Hunt v. Bankers Trust Co.
| Decision Date | 15 September 1986 |
| Docket Number | No. 86-1655,86-1655 |
| Parties | 1986-2 Trade Cases 67,303, Bankr. L. Rep. P 71,473, 1 Tex.Bankr.Ct.Rep. 15 William Herbert HUNT, et al., Plaintiffs-Appellants, v. BANKERS TRUST COMPANY, et al., Defendants-Appellees. REPUBLICBANK DALLAS, National Association, et al., Counter-Plaintiffs, v. CRESCENT INVESTMENT COMPANY, et al., Additional Counter-Defendants. PENROD DRILLING COMPANY, et al., Plaintiffs-Appellants, v. MANUFACTURERS HANOVER TRUST COMPANY, et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Stephen F. Gordon, Edwin A. McCabe, George P. Field, McCabe & Gordon, P.C., Boston, Mass. and Ben L. Krage, Kasmir, Willingham & Krage, Dallas, Tex., for plaintiffs-appellants.
Daniel C. Stewart, Dallas, Tex., W. Ted Minisk, Jay J. Madrid, Winstead, McGuire, Sechrest & Minick, Houston, Tex. and Peter Kilchenmann, Lynn Goldstein, Peter Kilchenmann, Chicago, Ill., for First Nat. Bank of Chicago.
Robert M. Cohan, Lee M. Simpson, Frederick Bartlett Wulff, Cohan, Simpson, Cowlishaw, Aranza & Wulff, Dallas, Tex. and Robert L. Blank, Burton M. Freeman, New York City, for Bankers Trust Co.
David B. Eizenman, Moses & Singer, New York City, for Bankers Trust and additional defendants.
Melvyn L. Cantor, John J. Kerr, Jr., Thomas C. Rice, Simpson, Thacher & Bartlett, New York City, Hugh M. Ray, Alfred H. Ebert, Jr., Andrews & Kurth, Houston, Tex., Charles R. Haworth, Andrews & Kurth, Dallas, Tex., of counsel, for Mfrs. Hanover Trust Co.
Bracewell & Patterson, Kenneth R. Wynne, Houston, Tex., William Van Dercreak, Robert H. MacKinnon, Mark P. Zimmett, Shearman & Sterling, New York City, for Citibank, N.A.
James E. Babcock, Thomas H. Lee, James C. Kean, Dotson, Babcock & Scofield, Houston, Tex. and Henry L. Goodman, Andrew D. Gottfried, Zalkin, Rodin & Goodman, New York City, for Chemical Bank.
Jim K. Choate, John P. Lilly, Dewey Hicks, Douglas Kearney, Brice & Mankoff, Dallas, Tex., for Bank of America Nat. Trust & Sav. Ass'n and additional defendants; George W. Coombe, Jr., Winslow Christian, Frank G. Ker, Los Angeles, Cal., of counsel, for Bank of America.
Freytag, Perry, LaForce, Rubinstein & Teofan, Vernon O. Teofan, Thomas B. Anderson, Jr., Dallas, Tex., Walter L. Stratton, Mitchell A. Karlan, Gibson, Dunn & Crutcher, New York City and Thomas W. Craddock, Gibson, Dunn & Crutcher, Dallas, Tex., for Crocker Nat. Bank.
Michael M. Baylson, John Horstmann, Duane, Morris & Heckscher, Philadelphia, Pa., and Steven Gutman, New York City, and Mike Joplin, Strasburger & Price, Dallas, Tex., for European American Bank and Trust Co.
Jess Hall, Jr., D. Mitchell McFarland, James W. Paulsen, Liddell, Sapp & Zivley, Houston, Tex. and Vera Bangs, Liddell, Sapp & Zivley, Dallas, Tex., for Texas Commerce Bank.
W. Michael Byrd, Michael Lowenberg, Richard C. Levin, Maureen Armour, Akin, Gump, Strauss, Hauer & Feld, Dallas, Tex., for First Nat. Bank of Houston.
Charles Porter Storey, Storey, Armstrong, Steger & Martin, Dallas, Tex., and David A. Ranheim, Linda M. Freyer, Dorsey
& Whitney, Minneapolis, Minn., for First Nat. Bank of St. Paul.
Timothy McCormick, Jerry P. Jones, David R. McAtee, Thompson & Knight, Dallas, Tex., for Republicbank Dallas, N.A.
W. Frank Carroll, Martha J. Hardwick, Stinson, Ag & Fizzell, Vincent S. Walkowiak, Fulbright & Jaworski, Dallas, Tex. and James P. Grove, Rex H. White, Jr., White & Grove, Austin, Tex. and James C. Slaughter, Fulbright & Jaworski, Houston, Tex., Ernest E. Figari, Jr., Thomas A. Graves, James Pulis, Johnson & Swanson, Dallas, Tex., Daniel H. Williams, Phillips, Lytle, Hitchock, Blaine & Huber, Buffalo, N.Y., Paul B. Zuydhoek, Jones, Day, Reavis & Pogue, Terence M. Murphy, Patricia J. Villareal, James E. Coleman, Fletcher L. Yarborough, Carrington, Coleman, Sloman & Blumenthal, Dallas, Tex., Michael E. Niebruegge, Mayer, Brown & Platt, Houston, Tex., and Robert F. Finke, Mayer, Brown & Platt, Chicago, Ill., and Carla R. Voelker, Richardson, Tex., Ronald E. Cook, R.T. Nassberg, Mayer Day & Caldwell, Houston, Tex., for additional defendants.
Ivan R. Irwin, Jr., Al Conant, Jr., David M. Pruessner, Shank, Irwin & Conant, George W. Bramblett, Jr., Sharon N. Freytag, Haynes & Boone, Robert W. Jordan, Erin Y. Baker, Baker & Botts, Dallas, Tex. and James G. Ulmer, J. Michael Baldwin, Baker & Botts, Houston, Tex., for First Interstate Bank of Cal. and additional defendants.
Edwin A. McCabe, Stephen F. Gordon, George P. Field, McCabe & Gordon, P.C., Boston, Mass., Ben L. Krage, Kasmir, Willingham & Krage, Dallas, Tex., for third party defendants.
John M. Landis, William E. Brown, Barry W. Ashe, New Orleans, La., for Marine Midland Bank.
Charles F. Vihon, Boston, Mass., for intervenor--Committee of Unsecured Creditors.
Appeals from the United States District Court for the Northern District of Texas.
Before RUBIN, REAVLEY, and POLITZ, Circuit Judges.
The District Court for the Northern District of Texas enjoined parties to litigation before it from "filing a case under the Bankruptcy Code in any district other than the Northern District of Texas, Dallas Division, without [its] prior approval," and ordered two parties to that litigation and a corporate subsidiary of one of the parties, each of which had filed petitions under chapter 11 of the Bankruptcy Code in the Eastern District of Louisiana, to file a motion to transfer these cases to the bankruptcy court in Dallas. We hold that this court has jurisdiction of the appeal, deny the request for a stay, dismiss the appeal for lack of merit, and direct the transfer of the bankruptcy cases to the Northern District of Texas.
Placid Oil Company, Penrod Drilling Company, three trust estates, named the William Herbert Hunt Trust Estate, the Nelson Bunker Hunt Trust Estate, and the Lamar Hunt Trust Estate (the "Trust Estates"), which own stock in Placid and Penrod, and the trustees and certain beneficiaries of those Trust Estates, all of whom we refer to collectively as the Hunt interests, sued twenty-three banks that had made loans to Penrod, Placid, and the Trust Estates under separate credit agreements. At the time the action was filed, Penrod and Placid together owed the banks a total of $1.5 billion. The complaint filed in the District Court for the Northern District of Texas alleges that the banks had committed a number of wrongful acts in their business relations with the borrowers, including unlawful and inequitable conduct, breaches of fiduciary duty, fraud, and antitrust violations. The Hunt interests sought damages, declaratory relief, and reformation or rescission of two credit agreements.
After almost all of the banks had answered the complaint and had filed counterclaims or third-party actions or both, seeking recovery of the money loaned by them and asserting other claims, the banks moved on July 28, 1986 for a temporary restraining order enjoining all parties from initiating any action or proceeding in any forum other than the Northern District of Texas on any matter related to that action without prior approval of the district court. The district judge promptly convened a conference on the banks' application the same day, with only two hours notice to the Hunts' counsel. After hearing and considering the arguments of counsel, the district court entered a temporary restraining order, which provided:
Each party to the litigation, and all other persons acting in concert therewith, is enjoined and restrained from initiating any proceedings in any forum other than this Court on any matter or issue related to this action, without prior approval of this Court. (Emphasis added.)
The next day Placid and Penrod filed an antitrust action against the banks, alleging that the banks had conspired to fix prices and to monopolize the offshore contract drilling industry, and that the banks' efforts to collect on their loans were motivated by a desire to destroy Penrod and Placid in furtherance of this scheme.
Counsel for all parties thereafter agreed that the court would enter a preliminary injunction that would continue the terms of the temporary restraining order in effect "until a final judgment is entered in [the first] action from which there is no right of appeal." The court then entered such an order on August 15.
Soon thereafter, pursuant to Texas law which permits nonjudicial foreclosure, some of the banks filed notices of foreclosure on some of the properties pledged to secure loans to them. The Hunt interests then sought to enjoin the banks from foreclosing on any collateral pledged under the credit agreements. After a hearing, the district court denied the motion.
Faced with the prospect of foreclosure on their assets, Placid, Placid Building and Service Company ("PBSC")--a wholly owned subsidiary of Placid that was not a party to the two lawsuits--and one of the three trusts, the William Herbert Hunt Trust Estate, each filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Louisiana at New Orleans. The effect of the filings was to prevent the foreclosure sales that the district court had refused to enjoin. Placid, PBSC, and the William Herbert Hunt Trust Estate did not request or obtain approval from the District Court for the Northern District of Texas to file the Chapter 11 petition in Louisiana.
The banks promptly resorted to the district court, and, after a conference during which counsel for the plaintiffs and the banks were heard, that court on August 29 entered orders that:
(a) enjoined the plaintiffs from taking any actions "in furtherance of filing a case under the Bankruptcy Code in any district other than the Northern District of Texas, Dallas Division, without prior approval of this Court";
(b) enjoined Penrod from filing a bankruptcy case in any district other than the Northern District of Texas, Dallas Division, without prior...
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