In re White Motor Corp.
Decision Date | 14 August 1984 |
Docket Number | Misc. No. 84-53. |
Citation | 42 BR 693 |
Parties | In re WHITE MOTOR CORPORATION, Debtor. |
Court | U.S. District Court — Northern District of Ohio |
Henry Rose, Baruch A. Fellner, J. Stephen Caflisch, Lawrence F. Landgraff, Deborah West, Washington, D.C., for Pension Benefit Guaranty Corp.
Irwin M. Feldman, David C. Weiner, Armond D. Budish, Hahn, Loeser, Freedheim, Dean & Wellman, David G. Heiman, Jones, Day, Reavis & Pogue, James H. Woodring, Timothy Sheeran, George Crisci, Squire, Sanders & Dempsey, Cleveland, Ohio, for John T. Grigsby, Jr., Trustee.
This episode in the Chapter 11 reorganization of the White Motor Corporation ("White") raises difficult questions about the jurisdictional boundaries between this Court and the Bankruptcy Court under newly-enacted bankruptcy legislation. The Pension Benefit Guaranty Corporation ("PBGC"), a federal government entity which holds several of the largest claims against the White estate, contends that the Bankruptcy Amendments and Federal Judgeship Act of 1984 ("the Amendments") requires this Court to withdraw the reference of litigation concerning those claims from the Bankruptcy Court. After careful consideration of the statute and its legislative history, this Court determines that the Bankruptcy Court remains the proper forum for initial proceedings concerning these claims, and denies PBGC's motion.
This Court's jurisdiction over the White reorganization now derives entirely from 28 U.S.C. § 1334.
PBGC is charged with administering the pension plan termination insurance program of Title IV of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1301 et seq., as amended by the Multiemployer Pension Plan Amendments Act of 1980. White, a manufacturer of trucks and other large vehicles, filed for reorganization on September 4, 1980, pursuant to Chapter 11 of the Bankruptcy Reform Act of 1978 ("the 1978 Act" or "the Code"), 11 U.S.C. § 1101 et seq. On November 18, 1983, the Bankruptcy Court issued a Confirmation Order, approving White's reorganization plan and transferring all legal title to relevant property, assets and effects of White to a Reorganization Trust, managed by a Disposition Assets Trustee ("the Trustee"). The Trustee also acquired the authority and duty to pursue White Motor's objections to claims against the estate. The present dispute concerns objections by White, later adopted and supplemented by the Trustee, to PBGC's claims against the estate. PBGC seeks to remove adjudication of two groups of claims to this Court. The following summary of the contested issues in the two proceedings is drawn from pleadings submitted by PBGC and the Trustee to the Bankruptcy Court and to this Court.
The first fifteen disputed claims involve six pension plans established, sponsored and maintained by White for its employees. After filing for reorganization, White terminated the plans under 29 U.S.C. § 1341, and the date of termination was established as November 30, 1981. 29 U.S.C. § 1348. White and PBGC entered into agreements making the PBGC the trustee of the plans. PBGC claims that on the termination date the plans' assets were approximately $60,000,000 less than the value of the pension payments PBGC must make under ERISA to former White employees and their beneficiaries, and that White owed $17,887,297 in contribution to the plans to satisfy the minimum funding standards of ERISA, 29 U.S.C. § 1082, and the Internal Revenue Code ("IRC"), 26 U.S.C. § 412. For purposes of the current motion, there is no dispute about the amounts owed.
In May of 1982, PBGC as trustee for the plans filed fifteen proofs of claim for unpaid contributions. Six of the fifteen claims concern contributions which were required to be made to the plans during the administration of the estate ("Post-Petition Claims"); PBGC claims that these are administrative expenses entitled to priority under § 507(a)(1) of the Bankruptcy Code. Four claims concern contributions which were required to be made during the 180 days prior to the filing of the reorganization petition ("180-Day Claims"); PBGC claims that these are contributions to benefit plans entitled to priority under § 507(a)(4) of the Code. The remaining claims are unsecured.
On April 7, 1983, White and the official creditors' committee representing unsecured creditors ("Creditors' Committee") filed an Application to Reclassify Certain PBGC Claims ("the Application"). The applicants contended that a substantial portion of the ten secured claims were not entitled to priority status under § 507 and requested that the Bankruptcy Court reclassify them as unsecured claims. On April 26, 1984, the Trustee filed a Supplemental Application to Reclassify Certain PBGC Claims ("the Supplemental Application") which raised additional arguments in support of reclassifying large portions of the alleged priority claims.
Trial on the Application and Supplemental Application commenced in the Bankruptcy Court on June 26, 1984 and continued the following day. In his Trial Brief, the Trustee summarized his case as follows:
In its Trial Brief, PBGC stated its position:
To continue reading
Request your trial-
In re C-TC 9th Avenue Partnership
...as to its true meaning. In re Kuhlman Diecasting Co., 152 B.R. 310, 311 (D.Kan.1993). The seminal case on the issue is In re White Motor Corp., 42 B.R. 693 (N.D.Ohio 1984), in which the court carefully examined the legislative history of the statute and determined that Congress did not inte......
-
In re Contemporary Lithographers, Inc.
...all of the references in the Congressional Record leading to the passage of this law were found and discussed in In re White Motor Corp., 42 B.R. 693 (N.D.Ohio 1984). As Judge Aldrich pointed out in White Motor Corp., the text of the section was read into the Record on more than one occasio......