In re: Jevic Holding Corp., et al.

Filing 6

Recommendation that Bankruptcy Appeal be withdrawn from mandatory mediation (Taylor, Daniel)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

In re:

:
:
JEVIC HOLDING CORP, et. al.,
:
:
:
:
Debtors.
:
:
__________________________________ :
:
GEORGE L. MILLER, in his capacity as
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the Chapter 7 trustee of the Debtors’
:
bankruptcy estates,
:
Appellant,
:
:
v.
:
:
CIT GROUP/BUSINESS CREDIT INC., in :
its capacity as Agent, et al.
:
:
Appellees.
:

Chapter 11
Bankruptcy Case No. 08-11006 (BLS)
Bk. Adv. No. 08-51903 (BLS)
BAP 21-00034

C.A. No. 21-811-RGA

RECOMMENDATION
At Wilmington this 25th day of June, 2021.
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 have not previously participated in mediation since these cases were
converted to chapter 7 and the Trustee was appointed.
Appellant-Trustee believes mediation would be productive in leading to possible
settlement and thus feels Court-supervised mediation would be beneficial for the
following reasons: the Appeal rases matters of first impression in this Circuit and the
parties would benefit from mediation due to the uncertain procedural posture of the
underlying bankruptcy cases as related to the separate adversary proceeding initiated
by Appellee-CIT to recover disbursed proceeds of the prior settlement which was
overturned by the United States Supreme Court in Czyzwski v. Jevic Holding Corp., 137
S. Ct. 937 (2017).1 As a result, Appellant-Trustee contends that mediation could lead to
a global resolution. Further, Appellant-Trustee maintains Appellee-CIT’s inclusion of a
proposed briefing schedule is unnecessary based in this Court’s Order at D.I. 3 which
provides “[s]hould the parties jointly request the matter be removed from the mandatory
mediation requirement, they are to provide a proposed briefing schedule and/or advise
whether they feel a teleconference with a Magistrate Judge would be of assistance and
why.”2 If the proceedings are removed from mandatory mediation, Appellant-Trustee
requests no less than thirty (30) days to file its opening brief and a teleconference if the
Court is considering Appellee-CIT’s proposed schedule.
Appellee-CIT, as agent for the lender group, does not believe that mediation

1

This adversary proceeding is not on appeal and therefore, not presently before
this Court.
2

Emphasis in this Court Order at D.I. 3 was added by Appellant-Trustee.
2

would be beneficial noting that this bankruptcy case has been pending for about eleven
(11) years. It contends that the claims asserted by the creditors’ committee were settled
many years ago and Appellee-CIT paid full settlement consideration which was
distributed to the debtors’ creditors. After the Supreme Court vacated settlement,
Appellant-Trustee sought to pursue the same claims without returning the settlement
funds to Appellee-CIT. Therefore, Appellee-CIT is not interested in making any further
payment to settle this matter.
Further, Appellee-CIT maintains it is entitled to recover its fees and expenses for
defending litigation that Appellant-Trustee pursued. Absent Appellant-Trustee’s
willingness to discuss paying Appellee-CIT’s fees and expenses and dismiss its appeal
with prejudice, mediation is not worthwhile
Previously, Appellees engaged in settlement discussions prior to and after
conversion to Chapter 7. The relevant parties, including Appellant-Trustee postconversion, were never close to reaching a resolution.
According to Appellee-CIT, there are no issues regarding the Bankruptcy Court’s
authority to interpret its own order, and that Appellant-Trustee stands in the debtors’
shoes and is bound by the debtors’ waivers. Therefore, Appellee-CIT contends that
mediation would be a waste of the parties’ time, add unnecessary expense and delay
the end to these bankruptcy cases.
In additional to removal from mandatory mediation, Appellee-CIT further requests
that the following briefing schedule be entered:
Appellant’s Opening Brief

July 14, 2021

Appellees’ Responsive Briefs

August 11, 2021
3

Appellant’s Reply Brief

August 25, 2021

As noted previously herein, the above proposed briefing schedule is opposed by
Appellant-Trustee since it would be less than thirty (30) days for the filing of its opening
brief with this Court.
Appellees Sun Capital Partners, Inc., Sun Capital Partners, IV and Sun Capital
Partners Management IV, LCC (collectively “Sun”), although amenable to settlement
because of the long history and prior settlement payments made by Sun to the debtors’
administrative creditors under the vacant settlement which have not been returned, Sun
does not believe that the additional expense or the procedure for mediation is required
to reach a settlement. Consistent with the reasons provided by Appellee-CIT, Sun
requests this appeal be removed from mandatory mediation.
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.
IT IS NOT RECOMMENDED that the proposed briefing schedule requested by
Appellee-CIT be adopted.
The parties are 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
Chief U.S. Magistrate Judge Mary Pat Thynge

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