468 B.R. 634
Bankr. S.D.N.Y.2012Background
- HBLS, L.P. obtained a lease from Anguilla for Cap Juluca and later bought LIR stock; a pledge required HBLS to return stock if it defaulted.
- HBLS defaulted on the Stock Purchase Agreement; Friedland Group obtained a state-court judgment to transfer the stock, which was not completed.
- HBLS filed Chapter 11 in 1993 to stay enforcement of the judgment; the case has a long procedural history and mediation.
- A 1996 Settlement Agreement, approved by the court, required HBLS to transfer LIR/MBM stock to a mediator as security for the Friedland debt, and imposed a Friedland Group Protection Provision.
- The mediator determined HBLS owed $4.6 million; in 1997 Hickox placed three charges on LIR’s Cap Juluca leasehold; subsequent mediations and amplifications affected the charges’ status.
- Anguillan courts over the next decade held various views on the validity and timing of Hickox’s charges, ultimately treating the Third Charge as effective from the Stock Sale Date and not requiring re-registration; Friedland sought to reopen the bankruptcy case in 2012 to enforce prior orders, which the court denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the case should be reopened under § 350(b) for cause. | Friedland: reopen to enforce orders and mediator determinations. | Hickox: no cause to reopen; disputes are Anguillan, with available fora. | No reopening; lack of cause. |
| Whether equitable considerations justify reopening. | Friedland: reopening serves debtor relief and enforcement. | Reopening would prejudice non-debtor and not benefit estate. | Equities weigh against reopening. |
| Whether merits of underlying claim support reopening. | Friedland: enforce mediator’s determinations. | Anguillan rulings already resolve the disputes; reopening would be futile. | Merits do not compel reopening. |
| Whether relief is available in an alternative forum. | Friedland: need this court’s enforcement. | Anguilla courts can adjudicate; no need for this court. | Relief available in Anguilla; no reopening. |
Key Cases Cited
- Batstone v. Emmerling (In re Emmerling), 223 B.R. 860 (2d Cir. BAP 1997) (equitable considerations in reopening bankruptcy cases)
- Katz v. I.A. Alliance Corp. (In re I. Appel Corp.), 300 B.R. 564 (S.D.N.Y.2003) (nonexclusive list of factors for reopening discretion)
- Mid-City Bank v. Skyline Woods Homeowners Assoc. (In re Skyline Woods Country Club, LLC), 431 B.R. 830 (8th Cir. BAP 2010) (availability of relief in an alternative forum weighs against reopening)
- In re Kassover, 448 B.R. 625 (S.D.N.Y.2011) (merits of underlying claim inform reopening decision)
- State Bank of India v. Chalasani (In re Chalasani), 92 F.3d 1300 (2d Cir.1996) (reopening assessed against potential vacatur of judgments)