UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

Transcription

1 UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: GREEKTOWN HOLDINGS, L.L.C., et al., Reorganized Debtors. / Case No In Proceedings Under Chapter 11 Jointly Administered Honorable Walter Shapero OBJECTION TO EX PARTE MOTION OF BUCHWALD CAPITAL ADVISORS LLC, SOLELY IN ITS CAPACITY AS TRUSTEE FOR THE GREEKTOWN DISTRIBUTION TRUST, TO REOPEN THE DEBTORS BANKRUPTCY CASES Greektown Casino, L.L.C. ( Greektown for its Objection ( Objection to Buchwald Capital Advisors LLC, Solely in Its Capacity as Trustee for the Greektown Distribution Trust s (the Trust Ex Parte Motion to Reopen the Debtors Bankruptcy Cases (the Motion to Reopen states as follows: I. BACKGROUND On March 31, 2015, Greektown filed a Motion for an Order Administratively Closing Case under 11 U.S.C. 350(a and Federal Rule of Bankruptcy Procedure 3022 ( Motion to Close Cases [Docket No. 3845]. Greektown informed the Trust that its primary objection to the Cases remaining open was the ongoing and significant expense for quarterly fees charged by the office of the United States Trustee ( UST. Greektown also advised the Trust that there was no need to keep the Cases open because there was minimal activity in the Cases and few outstanding issues which could require the Court s jurisdiction at some time in the future. Over two months after Greektown first filed its Motion to Close Cases, the Court entered an order administratively closing the Cases on June 3, 2015 ( Closure Order [Docket No. 3845]. During this two month period, the Trust was intimately involved with, and actively wsd Doc 3922 Filed 09/28/15 Entered 09/28/15 12:01:27 Page 1 of 7

2 participated in, the proceedings that led to the entry of the Closure Order. For example, the Trust filed a limited response to the Motion to Close Cases outlining its concerns with case closure [Docket No. 3855], negotiated the terms of a proposed order closing the Cases with Greektown and other parties, and attended and argued at a contested hearing supporting the Motion to Close Cases. The Trust also determined that it needed to extend the Litigation Trust and filed a motion to obtain that relief prior to the entry of the Closure Order. Now, almost four months after entry of the Closure Order, the Trustee has realized that the Distribution Trust is about to expire and needs to be extended. The Trust now seeks to reopen the Cases so that it can file its Motion to Extend the Greektown Distribution Trust (the Extension Motion. No reason has been given for why this Extension Motion was not filed prior to the entry of the Closure Order along with the motion to extend the Litigation Trust. The Trust had ample warning that Greektown was seeking to close the Cases and there is simply no excuse for its failure to file its Extension Motion before the Cases were closed. Furthermore, the Trust improperly filed the Motion to Reopen on an ex parte basis. In doing so, it sought to cut off Greektown s notice and opportunity to object or otherwise respond, despite knowing that Greektown may incur liability to the UST if the Cases are reopened. Because Greektown has a financial stake in the outcome of the Motion to Reopen, it was not proper for the Trust to seek the relief on an ex parte basis. II. ARGUMENT A. The Trust s Motion to Reopen should not be heard on an Ex Parte Basis. The relief sought by the Trust in its Motion to Reopen has a clear and direct effect on Greektown s pocketbook, and as a result, the Motion to Reopen should not be heard on an ex wsd Doc 3922 Filed 09/28/15 Entered 09/28/15 12:01:27 Page 2 of 7

3 parte basis. Due process requires that Greektown be afforded notice and a hearing on the Motion to Reopen so that it can protect its financial interest. Accordingly, the Trust must provide Greektown with notice and an opportunity to object to the relief sought in the Motion to Reopen, and a hearing should be held on both the Motion to Reopen and the Extension Motion. B. Because the extension of the Distribution Trust could have been requested prior to the Cases closing, there is no Cause to reopen the Cases. The granting of a motion to reopen is within the court's discretion and the burden of demonstrating circumstances sufficient to justify same is on the moving party. Section 350(b gives the bankruptcy court broad discretion in reopening, which discretion should be exercised only where a compelling reason is demonstrated. In re Nelson, 100 BR 905, 906 (Bankr. N. D. Ohio 1989 (citing V.I. Bur. of Internal Rev. v. St. Croix Hotel Corp., 60 B.R. 412, (D. Virgin Islands 1986; In re Greer, 89 B.R. 757, (Bkrtcy. S.D. Ill. 1988; In re Stanke, 41 B.R. 379, (Bkrtcy. W.D. Mo (the court must be satisfied that there is compelling cause to reopen; Matter of Serafini, 30 B.R. 606 (Bkrtcy. W.D. Penn (whether closed bankruptcy case should be reopened to permit debtor to obtain relief to which he would have been entitled if seasonably applied for is matter within sound discretion of court and burden of establishing proper grounds for allowance of such reopening is on party seeking same. The Trust clearly could have, and should have, filed its Extension Motion prior to the Cases closing. The Trust filed a motion to extend the Litigation Trust prior to the closing of the Cases and could have easily sought to extend the Distribution Trust at the same time. There is simply no explanation for its failure to do so. Now, the Trust seeks to reopen the Cases, exposing Greektown to liability for payment of thousands of dollars in fees to the UST, so that it can fix its mistake and file a motion that clearly wsd Doc 3922 Filed 09/28/15 Entered 09/28/15 12:01:27 Page 3 of 7

4 should have been filed prior to the Cases closing. Because it has not provided any reason why it failed to file the Extension Motion prior to the closing of the Cases, the Trust has not met its burden of establishing proper grounds for allowance of the reopening of the Cases under 11 U.S.C. 350(a. C. In the event the Cases are reopened, the Trust must be held responsible to pay UST s fees resulting from the Trust s tardy request. The Trust had complete control over the timing of the filing of the Extension Motion, and could easily have filed the motion prior to the closing of the Cases. However, the Trust failed to do so and now seeks to correct its mistake by reopening the Cases - thereby subjecting Greektown to potential liability for payment of additional fees to the United States Trustee. Greektown should not be made to suffer the financial repercussions of the Trust s mistake. To the extent the Cases are reopened to accommodate the Trust, it is the Trust, and not Greektown, who should be responsible to pay Greektown s fees and expenses arising from any action taken by the UST, including any UST fees that are incurred by Greektown. See generally In re Nelson, 100 BR 905, 907 (Bankr. N. D. Ohio 1989 (conditioning the reopening of the case on the debtor s payment of fees incurred by creditor as a result of debtor s delay; See also In re Beshensky, 68 Bankr. 452, 455 (Bankr. E.D. Wis. 1987; In re Parker, 64 Bankr. 402, 404 (Bankr. M.D. Fla. 1986; Noble v. Yingling, 37 Bankr. 647, 651 (D. Del III. CONCLUSION WHEREFORE, Greektown requests that the Court deny the Trust s Motion to Reopen. In the event that the Court grants the Trust s Motion to Reopen, Greektown requests that the order reopening the Cases be in a form substantially similar to the proposed order attached hereto as Exhibit A, and provide that (i the Cases will be administratively closed immediately upon entry of an order adjudicating the Extension Motion, (ii the Cases are reopened only for the wsd Doc 3922 Filed 09/28/15 Entered 09/28/15 12:01:27 Page 4 of 7

5 limited purpose of allowing the Trustee to prosecute its Extension Motion, for expedited proceedings thereon, and for entry of an order adjudicating the Extension Motion, (iii the Trust is liable for payment of any fees incurred to the UST as a result of the reopening of the Cases, and (iv the Trust is liable to reimburse Greektown for the fees and costs, including attorney s fees, which it incurred in responding to the Motion to Reopen. Respectfully submitted, SCHAFER AND WEINER, PLLC Dated: September 28, 2015 /s/ Kim K. Hillary DANIEL J. WEINER (P32010 KIM K. HILLARY (P67534 Attorneys for Reorganized Debtors Woodward Avenue, Suite 100 Bloomfield Hills, MI ( khillary@schaferandweiner.com wsd Doc 3922 Filed 09/28/15 Entered 09/28/15 12:01:27 Page 5 of 7

6 EXHIBIT A UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: GREEKTOWN HOLDINGS, L.L.C., et al., Reorganized Debtors. / Case No In Proceedings Under Chapter 11 Jointly Administered Honorable Walter Shapero ORDER REOPENING THE DEBTORS BANKRUPTCY CASES This matter having come before the Court upon the Ex Parte Motion of Buchwald Capital Advisors LLC, Solely in Its Capacity as Trustee for the Greektown Distribution Trust (the Trust, to Reopen the Debtors Bankruptcy Cases (the Motion and the objection to same having been filed by Greektown Casino, L.L.C. (the Objection ; the Court having reviewed and considered the Motion and the Objection and finding that good cause exists for granting the relief in this order; IT IS HEREBY ORDERED that: 1. The Motion is conditionally granted on the terms set forth herein. 2. Case No filed by Greektown Holdings, L.L.C., Case No filed by Greektown Casino, L.L.C., Case No filed by Greektown Holdings II, Inc., Case No filed by Contract Builders Corporation, Case No filed by and Trappers GC Partner, LLC, and Case No filed by Realty Equity Company Inc. (collectively, the Cases and each a Case are reopened immediately upon entry of this Order for the limited purpose of allowing the Trustee to prosecute its Motion to Extend the Greektown wsd Doc 3922 Filed 09/28/15 Entered 09/28/15 12:01:27 Page 6 of 7

7 Distribution Trust (the Extension Motion, for expedited proceedings thereon, and for entry of an order adjudicating the Extension Motion. 3. Upon the entry of an order adjudicating the Extension Motion, the Cases shall be immediately administratively closed under the same terms as are set forth in the Order Granting Reorganized Debtors Motion for an Order Administratively Closing Case Under 11 U.S.C. 350(a and Federal Rule of Bankruptcy Procedure 3022 [Docket No. 3894]. 4. Upon the entry of an order adjudicating the Extension Motion, the clerk of the Court is directed to immediately enter a final decree administratively closing the Cases. 5. In the event Greektown incurs liability for payment of quarterly fees to the United States Trustee under 28 U.S.C as result of the reopening of the Cases pursuant to this Order, the Trust shall be liable for payment of such fees to the United State Trustee and shall indemnify Greektown for any liability for payment of same. 6. The Trust shall reimburse Greektown for its fees and costs, including attorney s fees, which it incurred in responding to the Motion to Reopen wsd Doc 3922 Filed 09/28/15 Entered 09/28/15 12:01:27 Page 7 of 7

8 UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: GREEKTOWN HOLDINGS, LLC, et al. 1 Debtors. Case No Chapter 11 Jointly Administered Honorable Walter Shapero CERTIFICATE OF SERVICE I hereby certify that on September 28, 2015 I electronically filed an Objection to Ex Parte Motion of Buchwald Capital Advisors LLC, Solely in its Capacity As Trustee for the Greektown Distribution Trust, to Reopen the Debtors Bankruptcy Cases with the Clerk of the Court using the ECF system, which will send notification of such filing to all counsel currently included on the Court s Electronic Mail Notice List. /s/ Pamela Jozwiak, Legal Assistant to KIM K. HILLARY (P67534 Schafer and Weiner, PLLC Woodward Ave., Ste. 100 Bloomfield Hills, MI Telephone: ( COUNSEL FOR REORGANIZED DEBTOR 1 The Debtors bankruptcy cases - Greektown Casino, L.L.C. Case No ; Greektown Holdings II, Inc., Case No ; Contract Builders Corporation, Case No ; Realty Equity Company Inc., Case No ; and Trappers GC Partner, LLC, Case No are jointly administered with Greektown Holdings, L.L.C., Case No (together the Cases. { } wsd Doc Filed 09/28/15 Entered 09/28/15 12:01:27 Page 1 of 1