Yellow Popular Lumber Company

Filing 48

OPINION AND ORDER Referring case to the United States Bankruptcy Court for the Western District of Virginia; Administratively terminating the case from the docket of this court. Signed by Judge James P. Jones on 6/28/2017. (lml)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF VIRGINIA
ABINGDON DIVISION
IN RE YELLOW POPLAR LUMBER
COMPANY, INC.,
Debtor.

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Case No. 1:15CV00037

OPINION AND ORDER
For the reasons hereafter set forth, it is ORDERED that this bankruptcy case
is REFERRED to the United States Bankruptcy Court for the Western District of
Virginia.
A brief history of this case, which is governed by the Bankruptcy Act of
1898 and the 1973 Rules of Bankruptcy Procedure, is as follows.
On July 17, 1928, White Oak Lumber Company filed a petition in the United
States District Court for the Western District of South Carolina1 to have Yellow
Poplar Lumber Company, Inc. (“Yellow Poplar”) adjudged a bankrupt. Yellow
Poplar was adjudged a bankrupt and the bankruptcy case was closed in 1931.
Eighty-two years later, on April 3, 2013, suit was filed in the Circuit Court of
Buchanan County, Virginia, seeking a determination of the ownership of the gas
estates of certain parcels of land located in Virginia, based upon a 1929 deed from
South Carolina was then divided into two federal judicial districts. It was
reorganized as a single district in 1965. 79 Stat. 951 (1965).
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Yellow Poplar’s bankruptcy trustee.2 The defendants removed the case to the
United States Bankruptcy Court for the Western District of Virginia. Later, at the
request of the plaintiff, this court withdrew reference of this removed declaratory
judgment action from the bankruptcy court. On December 10, 2013, the court
appointed John M. Lamie to serve as Guardian ad Litem (“GAL”) on behalf of the
unknown successors in interest to Yellow Poplar. Order, ECF No. 101.3
Thereafter, with the agreement of the parties, the United States District
Court for the District of South Carolina reopened Yellow Poplar’s bankruptcy case
and transferred it in its entirety to this court. Order, In re Yellow Poplar Lumber
Co., Case No. 8:28-cv-01101-BHH (Closed Case No. B-1101) (D.S.C. July 20,
2015); Case No. 1:15CV00037, ECF No. 4. On August 24, 2015, this court
appointed Mr. Lamie to serve as the replacement Trustee for Yellow Poplar.4
Order, ECF No. 397. The court later authorized the employment of Mr. Lamie in

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The original plaintiff was Plum Creek Timberlands, L.P. (“Plum Creek”).
Highland Resources, Inc., intervened and was joined as a plaintiff. On September 28,
2016, Plum Creek merged with Weyerhaeuser Company, Inc., with Weyerhaeuser
Company, Inc., as the surviving entity. On December 31, 2016, Highland Resources,
Inc., merged with Weyerhaeuser NR Company, with Weyerhaeuser NR Company as the
surviving entity. Weyerhaeuser Company and Weyerhaeuser NR Company were
accordingly substituted as plaintiffs.
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Unless otherwise indicated, the record citations refer to Case No. 1:13CV00062,
rather than the underlying bankruptcy case, which is numbered in this court as
1:15CV00037.
4

The original Trustee for Yellow Poplar is long deceased.
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his capacity as an attorney, along with his law firm, Browning, Lamie & Gifford,
P.C., as counsel for the Trustee.
The case was set for jury trial, but on January 25, 2017, a few days before
trial, the parties notified the court that they had reached a settlement of the
ownership claims. On February 8, 2017, the Trustee filed a Settlement Agreement
and accompanying Motion for Approval of Settlement. After publication of notice
of the proposed settlement, the court held a hearing on the settlement on May 12,
2017. No objections to the settlement were submitted. An Order approving the
settlement and quieting title to the subject property was entered on June 7, 2017.
Order, ECF No. 550. Mr. Lamie applied for payment of his fees and expenses as
GAL, Trustee, and counsel to the Trustee, which were approved. Op. & Order,
June 28, 2017, ECF No. 552. The ownership case was dismissed from the docket
of this court on June 28, 2017, ECF No. 553.
Based on this court’s approval of the settlement, which determined the
shares of ownership of the gas interests in question, it is anticipated that the
bankruptcy estate of Yellow Poplar will receive approximately $2 million of gas
royalties now being held in escrow by the Virginia Gas and Oil Board. In addition,
it is likely to receive ongoing royalty payments.
It is apparent that the bankruptcy court is in the best position to administer
Yellow Poplar’s bankruptcy estate. In such administration, the bankruptcy court
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may wish to consider two issues. First, one of the parties to the ownership case
objected to the appointment of Mr. Lamie as Trustee on the ground that he had
previously been appointed as GAL for the unknown successors in interest to
Yellow Poplar and had in fact represented certain descendants of one of its
shareholders. I determined that his service as Trustee in the ownership case would
pose no conflict since it did not encompass the distribution of assets. Op. & Order
7, Aug. 24, 2015, 1:15CR00037, ECF No. 13.

The individuals alleged to be

successors to a shareholder obtained other counsel after Mr. Lamie’s appointment
as Trustee, and it may be that no conflict will exist in the administration of the
estate. In addition, Mr. Lamie is well experienced in Yellow Poplar’s property and
affairs, and may be best suited to continue to serve as Trustee.
In addition, pursuant to Rule 212(c) of Federal Rules of Bankruptcy
Procedure (1973), which former rule is applicable to this case, a bond or the giving
of other security by Mr. Lamie as Trustee was excused upon his appointment,
because he then had no custody of any property of the estate. Order, Oct. 14, 2015,
1:15CV00037, ECF No. 16. The bankruptcy court will wish to reconsider that
issue in lieu of the anticipated payment of royalties to Yellow Poplar’s estate.
The clerk of this court shall administratively terminate the bankruptcy case
from the docket of this court, in light of this reference.

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The clerk is directed to provide a copy of this Opinion and Order to the
Honorable Paul Black, United Sates Bankruptcy Judge for the Western District of
Virginia, to John W.L. Craig, II, Clerk of the United States Bankruptcy Court for
the Western District of Virginia, and to Margaret Garber, Assistant United States
Trustee, Office of the United States Trustee, First Campbell Square Building, Suite
505, 210 First Street, SW, Roanoke, Virginia 24011.
ENTER: June 28, 2017
/s/ James P. Jones
United States District Judge

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