In re: Energy Future Holdings Corp et al.,
Recommendation that Bankruptcy Appeal be withrawn from mandatory mediation. Signed by Judge Mary Pat Thynge on 6/22/15. (kjk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
In re: Energy Future Holdings
Corp., et al.,
Avenue Capital Management II, LP, et al.,
C. A. No. 15-210-RGA
Bankruptcy Case No. 14-10979 (CSP) i!'.i~
Bankruptcy Adv. No. 14-50797 (CSS)
AP No. 15-7
Fidelity Investments, et al.,
At Wilmington this 22"d day of June, 2015.
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, 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.
The parties disagree regarding the standard applied by the Bankruptcy Court in
granting Appellees' motion to dismiss, and whether mediation in this matter should
Appellants claim that the Bankruptcy Court incorrectly applied the appropriate
legal standard, arguing the dismissal of the complaint was only warranted if Appellees'
interpretation of the contract was the only reasonable construction as a matter of law,
and warranted reversal on this appeal. They point out that mediation may help reach a
resolution, noting that the parties have not previously engaged in any ADR. They have,
however, engaged in discussions related to the broader Chapter 11 proceedings, in
which both are major creditors. Appellants note that they expressed a willingness to
resolve the Adversary Proceeding involved in this appeal in the context of the broader
resolution of the issues in the Debtors' Chapter 11 cases and look to mediation in this
court as an opportunity to resolve both the Adversary Proceedings and other issues
related to the broader Chapter 11 cases.
Appellees disagree with Appellants' comments above noting that the
Court rejected Appellants' approach to read one provision of the contract in isolation.
They emphasize that the parties are very familiar with each other and in very frequent
contact directly through principals and through intermediaries. Since those extensive
discussions have not lead to resolution of this appeal, Appellees do not believe that
mediation would be beneficial. More importantly, they note that the open issues
remaining in the bankruptcy case are unrelated to the issues on appeal and involve not
only the parties to this Adversary Proceeding, but a substantial number of parties not
involved in this appeal, which would require a much broader consensus of
stakeholders, and include parties over which this court does not have direct jurisdiction
through this appeal.
THEREFORE, IT IS RECOMMENDED that, pursuant to paragraph 2(a)
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. Through
this Recommendation, the parties were advised of their right to file objections to this
Recommendation pursuant to 28 U.S.C. § 636(b)(1 )(8), FED. R. C1v. P. 72(a) and D.
DEL. LR 72.1. Any objections to this Recommendation shall be filed within fourteen ( 14)
days, limited to five (5) pages, after being served with the same. Any response must be
filed within fourteen (14) days after service of objections and is limited to five (5) pages.
The parties are further directed to the Court's Standing Order in Non-Pro Se matters for
Objections Filed under FED. R. C1v. P. 72 dated October 9, 2013, a copy of which is
available on the court's website, www.ded.uscourts.gov.
Local counsel are obligated to inform out-of-state counsel of this Order.
Isl Mary Pat Thynge
UNITED STATES MAGISTRATE JUDGE
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