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Adelphia Recovery Trust v Harris Nesbitt Corp.

Case No. 11-1858-cv (C.A. 2, Apr. 4, 2014)

Appeal from a judgment of the United States District Court for the Southern District of New York (Lawrence M. McKenna, Judge) granting summary judgment to defendant-appellee Goldman, Sachs & Co. and dismissing Adelphia Recovery Trust’s fraudulent conveyance claim brought pursuant to 11 U.S.C. § 548(a)(1)(A). We affirm on grounds of judicial estoppel.

The Adelphia Recovery Trust, an entity created to represent the non-whole creditors of a debtor corporation that is party to a bankruptcy proceeding described below, appeals from Judge McKenna’s grant of summary judgment dismissing its fraudulent conveyance claim against Goldman, Sachs & Co. In such a fraudulent conveyance claim, the Trust may recover only property owned by the parent-company debtor. The various schedules and Chapter 11 plan, which were consummated with the agreement of appellant and its predecessors in interest in the bankruptcy proceeding, all treated the property transferred as owned by a separate subsidiary. We, therefore, affirm on grounds of judicial estoppel.

BACKGROUND



Adelphia Communications Corp. (“ACC”) was the parent company of some 200 holding and operating subsidiaries (collectively, “Adelphia”). At its peak, Adelphia formed the fifth-largest cable company in the United States. ACC, at all relevant times a publicly traded company, was founded by John Rigas in 1986, and members of the Rigas family held several top positions at ACC. After ACC disclosed that it had several billion dollars in fraudulently concealed, off-balance-sheet debt, Rigas family members were forced to resign from their positions and faced various civil and criminal actions. See, e.g., United States v. Rigas, 490 F.3d 208 (2d Cir. 2007).
 

 

Judge(s): Ralph Winter
Jurisdiction: U.S. Court of Appeals, Second Circuit
Related Categories: Civil Procedure , Finance / Banking , Property , Torts
 
Circuit Court Judge(s)
Jose Cabranes
John Walker, Jr.
Ralph Winter

 
Trial Court Judge(s)
Lawrence McKenna

 
Plaintiff Lawyer(s) Plaintiff Law Firm(s)
David Friedman Kasowitz Benson Torres & Friedman LLP
Michael Harwood Kasowitz Benson Torres & Friedman LLP
Howard Schub Kasowitz Benson Torres & Friedman LLP

 
Defendant Lawyer(s) Defendant Law Firm(s)
Melvin Brosterman Stroock & Stroock & Lavan LLP
Francis Healy Stroock & Stroock & Lavan LLP
Claude Szyfer Stroock & Stroock & Lavan LLP

 

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this methodology, often referred to as the ‘bank of adelphia paradigm,’ as the recitation of bankruptcy procedures and time frames6 inconsistent position in a later proceeding11 substantially consummated.8 of the debtor in property as of the commencement of the case,” 1122 appropriately be invoked are probably not20 we simply decline to require goldman and the courts having to11 on june 17, 2008, the claims asserted on behalf of acc subsidiary silence.3 33 cypress tree-1 llc, kzh iii llc, kzh ing-2 llc, kzh langdale3 4 counter-defendant-appellant.30 indebted.17 separately from its subsidiaries based on those schedules.4 13 confirmed and substantially consummated bankruptcy plan.18 fund, putnam high yield trust, putnam master income trust, putnam34 debtors’] liquid assets and liabilities,” and thereafter10 exercises complete dominion over the funds, and has all legally1 managed; or (ii) indirectly from the concentration account4 claims and classes of interests and specify how these classes18 defined in 11 u.s.c. § 1101(2), requires the “transfer of all or12 expenditures[, and] a statement of the debtor’s financial18 aggregated intercompany transaction balances consistent with the actual flow cnc llc, kzh highland-2 llc, kzh ing-1 llc, kzh ing-3 llc, kzh5 adelphia cablevision llc, from such sources18 food mkts., inc., 313 f.3d 758, 763 (2d cir. 2002).2 concerned that “[t]he amended complaint does not identify which3 *2 (s.d.n.y. june 16, 2009). the district court, therefore,9 directly to the margin lenders or to the rfe27 18 commingled concentration account. together, these cases are said30 happened had appellant or its predecessors in interest claimed13 the asset schedules showing that the concentration account was26 owned the concentration account assets. at no time during these14 belonged to the parent amdura, even though subsidiaries had9 bankruptcy estate includes “all legal or equitable interests of1 a) principles of judicial estoppel9 compliance with the bankruptcy code. 11 u.s.c. § 1129(a)(10),26 generale, cowen and company, llc, bmo capital markets corp., sun23 ruling inconsistent with the factual underpinnings of this duly17 position. second, courts regularly inquire7 control by, southmark’s estate. 49 f.3d at 1117. and in amdura,7 owned by the parent-company debtor. the various schedules and2 which tracked intercompany transfers through18 interest, any party in interest can file a competing plan and12 [lying]”).6 defendants-consolidated-defendants-counter-claimants,32 (usa), inc., limited and indosuez capital funding vi, ltd., bank36 courts have observed that the circumstances18 pertinent payments were made either: (i) directly to goldman33 proceedings here, the concentration account was listed as an16 the bankruptcy proceedings regarding ownership of the account is23 action to recover $63 million.6 august term, 20113 delay, or defraud any entity to which the14 howard w. schub, on the brief),27 holders of adelphia communications corp., official committee of14 quotation marks omitted)).5 conveyance claim brought pursuant to 11 u.s.c. § 548(a)(1)(a).24 1288, 2006 wl 2792769, at *3 (e.d.n.y. sept. 27, 2006))).6 judgment as a matter of law. see, e.g., miller v. wolpoff &25 c) application of judicial estoppel5 discussion23 impaired under the plan.” 11 u.s.c. § 1121(c)-(d). if the debtor9 recognized that its purpose is to protect the integrity of the13 a party may be bound by the position taken by its predecessors in parties taking a short term position that risks being4 claims is largely informed by the bankruptcy court’s treatment of26 inc., dai-ichi kangyo bank, ltd., the industrial bank of japan,24 634 f.3d at 696 (integrity of judicial process threatened by3 to “transfers of property of the debtor,” begier v. irs, 496 u.s.20 positions as to ownership of assets as they deem their litigation21 10 §§ 548(a)(1)(a) and 550(a). section 548(a)(1)(a) provides, in5 appellant and its predecessors in interest in the bankruptcy4 12 we also do not exclude the possibility that, in an unusual15 standing. adelphia recovery trust v. bank of am., n.a., 390 b.r. 80, 97 inconsistent with its future position, not only by “knowingly5 15 53, 58 (1990), which includes “all legal or equitable interests21 for the second circuit2 3 of the amended complaint. the revised paragraph should identify11 ownership of the concentration account in a timely fashion.14 mckenna’s grant of summary judgment dismissing its fraudulent42 citigroup financial products, inc.,5 ownership among the various entities agreed to by the pertinent6 in july 2003, appellant’s predecessor in interest filed suit3 [subsidiaries]. this omission is significant because [appellant]5 fraudulent conveyance claim, the trust may recover only property1 the court, from filing for chapter 11 relief in which to obtain7 7 reorganization plan, which involves “a schedule of all [the9 incorporated, barclays capital inc., suntrust capital markets,10 5 adelphia’s assets have been liquidated, returning approximately22 the bankruptcy court’s treatment of the asset schedules in6 stated, “it is admitted by [appellant’s] own revised pleading18 judgment of the district court is affirmed.9 the rigas family. see id. at 152. the resolution of this problem16 a debtor’s ownership of particular assets, we hold that3 for immediate payment over to the margin28 contributed to the account, because amdura was listed as the10 - - - - - - - - - - - - - - - -- - - - - - - - - - - - -16 applicability of judicial estoppel.21 and its subsidiaries were paid in full. in addition, all24 those claims. see galin v. united states, no. 08-cv-2508, 20081 trust bank, bank of america securities llc,24 typically inform the decision whether to3 contained most of the funds in the cash management system through2 members of the rigas family held several top positions at acc.14 judicial estoppel “is usually fulfilled . . . when the bankruptcy3 adelphia cablevision llc, an acc subsidiary on whose behalf20 predecessors in interest. the bankruptcy court adopted the asset2 debtor.” id. at 219 (discussing in re augie/restivo, 860 f.2d at11 11. u.s.c. § 1125(a)-(b). this plan includes items like complete23 judicial estoppel doctrine. throughout the reorganization15 operates, with full preclusive effect, to “bind its debtors and11 to cover these margin calls.20 given the1 encompassing than this broad definition.” (internal citations and4 b) the bankruptcy context14 conclusion24 kasowitz, benson, torres & friedman,28 allegation quoted above, that acc was the real owner of, and13 we affirm on grounds of judicial estoppel.25 importance to bankruptcy proceedings of determining with finality2 reorganization, substantially all assets of acc and its22 adelphia recovery trust v. goldman, sachs & co., et al. a single rfe subsidiary that controlled the main account:19 did any other party assert such a claim or seek a substantive3 principle. nevertheless, several factors2 defendant-bankruptcy-movant-counter-claimant,48 4 wachovia capital markets llc, citigroup global markets holdings,1 southmark because the funds were part of, and under complete6 chapter 11 plan, which were consummated with the agreement of3 the sei institutional managed trust, fifth third bank, fleet12 532 u.s. 742, 749-51 (2001) (internal citations and quotation16 bank, n.v., cooperative centrale raiffeisen-boerenleenbank b.a.,42 b.r. 84, 94 (s.d.n.y. 2007). substantial consummation, as11 - - - - - - - - - - - - - - - - - - - - - - - - - - - - -7 creditors as to all the plan’s provisions, and all related,12 u.s.c. § 1121(b), and a disclosure statement containing “adequate21 bankruptcy proceedings that would result from a different ruling,8 consummation of the plan of reorganization.21 defendants,25 statements and filed the may 2005 schedules, thus evidencing an9 debtor was or became, on or after the date15 co., 948 f.2d 869, 873 (2d cir. 1991); see also chartschlaa v.25 that the rigases caused acc to make cash payments of $63 million19 first, a party’s later position must be5 management account, the subsidiary’s settlement payment from that4 bank of america, n.a., indosuez capital funding iia, ltd., lcm i34 for the southern district of new york (lawrence m. mckenna,21 four and a half years to sort out whether acc or a subsidiary13 background8 litigated in the same cause of action.” sure-snap corp., 94814 nationwide life insurance company, nationwide life and annuity29 adelphia communications corp., and its affiliated debtors and12 appellant’s (or its predecessors’ in interest) position in22 18 10 exhaustive formula for determining the20 litigation must, to prevail, bear the heavy burden of showing a22 19 formally separate entities commingle and subject their collective6 unlikely” because “the debtors have issued restated financial8 would create the perception that either the12 mountain capital clo ii, ubs ag, mellon bank, n.a., j.p. morgan27 additional acc stock and thereby to maintain their control over15 15 of new york capital markets, inc., hsbc bank usa, national37 regard to the ownership of assets is inconsistent with its later25 overnight investment accounts, and transfers20 objection, a debtor’s subsequent claim to those assets in a21 schedules and approved a plan of reorganization that treated acc3 a bankruptcy proceeding described below, appeals from judge41 the plan -- the court can confirm the plan and bind all creditors24 directed appellant to “submit a revised version of paragraph 135910 funding, inc.,44 which the collective cash of acc and its subsidiaries was3 u.s.c. § 541(a)(1). whether the margin loan payments to goldman23 (5th cir. 1995) and in re amdura corp., 75 f.3d 1447 (10th cir.28 controlled, in the name of [a subsidiary]17 limited, apextrimaran-cdo i, ltd., caravelle investment fund,9 seeking estoppel in the ada context), we have not required this30 unravel all previous proceedings to determine what would have12 york branch, suntrust robinson humphrey, inc., credit suisse21 statements listed the account holder’s taxpayer id number as that time warner shares, and $9.5 billion in tradeable adelphia17 so, is the issue on appeal.25 citizens, n.a., kzh entities, deutsche bank ag new york branch,16 is primarily concerned with protecting the judicial process,2 the trustee may avoid any transfer . . . of7 11 however, neither decision was rendered in a legal context13 and liabilities[,] a schedule of current income and current17 in the present case, acc filed for bankruptcy on june 25,10 2006; and the plan was confirmed on january 5, 2007, leaving over12 second, within adelphia the concentration account was referred to as the which payments to [goldman] came from acc.” id.12 to the bankruptcy court’s actions. however, given the centrality17 claims against the debtor” (quoting negron v. weiss, no. 06-cv-5 estoppel doctrine depends heavily on the “specific factual36 the debtor must file “a list of creditors[,] a schedule of assets16 complaint is barred by the doctrine of judicial estoppel. the8 winter, circuit judge:37 banking corporation, halcyon fund, l.p., exis holding ltd., rbs15 nationwide mut. ins. co., 538 f.3d 116, 122 (2d cir. 2008) (the26 claim of ownership by acc in the bankruptcy proceeding. first, bank voluntarily or involuntarily . . . made such12 a different ruling would threaten the integrity of the19 31 particularly when, as here, the assets in question were claimed19 intercompany transfers between the various entities controlled by15 [t]he rigases caused acc to commingle funds15 as customer receipts, liquidation of19 attribution of the concentration account to acc required an explicit 38 llp, new york, ny, for plaintiff-29 judicial estoppel requires showing unfair advantage against the25 7 the asset schedules thus played a key role in both the4 version of the complaint that alleged, in relevant part:14 consolidated-defendants-counter-claimants,3 our holding in this regard is shaped by the context of a7 of tokyo-mitsubishi ufj trust company, mitsubishi ufj trust and14 11 u.s.c. § 548(a)(1)(a). the avoidance power thus applies only19 defendant-appellee,21 process and inject an unacceptable level of uncertainty into its25 information” to allow interested parties to evaluate that plan.22 were transfers of the property of acc, or should be deemed to be24 the adelphia recovery trust, an entity created to represent39 asset only of two successive acc subsidiaries, not the property17 action to proceed would clearly threaten the integrity of6 interest in prior proceedings. see, e.g., secured equities invs., inc. v. b.r. at 151. de minimis effect on the bankruptcy proceeding.23 estopped. in enumerating these factors, we do18 special opportunity master fund, ltd., sprugos investments iv,31 ny, for defendant-appellee.35 rigas family (a rigas family entity, or “rfe”) unconnected to12 adelphia paradigm,”4 on june 25, 2002, acc and its subsidiaries entered20 adelphia recoveries against third party lenders and accountants)19 trust v. bank of am., n.a., no. 05-civ-9050, 2009 wl 1676077, at8 49 reattribute asset ownership based on a determination of asset5 l.l.c., bnp paribas, first hawaiian bank, non-agent lenders,32 concentration account assets to acc. at the time of bankruptcy16 through an rfe and then to goldman. appellant seeks in this5 appellants are estopped from pursuing a claim that would4 (argued: april 25, 2012 decided: april 4, 2014)5 bankruptcy proceedings. we, therefore, hold that appellant’s7 out of a 1999 multi-million margin loan that goldman had extended10 the debtor . . . of all or substantially all of the property14 finally, any of acc, its subsidiaries, or rfes could direct that money be paid finality. in order for the reorganization to proceed, the8 central importance to this process. one of the foremost13 in the district court, and here, appellant faced the problem7 hampshire’s admonishment that the application of the judicial35 defendants-counter-claimants,45 docket no. 11-1858-cv6 “play[] fast and loose” with the requirements of the bankruptcy24 fund, putnam funds trust-putnam high yield trust ii, putnam high38 highland, was allegedly used by the rigases to purchase14 court confirms a plan pursuant to which creditors release their4 yield fixed income fund, putnam high yield managed trust, putnam39 insolvent entities, and the risk to judicial integrity if we were9 17 to an asset in the bankruptcy court only to do so in subsequent21 [appellant] does not have standing to sue.” id.21 adelphia cablevision as the owner of the account in concluding21 “adelphia”). at its peak, adelphia formed the fifth-largest11 seeking to assert an inconsistent position15 insurance company, nationwide mutual insurance company, marathon30 inconsistent with the claim it makes on appeal.2 property or non-property based claims which could have been13 the debtor in property as of the commencement of the case” and2 owner and “possessed all other legally cognizable indicia of11 of acc. the theory that the concentration account was actually18 v. bank of am., n.a., no. 05-cv-9050, 2011 wl 1419617 at *215 association, bank of montreal, citibank, n.a. and citicorp usa,38 “[i]ntercompany transactions (e.g., cash receipts, disbursements, appellant’s action against goldman alleges a fraudulent8 variable trust—pvt high yield fund, putnam floating rate income37 to sue the subsidiary. it therefore argued, based on the amended12 conveyance under 11 u.s.c. §§ 548(a)(1)(a) and 550(a). it arose9 doctrine is intended to prevent.5 limited, ibj whitehall funding 2001 trust, mizuho corporate bank,25 plan dependent upon those schedules.9 transfer . . . with actual intent to hinder,13 credit partners, l.p., sei institutional investments trust and11 appeal from a judgment of the united states district court20 or to a single entity, adelphia cablevision, llc (the ‘bank of adelphia’). similar to the one before us or involved application of the14 dealt with by the plan,” and “commencement of distribution under15 valid claim of a fraudulent conveyance under 11 u.s.c.4 11 putnam diversified income trust, putnam high yield advantage33 marks omitted). new hampshire explains that,17 a court to accept that party’s earlier9 filing and again in february 2004, the acc subsidiary acc17 v.18 different proceeding must be seen as inconsistent with its prior22 debtors in possession, official committee of equity security13 disadvantage to, goldman beyond the possible loss of $63 million.10 members were forced to resign from their positions and faced17 though, that every case emphasizes that “[b]ecause the doctrine1 in the concentration account that it16 interest can vote to approve it. following approval by at least21 mandatory requirements is that the plan designate classes of17 company americas, societe generale, s.a., merrill lynch & co.,40 unfair advantage); mitchell v. washingtonville cent. sch. dist.,33 9 in the bankruptcy context, whether a party’s position with24 granted goldman’s motion for summary judgment. id. the court17 that the payments to goldman were made in the name of the8 interest contested that determination.3 the entity that made and received payments involved with the account. ownership.” 75 f.3d at 1451.12 subsidiaries were liquidated, and all secured creditors of acc23 fifth and tenth circuits, matter of southmark corp., 49 f.3d 111127 element in all circumstances. see maharaj v. bankamerica corp.,31 payor from, the concentration account. adelphia recovery trust14 a position that unravels key decisions in the proceedings. we11 it had gathered in the concentration account25 adelphia. the loan, which was secured by acc stock owned by13 unfair detriment on the opposing party if not17 plaintiffs-counter-defendants,16 interest, and a portion of acc’s unsecured debt was paid. those26 managed high yield trust, putnam strategic income fund, travelers1 publicly traded company, was founded by john rigas in 1986, and13 conveyance on behalf of the [subsidiaries].” adelphia recovery7 bankruptcy under chapter 11. pursuant to an ensuing plan of21 of funds within the debtor’s cash management system.” in re adelphia, 368 judicial process by prohibiting parties from deliberately14 the exact criteria for invoking judicial estoppel will vary based11 190 f.3d 1, 6 (2d cir. 1999) (same). this is consistent with new34 years before the date of the filing of the10 128 f.3d 94, 98 (2d cir. 1997) (not requiring the element of32 150-51. the allocation of assets to the various entities was of12 if the plan is feasible, was proposed in good faith, and is in25 conveyance claim against goldman, sachs & co. in such a43 “rabobank nederland” new york branch, morgan stanley senior43 4 consolidated-defendant,6 timed to the legal exigencies of the moment, precisely what the4 46 30 that was made or incurred on or within 29 that such transfer was made[,] . . .16 account and that has paid all its scheduled creditors, which did10 between each such debtor and adelphia cablevision.” acc never26 suisse (usa), inc., td securities (usa) llc,31 not establish inflexible prerequisites or an19 “[i]t would be hard to imagine language that would be more3 17 appellant’s allegations against goldman were amended several1 it appears from this allegation and the record that the32 further, the bankruptcy plan undeniably was substantially9 that the margin loan payments were not made by acc but by19 ltd., j.p. morgan securities, inc., mountain capital clo i,26 subsidiary, adelphia cablevision llc, that held the concentration9 519) (internal quotation marks omitted). the bank of adelphia12 adelphia cablevision. id. at 151-53. adelphia cablevision was20 the plan.” over $6 billion in cash, $117 million in tradeable16 understanding of the plan. as the district court noted in its6 present litigation, as described above, and well after20 after acc disclosed that it had several billion dollars in15 been at risk of unraveling. we, therefore, decline to issue a16 discussion of substantive consolidation, such relief was “highly7 llc, kzh pondview llc, kzh shoshone llc, kzh waterside llc, kzh4 inconsistent position, adoption of that position by a court in an28 1 in any remaining assets that appellant can recover.2 adelphia recovery trust, aka the adelphia contingent value8 20 securities, inc., deutsche bank ag, j.p. morgan chase bank, n.a.,28 the claim to continue to summary judgment to determine whether the source of earlier proceeding, and unfair advantage against the party29 inc., merrill lynch capital corp., bank of new york, abn amro41 order to satisfy these margin calls. on each22 pamco llc, kzh soleil-2 llc, kzh sterling llc, kzh riverside llc,6 first or the second court was misled. . . . a13 hcm/z special opportunities llc, phoenix-goodwin high yield fund,17 cf. chartschlaa, 538 f.3d at 123 (“the bankruptcy code23 quotation marks omitted).6 that “intercompany transfers between a debtor on the one hand,22 from the account on their behalf by wire or check regardless of how much they from various subsidiary entities . . . in21 abn amro inc., deutsche bank securities, inc., fleet securities,8 bny mellon capital markets, llc, citigroup global markets inc.,18 david m. friedman (michael c. harwood &26 it is therefore crucial, both for the sake of finality and16 proceeding.13 v. chevron corp., 638 f.3d 384, 397 (2d cir. 2011) (internal5 by other parties during the bankruptcy proceeding without20 bankruptcy court’s supervision of the process and in the parties’5 adelphia. as acc’s stock price decreased following the16 wl 5378387, at *10 (e.d.n.y. dec. 23, 2008) (“adoption” in2 ownership was asserted in the present proceeding in 2009. nor2 17 to support a principle of attributing ownership of funds31 the debtor is given 180 days, extendable up to 20 months by6 paradigm, which included adelphia cablevision’s ownership of the13 adelphia entities underwent a massive restatement of their9 be distributed by adelphia cablevision llc26 1996), to determine whether acc was the true owner of the29 third consideration is whether the party14 to allow a party, after the consummation of a bankruptcy, to take10 the debtor is discharged from any prepetition debts, subject to2 and francis c. healy, on the brief),33 against goldman, sachs & co. (“goldman”).1 bankruptcy process by encouraging parties to alter their20 complicated bankruptcy proceeding involving 250 related,8 related entities are involved, a creditor who fails to lay claim20 bank of tokyomitsubishi trust company, mitsubishi trust and19 4 its impact on judicial integrity is certain.” republic of ecuador4 the property of acc appeared for the first time late in the19 the royal bank of scotland plc,13 16 defendants-consolidated-defendants,28 ability to generally determine the assets and liabilities of each10 the requirements of judicial estoppel are, therefore, met.25 contingent value vehicle shares (shares set up as an interest in18 from a particular account (the “concentration account”), which1 lenders.29 wachovia bank, national association,47 held by a subsidiary of acc were approved by appellant’s1 the sole issue is whether the amended complaint states a3 operations, inc. identified the concentration account as its18 whether the party has succeeded in persuading8 fraudulently concealed, off-balance-sheet debt, rigas family16 bankruptcy plan, and without it the entire process would have15 listed as the owner of the concentration account in both the21 rigases caused acc to direct that the funds24 an interest of the debtor in property . . .8 99, 103 (2d cir. 2010) (requiring a party to show a clearly27 liabilities in january and may 2005 listed the acc subsidiary20 accounting records, which sought to provide separate, audited10 changing positions according to the exigencies of the moment.”15 institutions, seeking damages for their alleged participation in5 debtors, who had already been paid in full, were dismissed for lack of acquisition accounting and cost allocations) were deemed to have been made by date identified in the following charts, the23 master intermediate income trust, putnam premier income trust,35 bankruptcy process, and particularly the creation of a bankruptcy8 needs to change, leaving courts to unravel previously closed22 kzh soleil llc, merrill lynch pierce, fenner & smith7 7 fails to file a plan or the debtor’s exclusive filing period10 depended on the parties’ adoption of the so-called “bank of17 abramson, l.l.p., 321 f.3d 292, 300 (2d cir. 2003); mario v. p&c1 party seeking estoppel, derosa v. nat’l envelope corp., 595 f.3d26 29 (s.d.n.y. 2008). the remaining claims were ultimately settled or dismissed creditors of acc who were not paid in full received an interest1 once a conforming plan has been proposed, parties in20 creating either a net payable or receivable intercompany balance25 determination of the ownership of assets is at the core of the7 january and may amendments to the debtors’ schedules of assets1 although we have recognized that “[t]ypically” the application of24 f.3d 79, 89 (2d cir. 2000); accord in re adelphia recovery trust,2 exclusive period in which to submit a plan of reorganization, 1120 following a filing for chapter 11 bankruptcy reorganization,15 2002; the ultimately-confirmed plan was proposed on october 16,11 (b); fed. r. bankr. p. 3020(b)(2). once the plan is confirmed,1 goldman, sachs & co.,20 of asset allocation to the integrity of the bankruptcy process,18 inc., cowen & co., llc, scotia capital (usa), inc.,2 banking corporation, cibc world markets inc., credit suisse, new20 would derive an unfair advantage or impose an16 will be treated under the plan. 11 u.s.c. §§ 1122, 1123(a).19 unsecured debt of the subsidiaries was also paid in full with25 [bankruptcy] petition, if the debtor11 the non-whole creditors of a debtor corporation that is party to40 $18 billion to claimholders.23 provisions. 11 u.s.c. §§ 1122, 1123(a), (b). foremost among the16 separate subsidiary. we, therefore, affirm on grounds of6 difficulties the bankruptcy court encountered was the issue of14 11-1858-cv national bank, bank of tokyomitsubishi trust company, n/k/a bank13 were distributed to claimholders as of early march 2007, just20 toronto dominion (texas) llc, the bank of nova scotia, credit30 rev. second am. compl. ¶ 1359.31 judge) granting summary judgment to defendant-appellee goldman,22 pursuant to this order, appellant submitted a revised13 we do not exclude the possibility of specific harm, or unfair9 adelphia cablevision (an acc subsidiary) account, and adelphia cablevision was inc., banc of america securities llc., pnc capital markets llc,11 to highland holdings ii llp (“highland”), an entity owned by the11 estoppel is intended to avoid. wight v. bankamerica corp., 2191 assets to single control. see in re augie/restivo baking co.,7 putnam variable trust—pvt diversified income fund, putnam36 consolidation of acc and adelphia cablevision’s bankruptcies, as4 affairs.” 11 u.s.c. § 521(a)(1). the debtor is given a 120-day19 seek approval by the parties in interest. 11 u.s.c. § 1121(c).13 22 14 issued several margin calls to highland. the complaint alleged18 rigas, 490 f.3d 208 (2d cir. 2007).19 asset schedules. see sure-snap corp. v. state st. bank & trust24 counter-claimants.14 parties, after a plan of reorganization has been confirmed and7 1 intercompany payable to adelphia cablevision by those entities was created. f.2d at 873 (citing 11 u.s.c. §§ 521(a)(1), 1141(a)).15 united states court of appeals1 proceedings did acc or any party attribute ownership of the15 2 various assets be determined in the bankruptcy proceedings.18 makes clear, debtors and creditors have ample periods of time7 these entities exceeded the entity’s contribution to the account, an first turn to a description of the legal mechanics of such a12 context[]” before the court. 531 u.s. at 751. we do note,37 case, the allocation of specific assets may be largely irrelevant16 cognizable indicia of ownership. in southmark, the court2 19 2 various civil and criminal actions. see, e.g., united states v.18 proceeding, all treated the property transferred as owned by a5 of some 200 holding and operating subsidiaries (collectively,10 (s.d.n.y. apr. 7, 2011). the district court disagreed and16 limited partnership, calyon new york branch, calyon securities35 stroock & stroock & lavan llp, new york,34 b e f o r e: winter, walker, and cabranes, circuit judges.18 860 f.2d 515, 518-19 (2d cir. 1988).8 relevant part:6 6 capital funding, inc., the bank of new york mellon, societe22 inc., barclays bank plc, pnc bank, n.a., deutsche bank trust39 id. at 750-51. (internal citations and quotation marks omitted).23 not include acc, in full. accordingly, appellant lacked standing11 account to its former president and director could be avoided by5 reducible to any general formulation of1 the payments to goldman was acc or a subsidiary. account in the asset schedules, was the cornerstone of the14 specific exceptions not relevant here, as long as the confirmed3 11 plaintiff-counter-defendant-appellant,10 aggregated in a communal account to a parent when the parent32 melvin a. brosterman (claude g. szyfer32 the fuji bank, limited, the toronto-dominion bank,27 inc., cibc world markets corp., morgan stanley & co.9 sachs & co. and dismissing adelphia recovery trust’s fraudulent23 determined that because southmark owned and controlled the cash3 permitted in bankruptcy proceedings to remedy circumstances where5 adelphia communications corp. (“acc”) was the parent company9 the present matter underlies their importance and the need for7 lacks standing to pursue claims to recover for fraudulent6 claimed the account as one of its assets until such a claim of1 26 19 judicial estoppel.7 cable company in the united states. acc, at all relevant times a12 both the debtor’s plan and any competing plan must meet various14 bankruptcy plan is followed. 11 u.s.c. §§ 1141(d)(1), 523.4 be paid completely or will have some other right altered under23 proceedings. doing so would allow parties an opportunity to23 expires without acceptance of a proposed plan by the parties in11 relief is granted only when the risk of inconsistent results with3 apply the doctrine in a particular case:4 harris nesbitt corp., deutsche bank ag, bank of new york company,23 incorporated, merrill lynch credit products llc, mizuho global8 mandatory provisions and may meet various discretionary15 substantially all of the property” in the plan, “assumption by13 also moved for dismissal of the claim against it, the district court allowed within which to finalize asset ownership schedules and fashion a8 against over 400 lenders, investment banks, and other financial4 and adelphia cablevision [as owner of the concentration account]23 mcfarland, 753 n.y.s.2d 264, 264 (4th dep’t 2002)). times at the suggestion of the district court. the court was2 vehicle,9 clearly inconsistent with its earlier6 fraudulent conveyances came from acc and which came from the4 and liabilities, and neither acc nor appellant’s predecessors in2 corresponding to the acc subsidiary national cable acquisition associates. 8 we review de novo whether goldman was entitled to summary24 after confirmation of the plan. since then, substantially all21 against all defendants other than goldman, sachs & co. although goldman had had contributed to the account, and if at any time the payments on behalf of the needs of debtors and creditors, that claims to ownership of17 the rigas family fraud. this action included the present action6 appellant argues that we should follow decisions of the26 the court held that funds in a commingled cash management account8 this appeal followed.22 22 l.l.c., caravelle investment fund ii, l.l.c., goldman sachs10 one class of impaired non-insider claims -- claims that will not22 the approval of “each class of claims or interests that is8 position, so that judicial acceptance of an10 finances.”). any other holding would encourage sharp practices,2 36 property; acc did not. amendments to the schedules of19 in relying upon the prospective harm to the integrity of7 under which judicial estoppel may19 on “specific factual contexts,” and that “courts have uniformly12 financials for each insolvent entity. in re adelphia, 368 b.r. at11 results -- exactly the result that the doctrine of judicial26 consummated as early as 2007. in re adelphia comm’cns corp., 36710 disclosure of the fraudulent concealment of debt in 2002, goldman17 revisiting the accuracy of those schedules to permit the present5 series fund, inc.-putnam, kzh holding corporation iii, kzh2 unsecured creditors of adelphia communications corp.,15 is premised on full and complete disclosure of the debtor’s1 in new hampshire v. maine, the supreme court made clear that10 on the other hand, have been netted in the intercompany schedule,24 cibc inc., bmo capital markets financing, inc., suntrust bank,12 involving strategic denials or affirmations of asset ownership3 see chartschlaa, 538 f.3d at 122, particularly where multiple19


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