Colony National Insurance Company v. SLB Toys USA, Inc. et al

Filing 105

MEMORANDUM Order Signed by the Honorable Milton I. Shadur on 7/14/2011. (ber, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
COLONY NATIONAL INSURANCE
COMPANY,
Plaintiff,
v.
SLB TOYS USA, INC., et al.,
Defendants.

)
)
)
)
)
)
)
)
)
)

No.

11 C 1121

MEMORANDUM ORDER
Following the transfer of this action to the United States
District Court for the Central District of California, Honorable
John Walter retransferred the action to this District Court for
the limited purpose of obtaining a ruling on the motion by one of
the defendants--SLB Toys USA, Inc. (“SLB”)--for reconsideration
of this Court’s one-page June 1, 2011 order (the “Order”)
granting the ex parte application of Byron Moldo (“Moldo”), as
assignee for the benefit of SLB’s creditors, to be substituted in
place of SLB.

This Court promptly issued the attached July 11

memorandum order and has now received both a copy of the
assignment document and written submissions by SLB and by one of
its codefendants--Manley Toys, Ltd. (“Manley”)--with the latter
seeking to join SLB’s current submission.1

1

That last document really supplies nothing of particular
value and, in addition, appears to pose a potential question of
Manley’s standing to address the issue. But because the result
set out here is unaffected by Manley’s stated position, its
motion is simply denied on mootness grounds.

After giving the matter full consideration, this Court has
decided that the most prudent course of action is to vacate its
earlier ruling substituting Moldo in place of SLB.

While the

suggestions made by SLB and Manley that such a substitution would
lead to collusion between Moldo and Plaintiff Colony National
Insurance Company (“Colony”) are certainly problematic without
further elaboration, it is clear that Judge Walter will be better
positioned to address the substantive issues as part of the
larger ongoing litigation because of the relationship of certain
subsidiary issues to California state law.

And there is no

question that the Order was inadvertently flawed procedurally
because, as SLB has stated at page 4 of its current Supplemental
Memorandum, this Court was “unaware that no notice had been
given” by Moldo.
For these reasons, SLB’s motion for reconsideration is
granted and the Order is vacated without prejudice to the representation of Moldo’s motion to Judge Walter for decision.2
Hence the limited retransfer is at an end, and the entire action
is once again before the District Court for the Central District

2

lack of
only as
between
SLB and

No view is expressed here as to the substantive merit or
merit in the contentions advanced by SLB or Moldo--not
to SLB’s not-fully-explained prospect of collusion
Moldo and Colony but also as to the other issues on which
Moldo have crossed swords.
2

of California in general--and before Judge Walter specifically.

________________________________________
Milton I. Shadur
Senior United States District Judge
Date:

July 14, 2011

3

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
COLONY NATIONAL INSURANCE
COMPANY,
Plaintiff,
v.
SLB TOYS USA, INC., et al.,
Defendants.

)
)
)
)
)
)
)
)
)
)

No.

11 C 1121

MEMORANDUM ORDER
After this Court caused this action to be transferred to the
United States District Court for the Central District of
California, Honorable John Walter of that court has retransferred
the action to this District Court for the limited purpose of
deciding the pending motion by SLB Toys USA, Inc. (“SLB”) for
reconsideration of this Court’s brief June 1, 2011 memorandum
order that had granted the ex parte application of Byron Moldo
(“Moldo”), as assignee for the benefit of SLB’s creditors, to be
substituted in place of SLB as the real party in interest.
Despite the obvious key importance of the November 29, 2007
document making the assignment, neither party’s counsel has seen
fit to provide this Court with a copy of that document.
Accordingly Moldo’s counsel is ordered to deliver a copy of the
assignment document to this Court’s chambers on or before
July 19, 2011.

This Court will then determine whether anything

more may be needed to rule on the motion and, if not, will rule
promptly.

________________________________________
Milton I. Shadur
Senior United States District Judge
Date:

July 11, 2011

2