In re Houbigant, Inc.
| Citation | 188 BR 347 |
| Decision Date | 08 November 1995 |
| Docket Number | Bankruptcy No. 93 B 45767 (JLG). Adv. No. 95-8857A. |
| 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 | United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York |
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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.
On remand from the District Court is a portion of Houbigant, Inc.'s ("Houbigant") motion pursuant to Fed.R.Civ.P. 12(b)(6) and 17 to dismiss certain counterclaims asserted on behalf of ACB Mercantile, Inc. and ACB Fragrances and Cosmetics, Inc. (collectively, "ACB") in this adversary proceeding. See Houbigant, Inc. and Parfums Parquet, Inc. v. ACB Mercantile, Inc. et al. (In re Houbigant, Inc.), 185 B.R. 680 (S.D.N.Y.1995) (Sweet, J.). We consider whether certain of the counterclaims are time-barred by ACB's failure either to file or timely file proof of claims herein.
Houbigant is a Delaware corporation with its principal place of business in New York, New York. It is the parent of a group of domestic and foreign companies which marketed and distributed perfumes and toiletries worldwide. On November 18, 1993 (the "Filing Date"), Houbigant and certain of its affiliates (collectively the "debtors") filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code ("Code") in this district. Since that time they have continued in possession and control of their businesses and assets as debtors in possession. In re Houbigant, Inc., 185 B.R. at 681. Post-petition, Houbigant discontinued its design, marketing and distribution operations and became a trademark licensor. Id. By order dated on or about June 2, 1994, we authorized Houbigant to implement and effectuate a license agreement with Parfums Parquet, Inc. ("PPI"), then known as New Fragrance License Corp., pursuant to which, in exchange for royalty payments, 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. Id.
On or about June 7, 1995 Houbigant filed its Third Amended Joint Plan of Reorganization (the "Plan"). By court order, its disclosure statement was approved and the confirmation hearing was scheduled for August 31, 1995. That hearing has been adjourned from time to time pending resolution of this adversary proceeding.
Pursuant to a series of agreements entered in April 1993 (collectively, the "ACB License Agreement"), Houbigant granted ACB an exclusive license 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. See Counterclaims asserted on behalf of ACB in its Answer and Counterclaims, dated June 15, 1995 ("Counterclaim") at ¶ 23; In re Houbigant, Inc., 185 B.R. at 681. Pursuant to an 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"). Counterclaim ¶ 70; In re Houbigant, Inc., 185 B.R. at 681.
On or about April 4, 1995, Houbigant and PPI commenced this adversary proceeding in this Court alleging violations of the Lanham Act, common law and various statutes of the State of New York, 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 or about April 11, 1994 the defendants moved by order to show cause to withdraw the reference of this litigation to the District Court. By stipulation among the parties, the April 14, 1995 return date of the motion was adjourned until May 17, 1995. On that date, the motion was granted on the consent of all parties. In re Houbigant, Inc., 185 B.R. at 682.
On May 5, 1995, PPI-Canada commenced an action against ACB in Canada ("Canada Trademark Litigation") alleging that ACB sold products infringing Houbigant's trademarks. In re Houbigant, Inc., 185 B.R. at 681-82. On May 26, 1995, Houbigant and PPI filed their First Amended Complaint (the "Complaint") in this litigation. It alleges seventeen (17) causes of action and names ACB, Augustine Celaya, Giacomo Giuliano (collectively the "ACB Defendants"), Gilles Pellerin, V & B Distributors, Harold Schiff, A. Rosenblum Sales, Inc., and Bernard Rosenblum as defendants. On or about June 16, 1995, ACB answered the Complaint and asserted counterclaims against Houbigant, PPI and the following third-party defendants: Luigi Massironi, Robert Graber, Thomas Bonoma, Renaissance Cosmetics, Inc., PPI Canada, Kidd Kamm & Company, CTC International Group, Brad Robinson, Chemical Bank New Jersey N.A., and Michael Sherman. See Counterclaim ¶¶ 1-217. The counterclaims allege: fraud (Count I), violations of the Canadian Trade-marks Act (Count II), breaches of fiduciary duties (Count III), breaches 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), breaches of contract against Houbigant and PPI-Canada (Counts XV and XVI), and cancellation of trademarks registrations under the Lanham Act (Count XVII). 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. In re Houbigant, Inc., 185 B.R. at 682.
We fixed April 15, 1994 (the "General Bar Date") as the last date for filing proof of unsecured claims against debtors, and January 31, 1995 (the "Administrative Bar Date") as the last date for filing proof of administrative expenses accruing on or after the Filing Date through June 30, 1994. In re Houbigant, Inc., 185 B.R. at 682 n. 3. ACB filed the following claims:
In re Houbigant, Inc., 185 B.R. at 682-83.
Houbigant seeks an order pursuant to Fed. R.Civ.P. 12(b)(6) and 17(a) dismissing the counterclaims on the grounds that (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. They urged that the remand was appropriate due to the changed circumstances of the litigation, primarily the absence of the non-ACB Defendants and the substantial relief provided under the...
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