In re: MD Helicopters, Inc.
Recommendation that Bankruptcy Appeal be withdrawn from mandatory mediation. Signed by Judge Mary Pat Thynge on 8/1/2022. (Taylor, Daniel)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
MD HELICOPTERS, INC.,
Bankruptcy Case No. 22-10263 (KBO)
THE STATE OF THE NETHERLANDS,
C.A. No. 22-828-RGA
MD HELICOPTERS, INC,
Bankr. BAP No. 22-039
At Wilmington, this 1st day of August, 2022.
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, this judge 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 for the following reasons noted below.
This Appeal addresses a June 17, 2022 Order (the “Sale Order”) of Judge Karen
B. Owens of the Bankruptcy Court which authorized and approved the sale of
substantially all of the Debtors’ assets free and clear of any liens, claims and
encumbrances and the assumption and assignment of certain executory contracts and
expired leases in connection therewith and granted related relief. This bench ruling was
issued on June 17, 2022 in connection with the Sale Order. Thereafter, this Court in a
July 1, 2022 order, denied the Emergency Motions for certification to the Supreme
Court of Arizona and the Emergency Motions for stay filed in the present matter and the
related appeal (C.A. No. 22-702-RGA). See 22-702 RGA at D.I. 3, 12, 14
(memorandum opinion) and 15 (July 1 Order).
As noted in this Judge’s prior Recommendation, the parties have not previously
and are not presently involved in any ADR process. In the 22-702-RGA matter, the
Parties agreed that mediation would not be productive at that time and this Judge
recommended that the appeal be withdrawn from mandatory mediation. See D.I. 17
Judge Andrews adopted the Recommendation and withdrew the appeal in 22-702 at
D.I. 19. However, the Parties disagree as to whether mediation would be productive
The Debtor opposes court ordered mediation for the following reasons: the
Parties previously engaged in unfruitful settlement discussions and there is no reason
to believe court-assisted mediation would be productive, and mediation is likely to be
unsuccessful in light of the nature of the issues on appeal and the Parties’ respective
positions. Appellant maintains that the Bankruptcy Court’s Sale Order erred in
authorizing the sale of Appellees’ assets free and clear of its lien.
Appellees contend that any “belated” objection to the sale by Appellant would fail
and they claim to have produced “uncontroverted evidence” that the Buyer proceeded
in good faith in the sale process which entitled it to the protections of the Bankruptcy
The Netherlands claims that since the stay litigation is resolved, now would be
an appropriate time for all parties to mediate this Appeal and the Initial Appeal in 22702-RGA. The Netherlands reserves its rights on any other substantive issues in these
Despite the above, the Parties agree that continued discussion about potential
mediation may be helpful and jointly request this Court to defer a decision on mediation
while their settlement discussions are continuing. They further request that this Court
not set a briefing schedule at this time. In the Initial Appeal, the Parties agreed that this
Court should defer setting a briefing schedule until Appellant’s certification is resolved.
Although Judge Andrews denied Appellant’s request for certification in his July 1, 2022
Order, it believes that certification to the Arizona Supreme Court remains warranted and
has appealed his decision to the Third Circuit. The Parties agree that this Court should
defer setting a briefing schedule in this matter and in 22-702-RGA until after the Third
Circuit appeal is resolved. As a result, the Parties propose that f ollowing a decision by
the Third Circuit, they meet and confer regarding a briefing schedule in the present
Appeal and in 22-702-RGA.
After this Judge’s review of her initial Recommendation in 22-702 dated June 23,
2022 and the Parties submissions in that matter, the joint submission by the Parties on
July 22, 2022 in the present matter and the docket entries of this Court in both appeals,
IT IS THEREFORE RECOMMENDED that pursuant to paragraph 2(a) of the
Procedures to Govern Mediation of Appeals from the United States Bankruptcy Court
for this District and 28 U.S.C. § 636(b), that this Appeal be tem porarily withdrawn from
the mandatory mediation referral. At the present stage, because of the status of the
litigation in the present Appeal, the appeal in 22-702, and the appeal to the T hird
Circuit, mediation efforts would not be worthwhile. This Judge further recommends that
the Parties, in both the present matter and in 22-702-RGA, be ordered to discuss
mediation with her after the decision is rendered by the Third Circuit to enable a more
thorough evaluation whether mediation in the present appeal and in 22-702 RGA
should be ordered.
Local counsel are obligated to inform out-of-state counsel of this
Dated: August 1, 2022
/s/ Mary Pat Thynge
Chief U.S. Magistrate Judge
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