In Re Philadelphia Newspapers, LLC

450 B.R. 99, 2011 Bankr. LEXIS 2247, 54 Bankr. Ct. Dec. (CRR) 235, 2011 WL 2357364
CourtUnited States Bankruptcy Court, E.D. Pennsylvania
DecidedJune 15, 2011
Docket19-11760
StatusPublished
Cited by1 cases

This text of 450 B.R. 99 (In Re Philadelphia Newspapers, LLC) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Philadelphia Newspapers, LLC, 450 B.R. 99, 2011 Bankr. LEXIS 2247, 54 Bankr. Ct. Dec. (CRR) 235, 2011 WL 2357364 (Pa. 2011).

Opinion

Opinion

STEPHEN RASLAVICH, Chief Judge. Introduction

Before the Court is the Motion of Philadelphia Media Network, Inc., (PMN), Alfred Lubrano, Julie Shaw, William Bender, and Rita Giordano (collectively, the Reporters) to Enforce the Confirmed Plan and to Bar Certain Plaintiffs from Prosecuting State Court Actions. The Plaintiffs who are the subject of this Motion have commenced defamation lawsuits against either PMN or the newspapers it owns. Two of the Plaintiffs (Richard Glunk, M.D., and Michelle Brodie) oppose the Motion. 1 A hearing on the Motion was held on May 12, 2011. The Court took the matter under advisement. For the reasons which follow the Motion will be granted.

Factual Background

The Debtors owned and operated the print newspapers the Philadelphia Inquirer and Philadelphia Daily Neivs as well as the online publication philly.com. The Debtors filed for Chapter 11 bankruptcy relief in February 2009. In October 2009 the papers printed an article which Dr. Glunk maintains defamed him. See Glunk’s Opposition to Motion. He filed a writ of summons against the papers on October 1, 2010. Motion, Exhibit 1. On June 22, 2010, the papers printed an article which Ms. Brodie maintains defamed her. Id., Exhibit 6. Ms. Brodie filed her complaint on December 13, 2010. Id.

The Debtors proposed a plan of reorganization which would sell substantially all of their assets at an auction. 2 On September 30, 2010, that plan was confirmed. PMN won the auction and purchased the Debtors’ assets under an Asset Purchase Agreement. The effective date of the Debtors’ plan was October 8, 2010; the closing of the Asset Purchase Agreement occurred on that same date. Important for present purposes are the release and injunction provisions in the plan and the exclusion of liabilities in the Asset Purchase Agreement. The plan and order of confirmation provide releases to the Debtors, to their employees, and to PMN. The plan and order likewise enjoin any actions against the purchaser or its reporters. Consistent with those plan provisions, the Asset Purchase Agreement specifically excludes the assumption of any liability of the Debtors for acts or omissions which occurred prior to the closing of the Asset Purchase Agreement.

Jurisdiction

Because a bankruptcy court is one of limited jurisdiction, the Court first determines its competence to hear the mat *102 ter in question. As this Motion involves administration of the estate, adjudication of claims against the estate, as well as plan confirmation, it is within this Court’s core jurisdiction. See 28 U.S.C. § 157(b)(2)(A), (B) and (L). It also arises post-confirmation and so the Court must likewise determine to what extent it retained jurisdiction under the plan to hear subsequently-arising issues. In that regard, the confirmation order provides that:

Retention of Jurisdiction. Pursuant to sections 105(a) and 1142 of the Bankruptcy Code, and notwithstanding entry of this Confirmation Order or the occurrence of the Effective Date, the Bankruptcy Court shall retain exclusive jurisdiction as provided in Article XI of the Plan over all matters arising out of, arising in or related to, the chapter 11 Cases and the Plan.

Order of Confirmation, ¶ 40, p. 40. The plan provides:

Section 11.01. Exclusive Jurisdiction of Bankruptcy Court. Notwithstanding the entry of the Confirmation Order and the occurrence of the Effective Date, the Bankruptcy Court shall retain after the Effective Date exclusive jurisdiction of all matters arising out of, arising in or related to the Chapter 11 Cases to the fullest extent permitted by applicable law, including, without limitation, jurisdiction to:
(e) construe, take any action, issue such order, prior to and following the Confirmation Date ..., as may be necessary for the enforcement, implementation, execution and consummation of the Plan and all contracts, instruments, releases, indentures and other agreements or documents created in connection with the Plan
(m) hear and determine disputes arising in connection with the interpretation, implementation or enforcement of the Plan or Asset Purchase Agreement.

Plan, Article XI, § 11.01(e), (m). Based on the plan and order of confirmation, jurisdiction was vested in this Court in order to ensure that the plan would be consummated.

Parties’ Positions

PMN maintains that both the Glunk and Brodie lawsuits were released and discharged pursuant to the express terms of the plan. The only claims not released were those which were pending as of June 25, 2010 and which were covered by the Debtors’ insurance policy for defamation claims. Motion, ¶ 28. A list of such claims was attached as Exhibit A to the plan. Id. Neither- Ms. Brodie’s nor Dr. Glunk’s claims were on that list. Id. Thus, PMN concludes, the claims of these plaintiff were released by the Plan. Moreover, while it purchased substantially all of the Debtors’ assets, PMN did not assume therewith liabilities such as the defamation claims which these two Plaintiffs raise. Id., ¶¶ 36-37. The sum and substance of PMN’s position is that these plaintiffs are without recourse as to the Debtor, the Reporters, or PMN.

Glunk and Brodie make two arguments in response: first, that such claims were not discharged by the plan because the release excepts claims involving willful and malicious conduct; and second, that PMN is liable for such claims because they arose after the effective date of the plan.

Notice of the Bankruptcy

Although neither Glunk nor Brodie raised the issue, PMN addresses a threshold question: it maintains that both plaintiffs received sufficient notice of the bankruptcy case and deadlines relevant to their claims in order to act to protect their *103 interests. T-4-7. Because both claims arose post-petition, PMN explains, neither plaintiff would have received actual notice. This is because neither would have been listed on the Debtors’ schedules. Yet while neither may have received actual notice of the bankruptcy, relevant deadlines were published in the Philadelphia newspapers as well as the Wall Street Journal. T-6. For such “unknown” creditors, notice by publication has been deemed consistent with due process:

For notice purposes, bankruptcy law divides claimants into two types, ‘known’ and ‘unknown’. Chemetron, 72 F.3d at 346 (citing Charter Crude Oil Co. v. Petroleos Mexicanos (In re Charter Co.), 125 B.R. 650, 654 (Bankr.M.D.Fla.1991)). Known creditors are entitled to actual written notice, while due process for unknown claimants is generally satisfied through notification by publication. Id.

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Cite This Page — Counsel Stack

Bluebook (online)
450 B.R. 99, 2011 Bankr. LEXIS 2247, 54 Bankr. Ct. Dec. (CRR) 235, 2011 WL 2357364, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-philadelphia-newspapers-llc-paeb-2011.