In Re: Energy Future Holdings Corp.

Filing 12

Recommendation that Bankruptcy Appeal be withrawn from mandatory mediation. Signed by Judge Mary Pat Thynge on 2/3/16. (kjk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

IN RE:
ENERGY FUTURE HOLDINGS CORP.,
et al.,

Bankruptcy Case No. 14-10979

Debtors.

SHIRLEY FENICLE, et al.
Appellants,

v.

C. A. No. 15-1183-RGA

ENERGY FUTURE HOLDINGS CORP,
et al.

FILED

Appellees.

FEB - 3 2016
RECOMMENDATION
U.S. DISTRICT COURT DISTRICT OF DELAWARE

At Wilmington this

3rd

day of February, 2016.

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 involved a joint letter
from the parties dated January 27, 2016, 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. ·

It was clear the parties have strong, divergent views regarding the strengths and
weaknesses of their respective positions and the benefits, if any, from mediation.
The underlying bankruptcy matter involves the reorganization of 70 Debtors. At
issue are the claims of person exposed pre-petition to asbestos who will succumb to
asbestos-related illnesses post-confirmation ("Unmanifested Asbestos Claimants"), and
who did not filed individual proofs of claim prior to the court-imposed bar date.
Appellants' couch the issue on appeal as whether consistent with the requirements of
due process, Unmanifested Asbestos Claimants for which proofs of claims were not file,
can be discharged by the order confirming the reorganization plan, which reinstated all
unsecured claims for which a proof of claim was timely filed.
Appellees feel that there is no middle ground available, noting that the
Bankruptcy Court established a December 14, 2015 bar date for all asbestos-related
claims, including those not manifested, that is individuals who have not suffered any
physical injury, approved the Debtors' notice plan for such claims and confirmed a plan
of reorganization discharging any untimely-filed claims. They view Appellants'
objections to the plan to be an attempt to overturn the Bankruptcy Court's asbestos bar
date and allow any unmanifested claimant to bring suit against the Debtors for prepetition asbestos exposure, whether they filed a timely claim. Appellees are not
agreeable to such a result or any other proposal that circumvents the bar date and
notice plan for such claims or prevents the discharge of untimely claims.
The issues in this appeal are similar to those raised in Cunningham v. Energy

Future Holdings Corp., 15-1218-RGA in which a Recommendation for removal from
mandatory mediation was made.

2

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 advise of their right to file objections pursuant to
28 U.S.C. § 636(b)(1 )(B), FED. R. C1v. P. 72(a) and D. DEL LR 72.1.
Local counsel are obligated to inform out-of-state counsel of this Order.

Isl Mary Pat Thynge
UNITED STATES MAGISTRATE JUDGE

3