590 B.R. 643
Bankr. D. Del.2018Background
- Samson Resources and affiliates filed Chapter 11 in September 2015; a Global Settlement Plan (the Plan) was confirmed in February 2017 and became effective March 1, 2017, creating a post‑confirmation Settlement Trust to pursue certain estate causes of action.
- The 2011 leveraged buyout (LBO) of Samson by Sponsors (led by KKR) from Schusterman‑related selling shareholders financed substantial debt and is the alleged source of avoidable transfers the Trustee seeks to recover.
- The Plan contains very broad third‑party releases; "Released Party" is defined in a long, complex provision that includes former affiliates and equity holders (but expressly excludes holders of Preferred Interests and certain pre‑2011 directors/officers).
- The Trustee sued various Schusterman‑related entities for constructive fraudulent transfers; several defendants moved for summary judgment arguing they are Released Parties under the Plan and thus immune from suit.
- The Court granted summary judgment for two trusts (Schusterman 2008 Delaware Trust and Stacy Family Delaware Trust) as Released Parties; it denied summary judgment for Samson Energy, Samson Offshore, Samson Exploration, Stacy Family Trust, SFTDM, and ST 2008 in whole or part due to ambiguity or genuine factual disputes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendants are "Released Parties" under the Plan | Trustee: releases were never intended to cover these defendants; any inclusion is scrivener's error or ambiguous and parol evidence should be considered | Defendants: Plan language is clear and unambiguous; if they fit defined categories (affiliate, equity holder) they are released; court should enforce Plan text | Court: Where Plan/Confirmation are unambiguous, enforce text; granted SJ for some defendants who clearly fit definition and denied for others with ambiguity/factual disputes |
| Whether Plan Supplement listing of retained causes of action creates ambiguity | Trustee: inclusion of certain defendants on Exhibit C‑2 shows intent not to release them; extrinsic evidence appropriate | Defendants: Confirmation Order controls over inconsistent Plan Supplement provisions | Held: Interplay created ambiguity for Stacy Family Trust and Samson Energy; court considered Disclosure Statement and found intent to preserve avoidance claims from 2011 LBO, so those two are not released |
| Whether specific entities qualify as "affiliate" or "equity holder" for release | Trustee: factual disputes about control and corporate relationships preclude SJ | Defendants: ordinary meaning or Bankruptcy Code definitions show affiliate/status; they meet definition | Held: For Samson Exploration and Samson Offshore, defendants failed to show lack of factual dispute about affiliate/control; SJ denied |
| Whether SFTDM and ST 2008 are excluded as "holders of Preferred Interests" | Trustee: record is undeveloped; they may have held Preferred Interests and thus be excluded | Defendants: they never received Preferred Interests and so are included in releases | Held: Genuine issue of material fact exists on Preferred Interests ownership; SJ denied |
Key Cases Cited
- United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (confirmed plan is binding and operates as final judgment)
- Trulis v. Barton, 107 F.3d 685 (plan confirmation has res judicata effect on issues that could have been raised)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment standard -- reasonable jury inference test)
- Celotex Corp. v. Catrett, 477 U.S. 317 (movant's burden on summary judgment and shift to nonmoving party)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (nonmoving party must present specific facts showing genuine issue)
- Hatco Corp. v. W.R. Grace & Co., 59 F.3d 400 (ambiguous writing permits extrinsic evidence to show intent)
- Golden Pac. Bancorp v. FDIC, 273 F.3d 509 (releases must show explicit, unequivocal present promise to release liability)
- Gross v. Sweet, 49 N.Y.2d 102 (releases excusing misconduct require close judicial scrutiny)
- Tamarind Resort Assocs. v. Gov't of Virgin Islands, 138 F.3d 107 (unambiguous contracts are resolvable as a matter of law)