CASE NO. 01-16034-AJG, (Southern District of New York), Adversary No. 03-3598.United States Bankruptcy Court, N.D. Texas.
October 15, 2004
MEMORANDUM OPINION AND ORDER
STEVEN FELSENTHAL, Bankruptcy Judge
Jeffrey McMahon, the defendant, filed a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), made applicable in this adversary proceeding by Bankruptcy Rule 7012, for failure to state a claim upon which relief can be granted in regard to the claims asserted in the complaint filed by the Official
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Employment-Related Issues Committee of Enron Corp. (the “Employment Committee”), the plaintiff. See docket nos. 10 and 25. The Employment Committee did not file a response to the motion. The court conducted a hearing on the motion on August 31, 2004. At the hearing, the Employment Committee acknowledged that it overlooked the motion to dismiss and failed to file a response.
The Employment Committee filed a complaint on April 9, 2003, against McMahon to recover a prepetition payment of $1.5 million made to him by Enron Corporation. The complaint alleges 1) that the payment was a voidable preference under 11 U.S.C. §§ 547 and 550; 2) that the payment was a fraudulent transfer under 11 U.S.C. §§ 548, 544(b), and 550 and applicable state law; and 3) alternatively, that the payment is voidable pursuant to § 24.006(b) of the Texas Business and Commerce Code, as incorporated by 11 U.S.C. § 544(b).
Rule 12(b)(6) permits a defendant to move to dismiss a pleading for failure to state a claim upon which relief may be granted. The court must determine, in the light most favorable to the plaintiff, whether the complaint states any valid claim for relief. Cinel v. Connick, 15 F.3d 1338 (5th Cir. 1994). A complaint may not be dismissed for failure to state a claim “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to
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relief.” Conley v. Gibson, 355 U.S. 41, 45-46 (1957). The court must accept as true all well-pleaded allegations contained in the plaintiff’s complaint. Albright v. Oliver, 510 U.S. 266, 268
(1994). The facts pled must be specific, however, and not merely conclusory. Guidry v. Bank of La Place, 954 F.2d 278, 281 (5th Cir. 1992).
McMahon argues that the Employment Committee’s complaint “is based entirely on conclusory statements of voidable preference and fraudulent transfer claims” which are inadequate to support the claims against him.
McMahon asks the court to dismiss the complaint or establish a deadline for the Employment Committee to amend its complaint with specific allegations that support a claim upon which the court may grant relief.
At the hearing, the Employment Committee agreed to amend its complaint to address the issues raised by McMahon.
Leave to amend should be freely granted. The Employment Committee should be given an opportunity to address these issues. The court finds cause to permit the Employment Committee to file an amended complaint. Fed.R.Civ.P. 15(a), made applicable by Bankruptcy Rule 7015. The Employment Committee filed its amended complaint on October 6, 2004.
Based on the foregoing,
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IT IS ORDERED that the motion of Jeffrey McMahon to dismiss is DENIED without prejudice.
IT IS FURTHER ORDERED that Jeffrey McMahon shall, by November 10, 2004, serve and file responsive pleadings to the amended complaint to all claims except, pursuant to the order entered September 30, 2004, the fourth claim for relief.
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