534 B.R. 538
Bankr. S.D.N.Y.2015Background
- This is a post-judgment opinion denying multiple motions by attorney Gary Peller on behalf of the “Bledsoe Plaintiffs” challenging this Court’s prior Decision and the Judgment implementing it in the GM ignition-switch litigation.
- Peller sought relief under Rule 52(b)/7052 (amend findings), Rule 59(e)/9023 (alter/amend judgment), Rule 60/9024 (relief from judgment), and local rule reargument, arguing among other things that certain plaintiffs (notably Sharon Bledsoe) should be allowed to press "Independent Claims," that the Sale Order and Judgment were void or notice-defective, and that successor-liability and "unlawful operation" claims survive.
- The Court found Peller identified no misstated facts warranting amendment and characterized many arguments as rehashing issues already decided or as legal disagreements not appropriate for findings amendment or reargument.
- The Court rejected contentions that pre-sale victims like Sharon Bledsoe can pursue successor-liability claims against New GM, holding such claims are barred unless they are genuinely independent claims based on New GM’s own conduct or knowledge.
- The Court held it had jurisdiction to interpret and enforce its Sale Order, to enjoin or stay actions (including actions pending before Article III courts), and that Peller and his clients had ample opportunity to be heard under the case-management orders but largely did not timely present briefs or request argument.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Court should amend findings under Rule 52(b)/7052 | Peller: Court mis-construed Sale Order and omitted findings; Independent Claims should be excluded from Sale Order coverage | New GM/Court: Findings correct; no omitted factual matters; legal disagreement not basis for Rule 52(b) relief | Denied — no factual error shown; legal reargument inappropriate on Rule 52(b) motion |
| Whether Rule 59(e)/9023 warrants altering the Judgment to allow pre-sale plaintiffs (e.g., Bledsoe) to assert successor or Independent Claims | Peller: Sharon Bledsoe and others should be permitted to assert Independent Claims or successor liability; lack of notice in 2009 renders judgment invalid as to them | New GM/Court: Pre-sale claims are prepetition claims; successor liability barred; lack of notice did not prejudice plaintiffs on key issues; Judgment stands | Denied — successor liability barred; Independent Claims allowed only if genuinely independent; no reversible error shown |
| Whether the Court lacked power to enjoin/stay Article III litigation or otherwise “censor” pleadings | Peller: Bankruptcy judge lacks power to bar prosecution before Article III courts; enforcement against Bledsoe Plaintiffs was void | New GM/Court: Bankruptcy courts have authority to interpret/enforce their orders and to enjoin related actions, including in other forums (Travelers/Petrie Retail) | Denied — Court had jurisdiction to enforce and stay litigation under Sale Order |
| Whether plaintiffs were denied opportunity to be heard on Threshold Issues | Peller: Bledsoe Plaintiffs were precluded from participating in threshold proceedings | New GM/Court: Procedural orders provided opportunities to file briefs and seek argument; Peller/Hornal filed many submissions but did not timely file threshold briefs or request oral argument | Denied — record demonstrates adequate opportunity; failure to act was counsel’s choice |
| Whether Rule 60(b)-type relief is available because Sale Order/Judgment are void | Peller: Sale Order provisions are void as applied to Bledsoe Plaintiffs; due process violated | New GM/Court: Arguments rehashed prior rulings; jurisdiction and due process issues previously considered and rejected | Denied — no basis for voidness relief |
| Whether reargument under local rule should be granted for alleged manifest error (in rem vs in personam) | Peller: Court misunderstood jurisdictional distinction and committed manifest error | New GM/Court: Argument repeats prior contentions; distinction does not change outcome; proper vehicle is appeal | Denied — reargument standard unmet |
Key Cases Cited
- In re Motors Liquidation Co., 529 B.R. 510 (Bankr. S.D.N.Y. 2015) (Decision) (prior comprehensive analysis of Sale Order and threshold issues)
- In re Motors Liquidation Co., 531 B.R. 354 (Bankr. S.D.N.Y. 2015) (Form of Judgment Decision) (judgment implementing Decision and case management mechanisms)
- Travelers Indemnity Co. v. Bailey, 557 U.S. 137 (2009) (bankruptcy courts have jurisdiction to interpret and enforce their own orders)
- In re Petrie Retail, Inc., 304 F.3d 223 (2d Cir.) (bankruptcy court retains post-confirmation jurisdiction to interpret and enforce orders)
- Burton v. Chrysler Group, LLC (In re Old Careo), 492 B.R. 392 (Bankr. S.D.N.Y. 2013) (discussion of successor liability and limits on claims post-sale)
- In re Motors Liquidation Co. (Elliott), 514 B.R. 377 (Bankr. S.D.N.Y. 2014) (earlier ruling addressing similar contentions)