In re Petrotex Minerals, Inc.

6 B.R. 243, 1980 Bankr. LEXIS 4412
CourtDistrict Court, D. Georgia
DecidedSeptember 25, 1980
DocketBankruptcy No. 79-03065A
StatusPublished

This text of 6 B.R. 243 (In re Petrotex Minerals, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Petrotex Minerals, Inc., 6 B.R. 243, 1980 Bankr. LEXIS 4412 (gad 1980).

Opinion

ORDER

W. H. DRAKE, Jr., Bankruptcy Judge.

This Order is another attempt by the Court to give direction to the parties in the hard fought “Paper War”1 known as In re Petrotex Minerals, Inc.

On June 3,1980, the District Court denied the alleged debtor’s (hereinafter “Petro-tex”) motion for leave to appeal an Order of this Court requiring Petrotex to answer certain interrogatories for the purpose of making a determination whether the Court should retain this case pursuant to 28 U.S.C. § 1477.2 On June 20, 1980, Petrotex filed answers to the interrogatories as ordered. Since that date, the parties have fired another flurry of volleys, the effects of which must now be determined.

On June 23,1980, Petrotex filed a motion to reconsider the status of the case and to dismiss the involuntary petition. On July 7, 1980, the petitioning creditor (hereinafter “Dinsmore”) filed a motion for a ruling on the undecided issues raised by a motion to compel discovery. The Court had previously declined to order full discovery pursuant to that motion until after a determination [245]*245of whether it would retain the case despite improper venue.3

On July 11, 1980, the Court set a hearing for August 6, 1980 on the issue of whether the case should be retained. On July 17, 1980, Dinsmore filed a motion for costs and attorneys’ fees incurred in compelling Pe-trotex to answer the previously mentioned interrogatories, a motion to compel more complete answers to these interrogatories, for sanctions and for an order for relief, a request for admissions, and a second set of interrogatories with a request for production of documents.

On July 18, 1980, Petrotex filed a response to Dinsmore’s request for a ruling on his motion to compel and on July 25, 1980 Petrotex filed a set of interrogatories. On July 30, 1980, Dinsmore filed a brief asserting the position that Petrotex had waived all objections to venue at a hearing on October 15, 1979. The next day Petrotex filed responses to Dinsmore’s motion for costs and attorneys’ fees, and to the motions to compel, for sanctions and for an order for relief.

On August 6, 1980, Petrotex filed a response to Dinsmore’s waiver argument and on that same day the scheduled hearing on whether or not the Court should retain this case was held and the matter taken under advisement. On August 18, 1980, Petrotex filed responses and objections to Dinsmore’s requests for admissions, objections to Dins-more’s second interrogatories, and a motion for a protective order.

On August 22, 1980, Dinsmore filed a motion to compel answers to his second interrogatories, answers to Petrotex’ interrogatories and a post-hearing brief on venue, sanctions, compelling discovery and attorneys’ fees. On August 25, 1980, Petro-tex replied with a brief in support of its motion to dismiss and in opposition to Dins-more’s motions to compel and for attorneys’ fees. On August 29, 1980, Petrotex filed a brief in response to Dinsmore’s second interrogatories, request for admission and request for production of documents.

CONCLUSIONS OF LAW

In order to wade through this procedural bloodbath, it is necessary to remember the issue upon which the tactics bear, i. e., whether the Court should retain this case pursuant to 28 U.S.C. § 1477. To aid its decision on that issue, the Court ordered Petrotex to answer certain interrogatories and the District Court upheld that Order. Petrotex filed answers to the interrogatories on June 20, 1980. The first question which arises is whether Petrotex has complied with that Order. By motion on July 7, at the hearing on August 6, and again by brief on August 22, Dinsmore has argued that the answers which Petrotex filed in response to the interrogatories were “so internally inconsistent and inconsistent with the representations of the Debtor’s counsel as to be incomplete on their face and no answer at all within the meaning of Federal Rule of Civil Procedure 37(a)(3) as adopted by Bankruptcy Rule 737.’’ Petitioning Creditor’s Post Hearing Brief, August 22, 1980.

The Court finds no merit to this argument. The objections which Dinsmore raises concerning the answers to these interrogatories do not raise inconsistencies which bear on the issue at hand. While the noted interrogatories may be relevant to the issue of credibility, they give no hint of undisclosed Georgia assets or creditors. The Court has considered the possibility of ordering more detailed answers to these interrogatories or even of allowing a second round of discovery. However, there is no evidence to indicate that either of these courses would be productive. The law requires only that answers to interrogatories be “complete, explicit and responsive.” Roberson v. Great American Insurance Companies of N. Y., 48 F.R.D. 404, 409 (N.D.Ga.1969), and the Court finds these answers to be sufficiently so. Therefore, Dinsmore’s motion to compel, motion for sanctions and motion for order for relief of July 17, 1980 are denied.

[246]*246Having ruled that Petrotex has complied with the Order of this Court compelling discovery, it is now necessary to determine whether or not the case should be retained in the interest of justice and for the convenience of the parties. In approaching this issue, it must be remembered that the discretion to retain a case where venue is improperly laid “must be used with caution and in few cases.” Matter of Commonwealth Oil Refining Co., Inc., 596 F.2d 1239, 1241 (5th Cir. 1979). The Court has already indicated that it will be guided by the six convenience criteria listed by the Fifth Circuit Court of Appeals.4 Id. at 1247.

The Court also notes that the burden of proof is on “those who ask the court to retain a wrongly placed case to show valid reasons for the exercise of discretion to retain the case.” 1 Collier on Bankruptcy ¶ 3.02, p. 3-213 (15th ed. 1980) and cases cited therein. Here the petitioning creditor, Dinsmore, has not shouldered the burden to show valid reasons why, under these criteria, the Court should exercise its discretion to retain this case. The evidence indicates that Petrotex has only one creditor in Georgia, and that most of its creditors are in Texas. Petrotex is and has been at all material times a Texas corporation with its principal offices in Corpus Christi, Texas. Of the known witnesses, one is in Georgia and the other is in Texas. Petrotex has no assets in Georgia and the assets it does have are in Texas and Minnesota.

Dinsmore also made no showing that the estate could be more economically administered in Georgia than in Texas nor any showing of the necessity of any ancillary administration. It appears that no good reason exists for the Court to exercise its discretion to retain this case.

Dinsmore also argued that Petrotex waived the defense of improper venue by failure to timely raise that defense. However, the Court finds no merit in this argument.

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Related

In The Matter Of Commonwealth Oil Refining Co., Inc.
596 F.2d 1239 (Fifth Circuit, 1979)
Roberson v. Great American Insurance
48 F.R.D. 404 (N.D. Georgia, 1969)
Commonwealth Edison Co. v. Train
71 F.R.D. 391 (N.D. Illinois, 1976)
Home Insurance v. Ballenger Corp.
74 F.R.D. 93 (N.D. Georgia, 1977)

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Bluebook (online)
6 B.R. 243, 1980 Bankr. LEXIS 4412, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-petrotex-minerals-inc-gad-1980.