scc Doc 382 Filed 11/22/17 Entered 11/22/17 14:57:17 Main Document Pg 1 of 20

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1 Pg 1 of 20 TOGUT, SEGAL & SEGAL LLP One Penn Plaza Suite 3335 New York, New York (212) Albert Togut Frank A. Oswald Brian F. Moore Lauren L. Peacock Counsel to the Debtors and Debtors in Possession Hearing Date: November 30, 2017 at 11:00 a.m. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x : In re: : Chapter 11 : TOISA LIMITED, et al., : Case No (SCC) : Debtors. 1 : (Jointly Administered) : x DEBTORS OBJECTION TO THE MOTION OF IOANNIS N. PELAGIDIS PURSUANT TO SECTION 362 OF THE BANKRUPTCY CODE, FOR AN ORDER MODIFYING AUTOMATIC STAY TO ALLOW PERSONAL INJURY ACTION TO BE COMMENCED AND PROCEED TO JUDGMENT 1 The Debtors are as follows: Trade Prosperity, Inc.; Toisa Limited; United Courage, Inc.; Trade Vision, Inc.; United Journey, Inc.; United Kalavryta, Inc.; Trade Sky, Inc.; Trade Industrial Development Corporation; United Honor, Inc.; Trade Will, Inc.; United Leadership Inc.; United Seas, Inc.; United Dynamic, Inc.; United Emblem, Inc.; United Ideal Inc.; Trade Unity, Inc.; Trade Quest, Inc.; Trade Spirit, Inc.; Trade Resource, Inc.; United Ambassador, Inc. ( United Ambassador ); Edgewater Offshore Shipping, Ltd.; United Banner, Inc.; Toisa Horizon, Inc.; and Trade and Transport Inc.

2 Pg 2 of 20 TABLE OF CONTENTS Page No. PRELIMINARY STATEMENT... 1 RELEVANT BACKGROUND... 3 A. These Chapter 11 Cases... 3 B. Pelagidis Shops for a Forum in the United States... 3 ARGUMENT... 5 I. The Motion Should Be Denied Because Pelagidis Has Not Shown Cause to Lift the Automatic Stay... 5 A. The Sonnax Factors Weigh Heavily in Favor of Maintaining the Stay... 7 i. The Club Does Not Have Full Responsibility for Defending the Lawsuit (Factor 5)... 7 ii. Lifting the Stay Will Interfere with the Debtors Administration of these Chapter 11 Cases and May Negatively Impact Other Creditors (Factors 2, 6, and 7)... 9 iii. If Pelagidis Brings the Lawsuit Against United Ambassador in the United States and Not Greece, It Will Not Result in a Complete, Expeditious, or Economical Resolution (Factors 1 and 10) iv. The Parties are Not Ready for Trial; Pelagidis Has Not Even Confirmed Where He Would Bring the Lawsuit (Factor 11) v. The Balance of the Harms and the Impact of the Stay on the Parties Tip the Scales Toward the Debtors (Factor 12) CONCLUSION i

3 Pg 3 of 20 Cases TABLE OF AUTHORITIES Arnold Dev., Inc. v. Collins (In re Collins), 118 B.R. 35 (Bankr. D. Md. 1990) Capital Commc ns Fed. Credit Union v. Boodrow (In re Boodrow), 126 F.3d 43 (2d Cir. 1997)... 5 City Ins. Co. v. Mego Int l, Inc. (In re Mego Int l, Inc.), 28 B.R. 324 (Bankr. S.D.N.Y. 1983)... 9 DePippo v. Kmart Corp., 335 B.R. 290 (S.D.N.Y. 2005)... 8 Hazim v. Schiel & Denver Book Publishers, 647 F. App x 455 (5th Cir. 2016) Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984) In re A.H. Robins Co., Inc., 828 F.2d 1023 (4th Cir. 1987) In re Bally Total Fitness of N.Y., Inc., 402 B.R. 616 (Bankr. S.D.N.Y. 2009)... 10, 15 In re Celotex Corp., 128 B.R. 478 (Bankr. M.D. Fla. 1991) In re Leibowitz, 147 B.R. 341 (Bankr. S.D.N.Y. 1992)... 7 In re M/V MSC Flaminia, 183 F. Supp. 3d 499 (S.D.N.Y. 2016) In re Mazzeo, 167 F.3d 139 (2d Cir. 1999)... 7 In re Metro Transp. Co., 82 B.R. 351 (Bankr. E.D. Pa. 1988) In re N.Y. Med. Grp., P.C., 265 B.R. 408 (Bankr. S.D.N.Y. 2001) In re Northwest Airlines Corp., 2006 WL (Bankr. S.D.N.Y. 2006) In re Pioneer Commercial Funding Corp., 114 B.R. 45 (Bankr. S.D.N.Y. 1990)... 5 In re Plumberex Specialty Prods., Inc., 311 B.R. 551 (Bankr. C.D. Ca. 2004) In re Project Orange, 432 B.R. 89 (Bankr. S.D.N.Y. 2010)... 6 In re R.J. Groover Const., LLC, 411 B.R. 473 (Bankr. S.D. Ga. 2008) In re Residential Capital, LLC, 2012 WL (Bankr. S.D.N.Y. August 7, 2012) passim In re Sonnax Indus., Inc., 907 F.2d 1280 (2d Cir. 1990)... passim Int l Shoe Co. v. Washington, 326 U.S. 310 (1945) Johns-Manville Corp. v. Asbestos Litig. Grp. (In re Johns-Manville), 26 B.R. 420 (Bankr. S.D.N.Y , 15 Membreno v. Costa Crociere S.p.A., 425 F.3d 932 (11th Cir. 2005) ii

4 Pg 4 of 20 Midatlantic Nat l Bank v. N.J. Dep t of Envt l Prot., 474 U.S. 494 (1986)... 5 Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981) Royal Ins. Co. of Am. v. McRory Corp., 1996 U.S. Dist. LEXIS 5552 (S.D.N.Y. Apr. 25, 1996) SEC v. Brennan, 230 F.3d 65 (2d Cir. 2000)... 5 Statutes 11 U.S.C. 1107(a) U.S.C U.S.C. 362(d)... 5, 7 iii

5 Pg 5 of 20 TO THE HONORABLE SHELLEY C. CHAPMAN, UNITED STATES BANKRUPTCY JUDGE: Toisa Limited and certain of its affiliates, as debtors and debtors in possession in the above-captioned cases (collectively, the Debtors and each a Debtor ), hereby file this objection (this Objection ) to Ioannis N. Pelagidis ( Pelagidis or Plaintiff ) Motion Pursuant to Section 362 of the Bankruptcy Code, for an Order Modifying Automatic Stay to Allow Personal Injury Action to be Commenced and Proceed to Judgment (the Motion ) [Dkt. No. 260]. The Debtors respectfully submit that the Motion should be denied for the reasons set forth below. PRELIMINARY STATEMENT Pelagidis, a Greek national, seeks relief from the automatic stay to bring a lawsuit against Debtor United Ambassador Inc. ( United Ambassador ) in an unnamed court of competent jurisdiction for the injuries he claims he sustained on December 21, 2016 in an accident while he was working on a Debtor-owned vessel named United Ambassador. Although the United Ambassador is a Greek flagged oil tanker that was managed by a Greek entity, manned by a crew of foreign citizens, and on the high seas at the time of the accident, Pelagidis has been shopping for a forum in the United States. Pelagidis principal argument that the stay should be lifted is that there will be no prejudice to the Debtors or their estates because he agrees to limit his recovery to insurance proceeds. This argument is based on a flawed premise. Although debtor United Ambassador Inc. ( United Ambassador ) has protection and indemnity coverage (the Coverage ) with the London P&I Club (the Club ), Coverage is not unconditional. Rather, the Rules of Entry with the Club (the Rules ) provide that the Club will indemnify United Ambassador pursuant to the terms of the 1

6 Pg 6 of 20 Rules. Additionally, Debtor United Ambassador must pay 25% of its own defense costs. 2 Moreover, the Debtors have a contractual obligation to cooperate with the Club, and as of the date hereof, the Club has not agreed to the Debtors consenting to lift the automatic stay unless Pelagidis agrees to pursue his claims in Greece. Accordingly, there can be no finding that there is no harm to the Debtors in lifting the stay. In any event, Pelagidis most recent lawsuit seeks $35 million against one of the Debtors non-debtor management companies for an accident on a Debtorowned vessel. Allowing Pelagidis to proceed would therefore require the Debtors to divert their limited time, attention, and manpower to defending a personal injury lawsuit while they are trying to reorganize. This is precisely the distraction the automatic stay was designed to protect against. And it would neither be efficient, expeditious, nor serve judicial economy to lift the stay to allow Pelagidis to bring his personal injury lawsuit in the United States when all of the facts point to Greece. If Pelagidis sues United Ambassador in the United States, the Debtor s first order of business will be to seek dismissal for lack of personal jurisdiction and, alternatively, for forum non conveniens. It would be extremely wasteful to litigate these forum issues before a tribunal that will in all likelihood not be the arbiter of the actual merits. This is particularly true where Pelagidis has pointed to no harm or prejudice he would face if the stay remains in place and has not even identified which forum he plans to sue the Debtors. For these reasons and those set forth below, the balance of the harms and equities weigh heavily in favor of keeping the automatic stay in place to protect the Debtors and these estates. Accordingly, the Motion should be denied. 2 There is also a $7,000 deductible for crew injury. 2

7 Pg 7 of 20 RELEVANT BACKGROUND A. These Chapter 11 Cases 1. On January 29, 2017, (the Petition Date ), the Debtors each commenced a case by filing a petition for relief under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York (the Court ). These chapter 11 cases have been consolidated for procedural purposes only and are being jointly administered. 2. The Debtors continue to operate their businesses and manage their properties as debtors and debtors in possession pursuant to Bankruptcy Code sections 1107(a) and B. Pelagidis Shops for a Forum in the United States 3. On February 10, 2017, Pelagidis, a Greek national, filed a lawsuit against one of the Debtors non-debtor management companies, Marine Management Services, M.C. ( MMS ), in the United States District Court for the Southern District of Texas, Galveston Division (the Texas Federal Court ) seeking $20 million in damages under the Jones Act for severe brain trauma that he allegedly suffered in an accident while he was working on the United Ambassador (the Texas Federal Action ). See Mot. Ex. A. The United Ambassador is a vessel owned by Debtor United Ambassador, and United Ambassador is a Liberian entity with its actual place of business in Greece. MMS is a Greek corporation with its principal place of business in Greece. See First Day Decl. 4; see also Mot. Ex. A, 2. 3 The factual background regarding the Debtors, including their business operations, their corporate and capital structure, and the events leading to these chapter 11 cases, is set forth in detail in the Declaration of Robert Hennebry Pursuant to Local Bankruptcy Rule and in Support of the Debtors Chapter 11 Petitions and First Day Pleadings [Docket No. 3] (the First Day Declaration ). 3

8 Pg 8 of On May 19, 2017, MMS filed a Rule 12(b)(2) Motion to Dismiss seeking to dismiss the Texas Federal Action for lack of personal jurisdiction because MMS lacks sufficient minimum contacts with Texas such that maintaining the suit in Texas would offend the traditional notions of fair play and substantial justice. See Marine Management Services M.C. s Rule 12(b)(2) Motion to Dismiss, 3:17-CV (S.D. Tex. May 19, 2017) [Docket No. 18] After months of jurisdictional discovery, on October 5, 2017, Pelagidis filed a notice of dismissal of the suit and sought dismissal of the motion as moot. See Notice of Voluntary Dismissal Without Prejudice, Case No. 3:17-CV (S.D. Tex. October 5, 2017) [Docket No. 43]; Response to Marine Management Service M.C. s Rule 12(b)(2) Motion to Dismiss, Case No. 3:17-CV (S.D. Tex. October 5, 2017) [Docket No. 44]. The Texas Federal Action was dismissed without prejudice on October 10, See Final Dismissal Order, 3:17-CV (S.D. Tex. October 10, 2017) [Docket No. 45]. 6. On October 6, 2017, Pelagidis filed a lawsuit against MMS, the Club, and other defendants in the District Court of Harris County, Texas (the Texas State Court ) seeking $35 million in damages $15 million more than in the Texas Federal Action for the injuries he claims he sustained in the December 21, 2016 accident and for the defendants purported failure to provide maintenance and cure of those damages (the Texas State Action ). See Plaintiff s First Amended Petition, Jury Demand, and Request for Disclosure, Civil Case No.: (Tex. Dist., Harris Cty Oct. 6, 2017). 4 At or around June 30, 2017, Pelagidis also attempted to open a civil case in the Southern District of New York against MMC. See Pelagidis v. Marine Management Services M.C. et al., Case No. 1:17-cv CM. Because the case-initiating document was illegible, unreadable, or not attached, the New York case was administratively closed on September 12, See id. 4

9 Pg 9 of By the Motion, Pelagidis seeks relief from the automatic stay to bring a lawsuit on account of the accident (the Lawsuit ) against United Ambassador in an unnamed jurisdiction. ARGUMENT I. THE MOTION SHOULD BE DENIED BECAUSE PELAGIDIS HAS NOT SHOWN CAUSE TO LIFT THE AUTOMATIC STAY 8. The automatic stay is a fundamental protection afforded to debtors under the Bankruptcy Code. See Midatlantic Nat l Bank v. N.J. Dep t of Envt l Prot., 474 U.S. 494, 503 (1986). The automatic stay maintains the status quo and protects the debtor s ability to formulate a plan for the sale or disposition of property of the estate. In re Residential Capital, LLC, 2012 WL , at *2 (Bankr. S.D.N.Y. August 7, 2012). Importantly, the automatic stay allow[s] the bankruptcy court to centralize all disputes concerning property of the debtor s estate so that reorganization can proceed efficiently, unimpeded by uncoordinated proceedings in other arenas. See SEC v. Brennan, 230 F.3d 65, 70, 75 (2d Cir. 2000) (internal quotation omitted). In this regard, the automatic stay prevent[s] disparate actions against debtors... and ensure[s] that no creditor receives more than an equitable share of the bankrupt s estate. See Capital Commc ns Fed. Credit Union v. Boodrow (In re Boodrow), 126 F.3d 43, 48 (2d Cir. 1997) (internal quotation omitted); see also In re Pioneer Commercial Funding Corp., 114 B.R. 45, 48 (Bankr. S.D.N.Y. 1990) (noting stay promot[es] equal creditor treatment and giv[es] the debtor a breathing spell ). 9. In order to obtain relief from the automatic stay, the movant must make an initial showing of cause. In re Sonnax Indus., Inc., 907 F.2d 1280, 1285 (2d Cir. 1990); see 11 U.S.C. 362(d). Although not defined by the Bankruptcy Code, the Court of Appeals for the Second Circuit has identified twelve factors that courts 5

10 Pg 10 of 20 examine to determine whether a movant has sufficiently established cause to warrant relief from the automatic stay and to allow stayed litigation to proceed in another forum. See In re Sonnax, 907 F.2d at These Sonnax Factors are: (1) whether relief would result in a partial or complete resolution of the issues; (2) lack of any connection with or interference with the bankruptcy case; (3) whether the other proceeding involves the debtor as a fiduciary; (4) whether a specialized tribunal with the necessary expertise has been established to hear the cause of action; (5) whether the debtor s insurer has assumed full responsibility for defending it; (6) whether the action primarily involves third parties; (7) whether litigation in another forum would prejudice the interests of other creditors; (8) whether the judgment claim arising from the other action is subject to equitable subordination; (9) whether movant s success in the other proceeding would result in a judicial lien avoidable by the debtor; (10) the interests of judicial economy and the expeditious and economical resolution of litigation; (11) whether the parties are ready for trial in the other proceeding; and (12) impact of the stay on the parties and the balance of harms. Id. A court need only apply the factors that are relevant, and does not need to give each factor equal weight. In re Project Orange, 432 B.R. 89, 104 (Bankr. S.D.N.Y. 2010). 10. The burden to show cause exists is particularly heavy for unsecured creditors: The general rule is that claims that are not viewed as secured in 6

11 Pg 11 of 20 the context of 362(d)(1) should not be granted relief from the stay unless extraordinary circumstances are established to justify such relief. See Residential Capital, 2012 WL , at *3 (quoting In re Leibowitz, 147 B.R. 341, 345 (Bankr. S.D.N.Y. 1992)). 11. When a movant fails to meet its burden, the court should deny relief without requiring any showing from the debtor that it is entitled to continued protection. See Sonnax, 907 F.2d at 1285; accord In re Mazzeo, 167 F.3d 139, 142 (2d Cir. 1999) ( Only if the movant makes such a showing does any burden shift to the debtor; absent a showing of cause, the court should simply deny relief from the stay. ). A. The Sonnax Factors Weigh Heavily in Favor of Maintaining the Stay 12. Pelagidis has not met his heavy burden to show that cause exists to lift the stay. Although Pelagidis acknowledges the twelve Sonnax factors, he focuses solely on his willingness to limit his damages to applicable insurance proceeds. But this alone is not a basis to lift the stay. 5 A proper review of all of the applicable Sonnax factors in particular, the first, second, fifth, sixth, seventh, tenth, eleventh, and twelfth factors demonstrate that the equities strongly weigh in favor of maintaining the automatic stay and denying the Motion. i. The Club Does Not Have Full Responsibility for Defending the Lawsuit (Factor 5) 13. Although not framed in the context of the Sonnax factors, the crux of Pelagidis argument is that he has demonstrated cause because he is willing to limit any immediate recovery to available insurance proceeds such that there would not be any great prejudice to the bankruptcy estate. See Mot. 16; see also id. 13, 15 5 And Pelagidis fails to recognize the type of insurance coverage available. 7

12 Pg 12 of 20 (citing Johns-Manville Corp. v. Asbestos Litig. Grp. (In re Johns-Manville), 26 B.R. 420 (Bankr. S.D.N.Y. 1983)). 14. But the Club will not cover all of the costs to defend the Lawsuit no matter the circumstances. More specifically, Debtor United Ambassador must pay 25% of the defense costs. Additionally, at present, the Club is not amenable to the Debtors entering into a consensual stipulation to allow the automatic stay to be lifted for the Lawsuit to proceed in the United States, and the Rules require the Debtors to cooperate with the Club. 15. Accordingly, there cannot be a finding that no burden to the estate would result if the stay were lifted. See Residential Capital, 2012 WL , at *5 (denying relief from the stay where, among other things, the debtor typically paid its defense legal fees and costs out-of-pocket and no insurer has assumed responsibility to pay for damages ); see also DePippo v. Kmart Corp., 335 B.R. 290, 298 (S.D.N.Y. 2005) (noting general rule that allowing litigation to proceed against the debtor is only appropriate where, among things, the debtor bears none of the expense of the defense and upholding confirmation order enjoining a plaintiff s claims where action against Kmart... would have [required the debtor] to pay litigation costs ). The fifth Sonnax factor therefore favors keeping the automatic stay in place. 16. Having placed all of his proverbial eggs in the insurance basket and neglected the other Sonnax factors, Pelagidis has failed to meet his burden to show cause and the Motion should be denied for this reason alone. 8

13 Pg 13 of 20 ii. Lifting the Stay Will Interfere with the Debtors Administration of these Chapter 11 Cases and May Negatively Impact Other Creditors (Factors 2, 6, and 7) 17. The second, sixth, and seventh Sonnax factors examine whether granting relief from the automatic stay will interfere with the Debtors estates or adversely impact the Debtors, their creditors or these chapter 11 cases. See Sonnax, 907 F.2d at Allowing Pelagidis to pursue his Lawsuit will cause these harms for multiple reasons. 18. First, allowing the Lawsuit to proceed will interfere with the Debtors chapter 11 cases at a critical stage. Even if the Rules required the Club to pay 100% of the costs to defend the Lawsuit (they do not), the Debtors will be required to assist the defense because the allegations concern Debtor United Ambassador s business. More specifically, Pelagidis (an employee of a Debtor) alleges that the United Ambassador (a vessel owned by one of the Debtors) was not a safe workplace and those unsafe conditions caused his severe bodily injury and subsequent damages. See e.g., Mot. Ex. A at 9 (alleging that the United Ambassador was not a safe work place and that his injuries were also legally caused by [its] unseaworthiness ). Therefore, if the stay is lifted, the Debtors will be required to divert their limited manpower away from their reorganization efforts so that their Debtors officers, directors, and employees can cooperate with the Club to defend the Lawsuit. 6 Such interference with these chapter 11 cases strongly militates against lifting the automatic stay. See Residential Capital, 2012 WL , at *6 (finding second Sonnax factor 6 For these same reasons, the Lawsuit a personal injury action brought by an employee of a Debtor seeking damages for the injuries he allegedly received in the scope of his employment on a Debtorowned vessel does not primarily concern third parties even if Pelagidis seeks to join Debtor United Ambassador in the Texas State Action commenced against other defendants. See Sonnax, 907 F.2d at This is another reason not to lift the automatic stay. See also City Ins. Co. v. Mego Int l, Inc. (In re Mego Int l, Inc.), 28 B.R. 324, 326 (Bankr. S.D.N.Y. 1983) (finding fact that debtor was more than a mere conduit for the flow of proceeds and that the action impacted the property and administration of [the debtor s] estate weighed against lifting stay). 9

14 Pg 14 of 20 weighed against lifting automatic stay because the debtor s legal department would be called upon to assist in defending California actions, which would divert the [l]egal [d]epartment s attention and resources from the resolution of the [d]ebtors chapter 11 cases ); In re A.H. Robins Co., Inc., 828 F.2d 1023, 1026 (4th Cir. 1987) (staying products liability action against debtor s insurer even though there was no threat to debtor property because it posed other kinds of harm including the burden placed on [the debtor s] officers, directors, and employees, which would exhaust their energies and thus interfere with the debtor s reorganization ); In re Metro Transp. Co., 82 B.R. 351, 354 (Bankr. E.D. Pa. 1988) (denying lift stay motion even though movant agreed to pursue insurer s assets only because, among other things, claims against debtors insurer would require debtor to expend some resources to defend claims); see also In re Bally Total Fitness of N.Y., Inc., 402 B.R. 616, 624 (Bankr. S.D.N.Y. 2009) ( During the pendency of [the] chapter 11 cases, the [d]ebtors estates limited resources are better spent stabling their operations and cash flows, rather than litigating a class action suit. ); Royal Ins. Co. of Am. v. McRory Corp., 1996 U.S. Dist. LEXIS 5552, at *7-8 (S.D.N.Y. Apr. 25, 1996) (holding that, on remand, bankruptcy judge should only lift the automatic stay to allow prosecution of claims against insurer if there is a record that there will be no burden to the estate or its creditors). 19. Second, unless and until the Club agrees to pay all of the costs to defend a Lawsuit in the United States, the Debtors will be forced to incur substantial administrative expenses in the form of litigation costs, which will prejudice all stakeholders. Diminishing the estates resources to defend against stayed litigation weighs against granting the Motion. See Residential Capital, 2012 WL , at *6 (denying stay relief where [r]equiring the [d]ebtor [d]efendants to litigate the 10

15 Pg 15 of 20 California [a]ctions would negatively impact the chapter 11 reorganization by diminishing the estates resources ). 20. Accordingly, these Sonnax factors favor denying the Motion. iii. If Pelagidis Brings the Lawsuit Against United Ambassador in the United States and Not Greece, It Will Not Result in a Complete, Expeditious, or Economical Resolution (Factors 1 and 10) 21. Pelagidis seeks relief from the automatic stay to bring an action against United Ambassador in an unspecified court of competent jurisdiction[.] See Mot. 6. Based upon Pelagidis forum choices to date, it appears that he plans to bring suit in the United States. But suing here will not result in a complete, expeditious, or economical resolution of Pelagidis claims. 22. This is because the United States lacks personal jurisdiction over United Ambassador and the United States is an inappropriate forum to litigate this Greek-centered incident. By his own account, Pelagidis is a Greek seaman who was allegedly injured on the United Ambassador (a Greek-flagged and Liberian-owned vessel) while it was being managed by MMS (a Greek cooperation with its principal place of business in Greece) and manned by a foreign crew in the scope of his employment with the one of the Debtors (a Liberian company that has its principal place of business in Greece). See Mot. Ex. A, 1. Pelagidis has complained that his injuries arose based upon a lack of a safe work place and failing to safely operate the United Ambassador and the seaworthiness of that foreign flagged and operated vessel operative facts that also point to Greece. See id. 9. The United Ambassador therefore does not have the minimum contacts to the United States that would be required for a U.S. court to assert in personam jurisdiction over it for this Greekcentered personal injury lawsuit. See generally Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984) ( Due process requirements are satisfied when in 11

16 Pg 16 of 20 personam jurisdiction is asserted over a nonresident corporate defendant that has certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. ) (citing Int l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)); Hazim v. Schiel & Denver Book Publishers, 647 F. App x 455, 458 (5th Cir. 2016) ( Due process requires that the defendant have minimum contacts with the forum state (i.e., that defendant has purpose availed himself of the protections of the forum state) and that exercising jurisdiction is consistent with traditional notions of fair play and substantial justice (internal citation omitted). 7 And even if jurisdiction existed (it does not), it would be oppressive[] and vexat[ious] to United Ambassador to allow a Greek national to sue them in the United States when Greece is an available and more appropriate and convenient forum. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 (1981) ( [W]hen an alternative forum has jurisdiction to hear the case, and when trial in the chosen forum would establish oppressiveness and vexation to a defendant... out of all proportion to plaintiff s convenience... the court may, in the exercise of its sound discretion, dismiss the case. ) (internal citation omitted); see id. at 256 ( Because the central purpose of any forum non conveniens inquiry is to ensure that the trial is convenient, a foreign plaintiff s choice deserves less deference. ) This lack of minimum contacts with the United States is precisely why MMS moved to dismiss the Federal Texas Action for lack of personal jurisdiction. Although Pelagidis withdrew the Texas Federal Action after jurisdictional discovery, United Ambassador s contacts to Texas (and elsewhere in the United States) remain unchanged. Although not entirely clear, it appears that Pelagidis will bring his Lawsuit against the United Ambassador under the Jones Act and U.S. maritime law. See Mot. Ex. A (attaching Texas Federal Action that is predicated on the Jones Act, which has since been dismissed). There is not, however, a basis for Pelagidis to bring a Jones Act claim on the foreign-based facts at issue here. See In re M/V MSC Flaminia, 183 F. Supp. 3d 499, 504 (S.D.N.Y. 2016) ( [T]he Jones Act is applied only if there is a substantial connection between the transaction and the United States. ); see also e.g., id. (dismissing Jones Act claim because explosion on German cargo ship, while traveling from Louisiana to Germany, that injured foreign citizen where ship management companies were foreign and lacked substantial connections to the United States was insufficient to apply U.S. law); 12

17 Pg 17 of If the stay were lifted, United Ambassador s first order of business would be to seek immediate dismissal of the Lawsuit for want of personal jurisdiction and, alternatively, to seek dismissal on forum non conveniens grounds. 9 Because allowing Pelagidis to proceed with the Lawsuit in the United States would not completely resolve the issues, the first Sonnax factor favors the Debtors. See, e.g., In re R.J. Groover Const., LLC, 411 B.R. 473, (Bankr. S.D. Ga. 2008) (denying lift stay motion where doing so would avoid duplicative litigation by avoid[ing] the necessity of a second lawsuit entirely and granting stay relief would not afford complete resolution of the issues ); see also Residential Capital, 2012 WL , at *6 (finding that first Sonnax factor counseled against lifting stay where doing so would not bring about a final resolution of the issues). Cf. In re N.Y. Med. Grp., P.C., 265 B.R. 408, 413 (Bankr. S.D.N.Y. 2001) (noting in lifting stay that the state court is the only forum that can award relief to all parties ). 24. So too lifting the automatic stay to allow a Greek national to seek damages against his foreign employer for injuries from an incident that occurred aboard a Greek-flagged, Greek-manned, and Greek-managed vessel on the high seas would not be expeditious, economical, or serve judicial economy. Quite the contrary, lifting the stay will lead to costly and time consuming litigation over forum issues that need not occur if the action were brought in Greece. Moreover, should the Debtor Membreno v. Costa Crociere S.p.A., 425 F.3d 932, (11th Cir. 2005) (affirming district court s decision that Jones Act and U.S. maritime law did not apply to wrongful act that occurred outside of U.S. waters on a foreign-flagged ship where the plaintiff-seaman lived and was a citizen of a foreign country, the shipowner was a foreign corporation, plaintiff entered into his employment contract in a foreign country, and defendant did not maintain a substantial base of operations in the United States ). 9 Additionally, presuming Pelagidis seeks to sue United Ambassador under the Jones Act as he has in the Texas Actions, the Debtor may also seek dismissal of the Lawsuit for failure to state a claim upon which relief can be granted because U.S. law does not apply. 13

18 Pg 18 of 20 prevail, judicial economy will not be served because the Lawsuit will need to be adjudicated by another Judge likely in a Greek court that has jurisdiction over and is the more appropriate forum. Beyond that, a trial so far away from the place where the witnesses and facts lie (and where the forum lacks power to compel the attendance of the unwilling) would be expensive and wasteful. This inefficiency also counsels against lifting the automatic stay. See, e.g., In re Plumberex Specialty Prods., Inc., 311 B.R. 551, 564 (Bankr. C.D. Ca. 2004) (denying relief from the stay to allow an action to be commenced in Massachusetts where [the debtor s] principal offices and place of business is in California, and its witnesses more than likely reside in California ); see also Residential Capital, 2012 WL , at *6 (denying motion to lift stay where a judgment... in either action would require a fact-intensive inquiry that may involve costly discovery, witness testimony, briefing, and oral argument ). 25. Because the Greek-centered Lawsuit cannot and should not be brought in the United States, the first and tenth Sonnax factors weigh heavily against granting relief from the stay. iv. The Parties are Not Ready for Trial; Pelagidis Has Not Even Confirmed Where He Would Bring the Lawsuit (Factor 11) 26. The Lawsuit could not be further from trial. Pelagidis has not even identified the precise jurisdiction where he would bring the Lawsuit. See Mot. 6. But even assuming he would seek to join United Ambassador in the Texas State Action, that case was only just filed on October 6, According to the docket, no motions have been filed, no discovery has been taken, no briefing has been submitted, and no trial date has been set. See Ioannis Nikolaos Pelagidis v. Future Kare Inc., et. al., Civil Case No.: (Tex. Dist. Ct., Harris Cty.). 14

19 Pg 19 of The seventh Sonnax factor thus weighs in favor of keeping the automatic stay in place. See Sonnax, 907 F.2d at 1287 (declining to lift stay in part because the litigation in state court has not progressed even to the discovery stage ); Residential Capital, 2012 WL , at *6 ( Because the parties to the California Actions have not begun significant discovery or undertaken other actions in preparation for trial, the eleventh Sonnax Factor weighs in favor of maintaining the automatic stay. ); In re Bally Total Fitness of Greater N.Y., Inc., 402 B.R. at 624 (denying stay relief where the parties had not started conducting extensive discovery and were not ready for trial); Arnold Dev., Inc. v. Collins (In re Collins), 118 B.R. 35, 38 (Bankr. D. Md. 1990) (declining to lift stay where [t]he case in the state court has not proceeded to trial and does not appear to be ready to do so... and the parties do not appear to have commenced discovery ). 10 v. The Balance of the Harms and the Impact of the Stay on the Parties Tip the Scales Toward the Debtors (Factor 12) 28. The twelfth Sonnax factor which examines the impact of the stay on the parties and the balance of the harms also favors keeping the stay in place. Pelagidis has not identified any harm that he would face if the stay is not lifted or identified any urgency. He merely submits that [i]t would be far more efficient and just if his claims are decided sooner rather than later. See Mot. 16. This is no reason to deprive the Debtors of this fundamental Bankruptcy Code protection. 29. On the other hand, as set forth above, lifting the stay to allow the Lawsuit to proceed will divert valuable resources away from the Debtors 10 Despite the nascent stage of the Lawsuit, Pelagidis relies on authority that has granted relief from the stay to allow parties to pursue appeals. See Mot. 14 and 15 (citing In re Celotex Corp., 128 B.R. 478, 481 n. 9 (Bankr. M.D. Fla. 1991) and Johns-Manville, 26 B.R. at 433). Such authority does not apply here. 15

20 Pg 20 of 20 restructuring efforts at a critical time, will interfere with the Debtors administration of these estates, and will deplete estate resources to the detriment of other creditors. See I(A)(i). Accordingly, the last Sonnax factor also militates toward preserving the stay. See In re Northwest Airlines Corp., 2006 WL , at *2 (Bankr. S.D.N.Y. 2006) (denying lift stay motion, in part, because balance of harms weighed strongly against lifting stay where movant sought only monetary damages and actions did not involve public health or safety and lifting stay would divert management s and counsel s attention at critical stage in bankruptcy proceedings). 30. Because Pelagidis has failed to meet his burden to show cause and because all of the relevant Sonnax factors favor maintaining the stay, the Court should deny the Motion. CONCLUSION WHEREFORE, the Debtors respectfully request that the Court (a) deny the Motion, and (b) grant such other further relief as the Court may deem proper. Dated: New York, New York November 22, 2017 TOISA LIMITED, et al., Debtors and Debtors in Possession By Their Counsel TOGUT, SEGAL & SEGAL LLP, By: /s/ Frank A. Oswald ALBERT TOGUT FRANK A. OSWALD BRIAN F. MOORE LAUREN L. PEACOCK One Penn Plaza, Suite 3335 New York, New York (212)