In re: Caribbean Petroleum Corp., et al.

Filing 7

Recommendation that Bankruptcy Appeal be withrawn from mandatory mediation. Signed by Judge Mary Pat Thynge on 12/1/14. (cak)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

In re: Caribbean Petroleum Corp., et al.
_____________________________________________________________________
Intertek USA Inc.,
Appellant.
v.
FTI Consulting Inc.,
Appellee.

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C. A. No. 14-1334-LPS
Bankruptcy Case No. 10-12553 (KG)
BAP No. 14-33

RECOMMENDATION
At Wilmington this 1st day of December, 2014.
WHEREAS, pursuant to paragraph 2(a) of the Procedures to Govern
Mediation of Appeals from the United States Bankruptcy Court for this District dated
September 11, 2012, the court conducted an initial review, which included information from
counsel, to determine the appropriateness of mediation in this matter;
WHEREAS, on November 18, 2014 the parties provided a joint report on their
respective positions regarding mediation.

Because of the parties’ divergent views

regarding mediation, on November 24, 2014, a teleconference occurred to explore the
parties’ positions
WHEREAS, as a result of the above screening process, the issues involved
in this case are not amenable to mediation and mediation at this stage would not be a
productive exercise, a worthwhile use of judicial resources nor warrant the expense of the
process. In this particular bankruptcy matter, two prior appeals involving the same parties

occurred. The parties participated in mediation in connection with 12-898-LPS with Ian
Connor Bifferato, Esq. They jointly waived mediation in the subsequent appeal that joined
13-446-LPS and 13-717-LPS, however, they participate in mediation at the Third Circuit
(C.A. No. 13-4415). Neither mediation was successful in resolving those appeals. Intertek’s
argument for mediation primarily rests on the mandatory nature of this court’s standing
order for mediation of bankruptcy appeals, and Judge Gross’s order of authorizing initial
distribution to holders of allowed general unsecured claims and establishing a reserve for
certain claims and expenses as not factually supported. FTI argues that Intertek’s claim
was disallowed and it was unsuccessful in staying distribution of valid allowable claims. At
this stage of the proceedings, FTI, as the liquidation trustee, is not interested in further
attempts at mediation.
Although all bankruptcy appeals to this Court are automatically referred to mediation,
the Standing Order provides that referral is to a Magistrate Judge “for initial review and
discussion . . . to determine the appropriateness of mediation for the case
. . . .” See ¶ 2 (a) Referral for mediation (emphasis added). That section also authorizes
the reviewing Magistrate Judge to determine not only whether mediation is appropriate, but
also to recommend to the assigned Judge whether the matter should be referred to a Panel
member. ¶ 2(b).

It further provides if mediation is determined not appropriate, the

assigned Judge will issue an order withdrawing the matter from mediation for the case to
proceed through the appellate process. See ¶ 2(b)(ii). As evidenced by the Standing
Order, mandatory mediation does not mean that all bankruptcy appeals must be mediated
before briefing will occur or that mediation will automatically happen.
THEREFORE, IT IS RECOMMENDED that, pursuant to paragraph 2(a)
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Procedures to Govern Mediation of Appeals from the United States Bankruptcy Court for
this District and 28 U.S.C. § 636(b), this matter be withdrawn from the mandatory referral
for mediation and proceed through the appellate process of this Court. The parties were
advised of their right to file objections to this Recommendation pursuant to 28 U.S.C. §
636(b)(1)(B), FED. R. CIV. P. 72(a) and D. DEL. LR 72.1.
Local counsel are obligated to inform out-of-state counsel of this Order.

/s/ Mary Pat Thynge
UNITED STATES MAGISTRATE JUDGE

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