PENNSYLVANIA BANKRUPTCY COURT AWARDS VETERAN $25K IN PUNITIVE DAMAGES TO DETER CREDITOR’S HABIT OF FLOUTING AUTOMATIC STAY

The bankruptcy court for the Eastern District of Pennsylvania awarded $4,179 in actual damages and $25,000 in punitive damages to a veteran (“Debtor” or “Glenn”) whose car had been disabled by his leasing company, Ed’s Used Car Rental (“Ed’s”), in violation of an automatic bankruptcy stay. In re: Roy A. Glenn, Case No. 25-14427 (PMM). 

By way of history, in February 2025 Glenn leased a 2017-Nissan Rogue (the “Nissan”) from Ed’s and made payments on the first day of each month per a rent-to-own agreement with Ed’s. The lease agreement required payments to be made timely, did not provide for a grace period and authorized Ed’s to remotely disable the Nissan by use of what the court described as a “kill switch” if Glenn missed a payment.

On October 31, 2025, Glenn filed for bankruptcy protection under chapter 13 of the bankruptcy code. At that time, Glenn was current on his lease payments to Ed’s; however, since he filed for bankruptcy protection he did not make his November 1, 2025, payment. Glenn identified Ed’s as a creditor in his bankruptcy filing. Ed’s contacted Glenn by phone on Sunday, November 2, 2025, to inquire why he had not made his lease payment. 

Despite learning of Glenn’s bankruptcy filing during the call, Ed’s advised Glenn that they intended to disable the Nissan because “the bankruptcy did not cover the Car.” Thereafter, Ed’s disabled the Nissan and Glenn “stayed up all night long worrying” because he relied on his vehicle to go to doctor visits, purchase groceries and assist his daughter and grandchildren (whom he lived with).

Glenn contacted Ed’s the next morning and requested the car be turned back on, but Ed’s refused and hung up on him. Glenn’s next call was to his bankruptcy attorney who was also told by Ed’s that the stay did not affect the lease contract. In the meantime, Glenn rented a car so he could make it to his medical appointments and honor other family commitments. 

After speaking with Ed’s on November 3, 2025, Glenn’s attorney provided proof of the bankruptcy filing and sent a fax demanding Ed’s turn the Nissan back on. When Ed’s still refused to reactive the Nissan Glenn’s counsel filed an emergency motion for sanctions (“Sanctions Motion”) with the bankruptcy court. The Sanctions Motion asserted that Ed’s willfully violated the bankruptcy stay by activating the kill switch after receiving notice of Glenn’s bankruptcy. 

In response to the Sanctions Motion, Ed’s argued that Glenn’s phone call advising he filed bankruptcy without written corroboration was insufficient notice of the automatic stay. For that reason, Ed’s argued that when they shut off the Nissan, the stay did not yet apply. Ed’s elaborated that its decision to turn off the Nissan was objectively reasonable because the Nissan was not an asset of the estate but rather owned by Ed’s. The bankruptcy court disagreed, rebutting all of Ed’s arguments in a lengthy, well-reasoned opinion issued after the court conducted an evidentiary hearing.

The court explained that Glenn’s possessory interest in the Nissan “was property of the bankruptcy estate” and protected by the bankruptcy the stay. The court noted formal written notice of the bankruptcy was not required and Ed’s alleged lack of notice did not absolve Ed’s from liability. The court clarified that “any form” of notice, including Glenn’s phone call, was sufficient to inform Ed’s of the bankruptcy.

The court rejected Ed’s explanation that it assumed Glenn was lying when he informed Ed’s of his bankruptcy. The court remarked that Ed’s made a “knee-jerk assumption” which showed contempt for their customers and “disregard for the law that protects [their customers].” The court elaborated that Ed’s had a duty to investigate the legitimacy of Glenn’s claim and to abide by the conditions of the stay until obtaining verification that a stay was not in place or did not apply.

As justification for an award of punitive damages, the court noted that Glenn, a “bankrupt veteran,” would end up paying $25,000 for an “unfancy car worth $13,500,” a deal that was “not illegal” but one the court concluded was predatory based on how Ed’s conducted its business. The court reprimanded Ed’s for its “pattern and practice” of ignoring and/or flouting the bankruptcy stay and clearly empathized with Glenn whom the court described as a disabled veteran, grandfather and cancer survivor. 

The court explained punitive damages were properly awarded to punish Ed’s for “nearly three decades” of aggressive and predatory behavior and to deter bad behavior in the future. The court also evaluated “three guideposts” and determined the $25,000 award was warranted because Ed’s conduct was (1) reprehensible, (2) the six to one ratio of  punitive to actual damages was reasonable, and (3) the award was in line with other comparable cases. Given the egregious conduct by Ed’s and Ed’s apparent lack of respect for its customers or the bankruptcy law, the court’s decision to award punitive damages is no surprise and easily avoidable.

In a hurry? Click here for the key points.

1. The bankruptcy court for the Eastern District of Pennsylvania awarded $4,179 in actual damages and $25,000 in punitive damages to debtor Roy A. Glenn (“Glenn”) whose car (“the Nissan”) had been disabled by his leasing company, Ed’s Used Car Rental (“Ed’s”), in violation of an automatic bankruptcy stay. In re: Roy A. Glenn, Case No. 25-14427 (PMM).

2. Although current with his lease payments, Glenn stopped making payments once he filed bankruptcy. When Ed’s called to inquire about the missed payment, Glenn advised of the bankruptcy over the phone. Ed’s did not believe him and shortly after the call activated a remote “kill switch” which disabled the Nissan. When Ed’s failed to promptly reactivate the car despite receiving written confirmation of the bankruptcy, Glenn moved for sanctions. In the meantime, Glenn was forced to rent a car.

3. The bankruptcy court awarded punitive damages based on Ed’s 30-year “pattern and practice” of aggressive and predatory behavior which the court noted included mistreating their customers and ignoring and/or flouting the bankruptcy rules. Given the egregious conduct by Ed’s and Ed’s apparent lack of respect for its customers or the bankruptcy law, the court’s decision to award punitive damages is no surprise and easily avoidable.

1 In re: Roy A. Glenn, at 1, 2, 12, 16.

2 In re: Roy A. Glenn, at 1-2. Future references to this case are to this citation until

indicated otherwise.

3 In re: Roy A. Glenn, at 3.

4 In re: Roy A. Glenn, at 2.

5 In re: Roy A. Glenn, at 3-4. Future references to this case are to this citation until

indicated otherwise.

6 In re: Roy A. Glenn, at 4. Future references to this case are to this citation until

indicated otherwise.

7 In re: Roy A. Glenn, at 5.

8 In re: Roy A. Glenn, at 4. Future references to this case are to this citation until

indicated otherwise.

9 In re: Roy A. Glenn, at 1.

10 In re: Roy A. Glenn, at 6. Future references to this case are to this citation until

indicated otherwise.

11 In re: Roy A. Glenn, at 6.

12 Comically, the opinion indicated Ed’s insisted that its decision to ignore the stay was

“objectionably reasonable.”

13 In re: Roy A. Glenn, at 6, 8.

14 In re: Roy A. Glenn, at 8.

15 In re: Roy A. Glenn, at 9-10.

16 In re: Roy A. Glenn, at 10.

17 In re: Roy A. Glenn, at 15.

18 In re: Roy A. Glenn, at 11.

19 In re: Roy A. Glenn, at 16-17.

20 In re: Roy A. Glenn, at 2.

21 In re: Roy A. Glenn, at 14.

22 In re: Roy A. Glenn, at 16-17.

---

`

Headquarters:

499 NW 70th Avenue, Suite 309 

Plantation, FL 33317

Main: 954-564-0071

Fax: 954-564-9252