In re Houbigant, Inc.

• Decision Date: 05 January 1996
• Docket Number: Bankruptcy No. 93 B 45767 (JLG). Adv. No. 95-8857A.
• Citation: 190 BR 185
• 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., Kid Kamm & Company, CTC International Group, Ltd., Brad Robinson and Chemical Bank New Jersey N.A. (as agent for itself and National Westminster Bank U.S.A.), Counterclaim-Defendants.
• Court: U.S. Bankruptcy Court — Southern District of New York

190 B.R. 185 (1995)

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., Kid Kamm & Company, CTC International Group, Ltd., Brad Robinson and Chemical Bank New Jersey N.A. (as agent for itself and National Westminster Bank U.S.A.), Counterclaim-Defendants.

Bankruptcy No. 93 B 45767 (JLG). Adv. No. 95-8857A.

United States Bankruptcy Court, S.D. New York.

December 19, 1995.

As Amended January 5, 1996.

Kaye, Scholer, Fierman, Hays & Handler, New York City, for Houbigant, Inc.

Marcus Montgomery Wolfson P.C., New York City, for ACB Mercantile, Inc. and ACB Fragrances and Cosmetics, Inc.

MEMORANDUM DECISION ON MOTIONS TO REARGUE

JAMES L. GARRITY, Jr., Bankruptcy Judge.

Previously we granted in part and denied in part that portion of Houbigant, Inc.'s ("Houbigant") motion pursuant to Fed. R.Civ.P. 12(b)(6) and 17 to dismiss certain counterclaims remanded to us by the district court. See Houbigant, Inc. v. ACB Mercantile, Inc. (In re Houbigant, Inc.), 188 B.R. 347 (Bankr.S.D.N.Y.1995). ACB Mercantile, Inc. and ACB Fragrances and Cosmetics, Inc. (collectively "ACB") and Houbigant separately have moved pursuant to Fed.R.Civ.P. 59(e), Bankruptcy Rule 9023 and Local Bankruptcy Rule 13(j) for reargument and an order altering or amending portions of the Decision. For the reasons stated herein, both motions are denied.

Facts

The facts are set forth in the Decision. Except as necessary, they will not be repeated herein. Houbigant and certain of its affiliates are chapter 11 debtors in possession. Pre-petition they marketed and distributed perfumes and toiletries worldwide. By order dated on or about June 2, 1994, Houbigant implemented and effectuated a license agreement with Parfums Parquet, Inc. ("PPI") pursuant to which Houbigant licenses to PPI certain patents, trademarks, trade names, and applications, as well as technical knowledge with respect to them. Under that agreement, PPI is Houbigant's exclusive licensee in the United States.

Pre-petition Houbigant granted ACB an exclusive license (the "ACB License Agreement") to manufacture, sell and distribute Houbigant's Parfums Parquet division fragrance products throughout the Territory of Canada and to use Houbigant's trademarks in connection therewith. By agreement dated on or about December 12, 1994 (the "Asset Purchase Agreement"), ACB conveyed substantially all its business, including the ACB License Agreement, to Houbigant (1995), Ltd. ("PPI Canada").

We fixed April 15, 1994, and January 15, 1995, respectively, as the last date for filing proof of unsecured claims against debtors, and proof of administrative expense claims accruing in these cases through June 30, 1994. ACB filed five claims identified in the Decision as the Hec Claim, Unsecured Unilex Claim, Unilex Administrative Claim, Indemnification Claim and the Defamation Claim. Only the Hec Claim was timely filed.

On or about April 4, 1995, Houbigant and PPI commenced this adversary proceeding in this court. By agreement the reference of this action was withdrawn to the district court. Houbigant and PPI's First Amended Complaint (the "Complaint") alleges seventeen (17) causes of action and names ACB, certain of its officers (collectively the "ACB Defendants"), and other individuals as defendants. On or about July 14, 1995, the district court (Martin, J.) approved a stipulation and order of settlement ("Settlement Agreement") between plaintiffs and the non-ACB Defendants. ACB answered the Complaint and asserted seventeen (17) counterclaims against Houbigant, PPI and certain third-party defendants.

In the district court, Houbigant contended that ACB's counterclaims should be dismissed pursuant to Fed.R.Civ.P. 12(b)(6) and 17(a) because (1) all the causes of action asserted in the counterclaims were assigned to PPI-Canada pursuant to the Asset Purchase Agreement, thereby divesting ACB of standing to assert them; (2) Counts I-IV, VI-IX, XIII-XIV, XVII and portions of Counts V, X and XV of the counterclaims are time-barred by ACB's failure to file claims or to timely file claims on account of those counterclaims; (3) the late filed Unilex Unsecured Claim is an invalid amendment of the timely filed Hec Claim and, as an independent claim, is time-barred; (4) the Unilex Administrative Claim, Indemnification Claim, and Trademark Claim, encompassing Counts II and XIII-XV of the counterclaims, do not qualify for administrative expense status and therefore are time-barred general unsecured claims; and (5) each counterclaim is meritless. On or about July 14, 1995, plaintiffs moved the district court for an order remanding this adversary proceeding to this court. The district court denied the motion, except that it remanded the issues of administrative time bars. See Houbigant, Inc. v. ACB Mercantile, Inc. (In re Houbigant, Inc.), 185 B.R. 680 (S.D.N.Y.1995) (Sweet, J.).

Discussion

Local Bankruptcy Rule 13(j) provides:

A notice of motion for reargument shall be served within 10 days after the filing of the court\'s determination of the original motion and shall be made returnable within the same period of time as required for the original motion. There shall be served with the notice of motion a memorandum setting forth concisely the matters or controlling decisions which counsel believes the court has overlooked. No oral argument shall be heard unless the court grants the motion and specifically directs that the matter shall be reargued orally. No affidavits shall be filed by any party unless directed by the court.

Rule 13(j) is adapted from Civil Rule 3(j) of the United States District Court for the Southern District of New York. See Comment to Local Rule 13(j). The standards applicable to motions to reargue under Civil Rule 3(j) are the same as those applicable to motions pursuant to Fed.R.Civ.P. 59(e) to alter or amend a judgment. E.g., Farkas v. Ellis, 783 F.Supp. 830, 833 n. 1. (S.D.N.Y.), aff'd, 979 F.2d 845 (2d Cir.1992); Travelers Ins. Co. v. Buffalo Reinsurance Co., 739 F.Supp. 209, 210 n. 1. (S.D.N.Y.1990). "The only proper ground on which a party may move to reargue an unambiguous order is that the court overlooked `matters or controlling decisions' which, had they been considered, might reasonably have altered the result reached by the court." Adams v. United States, 686 F.Supp. 417, 418 (S.D.N.Y.1988) (quoting Civil Rule 3(j)). See also Novak v. National Broadcasting Co., 760 F.Supp. 47, 48 (S.D.N.Y.1991); Caleb & Co. v. E.I. DuPont de Nemours & Co., 624 F.Supp. 747, 748 (S.D.N.Y.1985). The rule is calculated "to insure the finality of decisions and to prevent the practice of a losing party examining a decision and then plugging the gaps of a lost motion with additional matters." Carolco Pictures, Inc. v. Sirota, 700 F.Supp. 169, 170 (S.D.N.Y.1988). See also Farkas v. Ellis, 783 F.Supp. at 832. It also precludes repetitive arguments on issues that have already been considered by the court. Ruiz v. Commissioner of Dep't of Transp., 687 F.Supp. 888, 890 (S.D.N.Y.), aff'd, 858 F.2d 898 (2d Cir.1988).

ACB contends that the Decision should be altered or amended to reflect:

1. that Counts I, III, IX, X and XVII of the counterclaims are equivalent to "proofs of claim" entitled to consideration in the claims allowance process;

2. that there is a triable issue of fact as to whether those claims were timely filed;

3. that the Houbigant estate be required to preserve sufficient assets to pay the amounts sought in Count XV of the counterclaims as an administrative expense.

4. that Count XVII of the counterclaims is not time-barred by virtue of having been filed after the administrative bar date; and

Counts I, III, IX, X and XVII of the counterclaims do not correspond to proofs of claim filed on ACB's behalf. For that reason, we dismissed those counterclaims as to Houbigant. 188 B.R. at 352. ACB correctly notes that during oral argument in this court on August 29, 1995, it asserted that we should treat those counterclaims as informal proofs of claim and that we failed to consider that argument in reaching the Decision. Nonetheless, ACB is not entitled to relief herein because the counterclaims do not constitute informal proofs of claim. The informal proof of claim is an equitable principle developed by courts to alleviate the harsh results of strict enforcement of the bar date. See Matter of Mother Hubbard, Inc., 152 B.R. 189, 192 (Bankr. W.D.Mich.1993); 8 Collier on Bankruptcy ¶ 3001.03 at 3001-14 (Lawrence P. King et al. eds., 15th ed. 1995). To qualify as an informal proof of claim, a document purporting to evidence such claim must (1) have been timely filed with the bankruptcy court and have become part of the judicial record, (2) state the existence and nature of the debt, (3) state the amount of the claim against the estate, and (4) evidence the creditor's intent to hold the debtor liable for the debt. See In re L.F. Rothschild Holdings, Inc., 143 B.R. 335, 336 (S.D.N.Y.1992); In re Carmelo Bambace, Inc., 134 B.R. 125, 128 (Bankr.S.D.N.Y.1991). See also In re Cole, 189 B.R. 40, 46-47 (Bankr.S.D.N.Y.1995); Hatzel & Buehler, Inc. v. Station Plaza Assoc., L.P., 150 B.R. 560, 561 (Bankr.D.Del.1993); In re Thomson McKinnon, Inc., 130 B.R. 721, 723 (Bankr. S.D.N.Y.1991); In re Drexel Burnham Lambert Group, Inc., 129 B.R. 22, 26 (Bankr. S.D.N.Y.1991). In its written submission, ACB contends that its counterclaims on file in the district court in this litigation are informal proofs of...