BKY 05-30073.United States Bankruptcy Court, D. Minnesota.
March 10, 2005
ORDER RE: STATUS OF BRIEFING FOR “LEGAL ISSUES HEARING”
GREGORY KISHEL, Bankruptcy Judge
At St. Paul, Minnesota, this 10th day of March, 2005.
This is a Chapter 11 case. Via case management orders entered on January 26 and February 7, 2005, the Court established formats and deadlines for various procedures preliminary to a confirmation hearing. The format included a “Legal Issues Hearing.” The framework for litigation under these orders is the product of negotiation among very sophisticated bankruptcy practitioners. Many of these lawyers have substantial working experience in the very specialized subject matter of this case.
On March 2, 2005, the Debtor timely filed its statement of the legal issues that it anticipated for the “Legal Issues Hearing,” which is on the calendar for March 30, 2005. On March 4, 2005, Great American Insurance Company (“GAIC”) filed a document in response to the Debtor’s statement, titling it as an “Objection” to the statement and a “Request for Clarification.” On March 7, 2005, the Debtor’s counsel filed a response to GAIC’s submission.
Via its “Objection” and “Request for Clarification,” GAIC seeks further modifications of the structure of proceedings under the case management orders. Under all of the circumstances, the requests are not appropriate. A hearing to present them and any responses is not warranted.
The prospect of entering a case management order originally came before the Court on motion by GAIC. There was no material controversy among the participating parties that such
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an order should be entered. Nor was there disagreement about the sorts of pre-confirmation proceedings that should be made subject to a procedures order, or about the basic format and sequence of procedures. (The outline of those procedures had been set forth in a form of order that GAIC had proposed.) After hearing lengthy statements of position and contention at a hearing on January 20, 2005, the Court directed the parties to work together to adjust the terms of GAIC’s proposed order, particularly as to the timing of procedures. This was to be done in a way that would promote efficiency in all further discovery and pre-hearing preparation, while preserving the existing calendar settings for hearings on substantive issues.
The result was the case management order of January 26, 2005, later amended without significant controversy by the order of February 7, 2005.
All parties agreed that there should be a separate, advance hearing for the presentation of confirmation-related disputes that were purely on the law. All counsel understood that such a hearing would be treated essentially as one on cross-motions for summary judgment, ideally to be presented on stipulated or jointly-assumed facts, and after joint identification of specific issues. In any case, any party was to be able to present an issue that its counsel believed in good faith to be one purely of law, after a fair evaluation of potential issues of fact and the rejection of those matters that would require competing evidentiary presentations. The sequence and timing of the deadlines for pre-hearing filings reflect this understanding. The goal is to air and early resolve as many confirmation-related issues as possible, while minimizing the cost of that effort.
Ideally, this would be done by coordination among opponents, with a consensual framing of specific issues. Opposing parties can always agree in good faith on the characterization of an issue as purely legal, and just get down to presenting the substance in a fair and professional manner.[1] However, where that is not forthcoming, anyone seeking an affirmative ruling on a
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particular issue could come forward in the first instance via the initial round of briefing due on March 9, 2005, there “pointing out” that there is no triable fact dispute going to that issue, and framing its argument for a ruling in its favor with supporting legal authority. On a given issue, it may be necessary to cite legal authorities for the proposition that the issue is inherently one of law. On others, it may be a matter of summarizing the lack of evidentiary support for underlying findings that would be contrary to those that the party propounds. In the first group, some disputes may turn solely on the language of the Debtor’s plan, on its face, and the construction to be given to it.
It remains, though, that under the case management orders, the first round of briefing can serve a preemptive function, to the extent that the parties do not agree on the framing and factual underpinning for a specific issue. The parties with the most motivation to obtain rulings on particular issues “as a matter of law” will make their case for that characterization, and should come forward for the advantage of obtaining such rulings. It will neither be necessary nor cost-effective for parties to anticipate all of the arguments of their opponents, and to try to defuse them in the first round.[2] Such confrontation is the function of the response and reply phases. The parties clearly took pains to include these phases in the case management orders. They jointly structured the deadlines for these procedures. There is nothing to indicate that any party had flawed assumptions in doing so.
GAIC protests that the Debtor filed a modified plan on March 2, 2005. It raises the specter that the plan may spawn unanticipated issues, and that opponents of confirmation cannot cope with such in the remaining time. The Debtor’s counsel responds by saying that the modifications all went to substantive objections that individual insurers filed earlier, and that most
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of them go to the acceptability of the original plan’s “insurance neutrality language” — an issue already much in controversy under the insurers’ objections. The Debtor’s counsel state that they circulated a “red-lined” version of the modified plan in tandem with their service of the integrated form of the plan, just to promote ease in review.
Given these circumstances and that measure, it does not appear that dealing with the modifications as a part of the “Legal Issues” process will be unduly burdensome for any party’s counsel. To the extent that any renewed review of the modified plan after the first round of briefing suggests other points of argument, the Court will grant some leeway as to the scope of issues that may be raised in responsive briefing.[3]
Simply stated, it does not appear that adhering to the sequence of timing and procedures and deadlines under the case management orders will overburden any party’s counsel, or cause substantive prejudice to any party. All of the attorneys at the center of the controversies in this case are experienced, articulate, intelligent, and able. Most of them demonstrate an impressive grounding in the peculiar complex of history, fact, and law that characterizes an “asbestos bankruptcy case.” There is no indication that this case presents an unprecedented aspect or permutation that would be outside counsel’s manifested ability to analyze and confront, under the existing timetable.
For these reasons,
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IT IS HEREBY ORDERED that the requests for further modification of the case management orders previously entered are denied.