The Babcock & Wilcox Company v. Philadelphia Energy Solutions Refining and Marketi

CourtUnited States Bankruptcy Court, E.D. Louisiana
DecidedMarch 6, 2025
Docket21-01014
StatusUnknown

This text of The Babcock & Wilcox Company v. Philadelphia Energy Solutions Refining and Marketi (The Babcock & Wilcox Company v. Philadelphia Energy Solutions Refining and Marketi) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
The Babcock & Wilcox Company v. Philadelphia Energy Solutions Refining and Marketi, (La. 2025).

Opinion

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF LOUISIANA

§ IN RE: § CASE NO: 00-10992 § THE BABCOCK & WILCOX § CHAPTER 11 COMPANY, § § SECTION A DEBTOR. § § § THE BABCOCK & WILCOX § COMPANY, § § PLAINTIFF, § § ADV. NO. 21-1014 V. § § PHILADELPHIA ENERGY SOLUTIONS § REFINING AND MARKETING LLC, § PES LIQUIDATING TRUST, § WESTPORT INSURANCE COMPANY, § XL INSURANCE AMERICA, INC., § ALLIANZ GLOBAL RISKS US § INSURANCE COMPANY, HDI GLOBAL § INSURANCE COMPANY, AND § CERTAIN UNDERWRITERS AT § LLOYD’S LONDON-SYNDICATE 1221 § (NAVIGATORS), ZURICH AMERICAN § INSURANCE COMPANY, CERTAIN § UNDERWRITERS AT LLOYD’S § SUBSCRIBING TO ENNMG1800181, § CERTAIN UNDERWRITERS AT § LLOYD’S SUBSCRIBING TO § ENNMG1800281, CERTAIN § UNDERWRITERS AT LLOYD’S § SUBSCRIBING TO ENNMG1800282, § CERTAIN UNDERWRITERS AT § LLOYD’S SUBSCRIBING TO EN100070- § 18, § § DEFENDANTS. § MEMORANDUM OPINION AND ORDER The sole count in the above-captioned adversary proceeding filed by The Babcock & Wilcox Company (“B&W”) seeks (i) a declaration that the confirmed plan of reorganization (the “Plan”) in B&W’s 2000 bankruptcy case discharged the claims now asserted against B&W entities1 in a Pennsylvania state court by two of the above-named Defendants, Philadelphia Energy

Solutions Refining & Marketing, LLC (“PESRM”), and PES Liquidating Trust (together, the “Defendants”); and (ii) enforcement of the confirmed Plan’s discharge injunction. [ECF Doc. 34, ¶ 38].2 The Pennsylvania state court action asserts non-asbestos-related products-liability claims against B&W entities stemming from a 2019 explosion at a refinery formerly operated by PESRM that was allegedly caused by the failure of an elbow joint manufactured by B&W and installed in the refinery in the 1970s. [ECF Doc. 34, ¶¶ 29–31 & Ex. A, ¶¶ 15 & 17]. B&W and the Defendants filed cross-motions for summary judgment. [ECF Docs. 82 & 138]. For the reasons stated in this Court’s Memorandum Opinion dated July 2, 2024, the Court denied both motions. [ECF Doc. 199]. Now before the Court is B&W’s second motion for

summary judgment and statement of uncontested facts. [ECF Docs. 209 & 210]. B&W seeks

1 According to the Amended Complaint filed by B&W in the above-captioned adversary proceeding: On February 26, 2021, PES filed the State Court Complaint in the Court of Common Pleas of Philadelphia, asserting claims of negligence, strict liability, and breach of implied warranties, against B&W, Babcock & Wilcox Holdings, LLC, and Babcock & Wilcox Enterprises, Inc. Babcock & Wilcox Holdings, LLC and Babcock & Wilcox Enterprises, Inc. . . . were not formed and did not come into existence until 2015. [ECF Doc. 34, ¶ 28]. B&W also noted that “PES . . . incorrectly designated Babcock & Wilcox Company as a defendant. There is no legal entity with the name of Babcock & Wilcox Company.” [ECF Doc. 34, n.3]. 2 On October 24, 2023, the following entities were allowed to intervene as plaintiffs in this adversary proceeding: (i) Westchester Fire Insurance Company; (ii) Ace Property & Casualty Insurance Company; (iii) Indian Harbor Insurance Company; (iv) Starr Surplus Lines Insurance Company; and (v) The Members of Lloyd’s Syndicate 1861 as constituted for the 2019 underwriting year of account acting through their managing agent Canopius Managing Agents Limited (collectively, the “Reorganized B&W Insurers”). The Reorganized B&W Insurers have not joined or filed any motion for summary judgment. summary judgment on two alternative theories, discussed below. The Defendants filed an opposition to the motion as well as their own statement of uncontested facts. [ECF Docs. 221 & 222]. B&W filed a reply in support of the motion. [ECF Doc. 223]. After oral argument, the parties each submitted supplemental briefing. [ECF Docs. 234 & 235]. For the reasons below,

the Court DENIES B&W’s second motion for summary judgment. JURISDICTION AND VENUE This Court has jurisdiction to grant the relief provided for herein pursuant to 28 U.S.C. § 1334. The confirmed plan of reorganization in B&W’s bankruptcy case also reserved to this Court post-confirmation jurisdiction to resolve matters including, but not limited to, “all controversies, suits, and disputes that may relate to, impact upon, or arise in connection with this Plan or any other Plan Documents or their interpretation, implementation, enforcement, or consummation.” [No. 00-10992, ECF Doc. 7003, § 9.5.3]. The matter presently before the Court constitutes a core proceeding that this Court may hear and determine on a final basis under 28 U.S.C. § 157(b)(2)(B). Venue is proper pursuant to

28 U.S.C. §§ 1408 and 1409. DISCUSSION This Court incorporates its recitation of undisputed facts submitted to the Court by the parties in prior cross-motions for summary judgment, particularly as it describes the history of B&W and nature of its business activities. [ECF Doc. 199]. In 2000, B&W and its affiliates filed petitions for chapter 11 bankruptcy relief primarily to deal with asbestos-related personal-liability claims. In 2006, the District Court confirmed the Plan proposed by B&W and its parent company. The Plan created the Asbestos PI Trust, funded with assets of B&W, its debtor-affiliates, as well as certain non-debtor affiliates; under the Plan, the Asbestos PI Trust would be the sole recourse for payment of current and future asbestos-related claims against B&W. All other non-asbestos- related claims, include the class of general unsecured creditors, would be resolved directly by the Reorganized Debtors. In other words, those claims would be paid pro rata as directed in the Plan by proceeds generated by the Reorganized B&W’s continuing operations.

In its second motion for summary judgment, B&W relies on several provisions in the Plan and Confirmation Order to encourage the Court to find as a matter of law that the non-asbestos- related products-liability claims asserted in the Pennsylvania state court action are dischargeable prepetition bankruptcy claims that have been discharged by the terms of the Plan. Specifically, B&W relies on the following provisions: The Plan defines both “Claim” and “Contingent Claim.” [No. 00-10992, ECF Doc. 7003, ¶¶ 1.1.51 & 1.1.56]. A Claim under the Plan is equivalent to a Claim under the Bankruptcy Code. Compare [No. 00-10992, ECF Doc. 7003, ¶ 1.1.51], with 11 U.S.C. § 101(5). The Plan also broadly defines “Contingent Claim”: “Contingent Claim” shall mean any Claim, the liability for which attaches or is dependent upon the occurrence or happening of, or is triggered by, an event, which event has not yet occurred, happened, or been triggered, as of the date on which such Claim is sought to be estimated or an objection to such Claim is filed, whether or not such event is within the actual or presumed contemplation of the holder of such Claim and whether or not a relationship between the holder of such Claim and the Debtor now or hereafter exists or previously existed.

[No. 00-10992, ECF Doc. 7003, ¶ 1.1.56].

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