Opinion
Case No. 01-31609-7
August 19, 2003
ORDER
At Butte in said District this 19th day of August, 2003.
In this Chapter 7 bankruptcy case, the Trustee ("Trustee"), Ford Elsaesser, filed on July 23, 2003, a Motion ("Motion") for Entry of an Order (A) Allowing Trustee to Compromise Certain Preference Claims; (B) Establishing Procedural Rules for Adversary Proceedings involving Preference Claims; and (C) Granting other relief, with Notice of Opportunity to Object. Debtor, through Harold V. Dye, filed a limited objection and scheduled a hearing for August 13, 2003. After due notice, a hearing was held at Missoula on August 13, 2003, on Trustee's Motion for order authorizing the Trustee to compromise certain claims that the Trustee intends to pursue in accordance with Sections 547 and 550 of the Bankruptcy Code and approving the procedures for resolution of such claims, and objections thereto. Trustee Elsaesser appeared and addressed the Court. Attorney Joel E. Guthals ("Guthals") also appeared on behalf of Trustee. The Court heard statements from Dye, who on August 12, 2003, withdrew his objection to the Trustee's application to employ Nancy Ross High Ridge Partners, which has been approved by Order entered July 24, 2003. Dye stated that the default notice provisions under this Court's local rule governing motions, Mont. LBR 9013-1, would be a more efficient method of obtaining approval for smaller settlements than the procedures proposed by the Trustee. The Trustee responded that his proposed procedures are permitted under F.R.B.P. 2002 and this Court has discretion to approve them. Guthals advised the Court of the time requirements for filing and serving individual notices on the Court's ECF system. No objections have been filed concerning Trustee's request to settle Preference Claims in an amount equal to 90% of the alleged transfers, less undisputed new value.
Upon review of the record and applicable law, and based upon the statements of the Trustee and counsel, this Court having jurisdiction over the subject matter of and parties to the Trustee's motion, and having the discretion to approve appropriate procedures,
IT IS ORDERED:
1. Dye's objection is overruled in part; and the Trustee's motion for order authorizing the Trustee to compromise certain claims that the Trustee intends to pursue in accordance with Sections 547 and 550 of the Bankruptcy Code and approving the procedures for resolution of such claims, filed August, 2003, is GRANTED in part.
2. Notice of this Order shall be transmitted by the Clerk's office to all attorneys and persons identified on the affidavit of service identified on Exhibits A and B contained in Docket No. 1326 and to all attorneys and persons identified on the certificate of service contained in Docket No. 1308, with the deletion of all duplicate names. Within 10 days of the date of this Order, every person receiving a notice of this Order and wishing to remain on the special, official preference claim notice list concerning Preference Claim proceedings and contested matters before this Court, with the exception of preference defendants whose name and service address will be added by Trustee during the course of the proceedings and contested matters, shall notify the U.S. Bankruptcy Clerk of Court at jore_corporation@mtb.uscourts.gov, of their request to stay on the special, official preference claim notice list. Such request by a person shall constitute his consent to receive notice by electronic means if it is available to such person. The Clerk of Court shall then post this official list on the Court's website, www.mtb.uscourts.gov under a Jore Corp. Link for use on all preference claim proceedings and contested matters entitled, "Preference Claim Notice List". The Clerk of Court shall further notify Trustee and his attorneys, Robert Fishman and Joel Guthals of the special, official preference claim notice list. Trustee in each preference claim pleading may add additional names and addresses to the special, official preference claim notice list, as deemed appropriate to provide adequate notice to interested parties.
3. Pursuant to F.R.B.P. 9019(b), Trustee is authorized to settle preference claims for an amount equal to 90% of the alleged transfers, less undisputed new value, without further notice to creditors or further Court order. All Preference Claims subject to this paragraph, irrespective of the amount of the transfers, are exempt from the procedures set forth in paragraph 4.
4. Trustee shall send a notice of any motion for approval of a settlement to the persons listed on the Preference Claim Notice List and any other persons Trustee may wish to add, together with the 10-day notice of opportunity to respond set forth in Mont. LBR 9013-1(d). The original motion together with the settlement agreement may be reviewed on the Court's CM/ECF system which can be accessed through the PACER system. [Contact the Clerk of Court by email or at (406)497-1243, if additional information on how to access PACER or CM/ECF is necessary]. In the event no response and request for hearing is filed pursuant to Mont. LBR 9013-1(e) within 10 days, the Court will enter an order [prepared and submitted by Trustee] approving such settlement without any hearing on the same. In the event a response and request for hearing is filed, such hearing shall be scheduled by the responding party on the next scheduled status hearing scheduled before this Court which date and time will be located on the Court's website under the Jore Corp. Links and entitled "Status Hearing Schedule for Preference Claims." If such date for the scheduled status hearing is less than 20 days, the responding party shall request that the 20-day notice period be shortened so the hearing may be held on the next scheduled status hearing date.
5. Trustee is authorized to extend deadlines for preference defendants to answer complaints and to comply with discovery requests without seeking further leave of the Court. The Court, however, may require periodic status reports in all adversary proceedings pending for longer than 60 days without any pleading activity. The Court will hold telephonic pretrial scheduling conferences as it deems appropriate.
6. With regard to Preference Claims which, in Trustee's discretion, are and continue to be in the "Settlement Possible" category (defined in the Motion), no formal discovery deadlines shall be set unless the Trustee or the transferee so requests. The Trustee and the preference defendants in the Settlement Possible category, however, may serve discovery on each other, and each side's responses to such discovery shall be due within the time period prescribed by the Bankruptcy Rules unless the parties otherwise agree in writing. The Court, however, may require periodic status reports in all adversary proceedings pending for longer than 60 days without any pleading activity. The Court will hold telephonic pretrial scheduling conferences as it deems appropriate.
7. With regard to claims in the "Disputed Category" (defined in the Motion), all discovery shall be completed by the parties as to any Disputed Claims within ninety (90) days after such claims are designated as Disputed Claims, in accordance with the Bankruptcy Rules, unless the Trustee and the defendants for any Disputed Claims agree in writing to different discovery timetables (which timetables shall be filed with the Court, but which shall be effective without further Court Order) or the Court, upon a motion or sua sponte, orders different discovery schedules. The Court, however, may require periodic status reports in all adversary proceedings pending for longer than 60 days without any pleading activity. The Court will hold telephonic pretrial scheduling conferences as it deems appropriate.
8. Omnibus status hearings regarding the Preference Claims shall be held every month, on the Court's regularly scheduled Missoula hearing date. The 2003 status hearing dates and times are as follows: September 11, 2003, at 9:00 a.m.; October 7, 2003, at 9:00 a.m.; November 6, 2003, at 9:00 a.m.; and December 11, 2003, at 10:00 a.m., or as soon thereafter as counsel can be heard, in the BANKRUPTCY COURTROOM, RUSSELL SMITH COURTHOUSE, 201 EAST BROADWAY, MISSOULA, MONTANA. The Court will schedule additional dates in 2004 as appropriate. Prior to each status hearing, the Trustee shall distribute to the Court, the persons named on the special, official Preference Claims Notice list, the U.S. Trustee and all of the preference defendants a status chart in form and substance substantially the same as that attached as Exhibit A to the Trustee's Motion, setting forth the status of the various "90% Settlements"; the "Settlement Possible Claims" and the "Disputed Claims" and any other matters to be addressed at the status hearing.
No Exhibit A was attached to Trustee's Motion. The exhibit may not have included reference to "90% Settlements", but the Court directs Trustee to add such information.
10. Defendants (and their counsel) in the "Settlement Possible" category are not required to attend the status hearings. Trustee and other parties and persons are encouraged to use videoconferencing, if available, and as frequently as possible for all status hearings and other hearings and trials, but must request such videoconferencing at least 10 days prior to any scheduled hearings through Lynn Myers, Chief Deputy Clerk, at (406) 497-1252, to minimize access problems and to confirm availability.
11. The Trustee shall have authority to defer the filing fees for adversary proceedings until such time as the Trustee collects sufficient funds from the recovery of Preference Claims. The Trustee shall inform the Court of the status of his collection efforts at each regularly scheduled status conference, through the status chart. The Court may order the Trustee to pay all or a portion of the deferred filing fees at any time.
12. The Court finds and concludes that, pursuant to Bankruptcy Rules 9006(c) and 9019, good cause in promoting judicial economy, efficiency and resources, exists to approve the procedures for settling Preference Claims as described in paragraphs 3 and 4 herein and that such procedures are appropriate under these particular circumstances.