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UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF OHIO
In re:
John Joseph Louis Johnson, III,
Debtor and Debtor in Possession.

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Case No. 14-57104

Chapter 11
Judge John E. Hoffman, Jr.

OMNIBUS RESPONSE OF THE OBJECTING CREDITORS IN OPPOSITION TO (I)

THE MOTION OF DEBTOR AND DEBTOR IN POSSESSION FOR ENTRY OF A
PROTECTIVE ORDER CONCERNING DEPOSITIONS SCHEDULED FOR AUGUST
21, 2015, AND (II) THE MOTION OF JOHN JOSEPH LOUIS JOHNSON II AND
KRISTINA JOHNSON FOR PROTECTIVE ORDER
RFF Family Partnership, LP (the Family Partnership), for itself and on behalf of
Capital Financial Holdings, LLC, Capital Holdings Enterprises, LLC, Cobalt Sports Capital,
LLC, EOT Advisors, Inc., ProPlayer Funding, LLC, and Rodney Blum (collectively with the
Family Partnership, the Creditors), responds as follows in opposition to (i) the Motion of
Debtor and Debtor in Possession for Entry of a Protective Order Concerning Depositions
Scheduled for August 21, 2015 filed August 17, 2015 [ECF 353] (the DIP Motion) by John
Joseph Louis Johnson III (the Debtor), debtor and debtor in possession herein, and (ii) the
Motion of John Joseph Louis Johnson II and Kristina Johnson for Protective Order also filed
August 17, 2015 [ECF 351] (the Parents Motion and together with the DIP Motion, the
Motions) filed by the Debtors parents, John Joseph Louis Johnson II and Kristina Johnson. As
set forth below, those Motions seek to improperly limit the Creditors discovery as to these
important witnesses1 with respect to the Debtors motion (the Conversion Motion) to convert

As the Court is aware the Debtor has consistently blamed his parents for his financial
circumstances, claiming that they improperly took out loans from the Creditors on his behalf. In
addition, the Debtor has listed his parents as potential witnesses in his initial disclosures,
indicating his intent to call them at the evidentiary hearing. That is clearly inconsistent with their

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this chapter 11 case to a case under chapter 7 of title 11 (the Bankruptcy Code) of the United
States Code. The evidence the Creditors intend to elicit from them goes to the totality of the
circumstances here and specifically to, among other things, the Debtors alleged good faith
herein and his qualifications to be a debtor under chapter 7 of the Bankruptcy Code two of
several essential issues that are before the Court with respect to the Conversion Motion. Given
that, the limitations jointly requested by the Debtor and his parents are absolutely improper. The
remaining parade of horribles set forth in the Motions (such as their fear that the parents
depositions could go the full 14 hours allowed under the rules and that the Debtors parents
would then have to either spend the night in a hotel or drive home in the dark) are ridiculous, an
eventuality that would only occur should the Debtor and/or his parents (collectively, the
Johnsons) further impede, delay or frustrate the depositions.2 In sum, the Motions are without
merit and should be denied.
RESPONSE IN OPPOSITION3

position now that the Conversion Motion is limited to post-petition conduct given his consistent
claim that he has had little if any communication with his parents since the commencement of
this case.
2

In fact, the reasons that both of the Debtors parents depositions are now scheduled to begin
and end on August 21 (the last day for discovery herein) is as an accommodation to their counsel
who requested they be moved from the original start date of August 17 since he claimed to have
a conflict that date and that he needed the next days to prepare his witnesses (the undersigned is
unavailable on August 20), coupled with the refusal of Debtors counsel to agree to extend the
time to conclude discovery beyond August 21. (It is also important to note that the Debtor
himself recently cross-noticed his parents deposition to commence immediately following those
of the Creditors, thereby himself extending the depositions.)
3

Given the extraordinarily compressed time frame allowed for the briefing of this issue, the
Family Partnership will forego a detailed background statement, since the Court is generally
aware of the facts underlying this contested matter. Nonetheless, suffice it to say that the
Debtors parents have closely followed the Debtors play book by seeking to frustrate at virtually
every turn the Creditors legitimate discovery efforts, including by avoiding service of the
subpoena herein and other delay tactics with the result that the Creditors are being forced to
depose these critical witnesses on the very last day allowed for discovery. The simultaneously
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As they of course informed the Debtor prior to the filing of the Motions, the Creditors
intend to proceed with discovery in this contested matter in accordance with the applicable
rules.4 Thus, the Creditors will examine the Debtors parents as to non-privileged matters
relevant to the Conversion Motion. More specifically, the Creditors plan to examine the
Debtors parents as to certain claims and defenses respecting the Conversion Motion, and to do
so regardless of whether those claims and defenses touch on facts arising from the period prior or
subsequent to the commencement of this case. That is entirely proper and necessary. For
example, the Creditors will examine the Debtors parents as to the Debtors alleged investigation
and his failure to pursue claims herein. As stated in the objection [ECF 186] of Capital Financial
Holdings, LLC to the Conversion Motion at p. 2, the Creditors believe that [the] Debtor has
made literally no apparent effort to investigate and prosecute claims and causes of action against
the advisors that he claims fraudulently borrowed millions of dollars from the creditors in this
case without his knowledge or consent.5 The Creditors are entitled to discovery in that respect,
particularly in light of the Debtors perfunctory claim that, [he] has not pursued claims against
his parents because the Debtor has no reason to believe that his parents have any assets or
meaningful income from which to satisfy claims that may exist. Debtors reply brief in support
of Conversion Motion (the Reply) [ECF 197] at 74. That the Creditors examination will by
filed DIP Motion and Parents Motion are only the most recent of the Johnsons stratagems in
this respect.
4

The Johnsons misrepresent the discussions among counsel prior to the filings of the Motions
by implying that Mr. Levinson was unreasonable by not agreeing to designate one attorney to
question the Debtors parents, would not agree to limit the scope of the depositions, and saying
he planned to use the full 7 hours for each of the deponents. In fact, the undersigned informed the
Johnsons counsel that the Creditors had not then determined the examiner(s) and that the
Creditors would otherwise proceed in accordance with and as limited by the applicable rules.
5

The Debtor has elsewhere acknowledged that his so-called advisors were in actual fact his
parents.

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necessity touch on the knowledge and actions of the Debtors parents prior to the commencement
of this case, is both obvious and essential since that is the only way the Creditors will obtain
information as to the substance and extent of that investigation.
Further, the Creditors intend to seek discovery with respect to underlying details and
accuracy of the Debtors contention that, [his] counsel has requested documents and
information from his parents, and that, [t]o date, his parents have not provided documents that
precede the bankruptcy. Reply 75. Given the obvious continued close relationship between the
Debtor and his parents6 and the critical importance of this issue relative to the Debtors claimed
good faith in his prosecution of this chapter 11 case as fiduciary for the Creditors, it is absolutely
appropriate in this context that the Creditors independently examine the Debtors parents as to
nature, extent and findings of the Debtors alleged investigation.7
Similarly, the Creditors intend to examine the Debtors parents with respect to the use of
the proceeds of the Creditors loans to the Debtor. Upon information and belief, and based on the
documents produced by the Debtor to date, a significant portion of those loan proceeds were
used by Kristina Johnson to purchase luxury consumer items and not, as the Debtor claims, for
business purposes. As this Court has noted, this goes directly to whether the Debtor would
qualify as a debtor under chapter 7 of the Bankruptcy Code. 8
6

Indeed, the Creditors find it quite troubling that the Debtor is essentially seeking to protect his
parents through the DIP Motion rather than joining in or otherwise supporting the Creditors
discovery efforts to reveal the facts surrounding his parents actions. The mere facts that
Debtors counsel has led this effort, and the Motions were filed simultaneously and the
arguments contained therein essentially mirror each another clearly demonstrate that the Debtor
and his parents are proceeding in concert.
7

During his deposition the Debtor essentially refused to provide any details with respect to that
investigation, asserting instead attorney client privilege.
8

The Debtors parents further claim that the Creditors are seeking to use the depositions as a
way to gather information to validate their claims against the bankruptcy estates in general and
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In sum, the Johnsons concerted effort to impose limitations on the Creditors

examination of the Debtors parents should be seen for what it is, a clear attempt to obstruct
proper discovery.9
Similarly, the Court should reject the additional absurd limitations the Johnsons seek to
impose on the Creditors. There is no basis for requiring the Creditors to produce to the Debtor 48
hours in advance of the deposition any documents they intend to use in examining the Debtors
parents, let alone barring their use if not so produced. (The Creditors note parenthetically that
those documents have not yet even been identified.)
Likewise, there is no basis to limit the number of examiners at the deposition. (The
Creditors note parenthetically that it is unlikely that all seven of them will want to examine the
Debtors parents. Indeed, several have already indicated their intent to just listen to the
depositions telephonically.)
Finally, there is no basis whatsoever to limit at this time the duration of the examination.
To do so will only invite further obstruction by the Debtor and his parents of the depositions
progress.

this is somehow improper, notwithstanding that a showing that those claims are in fact valid (as
the Debtor well knows) is further evidence of the Debtors bad faith in the commencement of
this case and the scheduling of some 63 of his 74 creditors (including all of the Creditors) as
disputed. Indeed, the Debtor has taken the position in both the Reply and during his deposition
that the Creditors loans are usurious and/or that the Creditors breached some duty to him. Since
he also says his parents took out most of the loans, inquiry into their prepetition discussions
involving the parents and the Creditors has been placed squarely at issue by the Debtor. So, he
cannot now limit the Creditors discovery.
9

Based on the Debtors position that his parents improperly took out loans in his name and/or
improperly diverted the proceeds to destinations unknown, the Creditors anticipate that the
Debtors parents may well assert their right against self-incrimination under the Fifth
Amendment to the U.S. Constitution. The Debtors attempt here to limit their testimony to postpetition date conduct, unrelated to their actions prepetition, may be designed to allow them to
avoid pleading the fifth.