Regions Bank v. Eymard

• Decision Date: 23 May 2022
• Docket Number: NUMBER 2021 CA 0926, NUMBER 2021 CA 0927
• Parties: REGIONS BANK and Regions Commercial Equipment Finance, LLC v. Michael EYMARD, Raimy Eymard, Louis Eymard, II and Offshore Marine Contractors, Inc. Avis Bourg, Jr. v. Michael Eymard, Louis J. Eymard, II and Raimy Eymard
• Court: Court of Appeal of Louisiana — District of US

342 So.3d 908

REGIONS BANK and Regions Commercial Equipment Finance, LLC

v.Michael EYMARD, Raimy Eymard, Louis Eymard, II and Offshore Marine Contractors, Inc.

Avis Bourg, Jr.

v.Michael Eymard, Louis J. Eymard, II and Raimy Eymard

NUMBER 2021 CA 0926, NUMBER 2021 CA 0927

Court of Appeal of Louisiana, First Circuit.

Judgment Rendered: MAY 23, 2022

Philip K. Jones, Jr., Joseph P. Hebert, New Orleans, LA, Counsel for Plaintiff/1^st Appellant, Bluehenge Capital Secured Debt SBIC, LP, as Successor in Interest to Regions Bank and Regions Commercial Equipment Finance, LLC

J. Eric Lockridge, Mark D. Mese, Janies R. Chastain, Jr., Ahmed M. Mohamed, Baton Rouge, LA, Counsel for Plaintiff/Intervenor/Appellee, Regions Bank and Regions Commercial Equipment Finance, LLC

Martin S. Bohman, Harry E. Morse, New Orleans, LA, Counsel for Defendant/2^nd Appellant, Offshore Marine Contractors, Inc.

Daniel A. Cavell, Thibodaux, LA, Counsel for Defendant/Appellee, Michael M. Eymard, Raimy D. Eymard, Louis J. Eymard II

Robert J. Burvant, Henry A. King, Timothy S. Madden, John A. Cangelosi, New Orleans, LA, Counsel for Defendant/Appellee, Avis J. Bourg, Jr.

Blair E. Boyd, Beverly A. Delaune, New Orleans, LA, Counsel for Defendant/Appellee, Pepperman, Emboulas, Schwartz & Todaro, L.L.C.

BEFORE: WHIPPLE, C.J., PENZATO, AND HESTER, JJ.

WHIPPLE, C.J.

In this matter, Bluehenge Capital Secured Debt SBIC, LP and Offshore Marine Contractors, Inc. appeal a judgment of the trial court maintaining a peremptory exception raising the objection of peremption and dismissing their claims against Avis J. Bourg, Jr., with prejudice. For the reasons that follow, we affirm in part, reverse in part, and remand.

FACTS AND PROCEDURAL HISTORY

Avis J. Bourg, Jr. and Michael Eymard, Louis Eymard II, and Raimy Eymard (collectively "the Eymards"), owned Offshore Marine Contractors ("OMC"), Offshore Marine, Inc. ("OMI"), Tram Aviation, LLC, and Tram Shipyard, Inc.¹ ("the companies").² In 2012, Bourg filed a derivative suit against the companies and the Eymards, in their capacities as officers and directors of the companies, alleging breaches of the Eymards’ fiduciary duties. On November 24, 2014, the parties agreed to settle their differences and executed redemption and sale agreements authorized and signed by the Eymards, as directors and/or managers of each of the companies, whereby the parties agreed to redeem all shares of OMI stock and/or membership interests owned by Bourg for consideration in the amount of $10,000,000.00, and all shares of OMC stock and/or membership interests owned by Bourg for consideration in the amount of $1,750,000.00. Pursuant to the redemption agreements, redemption payments were made to Bourg in the amount of $3,000,000.00 on December 9, 2014,³ and in the amount of $3,500,000.00 on December 29, 2014,⁴ in partial satisfaction of the amounts due.

In connection with the settlement, OMC and OMI also executed a promissory note on December 11, 2014 payable to Bourg for the remaining funds owed for his stock in the amount of $6,000,000.00,⁵ which was secured by personal guaranties by the Eymards, a corporate guaranty from their wholly owned affiliate, Glencoe, Inc., and a second preferred ship mortgage on the lift boat L/B KATHRYN EYMARD.⁶ On this same date OMI merged with and into OMC, and on April 30, 2015, Glencoe merged with and into OMC. As the surviving entity from these two mergers, OMC assumed all of OMI and Glencoe's liabilities. Although some payments were made to Bourg on the promissory note, including a February 27, 2017 payment in the amount of $500,000.00 in connection with the sale of the L/B KATHRYN EYMARD, the note ultimately went into default for non-payment.

In November of 2016, Regions Bank and/or Regions Commercial Equipment Finance, LLC ("Regions"), as a creditor of OMC, made demand upon Bourg for the sums paid, contending that the payment of the above funds to Bourg constituted "unlawful distributions" pursuant to LSA-R.S. 12:93, and, as such, were subject to a "claw-back" action by Regions in its capacity as a creditor of OMC. Thereafter, on November 23, 2016, Regions and Bourg entered into a tolling agreement, wherein they agreed that all prescriptive periods relating to the commencement of litigation by Regions against Bourg for causes of actions arising from payments made to Bourg in connection with the settlement agreements were tolled and extended through May 22, 2017. The parties subsequently amended the tolling agreement to extend the tolling period through November 22, 2017.

On November 28, 2016, Regions filed a petition for damages against the Eymards and OMC in the 17^th Judicial District Court, contending that the companies and the Eymards, in their capacity as directors, breached a duty to Regions by authorizing the redemption of corporate shares without ensuring that the payments would not render the companies insolvent. Region's suit was assigned docket number 131426 ("Regions’ suit"). Regions averred: that the stock redemption was in violation of LSA-R.S. 12:55, as the stock redemption and settlement payments rendered the companies insolvent; that the Eymards failed to exercise reasonable care and to act as reasonably prudent directors by approving the stock redemption and settlement agreement; and that the Eymards were jointly and severally liable to the creditors of the corporations pursuant to LSA-R.S. 12:92. Regions thus sought a judgment against the Eymards for all settlement payments made or promised to Bourg, plus interest, attorney's fees, and costs. On December 9, 2016, Bourg likewise filed suit against the Eymards in the 17^th Judicial District Court, seeking defense, indemnity, and/or reimbursement and money damages, which was assigned docket number 131524 ("Bourg's suit").

Upon the expiration of the tolling agreement with Bourg in November of 2017, Regions supplemented and amended its petition to add Bourg as a defendant in its suit and also intervened in Bourg's suit, asserting simliar claims against Bourg in both proceedings.⁷ Regions essentially restated its claims against the companies and the Eymards, contending that the companies became insolvent as a result of the redemption payments and that additional payments, including payments on the promissory note and a payment in connection with the sale of the L/B KATHRYN EYMARD, "deepened" their insolvency. Regions averred that the companies approved the payments in violation of LSA-R.S. 12:55 and that Bourg, as a shareholder, received an unlawful distribution of assets and was personally liable to the creditors of the corporation up to the amounts received by him pursuant to LSA-R.S. 12:93. Regions thus sought judgment awarding it the promissory note and all future payments on the note, or alternatively, that the court declare the promissory note void and the redemption agreement null, and that judgment be rendered against the companies, the Eymards, and Bourg, jointly, severally, and in solido, in an amount equal to all of the redemption payments and additional payments made to Bourg.

Pursuant to a motion by the Eymards and OMC, on February 8, 2018, Regions’ suit and Bourg's suit were consolidated in the trial court. Bourg answered Regions’ first supplemental and amending petition and asserted affirmative defenses. OMC also answered Regions’ amended petition and, on July 29, 2019, asserted a cross-claim against Bourg, averring that at the time OMC entered into the redemption agreement with Bourg, it had no surplus capital and was "either insolvent or made insolvent by the redemption and ancillary payments," rendering the redemption agreement and promissory note "illegal contracts under Louisiana law" and absolute nullities. OMC thus sought a declaratory judgment in its favor declaring that the redemption agreement and promissory note are null and void and that no future payments under the promissory note are owed.

On March 6, 2018, Regions executed an assignment whereby it transferred, assigned, and conveyed to Bluehenge Capital Secured Debt SBIC, LP ("Bluehenge") all of its right, title, and interest in the debt owed by the companies to Regions. Thereafter, on April 5, 2018, Bluehenge filed a motion to substitute itself as plaintiff and intervenor in the place of Regions in the litigation, which was granted by the trial court. Bourg answered Bluehenge's petition for intervention and asserted affirmative defenses.

Thereafter, Bluehenge filed a motion for summary judgment, averring that the payments made to Bourg were prohibited "unlawful distributions" and seeking a judgment against Bourg and the Eymards for the total amount of funds paid to Bourg, as well as a declaration that the promissory note in favor of Bourg was an absolute nullity. OMC filed a motion for summary judgment on its cross-claim against co-defendant Bourg, seeking a judgment declaring the promissory note absolutely null and unenforceable against OMC.

Bourg filed a peremptory exception raising the objection of peremption, contending that all claims asserted by Bluehenge and OMC against him were barred by the peremptive period in LSA-R.S. 12:93(D), which provides that an action to recover an unlawful distribution must be brought within two years from the date on which the unlawful distribution was received and must be dismissed with prejudice.⁸ Following the filing of oppositions by OMC and Bluehenge, Bourg's exception was heard by the trial court on February 5, 2021. On March 25, 2021, the trial court signed a judgment, maintaining the exception of peremption and finding that the controlling statutes, LSA-R.S. 12:92(D), 12.93(D), and 12:93(E), intended that a situation arising in this manner be governed by a two-year peremptive period, and therefore, Bluehenge's suit against Bourg, filed on November 21, 2017, was untimely as beyond the two-year peremptive period. The trial court also rendered written reasons for judgment. The trial court signed an amended judgment on April 23, 2021,...