In re Bluberi Gaming Technologies, Inc.

554 B.R. 841, 2016 WL 4167281
CourtUnited States Bankruptcy Court, N.D. Illinois
DecidedSeptember 7, 2016
DocketCase No. 16bk05364
StatusPublished
Cited by2 cases

This text of 554 B.R. 841 (In re Bluberi Gaming Technologies, Inc.) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Bluberi Gaming Technologies, Inc., 554 B.R. 841, 2016 WL 4167281 (Ill. 2016).

Opinion

[843]*843 MEMORANDUM DECISION 2

Timothy A. Barnes, United States Bankruptcy Judge

This matter comes on for consideration on AGS LLC’s Motion to Compel Performance of Bluberi Gaming Technologies Inc. Pursuant to 11 U.S.C. § 365(n)(4) [Dkt. No. 60] (the “Motion”), brought by AGS LLC (“AGS”). Upon a review of the parties’ respective filings and after holding hearings on the matter, for the reasons more fully stated below, the court finds that AGS has failed to establish a contractual right to the performance it seeks under 11 U.S.C. § 365(n)(4), and the Motion must, therefore, be denied.

JURISDICTION

The federal district courts have “original and exclusive jurisdiction” of all cases under title 11 of the United States Code, 11 U.S.C. § 101, et seq. (the “Bankruptcy Code”). 28 U.S.C. § 1334(a). The federal district courts also have “original but not exclusive jurisdiction” of all civil proceedings arising under title 11 of the United States Code, or arising in or related to cases under title 11. 28 U.S.C. § 1334(b). District courts may, however, refer these cases to the bankruptcy judges for then-districts. 28 U.S.C. § 157(a). In accordance with section 157(a), the District Court for the Northern District of Illinois has referred all of its bankruptcy cases to the Bankruptcy Court for the Northern District of Illinois. N.D. Ill. Internal Operating Procedure 15(a).

A bankruptcy judge to whom a case has been referred may enter final judgment on any core proceeding arising under the Bankruptcy Code or arising in a case under title 11. 28 U.S.C. § 157(b)(1). Bankruptcy judges must therefore determine, on motion or sua sponte, whether a proceeding is a core proceeding or is otherwise related to a case under the Bankruptcy Code. 28 U.S.C. § 157(b)(3). As to the former, the court may hear and determine such matters. 28 U.S.C. § 157(b)(1). As to the latter, the bankruptcy court may hear the matters, but may not decide them without the consent of the parties. 28 U.S.C. §§ 157(b)(1), 157(c); In re Radco Merch. Servs., Inc,, 111 B.R. 684, 686 (N.D.Ill.1990). Instead, the bankruptcy court must “submit proposed findings of fact and conclusions of law to the district court, and any final order or judgment shall be entered by the district judge after considering the bankruptcy judge’s proposed findings and conclusions and after reviewing de novo those matters to which any party has timely and specifically objected.” 28 U.S.C. § 157(c)(1).

The scope of what is or is not a core proceeding when arising in a chapter 15 case is unsettled. Recognition of foreign proceedings and other matters under chapter 15 of the Bankruptcy Code are expressly core proceedings. 28 U.S.C. § 157(b)(2)(P). At least one court has held, however, that the “other matters” language from this section is not outcome determinative. In re Fairfield Sentry Ltd. Litig., 458 B.R. 665, 676 (S.D.N.Y.2011) (“that ‘recognition of foreign proceedings and other matters under chapter 15 of title 11’ are core proceedings is not relevant” to a determination of whether such “other matters” are in fact core proceedings). Put another way, the “other matters” catchall operates in much the same way as section 105 of the Bankruptcy Code — it helps fill in the gaps but does not allow the court to act where it clearly should not. [844]*844See, e.g., Mobil Oil Corp. v. Higginbotham, 436 U.S. 618, 625, 98 S.Ct. 2010, 56 L.Ed.2d 581 (1978) (“There is a basic, difference between filling a gap left by Congress’ silence and rewriting rules that Congress has affirmatively and specifically enacted.”); Levit v. Ingersoll Rand Fin. Corp., 874 F.2d 1186, 1197-98 (7th Cir.1989) (same).

Each party has voluntarily submitted itself to this court’s jurisdiction (the debtors and the Foreign Representative, as defined below, by petitioning for chapter 15 relief and AGS by bringing the Motion) or has impliedly consented to this court’s jurisdiction, and thus the court may statutorily hear and determine the matters as core matters. Rodeo Merch. Servs., Inc., 111 B.R. at 686. In addition, because the matter at bar arises out of an earlier order of the court that neither party challenged jurisdictionally, the court must treat the enforcement of the order as validly within its statutory jurisdiction. Id. at 688.

That does not, however, answer the question of whether the court may constitutionally hear and determine the matters, but that is an inquiry better taken up once informed by the history of this matter.

HISTORY

These chapter 15 cases were commenced on February 18, 2016 by Bluberi Gaming Technologies Inc. (“Bluberi Gaming”), Bluberi Group Inc. and Bluberi USA, Inc. (collectively, “Bluberi”).

Bluberi’s Petitions and Verified Petitions [Dkt. Nos. 1, 2] (the “Petitions”) and the other documents filed in support thereof, state the case for Bluberi’s need for chapter 15 recognition and relief. Bluberi is, as is set forth in those documents, a Canadian company conducting business both in the United States and in Canada. That business is, at its essence, the development, sale and deployment of electronic gaming machines. Bluberi’s customers are principally casinos in the United States, including casinos located in Native American lands, but also exist elsewhere throughout the Americas.

Aside from its direct revenues, Bluberi appears to have financed its operations and recent growth in two ways, from direct borrowing from Callidus Corporation (“Callidus”), Bluberi’s largest creditor, and through the sale of interests in electronic gaming equipment and licensing of its proprietary software to AGS. With those funds, Bluberi expanded its business operations to include a wider range of services in the gaming industry.

Those expanded operations have not yet generated sufficient revenue to pay the obligations incurred by Bluberi. As a result, on November 15, 2015, Bluberi commenced an insolvency proceeding under Canada’s Companies’ Creditors Arrangement Act (R.S.C.1985, c. C-36) (the “CCAA”),

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Cite This Page — Counsel Stack

Bluebook (online)
554 B.R. 841, 2016 WL 4167281, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-bluberi-gaming-technologies-inc-ilnb-2016.