In Re: Settlement Facility

Filing 954

ORDER denying 936 Motion to Stay Pending Appeal. Signed by District Judge Denise Page Hood. (SSch)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
In Re:
Case No. 00-00005
Settlement Facility Dow Corning Trust.
Honorable Denise Page Hood
_______________________________________/
ORDER DENYING MOTION TO STAY PENDING APPEAL
I.

BACKGROUND
This matter is before the Court on a Motion to Stay the Court’s Ruling

Regarding Partial Premium Payment Distribution Recommendation by the Finance
Committee filed by Dow Corning Corporation, the Debtor’s Representatives and
Shareholders (“Movants”). The Claimants’ Advisory Committee (“CAC”) filed a
response opposing the motion and a reply brief has been filed. The Movants assert
that the Finance Committee, the proponent of the Partial Premium Payment
Distribution, does not object to the motion.
On December 31, 2013, the Court entered a Memorandum Opinion and Order
granting the Finance Committee’s recommendation to distribute partial Premium
Payment to Claimants. (Doc. No. 934) A Notice of Appeal to the Sixth Circuit Court
of Appeals was filed on January 16, 2014 by the Movants. (Doc. No. 935)
II.

ANALYSIS
A.

Standard Governing Stay Pending Appeal

Rule 8(a) of the Federal Rules of Appellate Procedure provides that a party
seeking a stay of an order must first request a stay from the district court. The
following four factors are weighed in order to determine whether a stay pending
appeal should be issued: 1) the likelihood that the party seeking the stay will prevail
on the merits of the appeal; 2) the likelihood that the moving party will be irreparably
harmed absent the stay; 3) the prospect that others will be harmed if the court grants
the stay; and 4) the public interest in granting the stay. Michigan Coalition of
Radioactive Material Users, Inc. v. Griepentrog, 945 F.2d 150, 153 (6th Cir. 1991).
These factors should be balanced in light of the overall circumstances of the case. In
re DeLorean Motor Co., 755 F.2d 1223, 1229 (6th Cir. 1985). The Movants’
argument that Rule 62(d) of the Rules of Civil Procedures applies in this analysis is
inapplicable since the matter before the Court was to interpret the Plan language.
B.

Likelihood of Success

The Movants argue the first factor is met since the issues on appeal are complex
and difficult and have been heavily contested. They claim that the litigation involved
extensive analysis of complex claims data and of calculations on that data, disputes
about the governing standard under the Plan, the Plan Documents, and the Bankruptcy
Code for the distribution of Second Priority Payments.
The CAC responds that the Movants do not even attempt to articulate serious
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issues presented by their appeal and that the Court’s Order represents a conservative,
intermediate step to provide Claimants with only half of the Premium Payments meant
to be paid long ago. The CAC asserts that the appeal is not “dizzyingly” complex as
portrayed by the Movants and that the only issue is whether the Court committed clear
factual error or abused its discretion in adopting the Finance Committee’s
conservative recommendation to issue partial Premium Payments based on projections
by the Independent Assessor showing a significant cushion to pay unexpected claims.
A party seeking a stay pending appeal is "required to show, at a minimum,
'serious questions going to the merits.'" In re DeLorean, 755 F.2d at 1229. This Court
finds that the Movants have not shown serious questions going to the merits. The
Premium Payment provision is agreed to by the parties. This Court accepted the
Finance Committee’s recommendation to only distribute partial Premium Payments.
The Court found that based on the Independent Assessor’s analysis, there are
sufficient funds to make such payments which would not jeopardize payments to the
other classes under the Plan. The Court’s interpretation of the Plan language as to the
timing of the payment and the basis of the analysis of whether payment should be
distributed are the issues before the appellate court. The Court finds the Movants have
not shown serious questions as to this Court’s analysis of the Plan language relating
to the Premium Payment provision.
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C.

Irreparable Harm to Movants and Harm to Others

The Movants argue that they, the claimants who are not scheduled to receive
Premium Payments but may in the future become eligible for such payments, future
claimants who have not yet filed claims and the Dow Corning Trust, face immediate
and irreparable harm if a stay is not granted. The Movants argue the harm is imminent
because the Finance Committee has indicated it is able to comply with the Court’s
order within six weeks of the filing of the instant motion. The Movants claim that
requiring the Trust to make more than $100 million in payments cannot be recovered
if the ruling is reversed.
The CAC responds that there is no irreparable injury as to the claimants since
under the Plan, they are entitled to the Premium Payments. The CAC argues that there
is only a “tiny” chance that paying fifty percent of the Premium Payments will result
in future First Priority Payments hitting the funding cap. The CAC asserts that it is
the Claimant who would be irreparably harmed since Claimants have already waited
for years to receive Premium Payments that were marketed to them as a key benefit
of the settlement. The CAC claims that the real-life consequences of delay that
Claimants will necessarily and further endure far outweighs the Movants’ imaginary
harm.
In evaluating the degree of injury to a movant, the key word in this
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consideration is “irreparable.” Mere injuries, however substantial, in terms of money,
time and energy necessarily expended in the absence of a stay, are not enough. The
harm alleged must be both certain and immediate, rather than speculative or
theoretical. Wisconsin Gas Co. v. Federal Energy Regul. Comm’n, 758 F.2d 669, 674
(D.C. Cir. 1985). A movant must provide some evidence that the harm has occurred
in the past and is likely to occur again. Michigan Coalition, 945 F.2d at 154.
Here, the Movants conflate the arguments regarding irreparable injury factor
to themselves and the injury harm suffered by others. The Movants allege monetary
injury–in the partial payment of Premium Payments which was agreed to by the
Movants. Premium Payments will be paid as agreed to by the Movants under the
Plan, if not now, at some point in time in the life of the Plan. The harm to the
Movants is not irreparable since the initial Premium Payments will be paid at some
point in time in the life of the Plan and the overall funding of the Plan has been agreed
to by the Movants. The Movants have not set forth any specific harm the Movants
themselves will suffer, in light of the fact that the Movants agreed to the Premium
Payments and to the funding cap of the Plan.
The Movants are essentially arguing harm to “others,” not themselves. As
argued by the CAC, Claimants have been waiting for years regarding the promise of
Premium Payments. The Court’s review of the Independent Assessor’s analysis
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shows that the cap of the funding payment will not be reached as a result of the initial
50% payment of Premium Payments. The Movants have not shown they will be
irreparable harmed, but as argued by the CAC, the Claimants themselves who have
been waiting for years for the Premium Payments have been harmed and continued
to be harmed should they continue to wait pending the appeal in this matter.
The Movants argue that strong public interest favors granting the stay because
the stay preserves the assets so that all eligible claimants will receive their base
compensation from the Trust. The CAC argues that public interest weighs against the
stay. The CAC claims the compelling public interest is to provide promised redress
to injured claimants and preserving public confidence in the judicial system to
implement and administer a settlement effectively and efficiently without further
delay.
D.

Public Interest

The public interest in this case is to ensure that the Plan agreed to by the parties
is effectively and efficiently implemented. The Movants and the CAC (or their
predecessors) agreed to the Premium Payment provision in the Plan. The Court’s
Order approves the Finance Committee’s request under the Plan to pay Premium
Payments to Claimants. It is noted that the Finance Committee only requested fifty
percent of the agreed to Premium Payment, which this Court approved.
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Weighing and balancing the factors set forth above, the Court finds the Movants
have not shown that they are entitled to a stay of the Court’s Order granting the
Finance Committee’s request to pay 50% Premium Payments.
III.

CONCLUSION
For the reasons set forth above,
IT IS ORDERED that the Motion to Stay Order on Motion to Amend/Correct

(Doc. No. 936, 1/16/14) is DENIED.
IT IS FURTHER ORDERED that the Motion to Expedite Motion for Stay
(Doc. No. 937, 1/16/14) is MOOT.
IT IS FURTHER ORDERED that the Motion to Seal and for Leave to File
Excess Pages (Doc. No. 938, 1/16/14) is GRANTED.

/s/ Denise Page Hood
DENISE PAGE HOOD
United States District Judge
DATED: February 25, 2014

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