Schermerhorn v. CenturyTel, Inc. (In re Skyport Global Commc'ns, Inc.)
| Decision Date | 26 March 2015 |
| Docket Number | H–13–3047.,H–13–3044,Civil Action Nos. H–11–1524,No. 08–36737–H4–7.,H–13–3041,08–36737–H4–7. |
| Citation | 528 B.R. 297 |
| Parties | In re SKYPORT GLOBAL COMMUNICATIONS, INC., Debtor. Joanne Schermerhorn, et al., Appellants, v. CenturyTel, Inc., et al., Appellees. Samuel Goldman, et al., Appellants, v. Joanne Schermerhorn, et al., Appellees. Franklin Craig, Appellant. TrustComm, Inc., et al., Appellants. |
| Court | U.S. District Court — Southern District of Texas |
Annie E. Catmull, Melissa Anne Haselden, Edward L. Rothberg, Hoover Slovacek LLP, Hugh Massey Ray, III, McKool Smith, Houston, TX, Jessica L. Hanzlik, Tiwari + Bell, PLLC, Helotes, TX, for Debtor.
Stephen Douglas Statham, Office of U.S. Trustee, Houston, TX, for U.S. Trustee.
This Memorandum Opinion and Order addresses appeals from fifteen orders entered by the Bankruptcy Court in Adversary No. 10–03150, into which Adversary No. 10–03225 was consolidated. The two actions consolidated under Adversary No. 10–03150 were filed in response to a state court lawsuit filed on February 12, 2010, by aggrieved investors following entry of the August 12, 2009, Order Confirming Plan of Reorganization, As Modified in In re SkyPort Global Communications, Inc., No. 08–36737–H4–11. The fifteen orders being appealed resolved allegations (1) that the filing of the State Court Petition was a direct violation of the injunctive provisions contained in—and a collateral attack on—the Confirmation Order and Plan entered in SkyPort's Chapter 11 bankruptcy case; (2) that the state court plaintiffs, Samuel Goldman (“Goldman”), Eric Fryar (“Fryar”), and Franklin Craig (“Craig”) (an individual acting in concert with Goldman), and their attorneys violated a Preliminary Injunction entered by the Bankruptcy Court; and (3) that the state court plaintiffs, their attorneys, and Craig are subject to sanctions in the form of attorneys' fees and costs. Appeal of the fifteen orders at issue have given rise to four civil actions: H–11–1524, H–13–3041, H–13–3044, and H–13–3047, the last three of which are the subject of an agreed order for joint administration under Civil Action No. H–13–3041.1 The fifteen orders being appealed and their docket entry numbers in Adversary No. 10–03150 are as follows:
For the reasons explained below, the Bankruptcy Court's orders will all be affirmed, and the four civil actions resulting from the appeals of those orders will be dismissed.
SkyPort Global Communications, Inc., n/k/a TrustComm, Inc. (“SkyPort” or “Reorganized Debtor”) was the debtor in a Chapter 11 bankruptcy filed on October 24, 2008, Case No. 08–36737–H4–11 (the “Bankruptcy Case”) in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the “Bankruptcy Court”). On August 12, 2009, the Bankruptcy Court entered its Order Confirming the Plan of Reorganization As Modified (“Confirmation Order”).2 Article 6.3 of the Plan provides for a merger of SkyPort with its sole shareholder, SkyComm Technologies Corporation (“SkyComm”).3 Once merged, all shares of stock owned by SkyComm's shareholders were to be cancelled, and all shares of the Reorganized Debtor were to be re-issued to Balaton Group, Inc.4 The Confirmation Order enjoined derivative claims filed on behalf of SkyPort or SkyComm, but did not enjoin direct claims against third parties.5
On February 12, 2010, 49 named plaintiffs referred to here as the “Schermerhorn Parties,”6 filed Plaintiffs' Original Petition, Request for Disclosure, and Request for Production of Documents (the “Petition”) commencing Cause No. 2010–09675, Joanne Schermerhorn et al. v. CenturyTel, Inc., et al., (the “State Court Action”) in the 113th Judicial District Court, Harris County, Texas (the “State Court”). The State Court Petition sought $32 million in damages for various misdeeds allegedly committed in connection with investments in and management of the Reorganized Debtor, SkyPort, and its parent, SkyComm, including breach of fiduciary duty, breach of contract, oppression, fraud, aiding and abetting fraud, securities fraud, negligent misrepresentation, and civil conspiracy. The Petition asserted fifteen counts on behalf of some or all of the plaintiffs against some or all of twelve named defendants: CenturyTel, Inc. (a/k/a CenturyLink); Clarence Marshall; R. Stewart Ewing, Jr.; Michael E. Maslowski; Harvey P. Perry (collectively, the “CenturyTel Defendants”); Robert Kubbernus; Balaton Group, Inc.; Bankton Financial Corporation; Bankton Financial Corporation, L.L.C.; Clear Sky Management, Inc.; Clear Sky Investments, L.P. (collectively, the “Kubbernus Defendants”);7 and Wilson Vukelich, L.L.P. (“Wilson Vukelich”).
On March 26, 2010, the CenturyTel Defendants and the Kubbernus Defendants removed the State Court Action to the Bankruptcy Court, thus commencing Adversary No. 10–03150.8 On the same day, McKool Smith P.C. (“McKool Smith”), acting on behalf of the removing defendants, filed a Motion to Dismiss or, Alternatively for Summary Judgment and for Sanctions, arguing that the State Court Petition constituted a collateral attack on the order confirming SkyPort's Chapter 11 Plan because it not only asserted derivative claims on behalf of SkyPort, the Reorganized Debtor, but also sought control of SkyPort, the Reorganized Debtor.9
On April 19, 2010, the Schermerhorn Parties moved to remand arguing that: (1) the Petition asserted direct claims that were not released by the Confirmation Order; (2) the State Court Petition was not a collateral attack on the Confirmation Order or the Plan; (3) the Bankruptcy Court had no jurisdiction over direct claims asserted in the State Court Action; and (4) sanctions should be imposed, if at all, against the removing defendants.10
On May 18, 2010, the law firm of Hoover Slovacek L.P. (“Hoover Slovacek”), acting on behalf of SkyPort the Reorganized Debtor, and two of the defendants named in the State Court Action—the Balaton Group, Inc. and Robert Kubbernus (collectively, “the SkyPort Parties”)—filed Plaintiff's Original Complaint and Application for Preliminary Injunction and Permanent Injunction, thus initiating Adversary No. 10–03225 against the Schermerhorn Parties.11 The SkyPort Parties sought: (1) an order consolidating Adversary Nos. 10–03150 and 10–03225;12 (2) “a declaratory judgment ... that [the Schermerhorn Parties'] Claims are property of the Reorganized Debtor and/or barred by the Plan Injunction;” and (3) “an order enjoining [the Schermerhorn Parties] from any act to obtain possession or exercise control over the Reorganized Debtor.”13
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