## Facts

- Andrea Ulanoff and Noah Citron opened Bolin & Co., LLC as a retail jewelry store selling antique, custom, and unusual pieces.
- From the start, Bolin struggled financially due to poor accounting, overstated sales, understated liabilities, and perpetually inaccurate inventory records, which produced recurring cash-flow problems.
- To address liquidity shortfalls, Ulanoff obtained a $270,000 loan from Sally Ogden.
- The loan was documented by (1) a promissory note and (2) a separate security agreement, and the two documents used different default and remedy language.
- The promissory note treated default as a failure to repay within five days after Ogden demanded repayment and did not set out a process for recovering collateral.
- The security agreement defined default more broadly (including nonpayment when due or after acceleration, and certain encumbrances or judgments involving collateral), authorized repossession without judicial process, and permitted acceleration whenever Ogden felt insecure.
- After learning of Bolin’s poor financial condition and its practice of pawning jewelry to raise cash to pay vendors and jewelers, Ogden went to Bolin’s premises and removed jewelry that was not held on consignment.
- Bolin later filed a Chapter 7 bankruptcy case.
- The Chapter 7 trustee, Ronald I. Chorches, brought an adversary proceeding against Ogden asserting tort-based claims arising from her conduct and its effect on Bolin’s operations and liquidation prospects.
- Following trial-level findings that Ogden’s conduct caused disorder that prevented an orderly liquidation and reduced value, the bankruptcy court entered judgment for the estate and set damages at $226,000.
- Ogden appealed to the U.S. District Court for the District of Connecticut, challenging liability, causation, damages, and issues related to her secured status.

## Issues

1. Whether the evidence supported a finding that Ogden’s conduct constituted tortious interference with Bolin’s business relations and proximately caused loss to the estate.
2. Whether the bankruptcy court used a legally permissible and factually supported method to calculate damages as the value lost because Bolin could not conduct an orderly liquidation.
3. Whether, notwithstanding tort liability, Ogden held a secured claim against the estate arising from the $270,000 loan and security agreement.

## Decision

- The district court affirmed the determination that Ogden was liable for tortious interference with Bolin’s business relations based on her actions that derailed Bolin’s ability to wind down in an orderly manner.
- The district court affirmed the $226,000 damages award, accepting the trial court’s valuation-based approach that measured the loss attributable to Ogden’s interference.
- The district court recognized Ogden’s secured claim arising from the $270,000 loan, while maintaining that secured-creditor status did not bar tort recovery by the estate for separate wrongful conduct.
- Applying the appellate standard of review, the district court deferred to the bankruptcy court’s factual findings and credibility determinations absent clear error.

## Legal Principles

- Under Connecticut law, tortious interference requires intentional interference with business relations and resulting actual loss; a creditor’s status does not immunize conduct that wrongfully disrupts a debtor’s relationships and liquidation efforts.
- Proximate cause may be found where the defendant’s conduct materially contributes to a loss in value by creating conditions that prevent an orderly liquidation that would otherwise have preserved value for the estate.
- Damages for interference may be measured by comparing the debtor’s net asset value immediately before the wrongful conduct with the amounts actually realized (or reasonably expected to be realized) through liquidation after the disruption.
- On appeal from bankruptcy court, factual findings and credibility calls are reviewed for clear error, and the reviewing court will not reweigh testimony where the record supports the trial court’s view.
- A secured creditor may retain an allowed secured claim while also being liable in tort to the bankruptcy estate for independent wrongful acts that diminish estate value.

## Conclusion

The district court in *Chorches v. Ogden (In re Bolin & Co., LLC)* affirmed a judgment holding that secured lender Sally Ogden tortiously interfered with Bolin’s business relations by taking actions that prevented an orderly liquidation, upheld a $226,000 damages award measured by the value lost from that disruption, and also recognized Ogden’s $270,000 secured claim notwithstanding her tort liability.


Chorches v. Ogden (In re Bolin & Co., LLC), 437 B.R. 731 (2010)