In Re BearingPoint, Inc.
453 B.R. 486
Bankr. S.D.N.Y.2011Background
- December 22, 2009, BearingPoint plan confirmed; Trust created to pursue estate claims.
- Trustee seeks to bring fiduciary-duty claims against BearingPoint's former CEO Edwin Harbach and eight former directors.
- Plan contained limited releases for officers/directors; fiduciary claims carved out from releases remain—Trustee targeted claims within four identified areas.
- Plan and Confirmation Order granted exclusive jurisdiction to bankruptcy/district courts over non-released claims; Trustee aims to litigate in Virginia state court.
- Trustee requests modification of the Confirmation Order to permit Virginia forum litigation without undermining creditor expectations; court must address Stern v. Marshall implications and final-judgment authority.
- Court grants limited relief from the Plan/Confirmation Order to allow Trustee to pursue claims elsewhere, avoiding likely procedural entanglements in this Court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May Trustee obtain relief from the plan/confirmation order to sue in another forum | Trustee seeks relief to avoid burdensome litigation in this Court | Targets argue for maintaining original exclusive-venue protections | Yes; relief granted. |
| Whether exclusive jurisdiction provisions bar Virginia forum litigation | Provisions should be preserved but allow gatekeeping | Litigation must occur in SDNY court as intended | No; relief from order granted to permit alternate forum. |
| Impact of Stern v. Marshall on final adjudication authority | Consent and efficiency arguments are undermined by Stern’s reasoning | Stern limits final judgments in non-core matters | Relief granted to avoid Bleak House delays and final-judgment risks. |
| Whether modification affects creditor rights or plan expectations | Modification would not harm creditor expectations | Modifications risk undermining plan structure | Not dispositive; relief granted with minimal plan disruption. |
| Whether the bankruptcy court should maintain exclusive‑jurisdiction posture vs abstention | Keep gatekeeping role to ensure fair adjudication | Abstention or transfer could reduce complexity | Relief granted; avoids forcing trustee to litigate in this Court. |
Key Cases Cited
- In re Adelphia Communications Corp., 368 B.R. 140 (Bankr.S.D.N.Y.2007) (third-party releases and jurisdictional safeguards in plan confirmation)
- Metromedia Fiber Network, Inc., 416 F.3d 136 (2d Cir.2005) (limitations on releases; merit-based assessment of claims)
- Motors Liquidation Co. (General Motors Corp.), 447 B.R. 198 (Bankr.S.D.N.Y.2011) (gatekeeping/exclusive jurisdiction with cautionary approach post‑Stern)
- Chemtura Corp., 439 B.R. 561 (Bankr.S.D.N.Y.2010) (exculpation protections and safeguards in chapter 11 plans)
- In re DBSD North America, Inc., 419 B.R. 179 (Bankr.S.D.N.Y.2009) (analysis of non-core proceedings and related jurisdiction)