Yolo Capital, Inc. v. Normand et al
ORDER granting 34 Motion for Referral to Bankruptcy Court. This civil action is referred to the Bankruptcy Court. Signed by District Judge Halil S. Ozerden on 4/16/18. (RLW)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
YOLO CAPITAL, INC.
LOUIS J. NORMAND, JR.,
Individually, LOUIS J. NORMAND,
JR., TRUSTEE OF AMERICAN
SUCCESS IRREVOCABLE TRUST,
TRUCK CAPITAL, LLC, COAST
MANAGEMENT SYSTEMS, LLC,
REINSURANCE CO., LTD.,
Case No. 1:18-cv-00062-HSO-JCG
ORDER REFERRING CIVIL ACTION TO BANKRUPTCY COURT
This matter comes before the Court upon Motion for Automatic Referral to
Bankruptcy Court Dkt # 34] (“Motion”) filed by Defendants, Louis J. Normand, Jr.,
individually, Louis J. Normand, Jr., as Trustee of American Success Irrevocable
Trust, Truck Capital, LLC, Coast Management Systems, LLC, and Global
Transportation Reinsurance Co., Ltd. (collectively, “Defendants”). After reviewing
the facts and considering the same, the Court finds that the Motion is well taken and
should be granted. The Court finds as follows.
On July 11, 2017, Plaintiff, Yolo Capital, Inc. (“Plaintiff”), originally filed
this action against Defendants as Case No. 1:17-cv-00180 in the U.S. District Court
for the Western District of North Carolina (the “North Carolina Action”), alleging that
Defendants breached a Guaranty Agreement, guaranteeing non-party National
Truck Funding, LLC’s (“National Truck”)1 performance under a Note Agreement and
related Promissory Note, and sought to recover amounts due under the Promissory
Note from the date of National Truck’s alleged default. [Dkt. # 1.]
Prior to the commencement of this action, on June 25, 2017, National
Truck filed a voluntary petition under Chapter 11 of the Bankruptcy Code in the
United States Bankruptcy Court for the Southern District of Mississippi, Case No.
17-51243-KMS (the “Chapter 11 Case”) and, subsequently listed Plaintiff as a
creditor who has claims secured by National Truck’s property and identified
Defendants as co-debtors on the debt to Plaintiff. (See Chapter 11 Case, Dkt. # 172.)
On August 23, 2017, Defendants filed a Motion to Transfer Venue
seeking to transfer the North Carolina Action to the U.S. District Court for the
Southern District of Mississippi. [Dkt. # 9-10.]
On January 26, 2018, the U.S. District Court for the Western District of
North Carolina entered its Memorandum of Decision and Order, granting
Defendants’ Motion to Transfer pursuant to 28 U.S.C. § 1412, which applies to the
transfer of cases “arising in or related to cases under title 11,” and noting that “[t]he
Plaintiff does not dispute that the present action ‘relates to’ National Truck’s
bankruptcy proceeding.” [Dkt. # 20, p. 4-5, n. 2.]
Defendants, Louis J. Normand, Jr. and American Success Irrevocable Trust hold 10% and
90% membership interest, respectively, in National Truck and Mr. Normand is the Manager
and Chief Executive Officer of National Truck.
On January 30, 2018, Plaintiff advised the Court that it had no objection
to the Memorandum of Decision and Order, entered on January 26, 2018.
On February 23, 2018, this Court entered a Notice [Dkt. # 22] confirming
that the North Carolina Action had been transferred from the U.S. District Court for
the Western District of North Carolina to this Court.
28 U.S.C. § 157(a) provides that “[e]ach district court may provide that
any or all cases under title 11 and any or all proceedings arising under title 11 or
arising in or related to a case under title 11 shall be referred to the bankruptcy judges
for the district.” Rule 83.6 of the Local Uniform Civil Rules for the United States
District Courts for the Northern and Southern Districts of Mississippi provides that
“[a]ll cases under Title 11 and all civil proceedings arising under Title 11 or arising
in or related to cases under Title 11 are referred to the bankruptcy judges of this
District pursuant to 28 U.S.C. § 157(a).”
Referral is appropriate as this action is a proceeding “arising in or
related to” the Chapter 11 Case given that adjudication of this action will have a
direct impact on the assets and liabilities of National Truck in the Chapter 11 Case
and the administration of the Chapter 11 Case as a whole, by among other things,
potentially decreasing the amount of claims against the bankruptcy estate and
freeing potential assets to be paid to other creditors. See In re Wood, 825 F.2d 90, 91
(5th Cir. 1987) (finding that a proceeding is “related to” the bankruptcy case if it could
“conceivably have an effect on the estate being administrated by bankruptcy”
(emphasis in original) (quotation omitted)); see also Dkt. # 10, 5-8.
The Court finds that this civil shall be referred to the United States
Bankruptcy Court for the Southern District of Mississippi, Southern Division,
consistent with L.U. Civ. R. 83.6 and 28 U.S.C. § 157(a).
THEREFORE, IT IS ORDERED that the Motion for Automatic Referral to
Bankruptcy Court is hereby granted. This civil action is hereby referred to the
SO ORDERED this the 16th day of April, 2018.
s/ Halil Suleyman Ozerden
HALIL SULEYMAN OZERDEN
UNITED STATES DISTRICT JUDGE
s/Jason R. Watkins
Jason R. Watkins
O’HARA WATKINS, LLC
1307 Main Street
Daphne, Alabama 36526
Telephone: (251) 441-7779
Counsel for Defendants
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