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• $2.2 million(fraudulently diverted profits)
• $1 million(punitive damages)
• $1.5 million(attorneys’ fees and costs)
• $1.428 million(interest and penalties)

Once the arbitration award became final, Sire Spirits recorded a judgment in Connecticut Superior Court, which allowed it to place a lien on any real property owned by Green.

Bankruptcy Filings and Court Rulings

In an effort to halt enforcement actions, Green filed for Chapter 7 bankruptcy in the District of Connecticut in March 2024. Under 11 U.S.C. § 362, an automatic stay prevented all collection attempts—including foreclosure—while Green’s bankruptcy case was pending. However, because the arbitration judgment stemmed from Green’s admitted fraud, Sire Spirits filed an adversary proceeding to declare the debt non-dischargeable.

On May 15, 2024, the bankruptcy court ruled Green’s debt to Sire Spirits was non-dischargeable under § 523(a)(2)(A), which excepts from discharge any debt “obtained by false pretenses, a false representation, or actual fraud.” Judge Joan A. Azrack found that Green’s “willful, intentional misrepresentations” to both Sire Spirits and French distillers met the statutory standard. As a result, Green could not shed the $6.9 million obligation through bankruptcy.

Once the adversary proceeding concluded, Sire Spirits petitioned the bankruptcy court to lift the automatic stay with respect to its Connecticut home. In its motion, Sire Spirits argued:

1. Lack of Equity: The Westport property, appraised at$1 million, was encumbered by a first mortgage of $5 million and the Sire Spirits lien of $6.9 million, leaving no equity.
2. Nonessential Asset: Under11 U.S.C. § 541(b)(2), a debtor’s interest in property may be excluded from the bankruptcy estate if it is “prohibited by any applicable law.” Because fraudulent debts are non-dischargeable, Sire Spirits maintained that Green’s home should not be shielded.
3. Homestead Exemption Limit: Connecticut law permits a homestead exemption of up to$75,000 for debtors whose misconduct was the root cause of the debt. Green’s admitted fraud disqualified him from claiming the full exemption of $250,000, reducing any protection.
4. Public Policy: Allowing Green to keep the home undermines the policy that wrongdoers should not benefit from bankruptcy to escape accountability.

On May 28, 2024, Judge Azrack signed an order lifting the stay, explaining:

“Given that the debt owed to Sire Spirits is the direct result of debtor’s willful fraudulent acts, the Court finds that the property at 299 Main Street holds no equity for the estate and is not necessary for debtor’s reorganization. Accordingly, the stay is lifted, and Sire Spirits may proceed under Connecticut foreclosure law.”

Judge Azrack also waived the standard 14-day stay under Fed. R. Bankr. P. 4001(a)(3), enabling Sire Spirits to move forward immediately.