In re Alper Holdings Usa, Inc.
| Citation | 398 B.R. 736 |
| Decision Date | 15 December 2008 |
| Docket Number | No. 08-CV-4355 (CM).,No. 08-CV-3344 (CM).,No. 07-12148 (BRL).,No. 08-CV-02489 (CM).,No. 08-CV-3625 (CM).,07-12148 (BRL).,08-CV-02489 (CM).,08-CV-3344 (CM).,08-CV-3625 (CM).,08-CV-4355 (CM). |
| Parties | In re ALPER HOLDINGS USA, INC., Debtor. Ray and Cathy Flake, Appellants, v. Alper Holdings USA, Inc., Appellee. Harry Holt, et al., Appellants, v. Alper Holdings USA, Inc., Appellee. Armstrong, Appellants, v. Alper Holdings USA, Inc., Appellee. The Adkins Claimants, Appellants, v. Alper Holdings USA, Inc., Appellee. |
| Court | U.S. District Court — Southern District of New York |
Andrew M. Leblanc, Milbank, Tweed, Hadley & McCloy, LLP, Washington, DC, Jessica Louise Fink, Milbank, Tweed, Hadley & McCloy, LLP, Los Angeles, CA, for Alper Holdings USA, Inc.
Douglas T. Tabachnik, Douglas T. Tabachnik, P.C., Freehold, NJ, for Ray and Cathy Flake, Jon and Charlotte Armstrong, Adkins Claimants, and Personal Injury Plaintiffs.
Alyssa Englund, Orrick, Lorraine S. McGowan, Herrington & Sutcliffe LLP, New York, NY, Debo Patrick Adegbile, Matthew Colangelo, NAACP Legal Defense & Educational Fund, Inc., New York, NY, for Harry Holt.
DECISION AND ORDER AFFIRMING THE BANKRUPTCY COURT'S DECISION GRANTING THE OBJECTION OF ALPER HOLDINGS USA, INC., TO PROOFS OF CLAIM FILED BY FLAKE, ARMSTRONG, ADKINS AND HOLT CLAIMANTS
This is a consolidated bankruptcy appeal. All cases involve a common defendant: debtor Alper Holdings USA, Inc. ("Alper" or "appellee"). In each of these cases, the bankruptcy court (Lifland, B.J.) dismissed, pursuant to 11 U.S.C. § 502(a), a proof of claim filed against Alper relating to the alleged contamination and remediation of an industrial site owned by Saltire Industrial, Inc. ("Saltire") and located in Dickson County, Tennessee. Each of the Appellants seeks to hold Alper liable for damages arising out of the remediation; Judge Lifland ruled that Alper could not be held liable.
For the reasons stated below, the bankruptcy court's orders are affirmed.
These claims arise in connection with groundwater contamination and environmental problems that first came to light in the mid-1980's in Dickson County, Tennessee. The contamination was allegedly caused, in part, by Saltire. From approximately 1964 until March 1985, Saltire operated a plant in Dickson County (the "Dickson Plant"), where it made automotive tire valves and associated products, and where Trichloroethyleme ("TCE"), a carcinogenic agent, was used as a degreaser. The Dickson Plant ceased operations in March 1985. (See e.g., Armstrong Proof of Claim, Ex. A at 1) From 1985 through August 2004, Saltire performed an investigation and remediation of environmental contamination at the Dickson Plant site. In re Alper Holdings USA Inc., 07-12148, 2008 WL 160203 at *1 (Bankr.S.D.N.Y. Jan. 15, 2008).
In 1992—seven years after the Dickson Plant ceased operations—Alper became the indirect parent company of Saltire. Armstrong Proof of Claim, Ex. A at 2. Alper ultimately became the direct parent of Saltire, but that did not occur until 1994. Id.; Alper, 2008 WL 160203 at *1. Appellants do not allege that Alper had any relationship with Saltire during the period the Dickson Plant was manufacturing tire valves, while Saltire was allegedly disposing of TCE-laden industrial waste in Dickson County.
Alper and Saltire entered into a management agreement, dated as of November 30, 1992. On January 1, 1995, Alper and Saltire terminated their 1992 agreement and entered into a new management agreement. Under the New Management Agreement, Alper agreed to provide Saltire with, inter alia, "supervision and management of various environmental matters, including risk assessment, technical assessment, remediation, legal and compliance." (New Management Agreement ¶ 1(g).) The New Management Agreement contained mutual indemnification clauses whereby Saltire and Alper agreed to hold each other harmless for "any and all loss, damage, claim or liability ... of any nature...." Id. ¶ 7.
Soon after the execution of the New Management Agreement, the remediation efforts at the Dickson Plant were taken over by Nicholas Bauer ("Bauer"). (See, e.g., Armstrong Proof of Claim, Ex. A at 3.) Bauer served as Saltire's Vice President of Environmental Affairs, and his job was to take care of the Saltire remediation. However, Bauer was paid by Alper and when engaging in work relevant to environmental investigation and remediation Bauer sometimes represented himself as an Alper official. Armstrong Proof of Claim, Ex. A at 3. Bauer worked out of an office in Virginia where Alper, and not Saltire, was authorized to do business. Id. at 4. He was, in effect, loaned to Saltire by Alper for the purpose of supervising the remediation efforts at the Dickson Plant.
Since 2003, numerous parties have filed lawsuits in Tennessee for alleged personal injury and property damage claims related to the environmental contamination in Dickson, Tennessee (collectively, the "Tennessee Actions"). The Tennessee Actions include three actions known as the "Dickson Actions": (1) Flake v. Saltire Indus., Inc. f/k/a/ Scovill, Inc.; Schrader-Bridgeport Int'l, Inc. f/k/a Schroder Auto., Inc.; Alper Holdings USA, Inc.; Tomkins PLC; the City; William Andrews; Lewis Edward Kilmarx and John Doe(s) 1-10 (the "Flake Tennessee Action"); (2) Armstrong v. Saltire Indus., Inc. f/k/a Scovill, Inc.; Schrader-Bridgeport Int'l, Inc. f/k/a Schroder Auto., Inc.; Alper Holdings USA, Inc.; Tomkins PLC; ArvinMeritor, Inc.; William Andrews; Lewis Edward Kilmarx and John Doe(s) 1-10 (the "Armstrong Tennessee Action"); and (3) Adkins v. Schrader-Bridgeport Int'l, Inc.; Alper Holdings USA, Inc.; ArvinMeritor, Inc.; the City; the County; William Andrews; Lewis Kilmarx and John Does (the "Adkins Tennessee Action"). These three actions (collectively the "Dickson Actions") underlie the Flake, Armstrong and Adkins claims that are here in issue.
The other Tennessee Actions are; (1) Harry Holt, et al. v. Scovill, Inc., n/k/a Saltire Indus., Inc.; Alper Holdings USA, Inc.; Ebbtide Corp. and the City and County of Dickson, Tennessee (the "Holt Tennessee Action"); (2) Lavenia Holt, et al., v. Scovill, Inc. et al, (the "Lavenia Holt Action"); and (3) Dunbar v. Saltire Indus., f/k/a Scovill, Inc. et al., pending in the Circuit Court of Dickson County, Tennessee (the "Dunbar Action"). A subset of claims at issue in the Holt Tennessee Action underlie the Holt claims issues here.
On August 17, 2004, in part to deal with liabilities related to the Dickson Plant, Saltire filed a voluntary petition for relief in the Southern District under Chapter 11 of the Bankruptcy Code. In re Saltire Indus., Inc., Case No. 04-15389(BRL) (Bankr. S.D.N.Y.2004). Judge Lifland presided over that bankruptcy proceeding.
On March 8, 2006, an order was entered in Saltire's bankruptcy case confirming Saltire's Modified First Amended Chapter 11 Plan of Liquidation (Saltire's "Reorganization Plan"). As part of the Reorganization Plan, Alper negotiated with the Saltire Creditors Committee, acting on behalf of Saltire, a settlement of the claims between Alper and Saltire. In return for a release from Saltire, Alper agreed to forego its claims against Saltire and to pay $1 million to Saltire. The Saltire release of claims provides in pertinent part:
The Debtor ... acquits and forever discharges Alper ... from any and all actions, causes of action [and] liabilities ... in any way relating to the Debtor ... that the Debtor could assert directly or any Holder of a Claim ... could assert derivatively or on behalf of the Debtor or its estate ... Notwithstanding the foregoing, the above release does not release any claims any nondebtor third party may hold against any of the Released Parties, except to the extent any nondebtor third party is asserting a claim that is property of the Debtor's Estate, (emphasis added.)
The bankruptcy court approved the Saltire-Alper Settlement (the "Release") on March 8, 2006. (Alper Opp'n. to Holt Br.) The Reorganization Plan became effective on April 25, 2006.
On July 13, 2007, Alper filed for relief under Chapter 11 of the Bankruptcy Code. Alper continues to operate its business and manage its properties as a debtor in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. Judge Lifland, who has extensive experience with the background of the Saltire situation, is also presiding over the Alper bankruptcy case.
The Flakes own land in Dickson, Tennessee. There is a spring on their property, and the Flakes wanted to bottle water from the spring and offer it for sale. Their plans were upended when they learned that the wells on their property were contaminated with TCE. They sued Alper in the Circuit Court of Dickson County in Tennessee. That lawsuit was stayed when Alper filed for bankruptcy.
The Armstrongs also own property in Dickson. They too sued Alper, alleging that the value of their property was diminished as a direct result of the TCE contamination.
The Adkins claim that they suffered personal injury, including wrongful death, as a result of the TCE contamination. They sued Alper prior to the bankruptcy in Tennessee state court.
The Flakes, Armstrongs and Adkins are all represented by the same lawyers: the law firm of Stutzman, Bromberg, Esserman & Plifka (the "Esserman" firm). All three sets of Claimants filed proofs of claim in the bankruptcy court, to which they appended their state court pleadings. Various amended proofs of claim were filed as well, and there were a variety of procedural motions filed that are irrelevant to this appeal.
The proofs of claim filed by these three partie...
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