Devices Liquidation Trust v. Pinebridge Vantage Partners, L.P. (In re Pers. Commc'n Devices, LLC)
| Decision Date | 03 April 2015 |
| Docket Number | Case No.: 13–74303–AST Jointly Administered,Adv. Pro. No.: 13–8174–AST |
| Parties | In re: Personal Communication Devices, LLC et. al., Debtors. Devices Liquidation Trust, Plaintiff, v. Pinebridge Vantage Partners, L.P., (f/k/a Pinebridge Vantage Capital L.P.), et al., Defendants. |
| Court | U.S. Bankruptcy Court — Eastern District of New York |
Schuyler G. Carroll, Gary F. Eisenberg, Tina N. Moss, Perkins Coie LLP, New York, NY, for Plaintiff.
Blake T. Denton, Christopher Harris, Latham & Watkins LLP, Lisa G. Beckerman, Akin Gump Strauss Hauer & Feld LLP, Douglas E. Deutsch, Marc Roitman, Chadbourne & Parke LLP, John E. Jureller, Jr., Lauren Catherine Kiss, Klestadt & Winters LLP, Kara Lynn Gorycki, Cohen Tauber Spievack & Wagner PC, New York, NY, for Defendants.
Susan Nokes, Gallatin, TN, pro se.
DECISION AND ORDER GRANTING MOTION TO DISMISS OF DLJ INVESTMENT PARTNERS III, L.P., DLJ INVESTMENT PARTNERS, L.P., AND IP III PLAN INVESTOR, L.P.
Pending before the Court is the motion (the “Motion”) filed by DLJ Investment Partners III, L.P., DLJ Investment Partners, L.P., and IP III Plan Investor, L.P. (collectively, “DLJ”) seeking dismissal of several claims filed against them by Plaintiff, Devices Liquidation Trust (“Plaintiff”). For the reasons set forth below, DLJ's Motion is granted, and all of Plaintiff's claims against DLJ addressed by the Motion are dismissed.
This Court has jurisdiction over this core proceeding pursuant to 28 U.S.C. §§ 1334(a) and (b), and 157(b)(2)(A), (K) and (O), and the Standing Orders of Reference in effect in the Eastern District of New York dated August 28, 1986, as amended on December 5, 2012, and made effective nunc pro tunc as of June 23, 2011.
Personal Communications Devices, LLC (“PCD”) was a company that purchased and sold cell phones and other wireless devices, acting as an intermediary between manufacturers and carriers, and provided related services. Personal Communications Devices Holdings, LLC (“Holdings”) was the parent company of PCD. On August 19, 2013 (the “Petition Date”), PCD and Holdings (collectively, “Debtors”) filed voluntary petitions for relief under chapter 11, commencing case nos. 13–74303 and 13–74304; these cases were administratively consolidated. On the Petition Date, Debtors filed a series of first day motions, including a motion seeking approval of a Debtor-in-possession financing facility, as well as a motion to sell substantially all of their assets under § 363(b) and (f)1 , along with a motion to establish bid procedures for the proposed sale2 . That same day, Debtors and Quality One Wireless, LLC (“Quality One”) executed an Asset Purchase Agreement (as amended the “APA”) pursuant to which Quality One agreed to purchase substantially all of Debtors' assets and assume certain defined liabilities.
On August 26, 2013, the Office of the United States Trustee appointed the Official Committee of Unsecured Creditors of Debtors' estates (the “Committee”).
On September 13, 2013, the Court entered its Final DIP Order3 and on September 16, 2013, entered an Order approving bid procedures4 . In the Final DIP Order, Debtors stipulated, among other things, to the enforceability of DLJ's claims and liens (Final DIP Order ¶ D), and that the Final DIP Order would be deemed a proof of claim. Final DIP Order, ¶ 27. The Committee was required to bring any Challenge against DLJ (as defined in the Final DIP Order), including any objection to DLJ's claims, by October 24, 2013. Final DIP Order, ¶ 17(b).
On October 17, 2013, the Court approved Debtors' sale of substantially all of their assets to Quality One. [Case No. 13–74303, dkt item 114]
On October 18, 2013, the Court approved a stipulation extending the Challenge period to October 28, 2013. [dkt item 216]
On October 24, 2013, the Court issued an Order Authorizing the Committee to Bring Certain Causes of Action on Behalf of the Debtors' Estates. [Case No. 13–74303, dkt item 218]
On October 28, 2013, the Committee commenced this adversary proceeding by filing a Complaint5 against DLJ along with PineBridge Vantage Partners, L.P. (f/k/a PineBridge Vantage Capital, L.P.), PineBridge Co–Investment AIV Fund, L.P., Vantage Star Investment Corp., PineBridge Plan Star Investment Corp., PineBridge PEP IV Co–Investment, L.P., and PineBridge PEP V Co–Investment, L.P. (collectively, “PineBridge”), and the Insurance Company of the State of Pennsylvania (“ISOP”). [dkt item 1] (Collectively, ISOP, PineBridge and DLJ are referred to as the “Investor Defendants”).
On December 20, 2013, PineBridge filed a Motion to Withdraw the Reference of this adversary proceeding [dkt item 9], in which DLJ subsequently joined. [dkt item 18] That motion remains pending before the District Court under 13–mc–01096–JMA.
On December 23, 2013, PineBridge and DLJ filed motions to dismiss the Complaint. [dkt items 12, 13, 14, 15] ISOP filed its motion to dismiss on January 15, 2014. [dkt items 29, 30]
On January 24, 2014, the Committee filed a First Amended Complaint against the Investor Defendants. [dkt item 34] The First Amended Complaint asserts eight causes of action6 ; however, Plaintiff asserts only the following claims against DLJ, numbered as denominated in the First Amended Complaint: the second cause of action, for recharacterization of DLJ's debt as equity; the fourth cause of action, for setoff; the fifth cause of action, for unjust enrichment; the sixth cause of action, for breach of contract; the seventh cause of action, for a declaratory judgment as to whether DLJ has a lien on commercial tort claims; and the eighth cause of action, disallowance of DLJ's claims (collectively, the “DLJ Claims”).
On February 21, 2014, DLJ filed its Motion to dismiss the DLJ Claims, excluding the seventh cause of action concerning commercial tort claims, a memorandum of law in support, and an affirmation in support thereof. [dkt items 37, 38]7
On March 21, 2014, Plaintiff filed an omnibus response to DLJ's Motion and the other Investor Defendants' motions to dismiss (the “Response”). [dkt item 44]
On April 4, 2014, DLJ filed a reply and a declaration in support. [dkt items 46, 47]
On April 29, 2014, the Court confirmed the First Amended Plan of Liquidation proposed by Debtors and the Committee (the “Plan”). [Case No. 13–74303, dkt item 421] The Devices Liquidation Trust, Plaintiff herein, was created under the Plan, and all causes of action of the Debtors vested in Plaintiff.
On July 25, 2014, the Court entered an agreed Stipulation and Agreed Order substituting The Devices Liquidation Trust as the Plaintiff in this adversary proceeding. [dkt item 56]
On October 9, 2014, while the DLJ Motion and other parties' motions to dismiss were pending, Plaintiff filed its Motion for Leave to File Second Amended Complaint (the “Motion to Amend”). [dkt items 97, 98, 99, 102] The proposed Second Amended Complaint did not seek to add any claims against DLJ, but did seek to add claims against PineBridge and ISOP, and to add several former members of the Board of Managers of Holdings (the “Director Defendants”) as new defendants8 .
By Order entered January 20, 2015, this Court granted Plaintiff's Motion to Amend. [dkt item 119]
On January 21, 2015, the Court conducted a hearing on the DLJ Motion (the “Hearing”), following which it took the matter on submission.
On February 2, 2015, Plaintiff filed its Second Amended Complaint. [dkt item 123] As noted above, the Second Amended Complaint asserts fourteen causes of action; however, Plaintiff asserts only the same DLJ Claims against DLJ. Accordingly, and without opposition from Plaintiff or DLJ, the Court will construe the Motion as against the Second Amended Complaint.
Rule 12(b)(6) dismissal
DLJ bases their requests for dismissal on Rule 12(b)(6), as incorporated by Bankruptcy Rule 7012. This Court has addressed on numerous occasions the application of Rule 12(b) and the flexible plausible pleading standard established by the Supreme Court. See Moxey v. Pryor (In re Moxey), 522 B.R. 428, 437–38 (Bankr.E.D.N.Y.2014) ; In re Ippolito, Case No. 12–70632, Adv. Pro. No. 12–8403(AST), 2013 WL 828316, at *3 (Bankr.E.D.N.Y. Mar. 6, 2013) (discussing Ashcroft v. Iqbal, 556 U.S. 662, 677–79, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) () and Bell Atl. Corp. v. Twombly, 550 U.S. 544, 546, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (); see also In re Int'l Tobacco Partners, Ltd., 462 B.R. 378, 385 (Bankr.E.D.N.Y.2011) ; In re Jones, Case No. 10–77783, Adv Pro. No. 10–9033(AST), 2011 WL 1549060, at *2–3 (Bankr.E.D.N.Y. Apr. 21, 2011) ; In re Coletta, 391 B.R. 691, 693–94 (Bankr.E.D.N.Y.2008).
Under the U.S. Supreme Court's Iqbal /Twombly analysis, to survive a motion to dismiss, a complaint must contain sufficient factual matter, which, when accepted as true, is adequate to “state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ; Twombly, 550 U.S. at 570, 127 S.Ct. 1955. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the relief sought. Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ; Twombly, 550 U.S. at 556, 127 S.Ct. 1955. The plausibility standard “asks for more than a sheer possibility that a defendant has acted” so as to create liability. Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. Where a complaint pleads facts that are “merely consistent with” a defendant's liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.’ ” Id. (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955 (internal citations omitted).
Neither Iqbal nor Twombly departed from the standard that, in considering a Rule 12(b)(6) motion, a court is to accept as true all factual allegations in the complaint and draw all inferences in favor of ...
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