The Lehman Brothers Inc. Deferred Compensation Def v. GiddensThe Lehman Brothers Inc. Deferred Compensation Def v. Giddens
Case Information
FOR PUBLICATION UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
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In re: :
: LEHMAN BROTHERS INC. : Cаse No. 08-01420 (SCC) SIPA
:
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THE LEHMAN BROTHERS INC. DEFERRED :
COMPENSATION DEFENSE STEERING :
COMMITTEE as Attorney in Fact for those : Adv. Pro. No. 19-01368 (SCC) Specified, :
:
Plaintiffs, :
:
-- against -- :
:
JAMES W. GIDDENS, as Trustee for the SIPA :
Liquidation of Lehman Brothers Inc., :
:
Defendant. :
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MEMORANDUM OPINION AND ORDER (I) GRANTING TRUSTEE’S MOTION TO DISMISS AND (II) DENYING ESEP COMMITTEE’S MOTION FOR SUMMARY JUDGMENT A P P E A R A N C E S:
SCAROLA ZUBATOV SCHAFFZIN PLLC
1700 Broadway, 41st Floor
New York, New York 10019
Richard J.J. Scarola, Esq.
Alexander Zubatov, Esq.
Of Counsel
Attorneys for The Lehman Brothers Inc. Deferred Compensation
Defense Steering Committee as Attorney-in-Fact for Those Specified HUGHES HUBBARD & REED LLP
One Battery Park Plaza
New York, New York 10004-1482
Nicolas Swerdloff, Esq.
Gregory C. Farrell, Esq.
Of Counsel Attorneys for James W. Giddens, Trustee for the SIPA Liquidation of Lehman Brothers Inc.
SHELLEY C. CHAPMAN
United States Bankruptcy Judge
Before the Court is the Motion to Dismiss Adversary Proceeding , dated November 6, 2019 (“Motion to Dismiss”) (Doc. No. 5) [1] filed by the defendant, James W. Giddens, as Trustee for the liquidation of Lehman Brothers Inc. (“Trustee” or “Defendant”) under the Securities Investor Protection Act of 1970 (“SIPA”), and the Cross Motion for Summary Judgment and Opposition to Motion to Dismiss , dated December 23, 2019 (“Motion for Summary Judgment”) (Doc. No. 10) filed by the plaintiff, the Lehman Brothers Inc. Deferred Compensation Defense Steering Committee as Attorney-in-Fact for Those Specified (“ESEP Committee” or “Plaintiff”). [2] A hearing was held on both motions on February 19, 2020, and the matter was taken under advisement.
Before diving into the legal issues presented by the Motion to Dismiss and the Motion for Summary Judgment, the Court believes it would be useful to desсribe in simple terms the history of the ESEP Committee’s actions in the SIPA proceeding of Lehman Brothers Inc. (“LBI”) over the last decade. With the goal of recovering approximately $270 million of deferred compensation directed to an unfunded “top hat” plan prepetition by the claimants who comprise the ESEP Committee (collectively, the “Claimants”) and in an effort to recover such deferred compensation at a higher claim priority in the SIPA proceeding than that to which the Claimants would be legally entitled, the ESEP Committee has filed multiple motions in this Court, has failed to prevail on each motion, and has appealed each and every time it has not prevailed. Over the past six years, the ESEP Committee’s litigation has garnered multiple decisions from this Court, from three District Court judges, and from two panels of judges on the United States Court of Appeals for the Second Circuit. Judges from all three courts have determinеd that the ESEP Agreements (as defined below) to which each of the Claimants is a party provide that the right to payment of the ESEP deferred compensation is subordinated to the claims of general unsecured creditors of the LBI estate.
Now, for the first time since the Claimants filed their claims against LBI over a decade ago, the ESEP Committee asserts a new and novel argument that is entirely at odds with every argument it has heretofore asserted: that section 541(b)(7) of the Bankruptcy Code excludes the ESEP deferred compensation from property of the LBI estate. The Complaint (as defined below) filed by the ESEP Committee in the instant Adversary Proceeding and its Motion for Summary Judgment are entirely without merit. It is time for this litigation odyssey to end. Simply put, enough is enough.
Even accepting as true all assertions set forth in the Complaint and drawing all reasonable inferences in the ESEP Committee’s favor, the Court concludes that ESEP Committee has failed to state a claim upon which relief can be granted. For the reasons set forth herein, the Trustee’s Motion to Dismiss is granted and the ESEP Committee’s Motion for Summary Judgment is denied. The Court’s decision follows.
BACKGROUND
The question before the Court is twofold. First, the Claimants seek a determination that
ESEP funds that are part of the LBI estate are, in fact, not property of the estate, but property of
the Claimants. As statutory support for their assertion in this regard, the Claimants cite to
section 541(b)(7) of the Bankruptcy Code, which excludes from property of the estate funds that
are either “withheld by an employer from the wages of employees for payment as contribution”
or “received by an employer from employees for payment as contributions” to “an employee
benefit plan that is subject to title I” of the Employee Retirement Income Security Act of 1974,
In order to address the matters before the Court, it is necessary to review the lengthy history of the litigation between the Claimants and the Trustee.
I. The ESEP Agreements
The Claimants are certain former highly compensated executives and select employees who participated in a voluntary deferred compensation plan during the period of their employment by LBI and its predecessors, as applicable, prior to the commencement of LBI’s SIPA proceeding on September 19, 2008. The deferred compensation plan, known as the Executive and Select Employee Plan (the “ESEP”), is governed by certain contracts (the “ESEP Agreements”). [3]
The ESEP is what is known as a “top hat” plan, and as such, is exempt from many of the protections of ERISA. [4] The ESEP is an unfunded plan. The amounts directed by Claimants to the plan were, by agreement, not set aside in trust for the Claimants’ sole benefit or kept separate from the assets of LBI. Instead, the ESEP Agreements specifically required that the amounts of compensation voluntarily deferred by Claimants be part of the capital of LBI and available to the creditors of LBI. The ESEP Agreements expressly state:
The amounts credited to the deferred compensation account hereunder shall be dealt with in all respects as capital of [LBI], shall be subject to the risks of the business, and may be deposited in an account or accounts in [LBI]’s name in any bank or trust company.
(ESEP Agreements § 9(i).) Under the ESEP Agreements, the Claimants deferred compensation in exchange for a contractual right to receive future payments based on the deferred amounts. In so doing, Claimants were allowed to defer income tax that would otherwise be owed for the deferred amounts, and they received a guaranteed compound interest rate of approximately eleven percent, which accrued on a tax-deferred basis. ( Id . § 2.)
This Court has previously found and determined that under the ESEP Agreements,
Claimants’ rights to payment are subordinate to the claims of general creditors of LBI.
See
Giddens v. 344 Individuals (In re Lehman Bros. Inc.)
,
irrevocably agrees that the obligations of [LBI] hereunder with respect to the payment of the amounts credited to [Claimant’s] deferred compensation account are and shall be subordinate in right of payment and subject to the prior payment or provision for payment in full of all claims of all other present and future creditors of [LBI] whose claims are not similarly subordinated . . . .
( Id . § 9(d).) Likewise, each of the Claimants agreed that in the event of a SIPA liquidation of LBI, the Claimant:
shall not be entitled to participate or share, ratably or otherwise, in the distribution of the assets of [LBI] until all claims of all other present and future creditors of [LBI], whose claims are senior to claims arising under [the ESEP Agreements], have been fully satisfied or provision has been made therefor.
( Id .) Each Claimant also agreed that any payments made to him or her under the ESEP Agreements were “unsecured subordinated obligations of [LBI] only,” and that he or she is “only a general subordinated creditor of [LBI] in that respect.” ( Id . § 5(d).) II. The LBI SIPA Proceeding and the Claims
On September 19, 2008 (the “Filing Date”), the liquidation of LBI under SIPA was commenced, and the Trustee was appointed. On November 7, 2008, the Court entered an order establishing a claims bar date of June 1, 2009. (Bankr. Doc. No. 241.)
Each of the Claimants filed timely claims against LBI (the “Claims”). The large majority of the Claims asserted that they were secured based on, among other things, section 541(b)(7). ( See, e.g. , Proof of Claim No. 7001872, Bankr. Doc. No. 14131, Ex. D.)
On November 15, 2012, the Court approved procedures for the Trustee to file omnibus objections to proofs оf claim. (Bankr. Doc. No. 5441). Between July 19, 2013 and January 28, 2014, the Trustee filed omnibus objections to the Claims, seeking an order subordinating such claims to all general creditor claims of LBI (Bankr. Doc. Nos. 6847, 6865, 6866, 7264, 7388, 8153, collectively, the “Omnibus Objections.”)
III. The Subordination Proceeding
Certain of the Claimants opposed the Omnibus Objections on procedural grounds, asserting that the relief sought required an adversary proceeding. On February 6, 2014, the Trustee filed a motion to convert the Omnibus Objections to a consolidated adversary proceeding. (Bankr. Doc. No. 8196.) Claimants opposed the motion, arguing that the Trustee was required to file a summons and complaint. (Bankr. Doc. Nos. 8280, 8282.) After a hearing held on February 27, 2014, this Court entered an order (Bankr. Doc. No. 8576) overruling Claimants’ objection and granting the motion to convert the Omnibus Objections to a single, consolidated adversary proceeding (the “Subordination Proceeding”).
A. Motion to Compel Arbitration
On June 6, 2014, Claimants moved to compel arbitration of the Subordination Proceeding. (Bankr. Doc. No. 9068, the “Motion to Compel Arbitration.”) On August 11, 2014, this Court entered an order denying the Motion to Compel Arbitration. (Bankr. Doc. No. 9617.) Claimants appealed.
On September 30, 2015, the District Court affirmed this Court’s denial of the Motion to
Compel Arbitration.
344 Individuals v. Giddens (In re Lehman Bros. Inc.)
, No. 14 Civ. 7643
(ER),
B. Motion to Withdraw the Reference
On November 6, 2014, while the appeal of the Motion to Compel Arbitration was pending, Claimants filed a motion to withdraw the reference. Motion to Withdraw the Reference, ECF Doc. No. 1, 344 Individuals v. Giddens (In re Lehman Bros. Inc.) , No. 14 Civ. 8825 (ER) (S.D.N.Y.). The District Court denied the motion on December 1, 2016. ( Id ., ECF Doc. No. 26.)
C. Cross-Motions for Summary Judgment
On January 13, 2017, the Trustee moved for summary judgment in the Subordination
Proceeding. (Bankr. Doc. No. 14128.) Claimants opposed the Trustee’s motion and cross-
moved for summary judgment in their favor, seeking a determination that the Claims were not
subordinated. (Bankr. Doc. Nos. 14192, 14196.) On July 13, 2017, this Court issued a decision,
finding that the ESEP Agreements plainly and unambiguously provide that the Claims are
subordinate to claims of general creditors of LBI and therefore must be classified as subordinated
claims. (
Giddens v. 344 Individuals (In re Lehman Bros. Inc.)
,
Claimants appealed from the Subordination Decision. The District Court affirmed on
September 26, 2018, agreeing with this Court that the plain language of the ESEP Agreements
requires the subordination of the Claimants’ claims.
344 Individuals v. Giddens (In re Lehman
Bros. Inc.)
, No. 17 Civ. 6246 (AT),
Claimants further appealed to the Second Circuit. On November 1, 2019, the Second
Circuit affirmed the judgment of the District Court, holding that it had properly affirmed the
Subordination Decision’s holding that the Claims are properly subordinated to the claims of
LBI’s general creditors.
344 Individuals v. Giddens (In re Lehman Bros. Inc.)
,
IV. The Secured Classification Motion
On September 2, 2015, while the Subordination Proceeding was still in its early stages, the Trustee filed a separate objection to the Claims’ assertion of secured status (Bankr. Doc. Nos. 12655, 12656, the “Secured Classification Motion.”) The Claims were filed as secured claims, which required the Trustee to maintain a reserve for the Claims at 100 cents on the dollar, limiting the funds available for interim distributions to holders of allowed, undisputed claims while objections to the Claims remained pending. By the Secured Classification Motion, the Trustee sought a determination that the Claims were unsecured.
The ESEP Agreements expressly state that each Claimant’s right to payment is
“unsecured.” (ESEP Agreement § 5(d).) By their response to the Secured Classification Motion
(Bankr. Doc. No. 12832), Claimants argued that, notwithstanding this contractual agreement, the
Claims were secured pursuant to section 541(b)(7), which excludes from property of the estate
funds that are either “withheld by an employer from the wages of employees for payment as
contributions” or “received by an employer from employees for payment as contributions” to “an
employee benefit plan that is subject to title I” of ERISA.
A hearing on the Secured Classification Motion was held on November 4, 2015. This
Court granted the Trustee’s objection to the Claimants’ assertion of secured status, reclаssified
the Claims as general unsecured non-priority creditor claims, and preserved the Trustee’s right to
further object to the Claims. (Bankr. Doc. No. 13053, the “Reclassification Order.”) In response
to Claimants’ argument that
Claimants appealed from the entry of the Reclassification Order. On September 30,
2019, the District Court affirmed this Court’s ruling.
344 Individuals v. Giddens (In re Lehman
Bros. Inc.)
, No. 15 Civ. 09670 (PGG),
V. The Adversary Proceeding
The ESEP Committee filed the complaint (the “Complaint”) initiating this adversary
proceeding on October 7, 2019. (Doc. No. 1.) The ESEP Committee seeks a declaratory
judgment that
On November 6, 2019, the Trustee filed the Motion to Dismiss, arguing that the
Complaint should be dismissed as untimely under the applicable statute of limitations, barred
under the equitable doctrine of laches, and dismissed on the merits for failure to state a claim.
(Doc. No. 5.) The ESEP Committee filed the Motion for Summary Judgment on December 23,
2019, asserting that the claims stated in the Complaint were not subject to any statute of
limitations and therefore were not barred; opposing the defense of laches and asserting that the
Trustee’s defense relies on facts outside the Complaint and therefore cannot be resolved on a
motion to dismiss; and seeking summary judgment in its favor on the issue of
On February 19, 2020, a hearing was held on the Trustee’s Motion to Dismiss and the ESEP Committee’s Motion for Summary Judgment, and the matter was taken under advisement. (Tr. of Feb. 19, 2020 Hr’g, Doc. No. 28.)
DISCUSSION
To survive a motion to dismiss under
I. The Complaint Fails on the Merits
A.
“In 1985, each of the Pension Parties entered into the Executive and Select Employees Deferred Compensation Agreements (the “ESEP Agreements”) with Shearson, each in the form annexed as Exhibit 1 to the Declaration of Richard J.J. Scarola, dated December 23, 2019. See also ECF No. 14129, at ¶2.”
The explicit language of the ESEP Agreements makes clear that the ESEP was a top hat
plan. (
See
ESEP Agreements §9(i).). As discussed,
supra
, a top hat plan is “a plan which is
unfunded and is maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees.”
Being exempt from the funding requirements of title I of ERISA, the assets of a top hat
plan are part of “the general assets of the employer.”
See Gallione v. Flaherty
,
[I]n providing relief for “top-hat” plans from the broad remedial provisions of ERISA, Congress recognized that certain individuals, by virtue of their position or compensation level, have the ability to affect or substantially influence, through negotiation or otherwise, the design and operation of their deferred compensation plan, taking into consideration any risks attendant thereto, and, therefore, would not need the substantive rights and protections of Title I.
Opinion No. 90-14 A (E.R.I.S.A.),
Were the ESEP Committee’s interpretation of
If
Further, as explained by the Trustee in the Motion to Dismiss and in the Reply, numerous
courts addressing the issue have held that
To exclude the assets of an unfunded plan from property of the estate and remove those assets from the reach of general unsecured creditors would therefore fly in the face of the very purpose, structure and function of a top hat plan. It would place11 U.S.C.
§ 541(b)(7) at odds with ERISA and essentially nullify a top hat plan in the bankruptcy context. It would upend the policy of ERISA and the tax law that the deferred amounts in a top hat plan remain part of the general assets of the company subject to the claims of its general creditors.
In re The Colonial BancGroup, Inc
.,
The sole case cited by the ESEP Committee in support of its interpretation of
The express contractual language governing the ESEP, which language was agreed to by the Claimants, also confirms that compensation deferred under the ESEP is рart of the capital of LBI and remains subject to the claims of its creditors in the event of insolvency. As described supra , the ESEP Agreements expressly provide that “[t]he amounts credited to the deferred compensation account hereunder shall be dealt with in all respects as capital of [LBI] [and] shall be subject to the risks of the business.” (ESEP Agreements § 9(i).) The ESEP Agreements also provide that each of the Claimants irrevocably agrees that the deferred compensation payments “are and shall be subordinate in right of payment and subject to the prior payment or provision for payment in full of all claims of all other present and future creditors of [LBI] whose claims are not similarly subordinated.” ( Id. § 9(d).). Each Claimant agreed that any future payments made to him or her under the ESEP Agreements were “unsecured subordinated obligations of [LBI] only,” and that he or she is “only a general subordinated creditor of [LBI] in that respect.” ( Id . § 5(d).)
Finally, the Court observes that, even if Claimants were to prevail on their request for a
declaratory judgment that the ESEP amounts are not property of the LBI estate, this declaration
alone would not provide them with an ownership right in the ESEP amounts. Where applicable,
Under the terms of the ESEP Agreements, deferred compensation directed to the ESEP
by the Claimants is part of LBI’s estate and remains subject to the claims of LBI’s general
creditors. For all of the foregoing reasons,
II. The Complaint is Barred by the Statute of Limitations
Section 1658(a) of title 28 of the United States Code provides for a four-year statute of
limitations to cases arising under federal law when no other statute of limitations applies. The
statute provides that “[e]xcept as otherwise рrovided by law, a civil action arising under an Act
of Congress enacted after the date of the enactment of this section may not be commenced later
than 4 years after the cause of action accrues.”
The statute of limitations applicable to declaratory judgment actions is the limitation
applicable to the underlying cause of action.
See 118 E. 60th Owners, Inc. v. Bonner Props.,
Inc.
,
Because
The ESEP Committee opposes the application of the statute of limitations set forth in
The Court finds that Claimants have failed to demonstrate that an “adversary proceeding”
filed in a bankruptcy court is not a “civil action,” such that
The ESEP Committee also has failed to persuade the Court that, simply because certain
other provisions of the Bankruptcy Code do not set time limitations, no statute of limitations
applies to a cause of action invoking
A cause of action is deemed to accrue pursuant to
Even if the Complaint was not subject to dismissal on the merits for failure to state a claim upon which relief can be granted, the Complaint is barred by the statute of limitations and must be dismissed.
III. The Complaint is Barred by Laches
Although the Complaint must be dismissed on the merits and because it is time barred, the extraordinary undisputed facts present here support dismissal of the Complaint as a matter of law based on the doctrine of laches.
The equitable doctrine of laches prohibits “unreasonable, inexcusable and prejudicial
delay.”
Sec. Inv’r Prot. Corp. v. Bernard L. Madoff Inv. Sec. LLC
,
There are two elements to a laches defense. “A party asserting a laches defense must
show that the plaintiff has inexcusably slept on its rights so as to make a decree against the
defendant unfair” and “that [defendant] has been prejudiced by the plaintiff’s unreasonable delay
in bringing the action.”
Zuckerman v. Metro. Museum of Art
, 928 F.3d at193 (quoting
Merrill
Lynch Inv. Managers v. Optibase, Ltd.
,
To begin, the Court takes judicial notice of Claimants’ Claims and of their previous
public filings during the many years of litigation which Claimants have pursued against the LBI
estate with respect to such claims.
See Staehr v. Hartford Fin. Servs. Grp., Inc.
,
The Claims filed by Claimants in 2009 were premised upon Claimants’ status as creditors
of the estate; as discussed
supra
, the large majority of the Claims asserted that they were secured
claims based upon
It is crystal clear that, since the time the Claims were filed, Claimants were aware of
The Court recognizes that a litigant is permitted to plead in the alternative and to posit different theories of recovery. But that does not translate into an entitlement to engage in costly and protracted Dickensian litigation. Here, since the filing of the Claims over a decade ago, Claimants have steadfastly asserted that they are creditors of the estate and that they have a claim to approximately $270 million in estate property. Now, for the first time, and after losing in this Court, the District Court, and the Court of Appeals, Claimants seek, through the Adversary Proceeding, a declaratory judgment that the ESEP amounts – the estate property to which the Claims lay claim – are not propеrty of the estate. There is no reasonable justification for their prolonged failure to make this argument since the time they filed the Claims in 2009.
In addition, as the Trustee highlights in the Motion to Dismiss, Claimants also did not
raise their
Moreover, Claimants’ inexcusable delay in asserting their
In addition to prejudice resulting from the additional, significant litigation expenses which could have been avoided had the Claimants not delayed at least six years in asserting this new cause of action, the Trustee has articulated a second form of prejudice here. The Adversary Proceeding and Claimants’ pending Second Circuit appeal are the only remaining open matters in the LBI SIPA proceeding. ( See , e.g ., Bankr. Doc. No. 14905 (April 30, 2019 lettеr from Trustee informing the Court that, upon final resolution of the pending ESEP claims matters, the Trustee will immediately seek Court approval for a final distribution and other closing procedures).) Stated differently, Claimants’ delay in raising a new argument directly contrary to their prior position as creditors of the estate impedes the ability of the Trustee to move forward with closing the LBI estate. Keeping the estate open causes the Trustee to incur substantial operational costs that are separate and apart from litigation costs. ( See id. ). Such costs are detrimental to other creditors of the estate, as they reduce the total funds available for distribution and the amounts that creditors will ultimately receive. The delay in closing the LBI estate also prejudices these creditors, as it forces them to wait additional time for final distributions in an otherwise fully-administered case that was commenced over eleven years ago.
For all of these reasons, the Court finds that Claimants’ inexcusable delay has caused significant prejudice to the LBI estate, its creditors, and the Trustee, and holds that the doctrine of laches, as a matter of law, mandates dismissal of the Adversary Proceeding.
CONCLUSION
For all of the reasons stated herein, the Trustee’s Motion to Dismiss is granted. The ESEP Committee’s Motion for Summary Judgment is denied as moot. Any other arguments made by the ESEP Committee and not specifically addressed in this Memorandum Opinion and Order are hereby overruled.
IT IS SO ORDERED.
Dated: New York, New York
June 15, 2020
/s/ Shelley C. Chapman SHELLEY C. CHAPMAN United States Bankruptcy Judge
Notes
[1] Herein, “Doc. No.” refers to documents filed in Adversary Proceeding No. 19-01368, and “Bankr. Doc. No.” refers to documents filed in the Lehman Brothers Inc. SIPA liquidation proceeding, Case No. 08-01420.
[2] The Plaintiff has also filed its Statement of Undisputed Facts , dated December 23, 2019 (“Statement of Undisputed Facts”) (Doc. No. 11) and the Declaration of Richard J.J. Scarola in Opposition to the Trustee’s Motion to Dismiss and in Support of Cross-Motion for Summary Judgment , dated December 23, 2019 (“Scarola Decl.”) (Doc. No. 10-2), in support of its Motion for Summary Judgment. The Defendant has also submitted the Trustee’s Reply in Support of His Motion to Dismiss and Opposition to Claimants’ Cross-Motion for Summary Judgment , dated January 21, 2020 (“Reply”) (Doc. No. 17), and Trustee’s Response to Claimants’ Local Bankruptcy Rule 7056-1 Statement of Facts as to Which There is No Dispute , dated January 21, 2020 (“Response to Statement of Undisputed Facts”) (Doc. No. 18).
[3] A legible example can be found attached to the
Declaration of Richard J.J. Scarola in Support of Motion to
Compel
, Ex. A, dated June 6, 2014 (Bankr. Doc. No. 9069), and it is from this document that the citations herein are
taken. The ESEP Agreements are incorporated by reference into the Complaint (as defined below), and therefore
may be considered when deciding the Motion to Dismiss.
See, e.g.
,
Int’l Audiotext Network, Inc. v. American Tel. &
Tel. Co.
,
[4] See Appellant’s Brief, ECF Doc. No. 11, p. 4, 344 Individuals v. Giddens (In re Lehman Bros. Inc.) , No. 17 Civ. 06246 (AT) (S.D.N.Y.) (noting that the ESEP “did not have all of ERISA’s protections . . . because it was what is known as a ‘Top Hat’ plan exempt from some of those protections”).
[5] The parties agree on the following two statements: “The Pension Parties are former Shearson Lehman Bros. Inc. (“Shearson”) employees who participated in an Executive and Select Employees Deferred Compensation Plan. See ECF No. 14129, at ¶1.”
[6] Beneficiaries of an unfunded top hat plan do not have legal rights “greater than that of an unsecured
creditor to a specific set of funds from which the employer is, under the terms of the plan, obligated to pay the
deferred compensation.”
Demery
,
[7] The Court has been provided with no legislative history or other information supporting the assertion that
Congress intended
[8] In contrast to an “unfunded” plan, a plan that is subject to both the procedural and substantive rights and
protections of ERISA, is a “funded” plan, and “the plan assets must be “segregated from the general assets of the
employer [such that the assets] are not available to general creditors if the employer becomes insolvent.”
Northwestern Mut. Life Ins. Co. v. Resolution Tr. Corp.
,
[9] The Trustee states, persuasively, that “Claimants’ own actions also undercut their claim to ESEP amounts,”
as Claimants have not asserted that they paid taxes on any ESEP amounts that they now claim to own, which weighs
against their argument that the ESEP funds are their property. (Reply, p. 16 (citing
In re Cheeks
,
[10]
See, e.g.
,
Oppenheim v. Campbell
,
[11] Claims are only allowable if they are enforceable against “property of the debtor.” See, e.g.,
[12] Bankr. Doc. Nos. 1866 (noting that the Trustee “expects that most of the LBI Estate will be allocated to Customer Property”), 2743, 4760, 6023.
[13] Bankr. Doc. Nos. 8885, 9273, 9246, 9520, 11147, 11358, 12478, 12579, 13642, 13683, 14162, 14210, 14568, 14595, 14596, 14605.