Imperial Tobacco Canada Ltd. v. Flintkote Co. (In re the Flintkote Co.)

526 B.R. 515, 2014 U.S. Dist. LEXIS 93525, 59 Bankr. Ct. Dec. (CRR) 207
District Court, D. Delaware·Decided July 10, 2014·No. Bankr. Case No. 04-11300-JKF; Civ. No. 13-227-LPS·Published·Cited by 1 cases

Opinion

MEMORANDUM OPINION

STARK, U.S. District Judge:2

I. INTRODUCTION

This bankruptcy appeal involves objections to the Confirmation Order and Opinion entered in In re The Flintkote Company (Bankr.Case No. 04-11300-JKF), as well as a request for affirmance of a bankruptcy Plan.3 For the reasons discussed, the Court will overrule all objections filed by the lone objector, Imperial Tobacco Canada Limited and certain of its wholly owned subsidiaries, including, without limitation, Genstar Corporation (collectively, “ITCAN”), adopt the Bankruptcy Court’s rulings — including its Findings of Fact and Conclusions of Law — and affirm confirmation of the Plan, including its § 524(g) “channeling injunction.”4

II. BACKGROUND5

A. Plan Confirmation

On October 25-26, 2010 and September 12, 13, and 19, 2011, the Bankruptcy Court [519] held confirmation hearings related to the Amended Joint Plan of Reorganization in Respect of The Flintkote Company and Flintkote Mines Limited (as modified November 16, 2011). On December 21, 2012, the Bankruptcy Court entered the following:

(1) Findings of Fact, (2) Conclusions of Law, (3) an Order and Notice of Certain Bar Dates,.and (4) an Order Regarding Confirmation of the Amended Joint Plan of Reorganization in Respect of The Flintkote Company and Flintkote Mines Limited (as Modified November 16, 2011), In re The Flintkote Company, Bankr.Case No. 04-11300 (Bankr.D.Del. Dec. 21, 2012) [Bankr.D.I. 7254] (“Confirmation Order”); and Memorandum Opinion Overruling Objections to the Amended Joint Plan of Reorganization, Confirming Plan and Recommending the Affirmation of Confirmation and of the § 524(g) Injunction, In re The Flintkote Company, Bankr. Case No. 04-11300 (Bankr.D.Del. Dec. 21, 2012) [Bankr.D.I. 7253; 486 B.R. 99 (Bankr.D.Del.2012) ] (“Confirmation Opinion”).

B. The Appeal

ITCAN’s appeal is addressed not only to the Confirmation Order and Confirmation Opinion, but also to “all orders and rulings adverse to ITCAN that were incorporated into, merged into, and/or relied upon in rendering the Confirmation Order and Confirmation Opinion.” (D.I. 1 at 2; see also D.I. 2 Ex. A)

1.Alter Ego Claim

The Bankruptcy Court denied ITCAN’s motion for leave to file an out-of-time proof of claim relating to potential alter ego liability (the “Alter Ego Claim”). ITCAN sought review of that order in an appeal to this Court. (See Civ. No. 11-00063-LPS D.I. 1) This Court held that the prior order was not a final order pursuant to 28 U.S.C. § 158(a)(1) and that ITCAN failed to meet the standards for interlocutory review set out in § 158(a)(3). On May 21, 2012, this Court dismissed the appeal for lack of jurisdiction. (Id. D.I. 24) After ITCAN appealed this ruling to the Third Circuit (see id. D.I. 26), the parties on January 30, 2013 jointly requested that the appeal be dismissed without prejudice (see id. D.I. 29). By that point, this Court had obtained jurisdiction to review the Alter Ego Claim in the context of its review of the Confirmation Order.

2.Section 107 Claim

In' its second ruling — embodied in (a) the Memorandum Opinion and (b) the related Order Sustaining Debtors’ Objection to Claim No. 2262 Filed By Imperial Tobacco Canada Limited and Overruling IT-CAN’s Objection to Plan Confirmation (Bankr.Case No. 04-11300 (Bankr.D.Del. Oct. 3, 2011) [collectively Bankr.D.I. No. 6227]) — the Bankruptcy Court disallowed ITCAN’s proof of claim for expenses incurred investigating the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. § 9601 et seq. claim.6 ITCAN appealed the Bankruptcy Court’s decision to this Court. (See Civ. No. 11-01299-LPS D.I. 1) This Court dismissed ITCAN’s appeal without prejudice to permit the issue raised in it to be considered in conjunction with the instant appeal.

3.Appeal of Plan Confirmation

ITCAN, the lone remaining objector to the Plan, now seeks this Court’s review of [520] the Confirmation Opinion and Confirmation Order pursuant to 28 U.S.C. § 158 and Bankruptcy Rules 8001, et seq. (See D.I. 10 at 2, 13; D.I. 12) In turn, the Plan Proponents request affirmance pursuant to § 524(g)(3)(A). (See D.I. 10 at 2; D.I. 12) ITCAN, of course, opposes affirmance. (See D.I. 10 at 2)

All aspects of ITCAN’s appeal are fully briefed.7 The Court heard oral argument on July 31,2013. (See D.I. 36 (“Tr.”))

III. LEGAL STANDARDS

Appeals from the Bankruptcy Court to this Court are governed by 28 U.S.C. § 158. Pursuant to § 158(a), district courts have mandatory jurisdiction to hear appeals “from final judgments, orders, and decrees” and discretionary jurisdiction over appeals “from other interlocutory orders and decrees.” 28 U.S.C. § 158(a)(1) and (3). “An order confirming a Chapter 11 plan is considered a final, appealable order.” In re Kaiser Aluminum Corp., 343 B.R. 88, 93 (D.Del.2006) (citing Eastern Minerals & Chems., Co. v. Mahan, 225 F.3d 330, 336 n. 11 (3d Cir. 2000)).

In conducting its review of the issues on appeal, this Court reviews the Bankruptcy Court’s findings of fact for clear error and exercises plenary review over questions of law. See Am. Flint Glass Workers Union v. Anchor Resolution Corp., 197 F.3d 76, 80 (3d Cir.1999). “A finding is ‘clearly erroneous’ when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” United States v. U.S. Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948). The Court must “break down mixed questions of law and fact, applying the appropriate standard to each component.” Meridian Bank v. Alten, 958 F.2d 1226, 1229 (3d Cir.1992).

IV. DISCUSSION

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Imperial Tobacco Canada Ltd. v. Flintkote Co. (In re the Flintkote Co.), 526 B.R. 515, 2014 U.S. Dist. LEXIS 93525, 59 Bankr. Ct. Dec. (CRR) 207 (D. Del. 2014).

526 B.R. 515 (Imperial Tobacco Canada Ltd. v. Flintkote Co. (In re the Flintkote Co.)) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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