In re O.W. Bunker Holding N. Am. Inc., CASE No. 14-51720 (lead) (JAM)
Citation | 607 B.R. 32 |
Decision Date | 26 August 2019 |
Docket Number | CASE No. 14-51720 (lead) (JAM) |
Court | United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — District of Connecticut |
Parties | IN RE: O.W. BUNKER HOLDING NORTH AMERICA INC., et al., Debtors. |
J. Stephen Simms, Esq., Simms Showers, LLP, 201 International Circle, Baltimore, Maryland 21030, Attorney for O'Rourke Marine Services, L.P., L.L.P
Michael R. Enright, Esq., Patrick M. Birney, Esq., Robinson & Cole LLP, 280 Trumbull Street, Hartford, CT 06103, Natalie D. Ramsey, Esq., Davis Lee Wright, Esq., Robinson & Cole LLP, 1000 N. West Street, Wilmington, DE 19801, Attorneys for the O.W. Bunker USA Inc. Liquidating Trust and O.W. Bunker USA
On November 13, 2014, O.W. Bunker Holding North America Inc. ("OWB Holding"), O.W. Bunker North America Inc. ("OWB NA"), and O.W. Bunker USA, Inc.1 ("OWB USA"), filed petitions for relief under Chapter 11 of the Bankruptcy Code. At the time of the filing of the petitions, OWB NA and OWB USA conducted the United States operations of an international group of global marine fuel companies (collectively, the "OW Bunker Group"), which provided fuel oil (the "bunkers" or "bunker fuel"), to marine vessels. See Debtors' Joint Disclosure Statement With Respect to Debtors' Liquidation Plans (ECF No. 1018).
On December 15, 2015, the Court entered an Order Confirming the Debtors' First Modified Liquidation Plans and Kelly Beaudin Stapleton (the "Liquidating Trustee") was appointed as the Liquidating Trustee of the O.W. Bunker North America Inc. Liquidating Trust (the "OWB NA Trust") and the O.W. Bunker USA Liquidating Trust (the "OWB USA Trust"). Prior to the confirmation of the Debtors' First Modified Liquidation Plans, O'Rourke Marine Services N.V. ("O'Rourke"), filed a Request for Allowance and Reimbursement of Administrative Expense (ECF No. 770), asserting it is entitled to an allowed priority administrative expense claim of $808,646.012 pursuant to section 503(b)(9)3 and the Debtors objected to O'Rourke's Request for Allowance and Reimbursement of Administrative Expense (ECF No. 830).
O'Rourke's remaining administrative expense claim is the subject of two motions for summary judgment; the first filed by O'Rourke and the second by the Liquidating Trustee.4 O'Rourke claims that it is entitled, as a matter of law, to an allowed administrative expense claim for delivery of bunker fuel to the four marine vessels defined below (collectively, the "Vessels"). The Liquidating Trustee objects to O'Rourke's assertion, and claims, as a matter of law, that the Debtors did not receive the bunker fuel and therefore O'Rourke's administrative expense claim should be recharacterized as a general unsecured claim. O'Rourke and the Liquidating Trustee submitted an extensive joint stipulation of facts with respect to the Motions for Summary Judgment and assert that the only disputed issue to be decided is whether the bunker fuel was "received by" OWB USA5 .
The purchase and delivery of the bunker fuel was accomplished through multiple parties and governed by several contracts. When the Vessels ordered bunker fuel, OWB USA ultimately fulfilled those orders by contracting with O'Rourke to deliver the bunker fuel to the Vessels. In the contracts between the OW Bunker Group and the Vessels, the OW Bunker Group was the "Seller" and each Vessel was the "Buyer."6 In the contracts between O'Rourke and OWB USA, O'Rourke was the "Seller" and OWB USA was the "Buyer."7
The parties have not presented, and the Court has not found, controlling case law specifically addressing the issue of "receipt" by a debtor in circumstances such as those presented in this case. The Motions for Summary Judgment focus on the issues of transfer of title, risk of loss, and delivery of the bunker fuel at each Vessel flange to determine whether OWB USA "received" the bunker fuel. However, addressing those issues does not answer the question of whether O'Rourke is entitled to an administrative expense claim. The Court must instead focus on the case law addressing the definition of "receipt" under section 503(b)(9) and the contracts between the OW Bunker Group and the Vessels in order to determine whether OWB USA "received" the bunker fuel.
The parties agree that O'Rourke delivered bunker fuel to four vessels pursuant to its contracts with OWB USA. O'Rourke and the Liquidating Trustee also agree that the bunker fuel supplied by O'Rourke constituted "goods" within the meaning of § 503(b)(9). O'Rourke and the Liquidating Trustee further agree that each delivery of bunker fuel occurred within the twenty day period before the petition date and that OWB USA never had physical possession of the bunker fuel that is the subject of O'Rourke's alleged administrative expense claims. The facts surrounding the delivery of the bunker fuel to each Vessel, along with the amount of O'Rourke's alleged administrative expense claims, are detailed below.
The COSCO Venice owners initially ordered bunker fuel from COSCO Petroleum Ptd Ltd. ("COSCO Petroleum"), which ordered bunker fuel from Chimbusco Americas, Inc., which ordered bunker fuel from O.W. Bunker Far East ("OW Far East"), which then ordered from OWB USA.9 On October 21, 2014, OWB USA submitted a purchase order to O'Rourke requesting the physical supply bunker fuel to the COSCO Venice.10 On October 27, 2014, O'Rourke delivered the bunker fuel to the COSCO Venice.11 On October 31, 2014, O'Rourke sent an invoice to OWB USA in the ordinary course of their businesses.12
The COSCO Haifa initially ordered bunker fuel from COSCO Petroleum, which ordered bunker fuel from Chimbusco Americas, Inc., which ordered bunker fuel from OW Far East, which then ordered from OWB USA.13 On October 28, 2014, OWB USA submitted a purchase order to O'Rourke for the physical supply of bunker fuel to the COSCO Haifa.14 On October 27, 2014, O'Rourke delivered the bunker fuel to the COSCO Haifa.15 On October 31, 2014, O'Rourke sent an invoice to OWB USA in the ordinary course of their businesses.16
The Sydney Express was under charter to Hapag-Lloyd Aktiengesellschaft ("Hapag-Lloyd"), which ordered bunker fuel from OW Germany GMBH ("OW Germany"), which then ordered from OWB USA.17 On October 28, 2014, OWB USA submitted a purchase order to O'Rourke requesting the physical supply of bunker fuel to the Sydney Express.18 On October 27, 2014, O'Rourke delivered the bunker fuel to the Sydney Express.19 On November 10, 2014, O'Rourke sent an invoice to OWB USA in the ordinary course of their businesses.20
The Derby D was under charter to Hapag-Lloyd, which ordered bunker fuel from OW Germany, which then ordered from OWB USA.21 On October 28, 2014, OWB USA submitted a purchase order to O'Rourke requesting the physical supply of bunker fuel to the Derby D.22 On October 27, 2014, O'Rourke delivered the bunker fuel to the Derby D.23 On November 10, 2014, O'Rourke sent an invoice to OWB USA in the ordinary course of their businesses.24
Federal Rule of Civil Procedure 56(a) is made applicable to these proceedings by Federal Rule of Bankruptcy Procedure 7056. Rule 56 directs that "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Bankr. P. 7056 ; Fed. R. Civ. P. 56(a). The "mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (emphasis in original). "Upon consideration of a motion for summary judgment, ‘the judge's function ... is not to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.’ " Parris v. Delaney (In re Delaney) , 504 B.R. 738, 746 (Bankr. D. Conn. 2014) (quoting Anderson , 477 U.S. at 249, 106 S.Ct. 2505 ). "[T]he court ‘cannot try issues of fact; it can only determine whether there are issues to be tried.’ " Mex. Constr. & Paving v. Thompson (In re Thompson) , 511 B.R. 20, 24 (Bankr. D. Conn. 2014) (quoting Flaherty v. Lang , 199 F.3d 607, 615 (2d Cir. 1999) ).
At the summary judgment stage, the moving party must show there are no material issues of fact, and the court must consider all facts in the light most favorable to the non-moving party when making this determination. Conn. Ironworkers Emp'rs Ass'n v. New England Reg'l Council of Carpenters , 869 F.3d 92, 98–99 (2d Cir. 2017), cert. denied , ––– U.S. ––––, 138 S. Ct. 1547, 200 L.Ed.2d 740 (2018) (citing Eastman Kodak Co. v. Image Tech. Servs., Inc. , 504 U.S. 451, 456, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992) ; Gemmink v. Jay Peak Inc. , 807 F.3d 46, 48 (2d Cir. 2015) ). Once the moving party has met its burden, the "party opposing summary judgment ... must set forth ‘specific facts’ demonstrating that there is ‘a genuine issue for trial.’ " Official Comm. of Unsecured Creditors of Affinity Health Care Mgmt., Inc. v. Wellner (In re Affinity Health Care Mgmt., Inc.) , 499 B.R. 246, 251 (Bankr. D. Conn. 2013) (quoting Wright v. Goord , 554 F.3d 255, 266 (2d Cir. 2009) ).
An administrative expense claim arises out of a transaction between a creditor and a debtor, and "only to the extent that the consideration supporting the...
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