Goldman, Sachs & Co. v. Esso Virgin Islands, Inc.

212 F.3d 144
CourtCourt of Appeals for the Second Circuit
DecidedMay 15, 2000
DocketDocket Nos. 99-5015(L), 99-5017(CON), 99-5023(CON), 99-5025(CON)
StatusPublished
Cited by32 cases

This text of 212 F.3d 144 (Goldman, Sachs & Co. v. Esso Virgin Islands, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Goldman, Sachs & Co. v. Esso Virgin Islands, Inc., 212 F.3d 144 (2d Cir. 2000).

Opinion

PARKER, Circuit Judge:

Goldman, Sachs & Co. (“Goldman”), First Manhattan Co. (“First Manhattan”), Firmanco Associates (“Firmanco”), Daniel Rosenbloom (together with First Manhattan and Firmanco, the “First Manhattan Appellants”), Panex Industries, Inc. Stockholders Liquidating Trust (the “Panex Trust”), Michael C. deBaecke as successor trustee to the Panex Trust, Andreas Gal, [147]*147and Paul Lazare1 (together with Gal, the “Laga Appellants”), appeal from the judgment of the United States District Court for the Southern District of New York (Lawrence M. McKenna, Judge) (the “District Court”) entered February 5, 1999, affirming the Order of the United States Bankruptcy Court for the Southern District of New York (Cornelius Blackshear, Bankruptcy Judge) (the “Bankruptcy Court”) entered June 23,1997, denying the motion made by Goldman and joined by the other appellants to enforce the permanent injunction in the final decree (the “Final Decree”) in the bankruptcy case of Duplan Corporation (“Duplan” or the “Debtor”) and Duplan Fabrics, Inc. (together, the “Debtors”). Appellants argue that appellees’ claims under the Comprehensive Environmental Response, Compensation and Liability Act of -1980 (“CERCLA”) §§ 107 & 113, 42 U.S.C. §§ 9607 & 9613, the Resource Conservation and Recovery Act of 1976 (“RCRA”) § 7002, 42 U.S.C. § 6972, and the common law, asserted against them as distributees of Duplan, were discharged in the Duplan bankruptcy proceeding and therefore, the Final Decree should be enforced to prohibit further proceedings on those claims.

The Bankruptcy Court concluded that the Final Decree discharged only claims that arose prior to the filing of the petition, and that appellees’ CERCLA claims arose at the earliest upon the enactment of CERCLA in 1980, after the filing of the petition. The Bankruptcy Court thus concluded that the Final Decree did not discharge appellees’ CERCLA claims. Although appellants also asserted that the RCRA and common law claims against them were discharged in bankruptcy, the Bankruptcy Court denied the motion without specifically addressing the RCRA or common law claims.- For the following reasons, we agree with the District Court’s affirmance of the decision of the Bankruptcy Court to deny enforcement of the Final Decree as to the CERCLA claims. We conclude that the RCRA claims fail as a matter of law and affirm the denial of enforcement as to the RCRA claims. We also conclude that further factual development is needed on the common law claims. We therefore affirm in part, and vacate and remand in part for further proceedings.

I. BACKGROUND -

A. Duplan’s Bankruptcy

Before declaring bankruptcy, Duplan was a publically traded Delaware corporation engaged in the textile industry. In 1970, Duplan acquired Laga Industries, Ltd. (“Laga”), a Virgin Islands corporation that operated a textile manufacturing facility in Tutu, St. Thomas (the “Laga Facility”). After the acquisition, the former owners of Laga, appellants Gal and La-zare, became officers of Duplan.

On August 31, 1976, Duplan filed a petition for relief in the United States Bankruptcy Court for the Southern District of New York under Chapter XI of the Bankruptcy Act of 1898, as amended through August 31, 1976 (the “Act”).2 By Order dated October 5, 1976, the bankruptcy court converted the ease into one for reorganization under Chapter X of the Act. The case then was transferred to the United States District Court for the Southern District of New York (Kevin T. Duffy, Judge), where the court appointed a reorganization trustee and established July 10, [148]*1481979 as the last day to file proofs of claims against the Duplan estate (the “Bar Date”).

By order dated August 28, 1979, Judge Duffy authorized the reorganization trustee to sell the Laga Facility, which had ceased operations in late 1978. On December 12, 1979, the reorganization trustee sold the Laga Facility to a New York partnership consisting of Gal and Lazare. In 1981, Laga was dissolved for failure to pay corporate franchise taxes.

Notice of the hearing on confirmation of the proposed plan of reorganization was published on April 27, 1981. After the confirmation hearing, by order dated June 4, 1981 (the “Confirmation Order”), the District Court confirmed the reorganization trustee’s Amended Plan of Reorganization (the “Plan”). For the purposes of implementing the Plan, the Confirmation Order permanently enjoined all creditors, from asserting, commencing, or continuing any “claims” against Duplan (which by order dated July 15, 1981 amending the Plan, was renamed Panex Industries, Inc. (“Panex”)).3

The Plan defines “creditor” as “the holder of a Claim” and “Claim” as:

[a]ny claim against either of the Debtors or the property of either of the Debtors, whether or not provable under Section 63 of the Bankruptcy Act, whether secured or unsecured, liquidated or unliq-uidated, fixed or contingent, which arose prior to the filing by the Debtors of the Petitions, proof of which was filed on or before July 10, 1979, or such other date as designated by the Court, and which has been or is hereafter allowed by the Court....

Plan at B-2. The Plan defines “Administrative Claims” in relevant part as “All costs and expenses of administration in connection with the Reorganization Cases ..., except [those] paid prior to the confirmation date.” Plan at B-2. Under the Plan, Duplan/Panex expressly assumed Administrative Claims for payment in the ordinary course of business. Plan at B-ll.

Pursuant to the confirmed Plan, Laga was formally dissolved, and creditors of Duplan received cash and new shares of stock in the reorganized company (now called Panex) in partial satisfaction of their claims against the Debtors. Goldman, First Manhattan, Gal, and Lazare were among the creditors of Duplan that received shares of Panex Stock. Firmanco, a now-dissolved limited partnership with First Manhattan as its General Partner, bought shares of Panex on the open market.

On June 27, 1983, the District Court entered the Final Decree, closing the bankruptcy case and approving the reorganization trustee’s final report. The Final Decree provided for a general discharge of the Debtors’ debts and liabilities (the “Discharge”)4 and permanently enjoined all persons having claims against the Debtors from pursuing or commencing any suit against the Debtors, Panex or any party with an interest in the Debtors or Panex (the “Permanent Injunction”).5 Both the [149]*149Discharge and the Permanent Injunction were subject to the other provisions in the Final Decree, and to the provisions in the Plan or the Confirmation Order. The Final Decree also provided that the court “shall retain jurisdiction” to enforce its orders and determine any issues related to the case. Final Decree at ¶ 9. Panex emerged from bankruptcy with over 300 shareholders, including Goldman, First Manhattan, Firmaneo, Gal, and Lazare.

B. The Dissolution of Panex

In September 1984, after Panex sold its major operating subsidiaries, the shareholders of Panex voted to dissolve Panex and adopted a plan of liquidation and dissolution.

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Cite This Page — Counsel Stack

Bluebook (online)
212 F.3d 144, Counsel Stack Legal Research, https://law.counselstack.com/opinion/goldman-sachs-co-v-esso-virgin-islands-inc-ca2-2000.