In re: Energy Future Holdings Corp. et al.

Filing 10

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

INRE:
ENERGY FUTURE HOLDINGS CORP.,
et al.,

Bankruptcy Case No. 14-10979

Debtors.

MICHAEL CUNNINGHAM, et al.
Appellants,

v.

C. A. No. 15-1218-RGA

ENERGY FUTURE HOLDINGS CORP,
et al.
FILED

Appellees.

FEB - 3 2016
RECOMMENDATION
·U.S. DISTRICT COURT DISTRICT OF Df!.AWAR~

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 and teleconference with counsel on January 28, 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 during the teleconference, the parties have strong, divergent views
regarding the strengths and weaknesses of their respective positions.
The underlying bankruptcy matter involves the reorganization of 70 Debtors.
Appellants filed class proofs of claim and sought to certify a class to protect the claims
of persons exposed to asbestos from four of the Debtors' asbestos-containing products
who in the future may fall ill from asbestos-related illnesses post-confirmation
("Unmanifested Asbestos Claimants"), and who did not filed individual proofs of claim
prior to the court-imposed bar date. Their appeal is from a Bankruptcy Court order
confirming the Debtors' reorganization plan which discharges claims of the
Unmanifested Asbestos Claimants who did not filed proofs of claims, but reinstated
claims for which a timely proof of claim was filed. Prior to the confirmation, Appellants
sought class certification and filed their class proofs of claim in an attempt to preserve
the claims of the Unmanifested Asbestos Claimants in the class. They note that the
confirmation order is the subject of a separate appeal pending in this court. Appellants
argue in support of mediation that the appellant relief sought is to protect the due
process rights of members of the class and to prevent their claims from being discharge
without constitutionally adequate notice. They contend that the Appellants did not
receive notice and learned of the situation by accident.
Appellees feel that there was no middle ground available, based on Appellants'
position on settlement, 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

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claims. They view Appellants' motion for class certification, which is the subject of this
appeal, 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 pre-petition
asbestos exposure, whether they filed a timely claim. Appellees are not agreeable to
that proposal or any other proposal that circumvents the bar date and notice plan for
such claims or prevents the discharge of untimely claim. They view the requested relief
by Appellants as all-or-nothing.
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. During
the teleconference, 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

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