. Corp. v. Zeller, 228 Conn. 206, 222–23,
635 A.2d 798, 806 (1994)). Likewise, “[E]quity has carefully refrained from defining
a fiduciary relationship in precise detail and in such a manner as to exclude new
situations.” Id. at 109.
“The fiduciary relation demands something more than the morals of the
market place.” Guth v. Loft, Inc., 23 Del. Ch. 255, 282, 5 A.2d 503, 515 (1939). A
fiduciary “must act honestly, and with the finest and undivided loyalty . . . , not
merely with that standard of honor required of men dealing at arm’s length and the
workaday world, but with a punctilio of honor the most sensitive.” Zeller, supra, 228
Conn. at 220, 635 A.2d at 805 (quoting Chief Judge Benjamin Cardozo in Meinhard
v. Salmon, 249 N.Y. 458, 464, 164 N.E. 545, 546 (1928)). See also Pacelli Bros.
Transp., Inc. v. Pacelli, 189 Conn. 401, 407, 456 A.2d 325, 329 (1983) (“[A fiduciary]
occupies a position of the highest trust and therefore he is bound to use the utmost
good faith and fair dealing in all his relationships with the corporation.”); 3 Am.
Jur. 2d Agency § 163 (noting that a fiduciary must “act solely for the benefit of the
principal, and in the utmost good faith for the benefit and in the best interest of the
principal in the course of the fiduciary relationship.”).
When one serves as a fiduciary for another party, the fiduciary owes a duty of
loyalty to that party. Barash, supra, 348 Conn. at 298, 303 A.3d at 598. The
fiduciary must act in the best interests of that party and in good faith in any matter
relating to that party. Id. “Agency is the fiduciary relationship that arises when one
person (a ‘principal’) manifests assent to another person (an ‘agent’) that the agent
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shall act on the principal’s behalf and subject to the principal’s control, and the
agent manifests assent or otherwise consents so to act.” Wall Sys., Inc. v. Pompa,
324 Conn. 718, 730 n.9, 154 A.3d 989, 998 n.9 (2017). “The duty of loyalty means
[the] agent is prohibited from acting in any manner inconsistent with their agency
or trust and is at all times bound to exercise the utmost good faith and loyalty in the
performance of duties.” 2A C.J.S. Agency § 266. “The relationship of principal and
agent implies trust or confidence by the principal in the agent, and the agent is
obligated to exercise the utmost good faith, loyalty and honesty toward his principal
. . . . The general principle for the agent’s duty of loyalty according to the
Restatement is that the agent must act solely for the benefit of the principal in
matters connected with the agency.” Pompa, supra, 324 Conn. at 731, 154 A.3d at
998. “The duty of loyalty is the most important fiduciary duty of corporate officers
and directors.” Joel Seligman, The New Corporate Law, 59 BROOK . L. REV. 1, 3
(1993). A CRO and financial advisor’s control and authority is tantamount to that of
corporate officers and directors.
Appurtenant to the duty of loyalty, in Connecticut, “[i]t is a thoroughly well-
settled equitable rule that any one acting in a fiduciary relation shall not be
permitted to make use of that relation to benefit his own personal interest. This
rule is strict in its requirements and in its operation,” and “extends to all
transactions where the individual’s personal interests may be brought into conflict
with his acts in the fiduciary capacity, and it works independently of the question
whether there was fraud or whether there was good intention.” Murphy v. Wakelee,
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247 Conn. 396, 401–02, 721 A.2d 1181, 1184 (1998) (quoting State v. Culhane, 78
Conn. 622, 622, 63 A. 636, 638 (1906)). See also Mallory v. Mallory Wheeler Co., 61
Conn. 131, 137–38, 23 A. 708, 710 (1891) (“The underlying thought is that an agent
or other fiduciary should not unite his personal and his representative characters in
the same transaction; and equity will not permit him to be exposed to the
temptation, or be brought into a situation where his own personal interests conflict
with the interests of his principal and with the duties he owes to his principal. The
rule applies alike to agents, partners, guardians, executors, and administrators, and
directors and managing officers of corporations, as well as to technical trustees.”); 3
Am. Jur. 2d Agency § 163 (“The agent owes the principal undivided allegiance and
must refrain from obtaining any advantage at the principal’s expense, [and must
not] voluntarily take a position or permit being placed in a position of interests in
conflict with the principal’s interest, or doing any harmful act to the principal, and
must refrain from any act of self-dealing not authorized.”). Accordingly, the duty of
loyalty prevents a fiduciary from furthering personal interests through the fiduciary
relationship and from partaking in an engagement that would conflict with the
duties owed to the principal.
One serving as a fiduciary also owes a duty of disclosure. As the Connecticut
Supreme Court stated, “It is essential to the validity of a contract between a
fiduciary and a beneficiary concerning matters within the scope of that relationship
that a full disclosure be made of all relevant facts which the fiduciary knows or
should know. . . . We are not inclined to relax these high standards which the law
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demands of fiduciaries.” Pacelli Bros. Transp., Inc. v. Pacelli, 189 Conn. 401, 408–
09, 456 A.2d 325, 329 (1983). See also Flannery v. Singer Asset Fin. Co., LLC, 312
Conn. 286, 314, 94 A.3d 553, 571 (2014) (concluding that an attorney serving as a
fiduciary breached the duty of loyalty owed to his client when he failed to disclose
material facts); 3 Am. Jur. 2d Agency § 163 (“Agents have a legal duty to the
principal to disclose information obtained in the course of the agency and material
to the subject matter of the agency, making full disclosure to the principal of any
conflicts of interest. The agent’s duty is one of full disclosure of matters concerning
the parties’ interests under a strict duty of candor and good faith.”) (emphasis
added). Furthermore, “An agent’s obligation to disclose to the principal any
information concerning the agency which the principal would be likely to want to
know is strongest when the principal has a conflicting interest in the transaction
connected with the agency.” 2A C.J.S. Agency § 269.
Regarding delegation, generally “a fiduciary cannot delegate [their] authority
because the duty of a fiduciary is personal and cannot be divested by delegation.”
Executor or Administrator’s Ability to Delegate Fiduciary Authority, Settlement of
Estates in Conn. § 7:41 (3d ed.). See also Restatement (First) of Agency § 18 (1933)
(“Unless the principal manifests otherwise, an agent has no authority to delegate to
another the exercise of discretion in the performance of his authority; nor may a
servant delegate to another the performance of service.”). Nonetheless, where a
fiduciary does delegate certain tasks, “those to whom the authority was delegated
[are likewise] obligated to adhere to those fiduciary duties . . . .” Bohn v. Dorothea L.
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Denton, LLC, No. DBD-CV-186024779S, 2021 WL 4286568, at *25 (Conn. Super. Ct.
Sept. 3, 2021). See also Restatement (Second) of Agency § 428 (1958). Furthermore,
“Courts have consistently held that a delegating fiduciary has an obligation to
monitor its appointed fiduciary’s performance with respect to any fiduciary duty
delegated to the appointed fiduciary.” T. David Cowart, et al., The Duty to Monitor:
A Fiduciary’s Continuing Responsibility, VMD0529 AM. L. INST. – A.B.A.
CONTINUING LEGAL E D . 229, 232 (2003).
i. 	Burden of Proof
“Once a [fiduciary] relationship is found to exist, the burden of proving fair
dealing properly shifts to the fiduciary.” Sherwood v. Danbury Hosp., supra, 278
Conn. at 196, 896 A.2d at 797 (quoting Cadle Co., supra, 268 Conn. at 455, 844 A.2d
at 847). Thus, if Novo is found to have served as CPI’s fiduciary, Novo must prove
that it dealt fairly with CPI by clear and convincing evidence. See Murphy, supra,
247 Conn. at 400, 721 A.2d at 1184 (“Proof of a fiduciary relationship, therefore,
generally imposes a twofold burden on the fiduciary. First, the burden of proof shifts
to the fiduciary; and second, the standard of proof is clear and convincing evidence.
Although we have not expressly limited the application of these traditional
principles of fiduciary duty to cases involving only fraud, self-dealing or conflict of
interest, the cases where we have invoked them have involved such deviations.”)
(emphasis in original); Dunham v. Dunham, 204 Conn. 303, 322–23, 528 A.2d 1123,
1134 (1987).
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ii. 	Existence of a Fiduciary Relationship
Here, the Court concludes that both Mr. Gupta and Novo owed a fiduciary
duty to CPI, given the critical role they played in guiding CPI at a time when both
CPI and its principals were particularly vulnerable and facing the harsh and
unfamiliar world of financial distress.
When CPI hired Novo and Mr. Gupta on August 7, 2020, the Novo/CPI
Engagement Contract stated that Mr. Gupta would serve as CPI’s CRO,44 with
other Novo personnel to serve as temporary employees of CPI. (Exh. P4, p. 1) As
noted, the Contract expressly granted Mr. Gupta authority to become an officer of
CPI, to exercise “his business judgment” on CPI’s behalf, “to hire and terminate
employment that leads to improved and sustained business performance,” and to
“[d]evelop a long-term business plan and strategy for the Company.” (Id.; 8/11/25
Tr. 56:21–57:4) Mr. Gupta enjoyed great authority over CPI and he even
acknowledged that reality at trial and that he accordingly owed a “duty of loyalty”
and care to CPI, which required him “to put [CPI’s] interests above all others . . . .”
(8/11/25 Tr. 60:14–25) Novo similarly agreed to “[m]ake personnel changes and
adjustments based on [its] business judgment to improve . . . operating costs,”
“[w]ork closely with the sales organization to develop [CPI’s] sales pipeline,” and
“[p]erform an assessment of the outstanding accounts payable, identify all critical
vendors, and develop payment plans for continued support of [CPI].” (Exh. P4, p. 2)
Novo, too, therefore exercised great control over CPI, implementing its business
44 See footnote 6 of this Memorandum of Decision, detailing the role of a CRO.
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judgment and expertise to help improve CPI’s finances at a critical time.
Accordingly, the Court concludes that both Mr. Gupta and Novo assumed
significant dominion, influence, and control over CPI’s operations, business
decisions, and property during its financial distress to navigate restructuring
waters both in and outside of Chapter 11, such that Mr. Gupta and Novo
indisputably became CPI’s fiduciaries. Novo’s contrary assertions and thin efforts to
distinguish Mr. Gupta from Novo in this context are manifestly dishonest.
Bolstering this conclusion is the fact that Novo not only agreed to take on
critical tasks and assume authority over multiple aspects of CPI’s operations and its
reorganization strategy, but also that Novo did so at a time when CPI’s
management was without the focus, skills, or experience to do so. Mrs. Squatrito
was pulled away from CPI because she had to direct her attention to her sick and
dying husband. (8/12/25 Tr. 13:2–5; 8/13/25 Tr. 151:14–18) Sandro and Sergio
helped manage the day-to-day operations, but were unable to fully embrace those
roles due to their rocky interpersonal relationship. (8/12/25 Tr. 13:6–17) Further,
CPI unexpectedly lost a major portion of its revenues while embarking on a costly
plant expansion – events that required more of CPI’s attention, not less. (8/11/25 Tr.
187:11–14; 8/13/25 Tr. 157:5–10) As the company navigated this period of crushing
financial distress and its principals experienced a period of distraction, tumult, and
misfortune, the Court concludes that Novo and Mr. Gupta incontrovertibly stepped
into a superior position over CPI and that they possessed superior knowledge, skill,
and expertise to CPI. Recall that Novo specialized in restructuring and that CPI, a
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family business, had no meaningful experience in restructuring. Accordingly, under
these facts, the Court concludes that a fiduciary relationship existed and that Novo
and Mr. Gupta were duty bound to appropriately represent CPI’s interests as its
fiduciaries. Novo, CPI’s sole counterparty in the Novo/CPI Engagement Contract,
thus bears the burden, by clear and convincing evidence, to prove fair dealing as to
the Novo Transfers.
iii. 	Breach of Fiduciary Duties as to the Pre-Petition BMO
Payment
As the Court has previously found, “BMO enjoyed an absolute legal
entitlement, as the Debtor’s obligee, to the transferred funds pursuant to the loan
documents and the Eighth Forbearance Agreement.” (ECF No. 120, p. 10
(Memorandum of Decision Granting Judgment on Partial Findings as to Count
One); Parts 3.2.a and 3.2.b of this Memorandum of Decision) CPI was obligated to
transfer the funds to BMO, even if it meant increasing its indebtedness.45 Old CPI
has not demonstrated how any role that Novo may have played in ensuring that
CPI made the Pre-Petition BMO Payment, which CPI clearly owed to BMO,
constitutes a violation of the fiduciary duties that Novo owed CPI, or a failure of
Novo to act in the best interests of CPI and in good faith in this matter. CPI had full
disclosure about the Payment and why it was being sent and immensely benefited
from BMO’s forbearance and its additional advances.
45 Indeed, if CPI failed to pay these sums, those expenses, related to Novo’s services to BMO, would
naturally have become part of CPI’s loan indebtedness to BMO.
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Old CPI, as in Count One, again points to “1) the closeness in time of the Pre-
Petition BMO Payment and the subsequent payment from BMO to Novo; 2) the
equivalence of the Pre-Petition BMO Payment and the subsequent payment from
BMO to Novo; 3) the inclusion of a $273,616.25 payment entry to Novo on CPI’s
Accounts Payable Aging Spreadsheet; and 4) the supervision and facilitation of the
payments from CPI to BMO to Novo by Novo’s employee,” Mr. Piotrowski, as
indicating that Novo breached its fiduciary duties in ensuring the Pre-Petition BMO
Payment was made. (Memorandum of Decision Granting Judgment on Partial
Findings as to Count One, ECF No. 120, p. 10; 8/13/25 Tr. 114:20–119:13 (wherein
Old CPI makes these arguments))
As fully discussed in this Court’s decision on Count One, these facts are not
dispositive. (Id.) Particularly, the fact that BMO subsequently transferred an
identical sum to Novo does not alter the Court’s analysis or somehow indicate a lack
of fair dealing on Novo’s part. On the contrary, it was commonsensical for BMO to
pay Novo once it received the correlated funds from CPI. Accordingly, the Court
concludes and adjudges that Novo, by clear and convincing evidence, did not breach
any fiduciary duty as it pertains to the Pre-Petition BMO Payment.
d. Count Five: Breach of Fiduciary Duty as to the Novo/CPI
Engagement
In Count Five, Old CPI reiterates that Novo owed fiduciary duties to CPI as
its financial advisor and CRO (the role in which Mr. Gupta served), and that Novo
breached those duties in a number of ways.
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First, Old CPI asserts that “Novo’s conflict of interest, due to its prior and
ongoing relationship with BMO . . . impaired and/or prevented Novo from fulfilling
its fiduciary duties to CPI and exercising loyalty to CPI and its independent
business judgment for the exclusive benefit of CPI and free from any restraint or
influence by its own pecuniary interests . . . .” (ECF No. 1, p. 18)
Second, Old CPI asserts that “[d]espite [its] patent conflict of interest, as
CRO of CPI, Novo caused CPI to pay Novo [compensation for its role as CRO] in the
sum of $1,167,036 for CRO services rendered during the period August 7, 2020
through the Petition Date – a period of only approximately 6 months – and at a time
when CPI could not timely and fully pay [all of its] critical trade vendors and
creditors . . . .” (Id.)
Third, Old CPI contends that “Novo caused CPI to borrow funds and increase
its indebtedness on the eve of its bankruptcy filing for the sole purpose of CPI’s
payment of Novo’s outstanding invoices associated with the BMO/Novo Engagement
. . . .”(Id.)
Fourth and finally, Old CPI contends that “Novo paid itself the CRO
Payments while being unable to act solely for the best interest CPI and/or free from
any conflict of interest.” (Id.)
In response, Novo reasserts that while Mr. Gupta owed a fiduciary duty to
CPI, Novo did not owe CPI any such duties, and that, regardless, neither Mr. Gupta
nor Novo breached any fiduciary duty owed. Further, Novo contends that “CPI
waived any such conflict [of interest] in its independent business judgment with the
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advice of counsel” by signing the Novo/CPI Engagement Contract. (Def. Post-Trial
Brief, p. 26 (ECF No. 126)) Specifically, Novo asserts that “M[r]s. Squatrito, on
behalf of CPI, intended to waive Novo’s potential conflict of interest in the CPI
Engagement.” (Id.)
This Court, in ruling on Count Five, relies on and incorporates the law
addressed and findings found in ruling on Count Four in Part 3.2.c of this
Memorandum of Decision. As previously stated in Part 3.2.c of this Memorandum of
Decision, the Court concludes and adjudges that both Novo and Mr. Gupta
indisputably acted as CPI’s fiduciaries. Therefore, it is Novo who bears the burden
to prove by clear and convincing evidence its fair dealing throughout the Novo/CPI
Engagement.
i. 	Novo’s Conflict of Interest
The Court concludes and adjudges that there was a clear and unmistakable
conflict of interest that should have prevented Novo from entering into the
Novo/CPI Engagement Contract on August 7, 2020, given that Novo had previously
been retained by BMO to assess CPI’s viability and that Novo had an ongoing
“institutional relationship” with BMO. (MC – ECF No. 123-2, p. 5) As discussed in
Part 2 of this Memorandum of Decision, BMO hired Novo to assess CPI and Suri’s
viability and perform a Liquidation Analysis of CPI in the summer of 2020.
Accordingly, Novo thereby evaluated BMO’s interests, which were to reduce its
losses and minimize its exposure associated with the CPI loans. Novo visited CPI,
assessed CPI on BMO’s behalf, developed and advised on the Lender Report
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containing the Liquidation Analysis, and summarized and discussed its findings
with the Senior Lenders. Novo also appears to have been tasked with setting forth
BMO’s strategic options going forward regarding CPI. Novo agreed to keep this
advisory work for the Senior Lenders strictly confidential. Neither this Court nor
CPI know the full extent and tenor of Novo’s confidential advice and conclusions to
the Senior Lenders.
On August 6, 2020, the BMO/Novo Engagement seemingly concluded. The
very next day, Novo agreed to serve as CPI’s financial advisor with Mr. Gupta
serving as its CRO. Thereby, both Mr. Gupta and Novo agreed to provide extensive
financial advisory services and exert significant dominion, control, and influence
over CPI’s operations and strategic approach to a potential restructuring. As Mr.
Gupta even testified at trial, he became an officer of CPI, fully entrusted “with
specific authority to take actions on behalf of [CPI].” (8/11/25 Tr. 56:21–57:4) The
Novo/CPI Engagement Contract permitted Novo to “fully, independently and
directly communicate with [CPI’s] senior secured lenders [including BMO] and their
professionals and advisors from time to time in performing the Services hereunder
and will share such communications with the Board of Directors as described in the
Scope of Services.” (Exh. P4, p. 4) Mr. Gupta indeed regularly communicated with
representatives of BMO on CPI’s behalf. (8/11/25 Tr. 195:12–14) Neither this Court
nor CPI fully know the content and tenor of those confidential communications.
As mentioned, Mrs. Squatrito and CPI’s prior leadership adamantly did not
want to liquidate. (8/12/25 Tr. 16:3–7) Instead, the Squatritos sought an alternative
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that might allow the company to continue operating with the Squatrito family at
the helm, as it had for over forty years.46 (Id.; MC – ECF No. 4, p. 2) The stark
contrast in objectives that Novo had to navigate – as it concluded its assessment of
CPI on BMO’s behalf one day and commenced its navigation on CPI’s behalf the
next – underscores that CPI and BMO actually or potentially possessed
diametrically opposing interests.47 CPI and BMO’s interests aligned only insofar as
success for CPI in effecting a successful operational turnaround would have spelled
success for BMO by preserving or enhancing the enterprise value and the
attractiveness of CPI for an orderly liquidation sale. Their interests, however, also
manifestly diverged economically, as CPI wanted to keep the family business
running with the Squatritos at the helm, while BMO’s focus embraced mitigating
further advances or losses of enterprise value associated with its operating loans to
CPI and Suri.48
Therefore, on August 7, 2020, Novo, having just represented and advised
BMO the day before, and having performed a fulsome Liquidation Analysis, was
installed to guide CPI’s diametrically opposed goals and interests, including its
46 As Attorney Henzy testified, the Squatritos wanted “to keep their business and to [continue to] run
their business,” not to liquidate. (8/12/25 Tr. 16:3–7)
47 As Mr. Jalbert astutely opined at trial, once Novo “worked for Carla’s Pasta, they were working
from one day to the next day for and against two very adverse parties.” (8/13/25 Tr. 20:6–8)
48 This divergence in interests is not something that arose throughout the duration of the Novo/CPI
Engagement. Perfectly encapsulating these diverging positions is the position CPI was in while Novo
was being considered to become its new CRO and financial advisor in late July and early August of
2020. At this time, CPI needed more liquidity to stay operational (8/12/25 Tr. 28:19–29:1); which
conflicted with BMO’s goals to limit further advances and impose a new CRO and financial advisor
on CPI who could help reduce BMO’s exposure. (Exh. P1, p. 2; Exh. P19, p. 15; Exh. D14; 8/11/25 Tr.
38:14–39:16) As an experienced advisor well versed in CPI and BMO’s relationship, Novo was fully
aware of these dynamics and diverging interests before the Novo/CPI Engagement began.
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interest in avoiding liquidation and motivating BMO to further fund operational
needs.49 All the while, Novo was to keep confidential its communications with the
Senior Lenders and the information it had learned about CPI through its
engagement with BMO and its development of the Liquidation Analysis contained
within the Lender Report. This restraint presents a formidable, if not
unsurpassable ethical impediment for a strategic restructuring professional and a
fully aligned fiduciary advisor. For example, CPI asked Novo whether it could view
the Lender Report on at least two separate occasions.50 Citing the confidentiality
provisions of the BMO/Novo Retention Agreement and BMO’s lack of consent, Novo
refused to share the Lender Report or the advice it gave to BMO with CPI. (8/11/25
Tr. 203:5–13) This scenario demonstrates Novo’s conflicting duties to act as CPI’s
unbridled fiduciary while simultaneously honoring its commitments and the
confidential opinions and advice it gave to BMO.
Furthermore, Novo was not only hired by BMO to assess CPI, but also
maintained an ongoing continuing relationship with BMO as one of its approved
financial advisors. Accordingly, Novo would be naturally incentivized to perform its
49 In financial distress, a debtor would naturally expect operational guidance and strategic guidance
to facilitate a restructuring, as opposed to any form of liquidation. Sometimes, that strategy must be
adversarial. Whereas here, there were no personal guarantees of BMO’s debt by the Squatrito
family, some leverage to exact mutual objectives might be called for. (8/11/25 Tr. 69:22–70:1) There
was no evidence presented to this Court that such a range of restructuring strategies were advised,
assessed, or pursued under Novo’s or Mr. Gupta’s captaining of the course of action through CPI’s
distress, demonstrating the consequences that the conflict of interest created for CPI.
50 8/11/25 Tr. 61:24–63:10 (discussing that CPI asked to see the Lender Report before CPI retained
Novo in August of 2020); 8/11/25 Tr. 203:5–13 (discussing that CPI asked to review the Lender
Report prior to Novo’s termination of the Novo/CPI Engagement in March of 2021); Exh. P25, p. 1
(again illustrating that CPI asked to read the Lender Report prior to Novo’s termination of the
Novo/CPI Engagement).
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duties under its singular engagement with BMO in 2020, but also to endeavor to
maintain a status that brought Novo future revenues and BMO’s referral of
distressed businesses. The Court acknowledges that Attorney Heimowitz opined
that BMO’s retention of Novo “was not concurrent” with CPI’s retention of Novo,
but given both the confidentiality provision Novo was subject to and the conflicting
motivations it faced to loyally serve CPI while still maintaining its lucrative
business relationship with BMO, the Court finds his conclusions to be disingenuous
and unsupported by the evidence in the record. (Exh. P91, p. 35) Thus, the conflict
of interest that the Novo/CPI Engagement created for Novo was or should have
been extraordinarily obvious, profoundly troubling, and recognized, in advance, as
irreconcilable.51
In sum, under these facts and circumstances, the Court concludes and
adjudges that Novo faced a clear, manifest, and actual or potential conflict of
interest in accepting the Novo/CPI Engagement.52
51 Recall that both Attorney Henzy and counsel for PUB both accurately foresaw that Novo could not
be retained by CPI in a Chapter 11 bankruptcy. (8/12/25 Tr. 35:3–19; Exh. D19, p. 1; Exh. P83, p. 1)
52 Novo attempts to counter this conclusion by illustrating its successes in its engagement with CPI.
For example, in its Post-Trial Brief, Novo asserts that it “was able to begin implementing
performance improvement initiatives more quickly than another CRO” because Novo was able to
take “advantage of the insights from Novo’s work on the [BMO/Novo Engagement] to further vet and
implement certain performance improvement initiatives.” (Def. Post-Trial Brief, p. 12) To that end,
Novo further cites Sandro Squatrito’s statement that he believes Novo ran CPI “well” and fostered
“much more open dialogue throughout the facility, from the hourly staff through to Carla.” (Id., 13;
Exh. D86 at 27:7–18)
Although the Novo/CPI Engagement may have indeed provided value to CPI and operational
improvements may have resulted, these outcomes do not negate the Court’s conclusion that the
Novo/CPI Engagement was fraught with a serious, debilitating conflict of interest.
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ii. 	Novo’s Efforts to Secure a Knowing Waiver Were
Fundamentally Inadequate
Novo argues that even if it did owe fiduciary duties of loyalty and disclosure
to CPI, and even if a conflict existed that would normally have breached Novo’s duty
of loyalty, CPI waived its right to complain about breaches of those fiduciary duties
as it pertained to Novo’s relationship with BMO by signing the Novo/CPI
Engagement Contract. The Novo/CPI Engagement Contract stated:
Notwithstanding anything set forth in this section or any other sections
or provisions of this Engagement Contract, Novo and [CPI] agree and
acknowledge 	that 	Novo 	may 	fully, 	independently, 	and 	directly
communicate with [CPI’s] senior secured lenders and will share such
communications with the Board of Directors as described in the Scope of
Services. [CPI] acknowledges that Novo previously represented the
senior secured lender(s) (Bank of Montreal and People’s United Bank)
of CPI, and agrees to waive all previous conflicts related to the prior
lender engagement between Novo and the lender(s).
(Exh. P4, p. 3, emphasis added)
Novo asserts that this blanket language sufficiently informed CPI about
Novo’s relationship with BMO and that, by signing the Engagement Contract, CPI
waived any conflict that may have arisen due to Novo’s and Mr. Gupta’s
relationship with BMO. The Court firmly disagrees and concludes that such a
contention is self-serving and, again, specious as to the adequacy of the purported
waiver because it is bereft of any of the material disclosures that a genuine
fiduciary should make to assure the due performance of its duties and to secure a
knowing and intelligent waiver of conflicts.
The Court further disagrees with Novo’s distorted contentions primarily
because the waiver specifically refers only to previous conflicts related to the prior
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lender engagement between BMO and Novo, but BMO’s relationship with Novo did
not end on August 6, 2020. First, Novo was naturally incentivized to stay in BMO’s
good graces and maintain the ongoing “institutional relationship” it enjoyed with
BMO and benefited from, while simultaneously representing CPI’s interests in
efforts to secure cooperation and funding from BMO. (MC – ECF No. 123-2, p. 5)
Confirming this incentive is the fact that no evidence was adduced at trial
indicating that Novo’s relationship with BMO had concluded. Second, although
Novo was no longer retained by BMO on the CPI matter after August 6, 2020, Novo
was still required to protect the confidential Lender Report it authored and advised
on during the BMO/Novo Engagement. (Exh. P1, p. 7; 8/13/25 Tr. 176:9–16; 8/14/25
Tr. 99:11–17) The inside information Novo garnered about CPI included its
customers, vendors, business, management capabilities, liquidity, its range of
financial needs, its operational vulnerabilities, and its management’s interpersonal
vulnerabilities. Novo nevertheless could not share the Lender Report with CPI.53
53 Novo’s Expert Witness, Attorney Heimowitz, opined that, although Novo did not share the Lender
Report with CPI, it did essentially share the substance of that info with CPI. He writes in his Expert
Report: “CPI was not deprived of the substance of the Lender Report because Mr. Gupta was in
possession of the information contained in the Lender Report and as CRO was able to act on CPI’s
behalf with that knowledge. Mr. Gupta testified that as CRO he acted ‘in line with the conclusions’ in
the Lender Report, and further that additional measures were identified and implemented to
improve CPI’s value as a going concern.” (Exh. D90, p. 21–22) Similarly, Attorney Heimowitz stated
at trial that CPI “had the [L]ender [R]eport essentially” because Mr. Gupta would have remembered
the contents of the Report and “when he took over as CRO [he] could have done any of these things
without violating any confidentiality.” (8/13/25 Tr. 230:1–15) He continued: “There’s nothing that
restricted [Mr. Gupta] from [implementing] any of these company performance improvement
initiatives.” (Id.)
Conversely, Attorney Heimowitz was asked during trial: “Mr. Gupta wasn’t allowed to reveal
the contents of the [Lender Report] to [CPI], correct?” (8/14/25 Tr. 99:11–12) Attorney Heimowitz
replied: “The specific contents, yes.” (Id., 99:13) And indeed, BMO did not allow Novo to share the
contents of the Lender Report with CPI. (8/11/25 Tr. 203:5–13)
The parties dispute the significance of Mr. Gupta’s intimate knowledge of the Lender Report
and his inability to share that information with CPI due to the confidentiality requirements of the
BMO/Novo Retention Agreement, while he likely still relied on that knowledge in his work as CPI’s
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(8/11/25 Tr. 201:156–22, 203:5–13) Accordingly, the misleading description of Novo’s
conflict with BMO as a “previous conflict” did not meaningfully acknowledge or
explain Novo’s ongoing relationship with and duties owed to BMO, or its prior
vision for CPI’s liquidation, or its assessment of CPI’s reorganization prospects.
Thus, the Court concludes that the waiver contained in the Novo/CPI Engagement
Contract was patently inadequate to secure CPI’s knowing waiver of the conflict of
interest that Novo’s retention entailed.
Novo argues that even if the waiver was insufficient as written, CPI knew the
full extent of BMO’s relationship with Novo simply because CPI was repeatedly
warned by Attorney Henzy about the risks inherent in hiring Novo, and thus that
CPI fully waived any conflict that arose. For example, Attorney Henzy told CPI that
“Novo does work for BMO frequently,” (Exh. D13, p. 3); that Novo was “being
brought in to liquidate CPI,” (Exh. D20, p. 1; 8/12/25 Tr. 53:8–17); and that Novo
could not be approved by a bankruptcy court to serve as CPI’s CRO under applicable
standards in the Second Circuit. (Exh. D. 19, p. 1–2; Exh. D13, p. 2)
Although this evidence illustrates that CPI was aware of Attorney Henzy’s
belief that hiring Novo may have posed a conflict of interest, it does not illustrate
that CPI fully understood the substance or disabling nature of the ongoing conflict
of interest, nor that Novo discharged its responsibilities to address those concerns
CRO. Regardless of whether Mr. Gupta used the specific information contained in the Lender Report
as CPI’s CRO, the fundamental and irreconcilable issue is that Novo and Mr. Gupta owed conflicting
duties to both BMO and CPI, simultaneously, and further, were likely unable to serve CPI in a
Chapter 11 as its CRO or financial advisor, despite their promises to do so. Novo and Mr. Gupta did
not adequately apprise CPI of these issues.
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with sufficient detail in advance. Although the Squatritos were informed that “Novo
does work for BMO frequently,” it is not clear from the evidence adduced at trial
that they understood the dimensions of Novo’s ongoing institutional relationship
with BMO and that Novo remained obligated to hold confidential the conclusions
and opinions (written or oral) that it had advanced about CPI to BMO. (Exh. D13, p.
3) The fact that CPI only later requested access to the Lender Report in fact
indicates that CPI did not fully appreciate the conflict that existed and its
consequences.54 At trial, Novo adduced no evidence that its conflict disclosures were
otherwise fulsome, forward-looking, or consistent with its independent fiduciary
duties of adequate disclosure. (8/11/25 Tr. 132:5–12; 8/13/25 Tr. 145:20–146:12)
Second, Attorney Henzy’s statements do not constitute an exonerating
warning given to CPI by Novo about the conflict. In his Expert Report, Attorney
Heimowitz makes much of the fact that Attorney Henzy warned CPI about the
conflict, opining that CPI therefore made an informed business decision to hire
Novo despite the risks. (Exh. D90, p. 29–32) Novo did not demonstrate, however,
that it delegated the fiduciary duty of disclosure that it owed CPI to Attorney
Henzy, nor that Novo could delegate such a duty. See Executor or Administrator’s
Ability to Delegate Fiduciary Authority, Settlement of Estates in Conn. § 7:41 (3d
ed.); Restatement (First) of Agency § 18 (1933). Furthermore, Novo’s attempts to
54 In his deposition, Sandro Squatrito attested that he “did not believe we would be able to see the
report, per se,” that Novo prepared for BMO. (Exh. D86, 54:25–55:6) This assertion, however,
contradicts Mr. Gupta’s testimony about the acts of other members of the Squatrito family who did
request to see the Lender Report. For example, when asked whether he recalled “talk[ing] about . . .
[how] M[r]s. Squatrito had asked you about your findings in connection with [the Lender Report,]”
Mr. Gupta replied, “I do.” (8/11/25 Tr. 203:24–204:3) Accordingly, the Court concludes that, overall,
the Squatritos did not appreciate the conflict that existed in its entirety.
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respond to or address any concerns that CPI may have had are not to be found in
the record. Scant evidence appears regarding whether Novo and CPI’s management
had any meaningful conversations on the subject at all while CPI contemplated
hiring Novo. (8/11/25 Tr. 132:5–12; 8/13/25 Tr. 145:20–146:12) Novo’s expert’s lack
of appreciation of this nondelegable duty is both disturbing and nonresponsive to
this issue. The Court thus concludes, on the whole, and having reviewed the entire
record, that Attorney Henzy’s repeated and emphatic warnings were no substitute
for the meaningful substantive disclosures and affirmations that Novo should have
made to CPI.
Ultimately, as CPI’s fiduciary, Novo bore the nondelegable burden of
ensuring CPI’s full, knowing, and intelligent waiver – not Attorney Henzy, and not
BMO. Although Novo remarkably may have been “unaware of [Attorney] Henzy’s
concerns about Novo’s potential conflict of interest and [the] potential risks of Novo
being retained in bankruptcy prior to being engaged by CPI,” as Novo asserts, as an
experienced restructuring advisor, it was Novo’s duty and province to foresee the
attendant concerns and prospective consequences and make them known to CPI.55
(Def. Post-Trial Brief, p. 10) Attorney Henzy may “never [have] addressed with
Novo any of his concerns about Novo or [given] Novo the opportunity to address
them,” but that does not negate Novo’s own paramount and nondelegable duty to
properly disclose its own conflicts to its clients. (Id.; 8/13/25 Tr. 141:15–24; 8/13/25
55 Again, it was not only Attorney Henzy who accurately foresaw that Novo could not be retained by
CPI in a Chapter 11 bankruptcy, but also counsel for PUB. (Exh. P83, p. 1) Novo similarly should
have foreseen this reality.
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Tr. 161:7–16) Notably, Novo made no effort to explore their role in Attorney Henzy’s
reasons to withdraw as CPI’s legal counsel. Novo adduced no evidence at trial that
its disclosures were otherwise fulsome, adequate, or consistent with its independent
obligations as CPI’s fiduciary to inform CPI fully and adequately about the true
extent of its conflict of interest. As Novo failed to discuss these subtleties or the
prospective consequences of its retention by CPI, it breached the fiduciary duty of
disclosure that it owed CPI.
iii. 	Novo’s Conflict was Unwaivable
The Court concludes, in the alternative, that even if Novo’s waiver was
otherwise somehow adequate to inform CPI about a potential conflict and satisfy
Novo’s duty of disclosure, and that CPI somehow waived the conflict, the conflict
that CPI purportedly waived under these facts and circumstances was unwaivable.
See Gabriel Rauterberg & Eric Talley, Contracting Out of the Fiduciary Duty of
Loyalty, 117 COLUM. L. REV . 1075 (2017) (noting that the duty of loyalty, while
subject to limited corporate opportunity waivers, remains one of the few mandatory
rules of corporate law); § 103(b). Effect of Partnership Agreement; Nonwaivable
Provisions, Rev. Unif. P’ship Act Section 103 (2025–2026 ed.) (stating that, under
the Revised Uniform Partnership Act, the duty of loyalty provided for under §§
404(b) or 603(b)(3) and the duty of good faith and fair dealing provided for under §
404(d) cannot be eliminated, and the duty of care provided for under §§ 404(c) or
603(b)(3) cannot be unreasonably reduced).
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Novo could not serve as CPI’s fiduciary while still tethered to BMO, a party
directly adverse to CPI. The Court acknowledges that Attorney Heimowitz opined
that “[n]either Novo nor Mr. Gupta were adverse to CPI at the time of the
[Novo/]CPI [E]ngagement,” but finds that conclusion neither believable nor
supported by the facts in the record. (Exh. P91, p. 35) As mentioned, Novo was still
bound to the confidentiality clause contained in the BMO/Novo Retention
Agreement, which prevented Novo from disclosing information it gathered about
CPI to CPI. It was also naturally inclined, as a professional advisor, not to challenge
its own Liquidation Analysis, developed only weeks or months prior, with alternate
reorganization outcomes (i.e., a capital raise, new Senior Lender advances, a partial
sale or joint venture, a sale–leaseback, lender liability, and so forth). Furthermore,
even though CPI’s interests (to stay in business and receive increased funding and
forbearance from BMO) were potentially opposed to BMO’s interests (to reduce its
losses), Novo had to simultaneously advance the interests of both entities – an
impossible task. Finally, and most importantly, Novo’s conflict was a concrete
impediment to exploring the full scope of restructuring strategies, which included
“[a]ssisting in developing a proactive public relations and communications program
to ensure an orderly Chapter 11 process,” even though Novo likely could not have
represented CPI in a Chapter 11 or proceeded adversely against a BMO liquidation
of CPI. (Exh. P4 at p. 3)
In sum, soberly considering all the irreconcilable dimensions and foreseeable
consequences of the Novo/CPI Engagement, Novo was indeed “hopelessly
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conflicted,” as Attorney Henzy and Mr. Jalbert opined, and no amount of disclosure
could remedy this situation. Accordingly, Novo could not and should not have
accepted an engagement as CPI’s CRO and financial advisor. Novo knew, or should
have known, of these irreconcilable tensions, but instead chose to ignore its
fiduciary duties, ostensibly in denial or in favor of its self-interest.56
iv. 	Conclusions and Damages
The Court concludes and adjudges that Novo did not meet its burden to show
fair dealing, by clear and convincing evidence, and breached the fiduciary duties of
loyalty and disclosure it owed CPI since the inception of, and during, the Novo/CPI
Engagement. When a breach of fiduciary duty is shown, disgorgement is an
appropriate equitable remedy, particularly where the harm resulting from the
breach may be difficult to prove. See 2 Restatement (Third), Agency § 8.01, comment
(d) (2), p. 259 (“An agent’s breach of fiduciary duty is a basis on which the agent
may be required to forfeit commissions and other compensation paid or payable to
the agent during the period of the agent’s disloyalty. . . . Forfeiture may be the only
available remedy when it is difficult to prove that harm to a principal resulted from
the agent’s breach or when the agent realizes no profit through the breach. In many
cases, forfeiture enables a remedy to be determined at a much lower cost to
litigants.”). “Disgorgement wrests ill-gotten gains from the hands of a
56 This was not Novo’s first venture in serving as a CRO, assisting a company at risk of entering a
Chapter 11 bankruptcy, or restructuring work. “Novo is a financial advisory firm that specializes in
turnaround advisory, restructuring advisory, services, [CRO] services, interim CRO and interim
chief executive officer services, crisis management, insolvency advisory, and various other
restructuring and insolvency issues.” (Stip. ¶ 15) (emphasis added) Mr. Gupta has “over two decades
of experience guiding clients in distressed and turnaround matters,” (MC – ECF No. 4, p. 1)
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wrongdoer. . . . It is an equitable remedy meant to prevent the wrongdoer from
enriching himself by his wrongs.” S.E.C. v. Huffman, 996 F.2d 800, 802 (5th Cir.
1993). See also Restatement (Third), Restitution and Unjust Enrichment § 51
(“Unless . . . subsection (2) imposes a greater liability, the unjust enrichment of a
conscious wrongdoer, or of a defaulting fiduciary without regard to notice or fault, is
the net profit attributable to the underlying wrong. The object of restitution in such
cases is to eliminate profit from wrongdoing while avoiding, so far as possible, the
imposition of a penalty. Restitution remedies that pursue this object are often called
‘disgorgement’ or ‘accounting.’”).
The Connecticut Supreme Court has confirmed that disgorgement is an
appropriate remedy for breach of the fiduciary duty of loyalty, particularly where
quantifying damages is difficult. See Pompa, supra, 324 Conn. at 734, 154 A.3d at
999. “Forfeiture may also have a valuable deterrent effect because its availability
signals agents that some adverse consequence will follow a breach of fiduciary
duty.” Id. (quoting 2 Restatement (Third), supra, § 8.01, comment (d) (2), p. 259).
This Court likewise concludes and adjudges that disgorgement is an
appropriate remedy here, where the harm resulting from the breach would be
difficult to prove, and such a remedy affords Old CPI equitable relief. Further, the
Court considers disgorgement an appropriate remedy where, as here, it is important
to deter restructuring fiduciaries from breaching the fiduciary duties of loyalty and
disclosure owed to debtors. Accordingly, the Court directs the disgorgement of the
fees Novo earned from the Novo/CPI Engagement, totaling $1,167,036. (Stip. ¶ 30)
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Such disgorgement, in good funds payable to the Liquidating Custodian, shall take
place within 30 days hereof, unless stayed by a Court of competent jurisdiction upon
posting an appeal bond or satisfactory escrow.
e. 	Count Six: Breach of the Implied Covenant of Good Faith and
Fair Dealing
In Count Six, Old CPI asserts that Novo breached its implied duty of good
faith and fair dealing pursuant to the Novo/CPI Engagement Contract. Old CPI
alleges that Novo breached this duty by effectively misrepresenting that it could
fully perform the obligations and duties outlined in the Engagement Contract – to
(1) loyally serve as CPI’s CRO and financial advisor and (2) shepherd CPI through a
potential Chapter 11 reorganization, should the occasion arise – when it was unable
to do so due to its conflict of interest. (ECF No. 1, p. 19–20) Old CPI further alleges
that Novo impeded CPI’s right to receive the material benefits of truly independent
restructuring advice outlined in the Engagement Contract and that Novo did so in
bad faith. (Plntff. Post-Trial Brief, p. 19–20)
In response, Novo asserts that it did not breach the terms of the Engagement
Contract, nor did it act in bad faith. Novo contends that CPI received what it
expected to receive under the Engagement Contract and that the evidence does not
support the conclusion “that Novo or Mr. Gupta were hired in their respective roles
as financial advisor and CRO in a bankruptcy.” (Def. Post-Trial Brief, p. 31) Novo
asserts further that “the requisite bad faith conduct” cannot be shown “because
Novo was not engaged to provide services in the bankruptcy and CPI was aware in
any event of potential risks with Novo being retained in a bankruptcy.” (Id., 32)
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In Connecticut, “[i]t is axiomatic that the . . . duty of good faith and fair
dealing is a covenant implied into a contract or a contractual relationship. . . . In
other words, every contract carries an implied duty requiring that neither party do
anything that will injure the right of the other to receive the benefits of the
agreement. . . . The covenant of good faith and fair dealing presupposes that the
terms and purpose of the contract are agreed upon by the parties and that what is
in dispute is a party’s discretionary application or interpretation of a contract term.”
Geysen v. Securitas Sec. Servs. USA, Inc., 322 Conn. 385, 399, 142 A.3d 227, 237
(2016) (citing De La Concha of Hartford, Inc. v. Aetna Life Ins. Co., 269 Conn. 424,
432–33, 849 A.2d 382, 387–88 (2004) and Landry v. Spitz, 102 Conn. App. 34, 47,
925 A.2d 334, 341–42 (2007)). “Stated otherwise, the claim [that the covenant has
been breached] must be tied to an alleged breach of a specific contract term, often
one that allows for discretion on the part of the party alleged to have violated the
duty.” Landry, supra, 102 Conn. App. at 47, 925 A.2d at 344. The implied covenant
of good faith and fair dealing is also viewed as a “rule of construction designed to
fulfill the reasonable expectations of the contracting parties as they presumably
intended.” Harley v. Indian Spring Land Co., 123 Conn. App. 800, 837, 3 A.3d 992,
1016 (2010).
“To constitute a breach of [the implied covenant of good faith and fair
dealing], the acts by which a defendant allegedly impedes the plaintiff’s right to
receive benefits that he or she reasonably expected to receive under the contract
must have been taken in bad faith. . . . Bad faith in general implies . . . actual or
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constructive fraud, or a design to mislead or deceive another, or a neglect or refusal
to fulfill some duty or some contractual obligation, not prompted by an honest
mistake as to one’s rights or duties, but by some interested or sinister motive. . . .
Bad faith means more than mere negligence; it involves a dishonest purpose.”
Geysen, supra, 322 Conn. at 399–400, 142 A.3d at 237–38 (quoting De La Concha of
Hartford, Inc., supra, 269 Conn. at 433, 849 A.2d at 388). “[B]ad faith may be overt
or may consist of inaction, and it may include evasion of the spirit of the bargain.”
Id. (quoting Elm Street Builders, Inc. v. Enter. Park Condo. Ass’n, Inc., 63 Conn.
App. 657, 667, 778 A.2d 237, 243–44 (2001)). “[W]hen one party performs the
contract in a manner that is unfaithful to the purpose of the contract and the
justified expectations of the other party are thus denied, there is a breach of the
covenant of good faith and fair dealing, and hence, a breach of contract, for which
damages may be recovered.” Id. (quoting Landry, supra, 102 Conn. App. at 44, 925
A.2d at 343). See also Capstone Bldg. Corp. v. Am. Motorists Ins. Co., 308 Conn. 760,
793–797, 67 A.3d 961, 986–987 (2013).
The parties agree that CPI bears the burden to prove the elements of a
breach of the covenant of good faith and fair dealing by a preponderance of the
evidence. Whelan v. Brestelli, 230 Conn. App. 683, 700, 331 A.3d 1220, 1233 (2025).
i. 	Breach of the Covenant of Good Faith and Fair Dealing
as CRO and Financial Advisor
The Court turns first to the contention that Novo breached the covenant of
good faith and fair dealing by promising and failing to loyally serve as CPI’s CRO
and financial advisor. In the Novo/CPI Engagement Contract, Novo promised that
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Mr. Gupta would “serve as [CPI’s] Chief Restructuring Officer (CRO)” and that
Novo would “provide certain financial advisory and consulting services,” as set out
more fully therein. (Exh. P4, p. 2) As described in Part 3.2.d, Novo and Mr. Gupta
thereby became fiduciaries of CPI. Accordingly, Novo and Mr. Gupta owed CPI
duties of undivided loyalty and disclosure, the benefits of which CPI reasonably
expected to receive under the contract.
Novo and Mr. Gupta, by gross neglect, omission, denial, or disregard of
duties, impeded CPI’s right to receive these benefits. Neither Novo nor Mr. Gupta
adequately disclosed the nature, consequence, and extent of the conflict of interest
they faced in signing on as CPI’s financial advisor and CRO while still bound to
keep confidential the communications with BMO and the advice and opinions Novo
presented to CPI’s adversary, BMO, about CPI, and while still engaged in an
institutional or prospective relationship with BMO that secured Novo business
referrals and revenue. In such a posture, it was virtually unthinkable and near
impossible for Novo to challenge BMO, or any liquidation objectives it had
previously advanced on its behalf, while representing CPI.
The Court further concludes and adjudges that the acts and omissions by
which Novo impeded CPI’s right to receive its reasonably expected benefits under
the Novo/CPI Engagement Contract were taken in bad faith. Novo’s bad faith here
consists of silence, gross neglect, material omissions, denial, and inaction – it did
not properly disclose the nature, consequence, and extent of its actual, perceived, or
potential conflicts to CPI. It either knew or should have known of these matters as
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an experienced financial advisor. Nor did it deploy its strategic experience and
expertise to loyally serve solely CPI to achieve its “best shot” at reorganization,57
nor did it forthrightly disclose the belatedly acknowledged barriers to its retention
in a Chapter 11 case. The Court concludes and adjudges that Novo clearly and
grossly neglected to fulfill its fiduciary duties and contractual obligations under the
Novo/CPI Engagement Contract in this regard not due to an honest mistake, but
due to its denial and blind self interest in profiting from the Novo/CPI Engagement
while maintaining its relationship with BMO. No meaningful or credible evidence
was presented at trial concerning Novo’s lack of knowledge or experience in failing
to disclose the nature, consequences, and extent of the conflict of interest it faced.
The hasty and chaotic way in which Novo was hired as CPI’s CRO and financial
advisor should have counseled more pause, more transparency, more caution, and a
more reserved professional and ethical judgment. The monies that Novo could and
did earn from the Novo/CPI Engagement in only six months sufficiently explain its
self-interest, bad faith, and motivation for material deception by omission, gross
neglect, and evasion of its fiduciary duties under both the letter and spirit of the
bargain it struck with CPI.
Pursuant to this Count, CPI seeks “disgorgement of the CRO Payments or an
award of money damages equal to the same.” Due to Novo’s bad faith and lack of
fair dealing pursuant to the Novo/CPI Engagement, the Court concludes and
adjudges that Novo should disgorge the CRO Payments of $1,167,036.00.
57 Exh. P86 at 25:1–24.
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ii. 	Breach of the Covenant of Good Faith and Fair Dealing
as CRO and Financial Advisor in Contemplation of a
Chapter 11 Filing
The Court turns next to Old CPI’s contention that Novo breached the
covenant of good faith and fair dealing by promising and failing to provide plenary
professional assistance, experience, and expert guidance to CPI in the event of a
Chapter 11 bankruptcy. Although Novo argues that it “was not engaged to provide
services in [a potential Chapter 11] bankruptcy and CPI was aware in any event of
potential risks with Novo being retained in a bankruptcy,” neither of these
contentions are credibly or logically supported by the indisputable and abundant
evidence in the record. (Def. Post-Trial Brief, p. 32)
The Novo/CPI Engagement Contract expressly contemplates that Novo could
and would provide services to CPI in the event of a Chapter 11 filing. Novo’s
counsel’s contrary contentions are truthless. First, the terms of the Novo/CPI
Engagement Contract expressly contemplate that Novo would support CPI in the
event of a bankruptcy and would prepare for such an outcome. Therein, Novo
promised to “[a]ssist [CPI] in developing a proactive public relations and
communications program to ensure an orderly Chapter 11 process . . . .” (Exh. P4, p.
3) Contrary to Novo’s intentional misdirection on this clause, this provision clearly
and plainly illustrates that Novo agreed to assist CPI in the event of a potential
bankruptcy and does not portray a Chapter 11 bankruptcy as a remote possibility.
Implicit in such a provision is Novo’s representation that Novo could reasonably be
engaged to provide such services were CPI to file for bankruptcy. Other provisions
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of the Novo/CPI Engagement Contract similarly indicate that bankruptcy was not a
remote possibility.58 The facts and circumstances surrounding CPI’s critical reliance
on Novo and CPI’s later expense of additional resources to pivot to another financial
advisor cannot be simply ignored in this context.
Second, the Eighth Forbearance Agreement – which went into effect on
November 1, 2020, while Novo served as CPI’s CRO and financial advisor, but
before CPI’s bankruptcy filing – again clearly contemplates that Novo would
support CPI and continue to serve as its CRO and financial advisor in the event of a
bankruptcy. In Exhibit C to that Agreement, the Chapter 11 Restructuring Term
Sheet expressly references Novo under the section entitled “Borrower’s
Management.” (Exh. P19, p. 47) That section states that Novo would continue as
CRO and allocates monthly borrowings to be set aside to cover Novo’s monthly
fees.59 (Id.) Another section, entitled “Professional Fees,” states that “[u]pon CPI’s
entering Chapter 11, Lenders will support interim fee procedures providing for
monthly payment of 50% of incurred professional fees for Borrowers’ counsel and
Novo . . . .” (Id.) Novo is referenced elsewhere throughout the document, too,
rebutting the patently false and misleading assertion that Novo was not engaged to
58 For example, the Contract extensively discusses how fees and expenses would be paid “[i]n a case
under the Bankruptcy Code,” should a bankruptcy ensue. (Exh. P4, p. 5–6)
59 The section reads in full:
Novo Advisors (‘Novo’) to continue as CRO. Upon entering Chapter 11, Lenders consent
to approval of monthly borrowings under the DIP Facility equivalent to payment of
50% of Novo’s monthly fees, with the balance to paid from sale proceeds.
CPI shall also cause its management team and the Investment Banker to be made
available to provide periodic telephone updates to the Administrative Agent and the
Lenders from time to time as reasonably requested by the Administrative Agent.
(Exh. P19, p. 47)
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provide services in a potential Chapter 11 bankruptcy, as well as the
unsubstantiated contention that CPI was aware of the potential risk that Novo
would not likely be retained in a bankruptcy.60
Third and finally, when CPI eventually did file for bankruptcy on February 8,
2021, CPI clearly anticipated that Novo could and would serve as its CRO and
financial advisor. CPI filed an application to employ Novo as such, further rebutting
Novo’s absurd contention that CPI did not rely on Novo “to undertake the
responsibility of guiding CPI through the process of filing for bankruptcy and
serving as its post-petition CRO and financial advisor.” (Def. Post-Trial Brief
Rebuttal, p. 18 (ECF No. 128); Application to Employ Novo Advisors (MC–ECF No.
123)) It was not until March 1, 2021, that CPI withdrew its application to employ
Novo after Novo finally acknowledged the insurmountable obstacles to its retention
and the imminent opposition from parties in interest and informed CPI that it was
accordingly terminating the Engagement.61 (MC – ECF No. 193; 8/13/25 Tr. 162:25–
163:4)
The evidence abundantly illustrates that Novo was engaged, in part, to
provide services in a potential Chapter 11 bankruptcy and that Novo did not make
60 Courts in the Second Circuit have consistently applied the Jay Alix Protocol when considering the
retention of bankruptcy professionals. See In re Saint Vincents Cath. Med. Ctrs. of N.Y., 2007 WL
2492787 at *14 (Aug. 29, 2007) (noting that an assertion that the Jay Alix Protocol might not be
applied in the Southern District of New York “is unsupported”); In re Nine West Holdings, 589 B.R.
679, 687–88 (Bankr. S.D.N.Y. 2019); In re K.G. IM, LLC, 620 B.R. 469, 486 (Bankr. S.D.N.Y. 2020);
In re Genever Holdings, LLC, No. 20-12411-JLG, 2021 WL 3919826, at *13 (Bankr. S.D.N.Y. Sept. 1,
2021). This Court likewise would support its application to Chapter 11 cases in Connecticut.
61 Mr. Gupta testified that Novo was “informed by [CPI’s] counsel at the time . . . that there was a
risk of a potential conflict being raised by the unsecured creditors committee or the U.S. Trustee or
both, I can’t recall which.” (8/13/25 Tr. 162:25–163:4)
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CPI aware of the potential risks and disruptive consequences that would result if
Novo could not ultimately be retained in a Chapter 11 due to judicial scrutiny of its
conflict of interest resulting from its work for BMO.62 CPI reasonably and naturally
expected to receive the unfettered benefits of Novo’s professional assistance in a
potential Chapter 11 under the Novo/CPI Engagement Contract. Those benefits
were already denied here the day Novo undertook the Novo/CPI Engagement.
The Court further concludes that the acts and omissions by which Novo
impaired CPI’s right to receive its reasonably expected benefits under the Novo/CPI
Engagement Contract were taken in bad faith. Novo’s bad faith here again consists
of inaction, gross negligence, disregard of its duties, and calculated material
omissions. As a financial advisory firm offering its wide expertise in bankruptcy and
restructuring, it knew or should have known its limitations and communicated
them to CPI with full disclosure of all material facts. (Stip. ¶ 15; 8/11/25 Tr. 36:6–
24) Accordingly, the Court concludes that Novo’s motivations in offering CPI
services in contemplation of a Chapter 11 filing that it could not or likely could not
provide, were self-interested and calculated, and involved material omissions, gross
neglect, and disregard of duties by a fiduciary, and thus were in bad faith. Novo
accordingly breached the covenant of good faith and fair dealing contained in the
CPI/Novo Engagement Contract.
62 This application perhaps also evidences Novo’s sincere belief that it could serve as CPI’s CRO and
financial advisor. Given Novo’s expertise and its promises under the Engagement Contract, however,
it bears the responsibility for that mistaken belief. Conversely, it is possible and more likely that
Novo knew of these obstacles and chose to ignore them in pursuit of its own self-interest.
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iii. 	Conclusions and Damages
In sum, the Court concludes that Novo breached the implied covenant of good
faith and fair dealing in its Engagement Contract with CPI. Pursuant to this Count,
Old CPI again seeks “disgorgement of the Novo Transfers and CRO Payments or an
award of money damages equal to the same.” (ECF No. 1, p. 20) Due to Novo’s
breach of the implied covenant of good faith and fair dealing, the Court concludes
and adjudges that Novo must disgorge the CRO Payments of $1,167,036.00 for the
same reasons articulated in Part 3.2.d.iv of this Memorandum of Decision. Such
disgorgement, in good funds payable to the Liquidating Custodian, shall take place
within thirty days hereof, unless stayed by a Court of competent jurisdiction upon
posting appeal bond or satisfactory escrow.
f. 	Count Seven: Violation of the Connecticut Unfair Trade
Practices Act (CUTPA), Conn. Gen. Stat. § 42-110b, et seq.
In Count Seven, Old CPI alleges that “Novo engaged in conduct, acts, and/or
omissions that [were] unlawful, unfair, immoral, unethical, oppressive, and/or
unscrupulous and/or of a nature that cause[d] substantial injury to consumers or
businesspersons with the meaning, and in violation, of CUTPA . . . .” (ECF No. 1, p.
20) Specifically, Old CPI alleges that Novo violated CUTPA through its:
1. 	“use [of] its knowledge of CPI’s precarious financial condition and its
relationship with BMO to [prey] upon CPI at its most vulnerable time in
order to secure its retention by CPI and charge CPI for services;”
2. 	representations “to CPI that it was capable of performing the obligations
and duties it was required to perform under the retention agreement
when in fact it was unable to do so as a result of its conflict of interest,
and its prior and ongoing relationship with BMO;”
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3. 	charging of CPI “for services it was unable to provide in whole or in part
as a result of its prior and ongoing relationship with BMO;” and
4. 	role in causing “CPI to borrow funds and increase its indebtedness on the
eve of its bankruptcy filing for the sole purpose of” enabling CPI to make
the Pre-Petition BMO Payment, which led Novo’s outstanding invoices
associated with its engagement with BMO to be paid.
(Id., 20–21) Old CPI alleges that CPI suffered an ascertainable loss of money or
property due to Novo’s conduct, and that Novo’s conduct evinces a reckless
indifference to CPI’s rights and/or the intentional and wanton violation of those
rights. (Id.) Herein, the Court adopts as findings the first three aforesaid allegations
and rejects only the fourth allegation.
In response, Novo argues that the CUTPA claim is inapplicable as it relates
to Mr. Gupta as CRO “because it is premised on an intra-corporate dispute between
a company and its temporary officer that is untethered from either deception or a
consumer relationship.” (Def. Post-Trial Brief, p. 33) Further, Novo asserts that CPI
“has not adduced evidence that Novo’s conduct was deceptive,” “that the CPI
Engagement ‘cause[d] substantial harm to consumers,” or “that [Novo] was unable
to perform its obligations under the CPI Engagement.” (Id., 34) These arguments
are unavailing and are rejected by the Court.
Connecticut General Statutes § 42–110b(a) provides that: “No person shall
engage in unfair methods of competition and unfair or deceptive acts or practices in
the conduct of any trade or commerce.”
It is well settled that in determining whether a practice violates CUTPA
[the Connecticut Courts] have adopted the criteria set out in the
[C]igarette 	[R]ule 	by 	the 	[F]ederal 	[T]rade 	[C]ommission 	for
determining when a practice is unfair: (1) [W]hether the practice,
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without necessarily having been previously considered unlawful, offends
public policy as it has been established by statutes, the common law, or
otherwise—in other words, it is within at least the penumbra of some
common law, statutory, or other established concept of unfairness; (2)
whether it is immoral, unethical, oppressive, or unscrupulous; (3)
whether it causes substantial injury to consumers, [competitors or other
businesspersons]. . . . All three criteria do not need to be satisfied to
support a finding of unfairness. A practice may be unfair because of the
degree to which it meets one of the criteria or because to a lesser extent
it meets all three. . . . Thus a violation of CUTPA may be established by
showing either an actual deceptive practice . . . or a practice amounting
to a violation of public policy. . . . In order to enforce this prohibition,
CUTPA provides a private cause of action to [a]ny person who suffers
any ascertainable loss of money or property, real or personal, as a result
of the use or employment of a [prohibited] method, act or practice.
Ulbrich v. Groth, 310 Conn. 375, 409–410, 79 A.3d 76, 100 (2013) (citing Harris v.
Bradley Mem’l Hosp. & Health Center, Inc., 296 Conn. 315, 350–51, 994 A.2d 153,
173 (2010)).
“Whether a practice is unfair and thus violates CUTPA is an issue of fact. . . .
The facts found must be viewed within the context of the totality of circumstances
which are uniquely available to the trial court.” De La Concha of Hartford, Inc.,
supra, 269 Conn. at 434, 849 A.2d at 387 (quoting Ancona v. Manafort Bros., Inc.,
56 Conn. App. 701, 714–15, 746 A.2d 184, 193 (2000)). See also Harley, supra, 123
Conn. App. at 835, 3 A.3d at 1015. A “single transaction or act of misconduct can[]
constitute a violation of CUTPA and [a violator of CUTPA need not engage] in
similar types of unfair or deceptive practices with more individuals . . . for the court
to find properly that [its] actions constituted a CUTPA violation.” Hart v.
Carruthers, 77 Conn. App. 610, 619–20, 823 A.2d 1284, 1290 (2003). Thus, this
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Court must assess the totality of the facts and circumstances and apply the
Cigarette Rule to determine whether Novo’s conduct violated CUTPA.
First, the Court concludes that Novo’s acts concerning CPI offend public
policy. It is indeed unfair, unethical, unscrupulous, and a detriment to public policy,
as demonstrated by the evidence that Novo has breached its fiduciary duty owed to
CPI and further breached the implied covenant of good faith and fair dealing. But
the Court also finds that it was manifestly offensive, unfair, and unethical for Novo
to promise CPI that it could perform its duties under the Novo/CPI Engagement
Contract – both as a fiduciary owing Novo its undivided loyalty and as a CRO and
advisor poised to shepherd CPI through a potential bankruptcy – when either Novo
could not perform those duties or it was substantially unlikely that Novo would be
approved by the Court to perform those duties due to its prior and ongoing
relationship with BMO. Similarly, it was manifestly offensive, unfair, unscrupulous,
and unethical for Novo to charge CPI for a range of services that it was likely
impossible or near impossible for Novo to provide. Accordingly, given the facts in
this case illustrating Novo’s debilitating conflict of interest that prevented it from
honoring the duty of unfettered loyalty owed and from strategically shepherding
CPI through a prospective reorganization, as the Engagement Contract
contemplated, the Court concludes that the first prong of the Cigarette Rule is
satisfied.
Second, as to whether Novo’s acts were immoral, unethical, oppressive, or
unscrupulous, the Court concludes that this prong is satisfied. Novo’s conduct was
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certainly immoral and unethical, as it is immoral and unethical to simultaneously
represent two adverse entities without fully disclosing the extent of the conflict of
interest, and particularly when serving as an officer of one of the entities. The
various codes of conduct and ethical standards referenced at trial by Mr. Jalbert
affirm that such a decision was unethical and at variance with customary practice,
industry standards, and fiduciary obligations. For example, by analogy, the
American Bar Association concludes that a conflict of interest exists if “there is a
significant risk that the representation of one or more clients will be materially
limited by the lawyer’s responsibilities to another client, a former client or a third
person or by a personal interest of the lawyer.” A.B.A. 1.7, Conflicts of Interest. This
professional standard or guideline of fiduciary conduct is manifestly breached here.
Similarly, the standard of the Turnaround Management Association, of which
Mr. Gupta is a member, states that “a member’s duty is solely to the client and he
or she should strive to remain independent of other affiliations that could
compromise his or her judgment or result in the appearance of compromise. Prior to
accepting an engagement, a [TMA] member shall disclose to his or her client all
financial relationships which may cloud, or give the appearance of clouding, his or
her judgment. If the client is the troubled business or organization, disclosure shall
be made of any past referrals from, prior work for, or an ownership interest in, any
owner, creditor or customer of the client and any party offering appearance of
conflicts of interest.” Turnaround Mgmt. Ass’n, Code of Ethics, Canon II, Sec. 2.2.
Again, this standard or guideline of fiduciary conduct is manifestly violated here in
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Novo’s decision to accept an engagement with CPI when it previously worked on an
engagement about CPI for BMO’s benefit, and while it still had an ongoing
institutional relationship with BMO. Novo’s decision was immoral, unscrupulous,
and unethical, whether judged against industry standards, custom, the Jay Alix
protocol, or common sense ethics for fiduciaries.63
Novo’s conduct was also unethical pursuant to the standards issued by the
Association of International Certified Professional Accountants (AICPA), as well.
The Code of Professional Conduct promulgated by the AICPA, section 1.100.01 (.01)
states that “In the performance of any professional service, a member shall
maintain objectivity and integrity, shall be free of conflicts of interest, and shall not
knowingly misrepresent facts or subordinate his or her judgment to others.” Ass’n
Int’l Certified Pro. Accts. Code of Pro. Conduct (Dec. 15, 2014), p. 52 (emphasis in
original). Thereafter, section 1.110.010 (.02) states, “A conflict of interest creates
adverse interest and self-interest threats to the member’s compliance with the”
63 It is not uncommon for Courts to consider an expert’s synthesis of industry and ethical standards
when determining whether a party met its ethical obligations. See Winkelmeyer v. DePuy
Orthopaedics, Inc., No. 2:13-CV-04058-MDH, 2023 WL 12179413, at *4–*6 (W.D. Mo. Aug. 15, 2023)
(observing that an expert’s opinions regarding industry standards generally can assist the trier of
fact in determining the requisite standard of care); In re Bloom, 622 B.R. 366, 401 (Bankr. D. Colo.
2020), aff’d, 634 B.R. 559 (10th Cir. BAP (Colo.) 2021), aff’d, No. 22-1005, 2022 WL 2679049 (10th
Cir. July 12, 2022) (wherein ethical industry standards, though not binding and enforceable by a
regulatory body, were considered and deemed to illustrate general tenets that aircraft brokers must
abide by); In re DePuy Orthopaedics, Inc., No. 3:11-MD-2244-K, 2016 WL 6271474, at *5 (N.D. Tex.
Jan. 5, 2016) (concluding that “ethical standards may be helpful to [the fact finder] when ethical
obligations are of consequence to the issues to be decided by the [fact finder], such as an attorney’s
ethical obligations in a breach of fiduciary duty claim or a physician’s standard of care in claims of
negligence.”); In re Johnson & Johnson Talcum Powder Prods. Mktg., No. 3:16-MD-2738 (MAS)
(RLS), 2026 WL 161184, at *212 (D.N.J. Jan. 20, 2026) (explaining that “experts may explain the
regulatory framework and industry standards that inform a . . . standard of care and may assess
compliance with those standards” to assist the finder of fact); Lehmann v. Louisville Ladder Inc., 610
F. Supp. 3d 667, 688 (E.D. Pa. 2022) (considering industry standards, though not dispositive, as
probative regarding whether a party’s assessment of risks and utilities were reasonable).
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aforementioned requirement of 1.100.01 (.01) to maintain objectivity and integrity,
to be free of conflicts of interest, and to not knowingly misrepresent facts or
subordinate one’s judgment to others. Id., 53 (emphasis in original) The Code cites,
as an example of a situation wherein adverse interest and self-interest threats may
arise, “the member or the member’s firm provides a professional service related to a
particular matter involving two or more clients whose interests with respect to that
matter are in conflict.” Id. Here again, Novo’s conduct clearly violated the AICPA
Code of Professional Conduct, demonstrating and that Novo’s conduct was unethical
and unscrupulous. Although Novo was not acting as CPI’s CPA, the standards to
which the AICPA holds its members are illustrative of the ethical industry
standards that comparable professionals are held to when working intimately with
their client’s finances, as Novo did. As CPI’s financial advisor and CRO, Novo did
not comport itself ethically within the boundaries of CPAs.
Novo’s conduct was furthermore unscrupulous because Novo essentially lied
to CPI about its qualifications and ability to assist CPI in the event of a bankruptcy.
As noted prior, Novo communicated to CPI multiple times that its intent was to
assist CPI in the event of a Chapter 11 filing. See Part 3.2.e.ii of this Memorandum
of Decision. Novo thereby deprived CPI of the opportunity to find a full service CRO
and financial advisor that could loyally represent its interests and shepherd it
through bankruptcy, which ultimately led Novo to incur greater expenses when the
time came that Novo could not represent CPI any longer. Recall that CPI had
multiple interviews with alternative financial advisors scheduled prior to hiring
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Novo, including one with Phoenix, but those interviews were cancelled as CPI was
increasingly pressured toward Novo. (8/12/25 Tr. 53:8–17; 8/13/25 Tr. 24:12–21)
Ultimately, when CPI had to find and engage a new financial advisor and CRO
upon Novo’s termination, it filed an application to hire Phoenix (MC – ECF No.
194), which this Court approved. (MC – ECF No. 326) Thereafter, Phoenix charged
CPI “hundreds of thousands of dollars” “to come up to speed” in the midst of a
Chapter 11 case. (8/13/25 Tr. 219:24–220:7) Mr. Jalbert opined that the costs he
reviewed were “a pretty good proxy for what it would have cost” any firm to get up
to speed at that juncture. (Id.) Similarly, Mr. Heimowitz attributed $404,255 to the
cost CPI incurred as Phoenix got up to speed in March and April of 2021, with
$241,635 in billable fees, not including expenses, for the period of March 1–31, 2021,
and $162,620 in billable fees, not including expenses, for the period of April 1–30,
2021. (Exh. D91, p. 30 n.91; MC – ECF No. 393 (showing $241,635 billed in March
of 2021); MC – ECF No. 583 (showing $162,620 billed in April of 2021))
Mr. Jalbert aptly summarized the attendant issues with Novo’s
representation in his Expert Report: “Novo never should have taken both
engagements and further exacerbated the situation by failing to fully inform CPI of
the contents of [the Senior Lender Report] . . . In all my years as a financial advisor,
CRO and fiduciary, I have never considered representing both sides in an
engagement without express disclosure and written permission by both sides. Even
then, in this situation, based on these facts, I would not have accepted the CPI
engagement given the clear conflict, my knowledge of confidential information of
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adverse counterparties, and the adverse relationship between a borrower and a
lender (particularly in connection with a potential bankruptcy filing).” (Exh. P91, p.
11)
The Court agrees with Mr. Jalbert that Novo should not have accepted the
engagement and that it was improper and unethical for Novo to do so. Although the
Court agrees with Attorney Heimowitz’s conclusion that the standards that Mr.
Jalbert cited are, in some instances, guidelines and are not necessarily dispositive,
here these standards are relevant to weighing the fundamental standards of care
for a fiduciary. As a fiduciary, Novo owed an even higher standard of care than
these alleged guidelines proscribe, but fell far short. “The fiduciary relation
demands something more than the morals of the market place.” Guth, supra, 23
Del. Ch. at 282. Novo’s blindness to ethics, fair dealing, moral civility, and custom
and practice in this industry do not vindicate its acts, omissions, and practices.
In sum, Novo did not treat CPI honestly or fairly by effectively misleading
CPI about its relationship with BMO and its ability therefore to fully and loyally
serve as CPI’s financial advisor, CRO, and fiduciary. Thus, the Court concludes and
adjudges that the second prong of the Cigarette Rule is abundantly satisfied.64
As to the third and final prong of the Cigarette Rule, the Court concludes
that Novo’s conduct caused substantial injury to CPI as a consumer and to other
64 The Court acknowledges that both Attorney Heimowitz and Mr. Jalbert referred to various ethical
standards in deriving their opinions, embodied in their Expert Reports, about whether Novo’s
conduct was ethical. For example, both Attorney Heimowitz and Mr. Jalbert reference and discuss
the Model Rules of Professional Conduct promulgated by the American Bar Association and the
Turnaround Management Association’s Code of Ethics (Exh. D91, p. 27–28; Exh. P91, p. 5–6) The
Court concludes that these ethical standards, although illustrative, are not dispositive, under these
facts and circumstances, of whether Novo breached its duties as a fiduciary or violated CUTPA.
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consumers. CPI was deprived of the unfettered and unbiased professional services
Novo promised to deliver and ultimately had to hire a new CRO and financial
advisor during its bankruptcy as a result, requiring CPI to take on additional
financial burdens and the onboarding of new advisors when it was already in a
period of serious financial distress. Furthermore, to allow a fiduciary to profit off an
improvident engagement while unable to meet the duties of undivided loyalty and
adequate disclosure owed causes substantial injury to other consumers and
commerce generally, as it erodes the standards to which professionals are held, on
which parties and this Court rely, and the policies underlying those standards.65
In sum, the Court concludes and adjudges that all three prongs of the
Cigarette Rule are satisfied here, even though all three need not be met to support a
finding of unfairness. Ulbrich, 310 Conn. at 409, 78 A.3d at 100. CPI has
successfully proven that Novo engaged in unfair and deceptive practices through its
conduct and omissions in the Novo/CPI Engagement and that Novo thus violated
CUTPA. The damages that this Court awards pursuant to this Count will be
discussed in Section 4 of this Memorandum of Decision.
65 See Daniele Marchesani, A New Approach to Fiduciary Duties and Employees: Wrongful Discharge
in Violation of Public Policy, 75 U. C IN. L. R EV. 1453, 1472 (2007) (“Fiduciary obligations, then, are
not just a matter of private economic relationships; rather, they serve as one of the essential pillars
of corporate law and of the entire economic system. They are an indispensable legal tool, which
makes corporations efficient economic engines for the benefit of the entire society. The fundamental
public policy that the fiduciary duties embody, therefore, is that of promoting collective economic
activity in order to increase the well being of the entire community.”); Melvin Aron Eisenberg, The
Structure of Corporation Law, 89 C OLUM . L. R EV . 1461, 1523–24 (1989) (discussing the importance of
fiduciary duties and noting that “permitting publicly held corporations to vary core fiduciary and
structural rules if they did so before they went public might well lead to inefficiency in the national
economy” because “a significant portion of our national economy could eventually come to be vested
in the hands of corporations in which inefficient managers were not effectively accountable and could
not be easily removed,” which “could both jeopardize the efficiency of the economy and put the
legitimacy of the corporate system into question.”).
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4. 	Damages
As Old CPI has prevailed on Counts Five and Six, the Court once again
concludes and adjudges that the disgorgement of the CRO Payments is proper for
the reasons articulated in Parts 3.2.d and 3.2.e of this Memorandum of Decision.
The Court further concludes that Old CPI shall receive pre-judgment interest and
costs on the $1,167,036.00 owed, determined as of the day the Complaint was
filed.66 The Court also concludes and adjudges that the awarding of reasonable
attorneys’ fees and expenses for Novo’s violation of CUTPA67 as well as the
aforesaid breaches of fiduciary duty68 is appropriate in this case.
Although Old CPI has prevailed on Count Seven regarding Novo’s violation of
CUTPA, Old CPI does not seek specific damages on this Count in the Complaint.
The Complaint, however, generally seeks “Avoidance of all Novo Transfers;” “[a]n
order directing that the Novo Transfers be set aside;” “[r]ecovery of the Novo
Transfers, or the value thereof for the benefit of the estate of the Debtor; plus any
profits generated therefrom, from [Novo] for the benefit of [CPI’s] estate and its
creditors;”“[a]n injunction against [Novo] prohibiting them from further disposing of
66 “Under Connecticut law, ‘interest at the rate of ten per cent a year, and no more, may be recovered
and allowed in civil actions . . . as damages for the detention of money after it becomes payable.’
Conn. Gen. Stat. § 37-3a(a). ‘[A]n award of interest under § 37–3a . . . is discretionary with the trial
court. Interest is awarded . . . when the court determines that such an award is appropriate to
compensate the plaintiff for the loss of use of [its] money.’ DiLieto v. Cnty. Obstetrics & Gynecology
Grp., P.C., 310 Conn. 38, 54, 74 A.3d 1212 (2013).” McCarter & Eng., LLP v. Jarrow Formulas, Inc.,
715 F. Supp. 3d 281, 316 (D. Conn. 2024).
67 “In any action brought by a person under this section, the court may award, to the plaintiff, in
addition to the relief provided in this section, costs and reasonable attorneys’ fees based on the work
reasonably performed by an attorney and not on the amount of recovery. . . . In any action brought
under this section, the court may, in its discretion, order, in addition to damages or in lieu of
damages, injunctive or other equitable relief.” Conn. Gen. Stat. § 42-110g(d) (emphasis added).
68 See Chioffi v. Martin, 181 Conn. App. 111, 141, 186 A.3d 15, 34 (2018) (“[A]ttorney’s fees may,
where found to be appropriate, be allowed as damages for breach of fiduciary duty.”).
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the Novo Transfers;” “[m]oney damages;” “[d]isgorgement of the Novo Transfers;”
“[d]isgorgement of the CRO Payments;” “[a]ttorneys’ fees;” “[p]unitive damages;”
“[p]re-judgment interest and costs;” and “[s]uch other and further relief as this
Court deems just and equitable.” (ECF No. 1, p. 23)
Pursuant to Count 7, the Court concludes and adjudges that Novo should
disgorge the CRO Payments of $1,167,036.00. Furthermore, considering the
egregiousness of Novo’s conduct, the Court also grants Old CPI punitive damages in
this case, as are permitted under Connecticut General Statutes § 42-110g(a). “ . . .
[T]he CUTPA statutes do not provide a method for determining punitive damages . .
. .” Herron v. Daniels, 208 Conn. App. 75, 102, 264 A.3d 184, 204 (2021). Section 42-
110g merely states, “[t]he court may, in its discretion, award punitive damages . . .
as it deems necessary and proper.” Accordingly, “punitive damage awards for
CUTPA violations do not follow a consistent pattern of application or calculation”
and Courts are left to their discretion. Mark K. Ostrowski & Brooke E. Havard,
Punitive Damages under the Connecticut Unfair Trade Practices Act, THE D EFENSE
8 (Summer 2008).
“[I]n order to award punitive or exemplary damages, evidence must reveal a
reckless indifference to the rights of others or an intentional and wanton violation of
those rights.” Wagner v. Our Lady of Mount Caritas, O.S.B., Inc., 157 Conn. App.
788, 801, 118 A.3d 103, 111 (2015) (quoting Berry v. Loiseau, 223 Conn. 786, 811,
614 A.2d 414, 427 (1992)). “In fact, the flavor of the basic requirement to justify an
award of punitive damages is described in terms of wanton and malicious injury,
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evil motive and violence.” Herron v. Daniels, 208 Conn. App. 75, 102, 264 A.3d 184,
204 (2021) (citing Ulbrich, supra, 310 Conn. at 446, 78 A.3d at 121–22).
The Court concludes that the evidence indeed reveals Novo’s “reckless
indifference to [CPI’s] rights” and its professional obligations, particularly in that
Novo disregarded CPI’s right to receive the undivided loyalty and fulsome
disclosure it owed CPI as a fiduciary, CRO, and Financial Advisor. See Advanced
Fin. Servs., Inc. v. Associated Appraisal Servs., Inc., 79 Conn. App. 22, 34, 830 A.2d
240, 250 (2003).
The Court further concludes that Novo acted with such reckless indifference
to CPI’s rights because its self-serving motive was to profit off of CPI’s distress
while maintaining its institutional relationship and building rapport with BMO.
Indeed, the Court agrees with Mr. Jalbert’s opinion that “Novo was not acting in the
best interest of CPI but rather in its own self interests” and that Novo cruelly and
intentionally disregarded CPI’s rights toward that end, injuring CPI in that it hired
an advisor and officer that could not impartially represent its interests and in that
it ultimately had to hire a substitute financial advisor and CRO. (Exh. P91, p. 9)
The Court concludes and adjudges that the award of punitive damages here serves
“to vindicate the purpose of the unfair trade practices statute which is to dissuade
business activities which are unfair or deceptive.” Rossman v. Morasco, No. X-08-
CV-010183603-S, 2006 WL 2411475, at *3 (Conn. Super. Ct. July 31, 2006).
Courts often award multiples of the underlying damage award as punitive
damages. Id. This Court concludes, however, that Novo’s conduct here warrants a
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more measured sanction given that some of Novo’s efforts on operational
performance arguably improved CPI’s business. (8/11/25 Tr. 72:20–24, 108:2–11;
8/13/25 Tr. 162:1–13) Accordingly, this Court awards $273,616.25 in punitive
damages to Old CPI. This amount equals and represents the sum that Novo
received for its work on the BMO/Novo Retention Agreement, investigating CPI on
BMO’s behalf. This element of the award effectively strips Novo of any earnings
related to CPI’s insolvency. The Court concludes and adjudges that such a sum will
appropriately deter Novo, and others like it, from engaging in duplicitous conduct,
material omissions, and disregard of ethical boundaries, and that this sum, in
measured restraint, disgorges Novo of its earnings from BMO and thereby
appropriately punishes Novo for its wrongdoings and omissions. Furthermore, this
award recognizes the rights of consumers of such services to be free from such
wrongdoing, which the legislature sought to protect by enacting CUTPA.69
In sum, the Court grants judgment in favor of Old CPI on Counts Five, Six,
and Seven, and concludes and adjudges that disgorgement of the fees Novo earned
from the Novo/CPI Engagement is appropriate to these claims. Accordingly, the
Court awards CPI the sum of $1,167,036.00, plus interest, in equitable
disgorgement. The Court further awards Old CPI punitive damages of $273,616.25,
and reasonable attorneys’ fees and expenses (to be determined). The payment of
these sums by Novo (other than the to-be-determined attorneys’ fees and expenses),
69 When punitive damages are awarded pursuant to § 42-110g(a), both punishment and deterrence
are proper purposes for such an award. Ulbrich, supra, 310 Conn. at 454 n.64, 78 A.3d at 126 n.64
(citing Boulevard Assocs. v. Sovereign Hotels, Inc., 861 F. Supp. 1132, 1139 (D. Conn. 1994) and
Harty v. Cantor Fitzgerald & Co., 275 Conn. 72, 97, 881 A.3d 139, 155–56 (2005)).
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in good funds payable to the Liquidating Custodian, shall take place within thirty
(30) days hereof, unless stayed by a Court of competent jurisdiction upon posting an
appeal bond or satisfactory escrow.
Counsel for Old CPI accordingly is ordered and directed to file with the Court
a Declaration and Application for prejudgment interest and reasonable attorneys’
fees and expenses within thirty (30) days hereof. Any response to that claim shall be
filed by the Senior Lenders within fifteen (15) days thereafter. After notice and a
hearing, this Court will enter a Supplemental Judgment related thereto.
5. 	Conclusions
For the foregoing reasons, the Court finds for the Plaintiff on the counts for
Breach of Fiduciary Duty as to the Novo/CPI Engagement and Violation of the
Connecticut Unfair Trade Practices Act (CUTPA), Conn. Gen. Stat. § 42-110b, et
seq. Further, for the foregoing reasons, and the reasons explained in this Court’s
earlier Memorandum of Decision Granting Judgment on Partial Findings as to
Count One (ECF No. 120), the Court finds for the Defendant on Count One, Two,
Three, and Four.
Accordingly, this Court awards Old CPI a Judgment in the amount of
$1,167,036.00, plus prejudgment interest, on Counts Five, Six, and Seven to
disgorge Novo of the CRO Payments, as well as punitive damages in the amount of
$273,616.25 on Count Seven. After notice and hearing, the Court will issue a
Supplemental Judgment to quantify any pre-judgment interest due and the
reasonable costs and attorneys’ fees to be awarded herein.
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The aforesaid Judgment shall entitle the Plaintiff to a single recovery of said
sums. See Meribear Prods., Inc. v. Frank, 328 Conn. 709, 722, 183 A.3d 1164, 1171
(2018) (observing that where a Complaint “involves claims that present alternative
theories of recovery for the same injury, but are not legally inconsistent[,] . . . there
is no legal impediment to the trier of fact finding that the plaintiff has established
both claims, although the plaintiff can recover only once for the same injury.”);
Conway v. Icahn & Co., 16 F.3d 504, 511 (2d Cir. 1994) (“Where a plaintiff seeks
recovery for the same damages under different legal theories, only a single recovery
is allowed.”).
The Clerk of Court shall cause a separate Judgment consistent with this
Memorandum of Decision and the Court’s earlier Memorandum of Decision
Granting Judgment on Partial Findings as to Count One (ECF No. 120) to promptly
enter upon the docket of this Adversary Proceeding. Any Supplemental Judgment,
described herein, shall enter in due course after notice and hearing.
IT IS SO ORDERED at Hartford, Connecticut this 17th day of March 2026.
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