Consolidated Companies, Inc. v. General Electric Capital Corporation

Filing 92

ORDER AND REASONS denying 23 Motion for Judgment on the Pleadings. Further Ordered that the parties are given an opportunity to submit supplemental briefing within 14 days of this Order's issuance as set forth in document. Signed by Judge Ivan L.R. Lemelle. (ijg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CONSOLIDATED COMPANIES, INC.

CIVIL ACTION

VERSUS

NO. 13-4704

GENERAL ELECTRIC CAPITAL, CORP.

SECTION "B"(5)

ORDER AND REASONS
Cause of Action and Facts of Case
This case arises out of a financing agreement between
Plaintiff Consolidated Companies Inc. (Consolidated) and
Defendant General Electric Capital Corp. (GECC). Consolidated was
purchased in 1986 by three investors with money furnished by
GECC. Consolidated filed for bankruptcy relief in 1991. To
satisfy creditors, the bankruptcy court issued the "Debtors’
Second Amended Joint Consensual Plan of Reorganization Under
Chapter 11 of the Bankruptcy Code" (the Plan). GECC, as one of
Consolidated's creditors, was granted warrants to purchase up to
thirty percent (30%) of stock in the newly restructured
Consolidated pursuant to the "Warrant to Purchase Common Stock of
Consolidated Companies, Inc." (Warrant Agreement). At a later
date, Consolidated repurchased two-thirds of the warrants from
GECC – leaving one-third of the warrants still in GECC's
possession.
The Warrant Agreement, per its terms, contained an
expiration date of July 23, 2012. (Rec. Doc. No. 1-3). As of the

1

expiration date, GECC had not exercised the remaining warrants to
purchase stock. However, on May 30, 2013, Consolidated claims
that counsel for GECC contacted Consolidated requesting
information on the warrants as a preliminary step to purchase
stock. This caused Consolidated to bring the instant action for
declaratory relief. Consolidated seeks a judgement declaring
that:
(1) The Warrant, providing GECC with the ability to require
Consolidated to repurchase warrant stock, expired
unexercised on July 23, 2012.
(2) Because GECC failed to exercise its option under the
Warrant on or before July 23, 2012, GECC can no longer
exercise the Warrant.
(Rec. Doc. No. 1)
In response, GECC asserts several affirmative defenses.
Chiefly, it claims that it did not exercise the warrants before
the expiration date because Consolidated concealed the fact that
in 2010 it sold assets to Reinhart Foodservice, L.L.C. (Reinhart)
- which made the stocks' value far higher than they were before
the sale. (Rec. Doc. No. 10 at 2-3). GECC also alleges a
counterclaim against Consolidated for breach of contract, based
on Consolidated's failure to supply GECC with information about
the sale to Reinhart. Further, GECC filed a third-party complaint
against Comerica Bank. Comerica maintains an escrow account of $7
million that was established in 2010 after the sale by
Consolidated to Reinhart. The escrow account was formed under the
GE Escrow Agreement ("Escrow Agreement") to protect Reinhart

2

against any claims made by GECC pursuant to the Warrant
Agreement. GECC now seeks the funds in the account.
Nature of Instant Motion and Relief Sought
In the instant motion, Consolidated seeks judgement on the
pleadings and dismissal of GECC's counterclaim and third-party
claim under Federal Rules of Civil Procedure 12(b) and 12(c).
(Rec. Doc. No. 23). Consolidated asks the Court to grant
judgement that the warrants have expired, and that GECC has no
further right to exercise the option to purchase stock in the
Warrant Agreement. (Rec. Doc. No. 23 at 2). In the alternative,
Consolidated asks the Court to dismiss the counterclaim filed by
GECC on the basis that GECC fails to state a claim. Further,
Consolidated avers that the third-party claim filed by GECC
against Comerica Bank should be dismissed because GECC is not a
third-party beneficiary to the Escrow Agreement.1
Accordingly, and for the reasons enumerated below IT IS
ORDERED that Consolidates' Motion for Judgement on the Pleadings
d's
(Rec. Doc. No. 23) is DENIED.
IT IS FURTHER ORDERED that the Parties are given an

1

In a separate series of motions, Comerica Bank has requested leave to
deposit funds with the Court and commence an interpleader action to resolve
Consolidated and GECC's claims to the Escrow Agreement funds. (Rec. Doc. No.
28). Consolidated has countered that the request should be denied and, in the
event that GECC is entitled to pursue a third-party beneficiary claim to the
escrow funds, that claim should be resolved through arbitration. (Rec. Doc.
No. 35). As discussed infra., the Court does not resolve the
interpleader/arbitration conflict here - instead determining it prudent to
allow the parties to supplement their motions on the issue, should they find
it necessary.

3

opportunity to submit supplemental briefing on whether GECC's
claim to the GECC Escrow Funds should be compelled to
arbitration, or whether the funds may be deposited with the Court
and subject to an interpleader action.
Law and Analysis
I. Rule 12(c) Standard
Rule 12(c) permits "[a]fter the pleadings are closed - but
early enough not to delay trial - a party may move for judgment
on the pleadings." Fed. R. Civ. P. 12(c). A Rule 12(c) motion "is
designed to dispose of cases where the material facts are not in
dispute and a judgment on the merits can be rendered by looking
to the substance of the pleadings and any judicially noticed
facts." Hebert Abstract Co., Inc. v. Touchstone Properties, Ltd.,
914 F.2d 74, 76 (5th Cir. 1990). Such motions are prudent "when
all material allegations of facts are admitted in the pleadings
and only questions of law remain." Brown v. Walraven, 9 F.3d 1546
(5th Cir. 1993). A court reviewing a 12(c) motion may consider
"the competing pleadings, exhibits thereto, matters incorporated
by reference in the pleadings, whatever is central or integral to
the claim for relief or defense, and any facts of which the
district court will take judicial notice." Wright & Miller, 5C
Fed. Prac. & Proc. Civ. § 1367 (3d ed.). The appropriate standard
for dismissal is the same standard applied in 12(b) cases. See
id. (citing cases). Namely, if, assuming all facts in their
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favor, the nonmoving party is unable to raise a claim to relief
beyond a speculative level, then the action must be dismissed.
Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir. 2009).
II. The Plan and Warrant Agreement
Consolidated's Motion for Judgement on the Pleadings is
focused one primary question: Is GECC still entitled to exercise
the warrants to purchase stock, or have the warrants expired
unexercised? In order to decide this question, the Court must
first determine what terms control the expiration of the warrants
- the Bankruptcy Plan, the Warrant Agreement, or some combination
of the two. If the Bankruptcy Plan exclusively controls the date
of expiration, as GECC argues, then the warrants have not
expired, and Consolidated's Motion for Judgement on the Pleadings
lacks merit on the expiration issue.2 Alternatively, if the terms
of the Warrant Agreement exclusively control expiration then the
warrants have expired,3 and the Court must determine if any legal
cause exists to extend the expiration date.
Rather than choosing between the terms of the Plan and the
Warrant Agreement, Consolidated suggests that the two can in fact
be read in unison. It argues that the Bankruptcy Plan allowed
GECC to exercise the warrants "at any time" subject to "the
2

The terms of the Plan state that, subject to a refinancing option that
was exercised in this case, the warrants were "exercisable at any time."
(Plan, Rec. Doc. No. 38, Ex. A at p. 53).
3

The Warrant Agreement states the "expiration date" is July 23, 2012.
(Warrant, Rec. Doc. No. 1-3, Ex. A at p. 4).

5

prescribed period established in the attached form Warrant
contract." (Rec. Doc. No. 49 at 4). The Warrant Agreement, in
turn, set out the expiration date for the warrants - thus
presenting no conflict between the two agreements. The Court
agrees.
A bankruptcy plan of reorganization "should be construed
basically as a contract." In re Stratford of Texas, Inc., 635
F.2d 365, 368 (5th Cir. 1981). Thus, in interpreting the
construction of the Plan the Court is guided by Louisiana
contract law.4
Where terms in a contract seemingly conflict, Louisiana law
instructs that the Court should examine the contract as a whole
and determine the true intent of the parties. Bolding v. Eason
Oil Co., 248 La. 269, 279 (1965). However, the Court should not
seek out conflict or ambiguity in contracts where terms can be
read in harmony. Cf. Texas E. Transmission Corp. v. Amerada Hess
Corp., 145 F.3d 737, 741 (5th Cir. 1998) ("[A] contract provision
is not ambiguous where only one of two competing interpretations
is reasonable or merely because one party can create a dispute in
hindsight."). Rather, a court should only conclude that terms are

4

The Bankruptcy Plan states that "the internal laws of the State of
Louisiana shall govern the construction and implementation of the Plan and any
agreements, documents and instruments executed in connection with the Plan,
without regard to the conflict of laws provisions of the State of Louisiana,
except as otherwise provided in such document." (Plan, Rec. Doc. No. 38, Ex. A
at p. 71, art. 16.18). Both parties agree that this provision makes the
construction of the Plan governed by Louisiana law. See (Rec. Doc. No. 10 at ¶
24); (Rec. Doc. No. 49 at ¶ 10).

6

in conflict or ambiguous where the contract is "uncertain as to
the parties' intentions and susceptible to more than one
reasonable meaning under the circumstances and after applying
established rules of construction." Lloyds of London v. Transcon.
Gas Pipe Line Corp., 101 F.3d 425, 429 (5th Cir. 1996) (emphasis
added). Where contract provisions can be read without producing
variation between their meanings, the Court should not invite
conflict between the terms.
In determining whether a conflict actually exists between
contract clauses, a reviewing court is instructed that later
clauses in a contract may provide more specificity to more
general preceding terms. See Friedrich v. Local No. 780, IUE-AFLCIO-CLC, 515 F.2d 225, 227 (5th Cir. 1975) (holding "a
contractual clause must be read in its context, and 'a subsequent
specification impliedly limits the meaning of a preceding
generalization.'"(internal citation omitted)). Thus, where a
later clause alters a preceding clause, a court should not
necessarily find the clauses in conflict, but instead determine
whether the later clause can be read to explain the preceding
clause.
Here, the Bankruptcy Plan set out the general terms of the
warrants to purchase stock. The Warrant Agreement set out the
more specific terms of the warrants, and how they were to be
exercised. The most reasonable interpretation for reconciling

7

these two provisions, without seeking a conflict between the
terms, is the interpretation provided by Consolidated - i.e., the
Bankruptcy Plan permitted the execution of the warrants "at any
time" subject to the expiration date contained in the Warrant
Agreement.
A contrary reading of the documents would assume that the
parties agreed to conflicting terms that could not be reconciled.
It would further ignore the general principle of interpreting a
later clauses as limiting preceding clauses. Friedrich, 515 F.2d.
at 227. Here, the more specific language of the Warrant Agreement
clearly limits the generalizations in the Bankruptcy Plan. Thus,
the Warrant Agreement's terms control the expiration date.
The Court is also guided by the fact that the Bankruptcy
Plan and the Warrant Agreement established an option contract,
wherein GECC was permitted to purchase stock within its
discretion. Louisiana law requires option contracts to be for a
set duration. La. Civ. Code art. 1933 ("An option is a contract
whereby the parties agree that the offeror is bound by his offer
for a specified period of time and that the offeree may accept
within that time.") (emphasis added); Cf. Crawford v. Deshotels,
359 So. 2d 118, 122 (La. 1978) (stating perpetual option
contracts invalid under La. Civ. Code art. 2462, the precursor to
art. 1933). GEEC's interpretation of the Plan would therefore
require the Court to interpret the option agreement in a manner

8

contrary to law, i.e. creating an unenforceable perpetual option
contract. The Court finds no reason to believe that the parties
here formed an invalid agreement. The more reasonable
interpretation of the contract language is that the Warrant
Agreement articulated the expiration date for the option contract
referenced in the Bankruptcy Plan.
GECC offers two arguments in reply: (1) the terms of the
Bankruptcy Plan were a final judgement of the bankruptcy court
and therefore the "exercisable at any time" language cannot be
altered by the Warrant Agreement; and (2) the terms of the
Warrant Agreement indicate that, in the event of any conflict
between the Plan and the Warrant Agreement, the Plan controls signifying that the "exercisable at any time" language should
prevail over the Warrant's expiration date. Both of these
arguments presume some conflict between the two provisions. As
the Court has already stated, no conflict exists. The terms can
be read in unison. Therefore, there is no reason for the Court to
address GECC's arguments premised on conflict between the terms.
III. Expiration of Option
Having determined that the expiration date contained in the
Warrant Agreement controls, the Court now moves to a
consideration of whether - despite the expiration date - GECC is
still permitted to exercise the warrants. Per the terms of the
Warrant Agreement, Illinois law controls the execution of the

9

warrants.5
Under Illinois law, "[n]otice of a decision to exercise an
option is only sufficient to bind parties if in exact accord with
option terms ." Keene Corp. v. Chapple, 716 F.2d 475, 477 (7th
Cir.1983). "Illinois law is particularly adamant in requiring
that option contracts be strictly construed and that an option be
considered exercised only if the person holding the opting power
adheres exactly to the conditions precedent to its effective
consummation.." Wilson Sporting Goods Co., a Delaware Corp. v.
Penn Partners, 2004 WL 2445372 (N.D. Ill. Oct. 28, 2004).
Consolidated heavily relies on these standards in arguing that
because GECC failed to exercise the warrants by the Agreement's
expiration date, the warrants are void.
GECC does not disagree with the general principle that
option contracts are strictly construed under Illinois law, but
contends that it is entitled to specific performance of the
option contract in this case because Consolidated breached its
implied covenant of good faith and fair dealing, as well as
particular contractual obligations. Specifically, GECC argues it
was entitled to notice of the sale of Consolidated's assets,
which was not provided.
The Warrant Agreement entitles GECC to "the same rights to

5

See (Warrant, Rec. Doc. No. 1-3, Ex. A at ¶ 18.9). Parties are in
agreement that this is the case. See (Rec. Doc. No. 10 at ¶ 24); (Rec. Doc.
No. 23-1 at 5).

10

receive notice of corporate action as any holder of Common
Stock." (Warrant, Rec. Doc. No. 1-3, Ex. A at ¶ 5.2). Notice
under the Agreement must be provided "in writing and either
delivered in person with receipt acknowledged or sent by
registered or certified mail, return receipt requested, postage
prepaid" to GECC's last known address. (Id. at ¶ 18.2).

Further,

GECC had a right under the Warrant Agreement to exercise the
warrants immediately prior to any plan by Consolidated to "sell,
transfer or otherwise dispose of all or substantially all its
property, assets or business to another corporation." (Id. at ¶
4.8). Moreover, Consolidated was required under the Warrant
Agreement to obtain consent before entering into any transaction
that "would cause an adjustment of the Current Warrant Price . .
." (Id. at ¶ 4.11). Lastly, Consolidated was required to refrain
from "any action" intended to "avoid or seek to avoid the
observance or performance of any of the terms of" the Warrant
Agreement, and was under a general duty of "good faith [to]
assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate to protect
the rights of [GECC] against impairment." (Id. at ¶ 6). GECC
claims Consolidated failed in its obligations under the
Agreement.
Every contract under Illinois law contains an implied duty
of good faith and fair dealing, including option contracts.
11

Martindell v. Lake Shore Nat. Bank, 15 Ill. 2d 272, 286 (1958).
In In re Edgewater Med. Ctr., 373 B.R. 845 (Bankr. N.D. Ill.
2007), a case with a similar option agreement to purchase
property as the one here, the United States Bankruptcy Court for
the Northern District Illinois, interpreting Illinois law,6 found
that "withholding key information" of the value of the property
subject to the option agreement "breached the covenant of good
faith and fair dealing" such that strict compliance with the
option's expiration date was excused. Id. at 858. Similarly in
this case, GECC contends that its failure to comply with the
expiration date should be excused based on Consolidated's
withholding of information.
GECC's argument that Consolidated failed to provide
information is stronger than in Edgewater, since the Warrant
Agreement here contained specific requirements that Consolidated
provide information to GECC that it allegedly did not provide.
See supra. Thus, GECC need not only rely Consolidated's implied
covenant of good faith, but is also capable of pointing to
particular provisions in the contract compelling Consolidated to
6

Consolidated argues in its Reply that the Court should not be
persuaded by this authority because it is not authority from the Illinois
Supreme Court. (Rec. Doc. No.49 at 5). Although the Court is aware of its
obligation to apply state law in diversity cases as articulated by the state's
highest court, Samuels v. Doctors Hosp., Inc., 588 F.2d 485, 488 (5th Cir.
1979), case law from federal courts interpreting state law is useful
persuasive authority for a federal court determining how the state's highest
court would answer an unclear state law question. As articulated infra. the
Court does not find the Illinois Supreme Court case law cited by Consolidated
to resolve the conflict presented in this case. Thus, it is appropriate for
the Court to consider other persuasive authority.

12

give notice.
Consolidated's arguments to the contrary are unpersuasive.
First, Consolidated argues that Edgewater is factually dissimilar
because there a party actively "prevented" the execution of the
option, and did not passively withhold information. (Rec. Doc.
No. 49 at 6). Consolidated either misreads Edgewater, or attempts
to mislead the Court as to its holding. Nowhere in Edgewater does
the court find that the breaching party actively prevented
execution of the option by engaging in conduct tantamount to
"h[olding] down the arms" or "kidnaping" the party attempting to
exercise the option - as counsel for Consolidated suggests.
(Id.). Rather, much like here, the allegation in Edgewater was
that the breaching party had intentionally withheld information
that, if known, would have increased the value of the property
subject to the option.7 Counsel for Consolidated's attempt to
convince the Court that Edgewater is distinguished on that basis

7

Specifically, the withholding of information included:

1) concealing critical information relating to the valuation of the
adjacent properties and the benefit to [the non-breaching party] if the
option were exercised; 2) causing inaccurate and overvalued appraisals
to be prepared and presented to [the non-breaching party]; 3)
influencing [the non-breaching party]'s board into continuing to lease
rather than exercise the option to buy by representing that a full
analysis of the buy versus lease decision was complete when, in fact, it
was not; and 4) further manipulating the board into believing that the
appraisals were commissioned by Henry Zeisel when they were not.
In re Edgewater Med. Ctr., 373 B.R. 845, 857 (Bankr. N.D. Ill. 2007) (internal
citation omitted).

13

is without merit.
Consolidated next contends that other precedent, separate
from Edgewater, requires a different result. The Court disagrees.
The cases cited by Consolidated do not involve the type of
intentional withholding of information alleged here. Instead, the
cases purely involve parties attempting to exercise an option,
but in a manner not authorized by the contract. See Dikeman v.
Sunday Creek Coal Co., 184 Ill. 546, 551 (1900) (court could not
extend option deadline where failure to exercise by date was
solely the result of party's negligence); Wilson Sporting Goods
Co. v. Penn Partners, 03 C 5236, 2004 WL 2445372 (N.D. Ill. Oct.
28, 2004) (refusing to enforce option because notice of intent to
exercise the option included outdated rider form and party failed
to comply with environmental reporting provisions); Epton v. CBC
Corp., 48 Ill. App. 2d 274, 284 (Ill. App. Ct. 1964) (refusing to
enforce option where party accepted orally rather than by
writing, where contract required written acceptance); Swiss Bank
Corp. v. Dresser Indus., Inc., 141 F.3d 689, 692 (7th Cir. 1998)
(finding that under Delaware law the fact that the expiration
date of a warrant occurred on a holiday did not extend the
expiration date). The cases cited by Consolidated are inapposite.
Consolidated's attempt to equate the negligence of an optionee
with the misconduct of an optionor is misguided.
Further, the cases cited by Consolidated do not involve a

14

specific agreement to provide information relating to the
execution of the option, as is the case with the Warrant
Agreement. Indeed, in Dikeman v. Sunday Creek Coal Co. - which
Consolidated claims is "the leading case" on option contracts
under Illinois law - the court specifically held that "the only
stipulation of the parties was as to time" and did not contain
"any corresponding right or privilege of the [optionor], and the
only stipulation was that the right should be exercised at a
certain time." 184 Ill. 546, 551. Here, unlike in Dikeman, the
Warrant Agreement did place corresponding responsibilities on the
optionor - requiring Consolidated to provide certain information
to GECC. While Consolidated continually claims in its Motion that
GECC "forgot" to exercise the option or did not exercise the
option because of "negligence" this mischaracterizes GECC's
argument. Far from arguing it forgot to exercise the option, GECC
argues that Consolidated breached its contractual obligations by
withholding crucial information.8
Similarly, Consolidated is incorrect that GECC's affirmative
defenses are subject to the heightened pleading requirement of
Rule 9(b). None of GECC's defenses rely on establishing fraud or
mistake, the only actions subject to the heightened pleading

8

The fact that the contract places responsibilities on Consolidated
additionally makes the contract bilateral in nature, unlike the unilateral
contracts that Consolidated cites in support of its Motion to Dismiss GECC's
Counterclaim. See Rec. Doc. No. 23-1.

15

requirement. Fed. R. Civ. Pro. 9(b) ("In alleging fraud or
mistake, a party must state with particularity the circumstances
constituting fraud or mistake. Malice, intent, knowledge, and
other conditions of a person's mind may be alleged generally.");
see also Swierkiewicz v. Sorema N. A., 534 U.S. 506, 513 (2002)
(refusing to extend heightened pleading requirement to causes of
action other than fraud or mistake). Rather, all of the
affirmative defenses contend that Consolidated has failed to meet
its contractual obligations. See (Rec. Doc. No. 10 at 1-3).
Consolidated provides no argument in its Motion as to why the
Court should construe GECC's claims as alleging fraud, other than
asserting it to be the case.9 The Court finds no reason to hold
the affirmative defenses to the heightened pleading requirement
of Rule 9(b).
Based on the above summarized law, Consolidated has failed
to established they are entitled to judgement as a matter of law
at this stage on the option issue, or that Consolidated's breach
of contract claims should be dismissed.
IV. Third-Party Beneficiary Claim
The last issue the Court must decide is Consolidated's
Motion to Dismiss GECC's third-party beneficiary claim. Here the

9

Consolidated goes so far as to accuse GECC of "merely recit[ing] the
elements of fraud." This is not the case. Nowhere in its Answer does GECC even
mention fraud, much less blindly recite the elements of fraud. See (Rec. Doc.
No. 10). Consolidated's claim is wholly without merit, and suggests a
conscious disregard for the actual content of the Answer.

16

Court is guided by Michigan law, which controls the
interpretation of the Escrow Agreement. See (Escrow Agreement,
Rec. Doc. No. 23-1, Ex. C at ¶ 4.4).
A contract "undertaken to give or to do or refrain from
doing something directly to or for" a person not a party to the
contract may be read to include third-party beneficiary rights
under Michigan law. Mich. Comp. Laws § 600.1405. But "only
intended third-party beneficiaries, not incidental beneficiaries"
may claim third-party beneficiary rights. Koenig v. City of S.
Haven, 460 Mich. 667, 679 (1999).
The Escrow Agreement here, although an agreement between
Consolidated and Reinhart, specifically makes mention of GECC.
Indeed, the title of the Agreement is the "GE Escrow Agreement."
(Escrow Agreement, Rec. Doc. No. 23-1, Ex. C). The Agreement
further includes a section on disbursement of escrow funds to
GECC. (Escrow Agreement, Rec. Doc. No. 23-1, Ex. C at ¶ 2.1).
Consolidated contends that GECC has failed to establish that
it "directly" benefits from the Agreement. More specifically,
Consolidated argues that Consolidated and Reinhart are the only
parties named in the agreement who can make claims to the Escrow
funds, and no promise is made to or for the benefit of GECC in
the Escrow Agreement. Consolidated's argument is unpersuasive.
Although true that a party must directly benefit from a
contract in order to be considered a third-party beneficiary,

17

this does not mean that a specific promise must be made to that
party. Rather, a promise need only be made for the third-party's
"benefit." Mich. Comp. Laws § 600.1405. Michigan law does not
even require a party to be named in an agreement for the party to
be found a third-party beneficiary, so long as the benefit to the
third-party becomes apparent.

Mich. Comp. Laws § 600.1405(2)(b).

Here, not only was GECC named in the Agreement, the
Agreement included specific instructions on how to distribute
escrow funds to GECC. (Escrow Agreement, Rec. Doc. No. 23-1, Ex.
C at ¶ 2.1). The clear objective of the Agreement was to directly
benefit GECC by protecting funds for possible later distribution
to GECC. This purpose was not merely incidental, but intentional
by the parties that formed the Agreement. For these reasons,
Consolidated again fails to satisfy the standard for judgement as
a matter of law.
V. Motion to Compel Arbitration and Motion to Institute
Interpleader Action
Having decided that GECC's third-party beneficiary claim may
proceed, the Court must now determine whether the claims made by
Consolidated and GECC to the Escrow funds may be decided in this
Court or must be submitted to arbitration. However, because the
Court recognizes that its decision in this Order may alter the
parties' arguments on the arbitration issue, the parties are to
be given 14 days from the issuance of this Order to supplement
18

their briefing on the arbitration issue if they find it
necessary.
Accordingly, and for the reasons enumerated above IT IS
ORDERED that Consolidates' Motion for Judgement on the Pleadings
d's
(Rec. Doc. No. 23) is DENIED.
IT IS FURTHER ORDERED that the Parties are given an
opportunity to submit supplemental briefing within 14 days of
this Order's issuance on whether GECC's claim to the GECC Escrow
Funds should be compelled to arbitration, or whether the funds
may be deposited with the Court and subject to an interpleader
action.

New Orleans, Louisiana, this 14th day of March, 2014.

_______________________________
UNITED STATES DISTRICT JUDGE

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