In Re Mpc Computers, LLC
465 B.R. 384
Bankr. D. Del.2012Background
- Debtors MPC Computers, LLC, and affiliates filed chapter 11 in November 2008; Liquidating Trust established under plan to liquidate estate assets and pursue litigation for creditors.
- In November 2010, Debtors filed an adversary complaint against Granite Financial Solutions for breach of contract and unjust enrichment related to pre-petition goods.
- The Plan of Liquidation, Confirmation Order, and Trust Agreement transferred Debtors' assets and litigation claims to the MPC Liquidating Trust and authorized pursuit of Litigation Claims and Causes of Action.
- The Trust Agreement and Confirmation Order provided automatic substitution of the Liquidating Trustee as plaintiff for pending litigation and allowed the Trust to pursue post-confirmation responsibilities, including litigation against customers.
- The present action—breach of contract and unjust enrichment for unpaid accounts—was contemplated by the Plan and Trust as part of implementing the Plan and is deemed related to the bankruptcy case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the bankruptcy court has subject matter jurisdiction over the adversary. | Stern does not bar jurisdiction; related-to analysis remains. | Stern limits final judgments in core actions and may restrict jurisdiction. | Yes; bankruptcy court has related-to jurisdiction under Pacor. |
| What standard governs post-confirmation jurisdiction in this context? | Post-confirmation actions retain related-to jurisdiction via plan-based nexus. | Resorts International narrows jurisdiction post-confirmation. | Pacor test governs; plan and trust create a close nexus sufficient for related-to jurisdiction. |
| Does Resorts International govern post-confirmation jurisdiction for this pre-confirmation action transferred to the trust? | Action was contemplated by the Plan and Trust; not merely collateral. | Resorts confines post-confirmation jurisdiction to close nexus cases. | Resorts distinguished; action fits Pacor-based related-to jurisdiction due to plan integration. |
| Does the defendant’s jury-trial demand affect jurisdiction? | Not jurisdictional; authority to trial can be addressed later. | Jury-trial rights implicate trial proceedings. | Jurisdiction unaffected; issue addressed as procedural matter, not jurisdictional. |
Key Cases Cited
- Stern v. Marshall, 131 S. Ct. 2594 (2011) (final-judgment authority under § 157(b) narrow; jurisdiction remains for related-to questions)
- Pacor, Inc. v. Higgins, 743 F.2d 984 (3d Cir. 1984) (test: related-to if outcome could affect estate handling)
- Resorts Int'l, Inc. v. Price Waterhouse & Co. LLP, 372 F.3d 154 (3d Cir. 2004) (post-confirmation jurisdiction limited by close nexus to plan/proceeding)
- Seven Fields Dev. Corp. v. Gershman, 505 F.3d 237 (3d Cir. 2007) (clarifies Resorts test applies to post-confirmation actions; close nexus not always required)
- In re Fairchild Corp., 452 B.R. 525 (Bankr. D. Del. 2011) (retention provisions and plan language can establish related-to jurisdiction)