In re: Syntax-Brillian Corporation et al.
MEMORANDUM OPINION. Signed by Judge Gregory M. Sleet on 9/29/2016. (asw)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
SYNTAX-BRILLIAN CORPORATION., et al.,
Bankr. Case No. 08-11407 (KJC)
Civ. No. 13-337 (GMS)
GREENBERG TRAURIG LLP, et al.,
Presently before the court is the prose appeal (D.I. 1) of Ahmed Amr ("Appellant"), a
former shareholder of the above-captioned Chapter 11 debtors ("Debtors"), from a Bankruptcy
Court Memorandum Order (B.D.I. 2107) 1 ("Reconsideration Order"), which denied Appellant's
Motion to Reconsider and Vacate Orders (B.D.I. 200i) ("Motion to Reconsider") regarding the
Bankruptcy Court's prior (1) Order Denying Motion to Compel (B.D.I. 1996), and (2) Order
Denying Motion to Sanction Nancy Mitchell and Greenberg Traurig LLP (B.D.I. 1997). The
Reconsideration Order is the only order on appeal, and the parties have completed briefing on the
merits. (See D.I. 43, 45, 50.) Since filing the Appeal, however, Appellant and other similarly
aggrieved former shareholders have filed numerous other requests and motions for relief, both
related and unrelat~d this Appeal (the "Shareholder Motions"). Appellant has filed a purported
The bankruptcy dock~t, captioned In re Syntax-Brillian Corporation, et al., Case No. 08-11407 (KJC) (Bankr. D.
Del.), is cited herein as/"B.D.I. _."
Motion for Summary Judgment Affirming Appellant's Standing to Sanction Nancy Mitchell and
Greenberg Traurig (ID.I. 23); Motion for an Emergency Injunction Directing the Secret Service to
Seize and Confiscate Forged Documents Currently in the Custody of the Liquidation Trustee (D.I.
38); and Motion to Impeach Nancy Mitchell's and Greenberg Traurig's Evidence (D.I. 70). Eight
former shareholders have filed separate pro se Motions to Intervene Due to Bankruptcy Fraud,
Spoliation of Evidence and Concealment of Forgery. (D.I. 47, 48, 49, 51, 52, 53, 54, 55.) This
Memorandum Opinipn addresses the Shareholder Motions. The court's ruling on the merits of the
Appeal will be issued separately.
The court assumes familiarity with the history of the Debtors' bankruptcy cases. The
factual background of this case is set forth in prior opinions by the Bankruptcy Court. 2 The
following background is only a summary of the facts relevant to the Shareholder Motions.
A. The Chapter 11 Cases and Plan
This appeal arises from the Chapter 11 cases of Syntax-Brillian Corporation and its debtor
affiliates. Prior to commencing these cases, the Debtors were in the business of selling "Olevia"
brand flat screen te~evisions through retail distribution channels such as Target. The televisions
were sourced and assembled in Asia and shipped to the United States. The record reflects that the
Debtors were victims of a large scale fraud perpetuated by their pre-bankruptcy management and
certain of their vendors or business partners in the Far East. As a result of losses suffered due at
See SB Liquidation Trust v. Preferred Bank (In re Syntax-Brillian Corp.), No. 08-11407 (BLS), 2011 WL 3101809
(Banla. D. Del. July 25, 2011); SB Liquidation Trust v. Preferred Bank (In re Syntax-Brillian Corp.), No. 08-11407
(BLS), 2013 WL 1538~1 (Banlcr. D. Del. Jan. 15, 2013), In re Syntax-Brillian Corp., 551 B.R. 156 (Banlcr. D. Del.
2016); see also SB Liquidation Trust v. Preferred Bank (In re Syntax-Brillian Corp.), 573 Fed. Appx. 154 (3d Cir.
least in part to such :(raud, the Debtors' business collapsed in the Spring of 2008, and these cases
were commenced on'July 8, 2008. (See B.D.I. 1.)
On August 1'2, 2008, the Bankruptcy Court entered an order authorizing the Debtors'
retention and employment of the law firm of Greenberg Traurig, LLP ("GT") as its bankruptcy
counsel. (B.D.I. 236.) The record reflects that Nancy A. Mitchell was one of the GT attorneys
that lead the Debtors' representation in the bankruptcy cases. The Debtors tried and failed to sell
the business as a going concern in the first few months of the case and promptly shut down
operations. On March 12, 2009, the Bankruptcy Court approved the Debtor's Second Amended
Disclosure Statement (B.D.I. 1017, 1020) (the "Disclosure Statement"). The Disclosure Statement
made fulsome disclosure regarding pre-petition and post-petition investigations and claims ·Of the
Debtors against a variety of parties, including prior management and trading partners. The
Disclosure Statement also specifically stated that recovery for shareholders was unlikely. (See
B.D.I. 1017 at 40.)
On July 6, 2009, the Bankruptcy Court entered an order (B.D.I. 1529) (the "Confirmation
Order") confirming the Debtors' Second Amended Chapter 11 Liquidation Plan (B.D.I. 1016) (the
"Plan"). The effective date of the Plan occurred on July 7, 2009 (the "Effective Date"). (See
On August 6, 2009, GT filed its final application for compensation and
reimbursement of expenses as counsel to the Debtors for the period from July 8, 2008 through July
7, 2009 (B.D.I. 1583), which was approved by the Bankruptcy Court on September 10, 2009.
Pursuant to the Plan, on the Effective Date, the Debtors' attorneys were exculpated from
"any liability for Jy post-petition action taken or omitted to be taken in connection with or in
contemplation of the restructuring or liquidation of the Debtors and/or relating to the Chapter 11
Cases" with the exc~ption of acts or omissions determined in "a Final Order to have constituted
gross negligence or *illful misconduct ... ". (Plan, Article XI.A.) The Plan also authorized the
establishment of a liquidating trust (the "Liquidation Trust") and appointment of a liquidation
trustee ("Trustee") to, among other duties, hold the Liquidation Trust Assets, pursue certain Causes
of Action,3 and make distributions to beneficiaries consistent with the terms of the Liquidating
Trust Agreement. (See Plan, Article VI.A. l.) The Debtors' assets, including rights to Causes of
Action, were deemed to have been automatically transferred to the Liquida,tion Trust on the
Effective Date. (See id) Finally, Class 7 Equity Interests were cancelled on the Effective Date,
and holders of Allowed Equity Interests did not receive any distribution under the Plan. The Plan
If prior to the closing of the Chapter 11 Cases the Liquidating Trustee
determines that Residual Equity Assets are available for distribution to Holders of
Allowed Equity Interests (meaning that additional assets are available after
satisfying in full all other pre- and post-Petition Date claims), then, upon reasonable
notice to the Holders of Allowed Equity Interests ... the Liquidating Trustee will
file a motion with the Bankruptcy Court requesting approval of procedures for
making distributions to the Holders of Allowed Equity Interests ... The Debtors
do not believe that any assets will be available for such distributions.
The Plan defines "Causes of Action" as:
all Claims, actions, causes of action, choses in action, suits, debts, dues, damages, judgments, thirdparty claims, counterclaims, and crossclaims (including, but not limited to, all claims arising under
state, federal or other nonbankruptcy law, and any avoidance, recovery, subordination or other
actions against insiders and/or any other Persons or Entities under the Bankruptcy Code, including
Sections 506, 510, 542, 543, 544, 545, 547, 548, 549, 550, 551, and 553 of the Bankruptcy Code or
otherwise) of ~he Debtors or any Debtor, the Estates or any Estate (including, but not limited to,
those actions qescribed in Article XII hereof) that are or may be pending or existing on the Effective
Date, or which are based on any facts or circumstances occurring on or before the Effective Date,
against any P~rson or Entity, based on law or in equity, including, but not limited to, under the
Bankruptcy Cbde, whether direct, indirect, known or unknown, derivative, or otherwise and whether
asserted or un~sserted as of the Effective Date, and including the Unknown Causes of Action, but
shall not include any Sale Causes of Action, and shall not include any Causes of Action against
[Silver Point Finance, LLC], the DIP Lenders, the Postpetition Agent, the Pre-Petition Lenders, the
Pre-Petition Agent and/or their respective affiliates, officers, directors and agents.
Plan, Article l.C.19.
(Plan, Article IV.A.'?.) Thus, although the Plan provided that shareholders could potentially
receive a distributiod on account of their stock holdings in the Debtors, both the Plan and federal
law4 expressly provide that no distributions to shareholders can be made until all allowed claims
are paid in full. Consistent with his duties under the Plan, the Trustee has pursued various Causes
of Action, including litigation against former officers and directors of the Debtors. 5 As of June 3,
2016, the Trustee reported that he has made a 21 % distribution to holders of Allowed General
Unsecured Claims. (See B.D.I. 2371, 'if 12.) The Trustee also reported that he does not anticipate
that Allowed Equity Interests will receive a distribution in the Chapter 11 cases. (See id. at 'if 10.)
B. Appellant and Former Shareholders
Appellant was a prepetition holder of the Debtors' common stock, and he has actively
participated in the Chapter 11 proceedings, making numerous appearances in court and numerous
prose requests for relief. Recognizing the importance of Appellant's input, the Bankruptcy Court
has previously awarded Appellant $6,700 pursuant to 11 U.S.C. § 503(b) in recognition of his
substantial contribution to the Chapter 11 cases. Other former shareholders have also made
numerous prose filings in the Chapter 11 cases post-confirmation. (See B.D.I. 2393.)
The court is well aware of the losses suffered by shareholders on account of the Debtors'
collapse. The Honorable Brendan L. Shannon, who presided over these cases from July 8, 2008
("Petition Date") to May 17, 2016, 6 recently recognized the wrongs suffered by the Debtors'
Syntax was the victim of a fraud, apparently perpetrated by certain members of its
manageme~t team as well as its suppliers in the Far East. The Court is acutely
aware of the suffering endured by Syntax's shareholders on account of the collapse
See 11 U.S.C. § 510(b).
See B.D.L 2413 at 5 (referencing adversary proceeding currently pending under the caption, SB Liquidation Trust v.
Li, et al., Adv. Proc. No. 08-51830 (KJC) (Banl
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