In re Houbigant, Inc.
| Decision Date | 24 August 1995 |
| Docket Number | No. 94 Civ. 2467 (RWS).,94 Civ. 2467 (RWS). |
| Parties | In re HOUBIGANT, INC., et al., Debtors. HOUBIGANT, INC. and Parfums Parquet, Inc., Plaintiffs, v. ACB MERCANTILE, INC., ACB Fragrances and Cosmetics, Inc., Giacomo Giuliano, Augustine Celaya and Gilles Pellerin, V & B Distributors, Canada, Inc., Harold Schiff, A. Rosenblum Sales, Inc., and Rosenblum, Defendants. ACB MERCANTILE, INC. and ACB Fragrances and Cosmetics, Inc., Counterclaim-Plaintiffs, v. HOUBIGANT, INC., Parfums Parquet, Houbigant, (1995) Ltd. (f.k.a. 3088766) Canada, Ltd.), Michael Sherman, Luigi Massironi, Robert Graber, Thomas Bonoma, Renaissance Cosmetics, Inc., Kidd Kamm & Company, CTC International Group, Ltd., Brad Robinson and Chemical Bank New Jersey, N.A. (as agent for itself and National Westminister Bank U.S.A.), Counterclaim Defendants. |
| Court | U.S. District Court — Southern District of New York |
Kaye, Scholer, Fierman, Hays & Handler (Mitchel H. Perkiel, Lisa M. Solomon, Joshua E. Fruchter, Steven D. Goldberg, of counsel), New York City, for plaintiff and counterclaim defendants Michael Sherman, Luigi Massironi and Robert Graber.
Marcus Montgomery Wolfson, P.C. (Sam P. Israel, Lisa Buckley, of counsel), New York City, for defendant ACB Mercantile, Inc.
Plaintiff/Debtor Houbigant, Inc. ("Houbigant") moves to restore the reference of this adversary proceeding to Bankruptcy Court. For the reasons discussed herein, the motion is denied.
Houbigant is a corporation organized and existing under the laws of Delaware, with its principal place of business in New York, New York. Houbigant is the parent of a group of domestic and foreign companies which marketed and distributed perfumes and toiletries worldwide. On November 18, 1993, Houbigant and certain of its affiliates (collectively the "Debtors") filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in this District. Since that time they have continued in possession and control of their businesses and assets as debtors in possession. Since filing the petition, Houbigant discontinued its design, marketing and distribution operations and became a trademark licensor. In re Houbigant, Inc., 182 B.R. 958 (Bankr.S.D.N.Y.1995).
Plaintiff Parfums Parquet, Incorporated ("PPI") is a corporation organized and existing under the laws of Delaware, with its principal place of business in New York, New York. On June 2, 1994 the Bankruptcy Court authorized Houbigant to implement and effectuate a license agreement with PPI1 Thereunder, in exchange for royalty payments, Houbigant licenses certain patents, trademarks, trade names, and applications as well as technical knowledge with respect to them. PPI was Houbigant's exclusive United States licensee.
Defendant ACB Mercantile, Inc. ("ACB Mercantile") is a Canadian corporation with its principal place of business in Quebec, Canada.
Defendant ACB Fragrances and Cosmetics, Inc. ("ACB") is a Canadian corporation with its principal place of business in Quebec, Canada. ACB Mercantile and ACB, Inc. are collectively referred to as "ACB companies." The ACB companies are Houbigant creditors in the Bankruptcy proceedings. ACB, Inc. and Houbigant entered into a series of agreements in April 1993 by which Houbigant granted ACB, Inc. an exclusive license to manufacture, sell, and distribute certain Houbigant products in Canada. An asset purchase agreement dated December 12, 1994 conveyed ACB, Inc.'s business to PPI.
Defendant Augustine Celaya ("Celaya"), an officer and principal shareholder of ACB Mercantile, is an individual residing in Texas.
Defendant Giacomo Giuliano ("Giuliano"), an officer and principal shareholder of ACB Mercantile, is an individual residing in Quebec.
Defendant Gilles Pellerin ("Pellerin"), an officer and principal shareholder of ACB Mercantile, is an individual residing in Quebec.
Houbigant and PPI filed an adversary proceeding in Bankruptcy Court in the Southern District of New York on April 4, 1995 pursuant to section 105(a) of title XI of the United States Code, alleging violations of the Lanham Act, various statutes of the State of New York and the common law, seeking damages and to enjoin defendants from infringing upon rights in certain Houbigant trademarks, unfair competition and injuring their business reputations or diluting the distinctive quality of the trademarks.
On April 11, 1994 the defendants moved to withdraw the reference to the District Court. By order to show cause, signed on April 11, 1994, the motion was set for hearing on April 14, 1994. On April 14, the parties appeared before this Court, and an order was entered postponing argument on the motion until May 3, 1995.2
On May 5, PPI's affiliate, PPI-Canada, commenced an action against ACB in Canada alleging that ACB sold products infringing Houbigant's trademarks.
On May 17, 1995, the parties appeared before the Court and the motion to withdraw adversary proceeding from the Bankruptcy Court was granted, with no opposition voiced, on consent of all parties.
On May 26, 1995, the plaintiffs filed the First Amended Complaint (the "Complaint"), no answer having yet been filed by the defendants. The Complaint recites seventeen claims and names the ACB companies, Celaya, Giuliano, Pellerin, V & B Distributors, Harold Schiff, A. Rosenblum Sales, Inc., and Bernard Rosenblum as defendants.
By Order of the Bankruptcy Court dated June 14, 1995, Houbigant's "Third Amended Joint Disclosure Statement Under Section 1125 of the Bankruptcy Code," was approved and Houbigant and its affiliated debtors were authorized to commence the process of soliciting acceptances of the Plan.
On June 16, 1995 ACB filed an answer and counterclaims against Houbigant, PPI, and third-party defendants Luigi Massirioni, Robert Graber, Thomas Bonoma, Renaissance, PPI Canada (a wholly owned subsidiary of plaintiff PPI), Kidd Kamm & Company, CTC International Group, Brad Robinson, Chemical Bank New Jersey, N.A. ("Chemical"), and Michael Sherman. These third-party defendants are not parties in the bankruptcy proceeding. The seventeen counterclaims allege fraud (Count I), violations of the Canadian Trademark Act (Count II), Breaches of Fiduciary Duties (Count III), Breached of Covenants of Good faith and fair dealing (Count IV), civil conspiracy to defraud (Count V), Unfair Competition Under the Lanham Act (Count VI), Injury to Business under New York Business Law (Count VII), Violation of New York Business Law regarding false advertising (Count VIII), Common Law Unfair Competition (Count IX), Tortious Interference with Contracts (Count X), Defamation Per Se (Count XI), Defamation under the Canadian Trademarks Act (Count XII), Contractual Indemnification (Count XIII), Indemnification Implied in Law (Count XIV), Post petition breaches of contract against Houbigant and PPI-Canada (Counts XV and XVI), for Cancellation of Trademarks Registrations under the Lanham Act (Count XVII).
A stipulation and order of settlement between plaintiffs and non-ACB defendants named in Houbigant's Complaint, including A. Rosenblum Sales, Bernard Rosenblum, Harold Schiff, and V & B distributors Canada, was signed by the Honorable John S. Martin, acting in his Part One capacity, on July 14, 1995.
Between July 14 and July 24, 1995, motions were made by Houbigant, PPI, Chemical Bank and ACB to dismiss the claims against each of them by the opposing party. Houbigant's motion to remand this proceeding back to Bankruptcy Court was filed on July 17, 1995. The parties briefed these motions extensively with reply briefs filed to each of the five sets of motions. Argument was heard for several hours on August 3, 1995, and the motions were considered fully submitted at that time.
This opinion resolves only the motion to remand the entire case back to the Bankruptcy Court. The motions to dismiss remain sub judice with the Court with decision reserved.
Parallel Claims filed in Bankruptcy Court3
ACB filed five unsecured and administrative proofs of claim against Houbigant's estate in Bankruptcy, which ACB claims were filed defensively to preserve assets from the estate. These claims in the Bankruptcy proceeding include:
Plaintiffs assert that five of the seventeen ACB Counterclaims filed in the adversary proceeding are duplicative of these bankruptcy claims.
On May 24, 1995 Houbigant commenced an adversary proceeding in Bankruptcy Court objecting to the ACB Bankruptcy claims on the grounds that (a) with one exception, they were time-barred by virtue of the court-ordered bar dates, (b) had been virtually all assigned to PPI Canada pursuant to the Asset Purchase Agreement, and (c) were without merit. Simultaneous therewith, Houbigant...
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