Searcy, as Plan Administrator v. Pharma-Safe Industrial Services Inc.

CourtUnited States Bankruptcy Court, S.D. Texas
DecidedApril 6, 2020
Docket19-03318
StatusUnknown

This text of Searcy, as Plan Administrator v. Pharma-Safe Industrial Services Inc. (Searcy, as Plan Administrator v. Pharma-Safe Industrial Services Inc.) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Searcy, as Plan Administrator v. Pharma-Safe Industrial Services Inc., (Tex. 2020).

Opinion

= □□ □□□ □□□□□□ □□ □□ □□ IN THE UNITED STATES BANKRUPTCY COURT □□□ □□ FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION ENTERED 04/06/2020 IN RE: § EMAS CHIYODA SUBSEA LIMITED, et al § CASE NO: 17-31146 Debtor(s) § § CHAPTER 11

JOSHUA SEARCY, AS PLAN § ADMINISTRATOR § Plaintiff(s) § § VS. § ADVERSARY NO. 19-03318 § PHARMA-SAFE INDUSTRIAL SERVICES § INC. § Defendant(s) § MEMORANDUM OPINION On February 27, 2019, Joshua Searcy, acting in his capacity as Plan Administrator of the Estate of EMAS Chiyoda Subsea, Inc. (“EMAS Subsea’) initiated this adversary proceeding against Pharma-Safe Industrial Services, Inc. (““Pharma-Safe”) seeking: (1) to avoid and recover a $39,168.32 payment pursuant to 11 U.S.C. §§ 547 and 550; and (ii) disallowance of any and all claims filed by Pharma-Safe pursuant to 11 U.S.C. § 502. Pharma-Safe failed to timely respond to the Plan Administrator’s Complaint. On June 19, 2010, the Plan Administrator filed a motion for default judgment based on Pharma-Safe’s failure to respond to the Complaint. On July 12, 2019, Pharma-Safe filed its first response. Pharma-Safe’s answer did not comply with this Court’s Rule 7016 Conference Order. Subsequently, on August 19, 2019, the Court held a pre-trial conference at which it required Pharma-Safe to file an amended answer. Pharma-Safe did not file an amended answer as required by this Court.

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On January 27, 2020, the Plan Administrator filed the motion for summary judgment currently at issue before the Court, seeking judgment as a matter of law on the preference claims against Pharma-Safe under 11 U.S.C. §§ 547 and 550. For the reasons set forth below, the Court grants the Plan Administrator’s motion for summary judgment. Background1

On February 27, 2017, EMAS CHIYODA Subsea Ltd., et al.2 (collectively, “the Debtors”) filed chapter 11 bankruptcy. (Case No. 17-31146; see ECF No. 1). This Court entered an order allowing for the joint administration of the Debtors’ chapter 11 cases on February 28, 2017. (Case No. 17-31146; see ECF No. 20). On March 21, 2017 the Office of the United States Trustee for the Southern District of Texas appointed an official committee of unsecured creditors. (Case No. 17-31146; see ECF No. 130). No trustee or examiner was appointed in the Debtors’ chapter 11 cases. (ECF No. 16 at 4). On or about May 8, 2017, Pharma-Safe Industrial Services, Inc. (“Pharma-Safe”) filed

proof of claim No. 317, requesting allowance of a general unsecured claim in the total amount of $99,563.85. (ECF No. 1 at 3). On June 28, 2017, the Debtors filed their Modified Third Amended Plan of Reorganization, along with a Second Amended Plan Supplement. (Case No. 17-31146; see ECF

1 A substantial portion of this background section was written in reliance on the parties’ briefing. It is included solely for background. This background section does not constitute findings by the Court.

2 The Debtors consist of: EMAS CHIYODA Subsea Ltd.; Lewek Falcon Shipping Pte. Ltd., Lewek Constellation Pte. Ltd; EMAS-AMC Pte., Ltd; EMAS CHIYODA Subsea Services Pte. Ltd.; EMAS Saudi Arabia Ltd.; EMAS Chiyoda Subsea Inc.; EMAS CHIYODA Subsea Marine Base Holding Co. LLC; EMAS CHIYODA Subsea Marine Base LLC; EMAS CHIYODA Subsea Services B.V.; EMAS CHIYODA Subsea Services (U.K.) Ltd.; EMAS CHIYODA ROV Pte. Ltd; EMAS CHIYODA Subsea Services LLC; EMAS CHIYODA Subsea (Thailand) Co., Ltd.; Gallatin Marine Management, LLC. (ECF No. 1 at 5). Nos. 572, 574). The Plan Supplement included the Plan Administrator Agreement, which appointed Stephen H. McGuire as the Interim Plan Administrator. (Case No. 17-31146; ECF No. 572 at 29). On June 29, 2017, the Court confirmed the Debtors’ Third Amended Plan, which became effective on the same date. (Case No. 17-31146; see ECF No. 579). The Third Amended Plan,

did not substantively consolidate the Debtors’ chapter 11 cases, but instead allowed each of the Debtors to maintain their “own specific claims and causes of action.” (Case No. 17-31146; see ECF No. 579 at 22 (noting that there are “Emerging Debtors”)). On September 28, 2017, in accordance with Section 7.1 of the Plan Administration Agreement, which was part of the Second Amended Plan Supplement, Stephen McGuire appointed Jason Searcy, “as the initial Successor Plan Administrator”—appointment which was to become effective on October 1, 2017. (Case No. 17-31146; see ECF No. 726). This Court approved Jason Searcy’s appointment as the Successor Plan Administrator on February 11, 2019. (Case No. 17-31146; see ECF No. 932).

On February 27, 2019, Jason Searcy, in his capacity as Plan Administrator initiated this adversary proceeding against Pharma-Safe to: (i) avoid and recover a $39,168.32 payment pursuant to 11 U.S.C. §§ 547 and 550; and (ii) “disallow any claim that Pharma-Safe has filed or asserted against the Plan Debtors.” (See ECF No. 1 at 1–2). Pharma-Safe failed to respond to the Plan Administrator’s Complaint. Consequently, on June 19, 2019, the Plan Administrator filed a motion for default judgment. (See ECF No. 9). Pharma-Safe thereafter filed its first response on July 12, 2019. (See ECF No. 10). In light of Pharma-Safe’s response, the Court denied the Plan Administrator’s motion for default judgment on July 15, 2019. (See ECF No. 11). On August 19, 2019, the Court held a pre-trial conference. (August 19, 2019 Hearing). At the hearing, the Court noted that Pharma-Safe’s response failed to comply with this Court’s Rule 7016 Conference Order. (August 19, 2019 Hearing at 1:36 p.m.). The Court required that Pharma-Safe file an amended answer by September 3, 2019. (August 19, 2019 Hearing at 1:37 p.m.). Pharma-Safe failed to file an amended answer as required by this Court. To the extent

that Pharma-Safe has admitted claims in its initial response, the Court takes judicial notice of those admissions. On January 27, 2020, the Plan Administrator filed the motion for summary judgment currently before the Court, seeking judgment as a matter of law as to its preference claims pursuant to 11 U.S.C. §§ 547 and 550. (See ECF No. 16). Pharma-Safe failed to respond to the Plan Administrator’s motion for summary judgment. For the reasons set forth below, the Court grants the Plan Administrator’s motion for summary judgment. Jurisdiction The District Court has jurisdiction over this proceeding pursuant to 28 U.S.C. § 1334.

This is a core proceeding under 28 U.S.C. § 157(b)(2)(A), (B), (C), and (O). Pursuant to 28 U.S.C. § 157(a), this proceeding has been referred to the Bankruptcy Court by General Order 2012-6.

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