Case BLS Doc 801 Filed 06/06/17 Page 1 of 7

Transcription

1 Case BLS Doc 801 Filed 06/06/17 Page 1 of 7 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: PHOENIX BRANDS LLC, et al., I Debtors. PHOENIX BRANDS LIQUIDATNG TRUST, by and through Joseph T. Moldovan, Trustee, Plaintiff, Chapter 11 Case No (BLS) (Jointly Administered) Adv. Proc. No. 17- (BLS) BRADFORD SOAP INTERNATIONAL, INC. BRADFORD SOAP WORKS, INC., Defendant. COMPLAINT FOR AVOIDANCE AND RECOVERY OF PREFEREliTTIAL TRANSFERS PURSUANT TO 11 U.S.C. 547 & 550 Plaintiff, the Phoenix Brands Liquidating Trust, established by the confirmed chapter 11 plan of the above-captioned debtors (the "Debtors"), as represented by the duly appointed Liquidation Trustee, Joseph T. Moldovan (the "Trustee"), not individually but solely as Trustee of the Phoenix Brands Liquidating Trust (the "Plaintiff'), for its CoJ~~plaint foi~ Avozdcrnce and Recovery of P~~efe~ential Ti crnsfe~ s I'z~Nsirant to 11 U.S. C. ~~~ 547 c~ SSO (the "Complaint") against Bradford Soap International, Inc. f%k/a Bradford Soap Worlcs, Inc. (the "Defendant"), alleges as follows: ~ The Debtors and the last fow- digits of their' respective federal taxpayer identification numbers ai-e as follows: Phoenix Brands LLC, (4609), Phoenix Brands Parent LLC, (8729), Phoenix North LLC, (no EIN), Phoenix Brands Canada ULC (a Nova Scotia Company), Phoenix RIT LLC, (5149), and Phoenix Brands Canada Laundry LLC (no E1N). The address of each of the Debtors is 1 Landmark Square, Suite 1810, Stamford, CI' 06901, except Phoenix Brands Ca~~ada ULC, which is Box 50, 1 FirsC Canadian Place, Toronto, Ontario, Canada MSX 1 B8. DOGS LA: /002

2 Case BLS Doc 801 Filed 06/06/17 Page 2 of 7 Nature of the Action "the Plaintiff brings this action against the Defendant to avoid and recover certain preferential transfers that occurred during the 90-day period prior to commencement of the Debtors' bankruptcy cases. The Parties 2. Joseph T. Moldovan is the duly appointed Trustee of the Phoenix Brands Liquidating Trust (the "Trust"), following the confirmation of the Joint Plan of Liquidation of the Debto~~s and Official Committee of Unsecu~~ed C~^editors in the Chapter 11 Cases. The Trust was established for the benefit of the holders of General Unsecured Claims entitled to receive distributions from the "Trust under the Plan and is authorized under the Plan, Conf rmation Order, and its trust agreement to bring this action. The Trustee is the representative of the Debtors' estates under section 1123(b)(3)(B) of Chapter 11 of Title 11, United States Code (the "Bankruptcy Code"), and is authorized, on behalf of the Trust, to litigate all Causes of Action of the Trust and object to claims as provided and defined in the Plan. 3. Upon information and belief, Bradford Soap International, Inc. is a corporation formed under the laws of the State of Rhode Island that maintains its principal place of business at 200 Providence Street, West Warwick, FZhode Island. Jurisdiction and Venue 4. The United States Banlc~uptcy Court for the Distt ict of Delawat~e (the "BankrLl~tcy Court") has jurisdiction over this adversary proceeding under the Ba~7k1 uptcy Code pursuant to 28 U.S.C. ~ 157(a) and 1334(a). DOCS_LA /002 2

3 Case BLS Doc 801 Filed 06/06/17 Page 3 of 7 5. This proceeding is a core proceeding within the meaning of 28 U.S.C. 157(b) and the Bankruptcy Court may enter final orders for the matters contained herein. 6. Pursuant to Local Bankruptcy Rule , the Plaintiff affirms its consent to the entry of final orders or judgments by the Court if it is determined that the Court, absent consent of the parties, cannot enter final orders or judgments consistent with Article III of the United States Constitution. 7. Venue in this District is proper pursuant to 28 U.S.C and 1409(a). 8. This adversary proceeding is commenced pursuant to Rule 7001(1) of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") and sections 547 and 550 of the Bankruptcy Code. Case Background 9. On May 19, 2016, Debtors Phoenix Brands, LLC, Phoenix Brands Parent, LLC, Phoenix North, LLC, and Phoenix Canada ULC (collectively, the "Original Debtors") each commenced a case by filing a voluntary petition for relief under chapter 11 of the Bankruptcy Code. On June 1, 2016, Debtor Phoenix RIT LLC filed its voluntary petition for relief. On June 17, 2016, Debtor Phoenix Brands Canada Laundry LLC filed its voluntary petition for relief (collectively with the Original Debtors and Phoenix RIT LLC, the "Chapter 11 Cases") 10. The Chapter 11 Cases are jointly administered lender Case No. 16-ll 242 (BI,S). 11. On December 19, 2016, the Bankruptcy Cow-t entered an order (the "Confirmation Order") [Docket No. 645] confirming the Joint Plan ofliqui~'ation of the Debto~~s ~ocs_i..n:~o~z~~.z ~o~svoo2 3

4 Case BLS Doc 801 Filed 06/06/17 Page 4 of 7 and the Official Comfnittee of UnseczrT ed Ci editors Under Chapter 11 of the BankT~zfptcy Code (the "Plan") [Docket No. 560]. The Plan became effective December 27, 2016 [Docket No. 656]. 12. Pursuant to Article VIII of the Plan, upon the Effective Date, the Trust was established and Joseph T. Moldovan was appointed Liquidation Trustee of the Trust. Under the Plan, this action was transferred to the Trust. Facts 13. Prior to the commencement of the Chapter 11 Cases, the Debtors were nationally recognized laundry and fabric care companies. 14. Prior to the Petition Date, Phoenix Brands LLC (the "Identified Debtor") made certain payments to Defendant for goods sold (soap products) to the Debtors pursuant to purchase orders and invoices including as reflected in the invoices and transfers identified on Exhibit A attached hereto. 15. During the ninety days prior to the Petition Date, the Identified Debtor made payments to or for the benefit of the Defendant (collectively, the "Transfers"), including those identified on Exhibit A. Exhibit A sets forth the details of each of the Transfers, including the identity of the transferor Debtor, check or payment number, payment date, clear date, and payment amount. The aggregate amount of the Transfers is not less than $68, Although it is possible that some Transfers might be subject in whole or in part to defenses under 11 U.S.C. ~ 547(c), Defendant bears the burden of proof pursuant to 11 U.S.C. 547(g) to establish any de~ense(s) under 11 U.S.C. 547(c). Plaintiff sent an DOCS_LA: /002 4

5 Case BLS Doc 801 Filed 06/06/17 Page 5 of 7 advance demand letter to Defendant inviting an exchange of information regarding any potential defenses, but Defendant did not respond. First Claim for Relief (Avoidance of Preferential Transfers-11 U.S.C. 547) 17. The Plaintiff repeats and realleges the allegations in paragraphs 1 through 16, above, as though fully set forth at length. 18. Within the ninety days prior to the Petition Date, the Identified Debtor made transfers to Defendant in the total amount of $68,774.40, as more specifically described in Exhibit A attached hereto (the "Transfers") and incorporated herein by this reference. 19. Each of the Transfers to the Defendant was a transfer of property of the Identified Debtor. 20. each of the Transfers to the Defendant was made to oi~ for the benefit of the Defendant. 21. The Defendant was a creditor of the Identified Debtor (within the meaning of 11 U.S.C. 110(10)) at the time that each of the Transfers was made or, alternatively, received each of the Transfers for the benefit of a creditor or creditors of the Identified Debtor. 22. Each of the Transfers to the Defendant was made on account or an antecedent debt owed by the Identified Debtor to the Defendant before the transfer was made. 23. Each of the Ti-ansfei s was made while the Identified Debtor was insolvent. The Identified Debtor- is presi~ined to be insolvent during the 90 days preceding the Petition Date pursuant to 11 U.S.C. 547(f). DOCS_LA30G26) /002 S

6 Case BLS Doc 801 Filed 06/06/17 Page 6 of Each of the Transfers enabled the Defendant to receive more than the Defendant would have received if (i) the transfers and/or payments had not been made, and (ii) the Defendant received payment on account of the debt paid by each of the Transfers to the extent provided by the Bankruptcy Code. 25. As of the date hereof, the Defendant has not returned any the Transfers to the Plaintiff. 26. The Plaintiff is entitled to an order and judgment that the Transfers are avoided under 11 U.S.C Second Claim for Relief (Recovery of Property-11 U.S.C. 550) 27. The Plaintiff repeats and realleges the allegations in paragraphs 1 through 26, above, as though fully set forth at length. 28. Pursuant to 11 U.S.C. 550(a), to the extent that a transfer is avoided under 11 U.S.C. 547, the Plaintiff may recover for the benefit of the estate the property transferred or the value of such property from (a) the initial transferee of such transfer or the entity for whose benefit such transfer was made or (b) any immediate or mediate transferee of such initial transferee. 29. "The Defendant is either the (a) initial transferee of the Transfers, the entity for whose benefit the Transfers were made, or (b) at1 immediate or mediate transferee of the initial transferee. 30. Subject to the Defendant's potential defenses, the Plaintiff is entitled to recover the value of the Transfers pursuant to 11 U.S.C. 550(a). I~OCS_LA3062G /002 6

7 Case BLS Doc 801 Filed 06/06/17 Page 7 of 7 WHEREFORE, the Plaintiff prays for judgment as follows: 1. Pursuant to the First and Second Claims For Relief, for a determination that each of the Transfers is avoidable as a preferential transfer under Section 547 of the Bankruptcy Code, and that the Plaintiff is entitled to recover the Transfers in the total amount of $68, under Section 550 of the Bankruptcy Code; 2. For costs of suit incurred herein, including, without limitation, attorneys' fees; 3. For pre- and post judgment interest on the judgment amount to the fullest extent allowed by applicable law; and 4. Por such other and Further relief as the Court may deem just and proper. Dated: June 6, 2017 /s/laura Davis Jones Laura Davis Jones (DE Bar No. 2436) Andrew W. Caine (CA Bar No ) Joseph M. Mulvihill (DE Bar No ) PACIIULSKI, STANG, ZIEHL &JONES LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, DE (Courier 19801) Telephone: (302) Facsimile: (302) j ones@pszj law. com acaine~pszjlaw.com jmulvihill@pszjlaw.com Counsel to Plaintiff the Phoenix Brands Liquidating Trust ~ocs_~a:3o~z6~.z ~o~s~iooz ~

8 Case BLS Doc Filed 06/06/17 Page 1 of 2 EXHIBIT A

9 Case BLS Doc Filed 06/06/17 Page 2 of 2 A B C D E F G H I J K 16 PHOENIX BRANDS LLC 17 CK. DATE ~ CK NO. Vendor # Vendor INV.# P.O. # Due Date ross Amt et Amoun Inv. Date ~3a~~ ~~ear~d I BRADFORD SOAP 18 2/5/ WORKS INC. g7gg /28/ , , ~ 1/8/2016 i 2/22/2016 I BRADFORD SOAP i ~ 19 3/4/2016 ~ WORKS INC. gg269 ~ /2/2016 ~ 8, , /5/2016 3~1~~2~16 BRADFORD SOAP i 2~ 3/4/ ~ WORKS INC /2/2016 8, , /9/2016 3/17/2016 BRADFORD SOAP i ~ 21 3/18/ WORKS INC i 3/10/2016 8, ~ 8, /19/2016 3/28/2016 I ~ BRADFORD SOAP ~ ZZ 3/25/ ~ WORKS INC. gg ~ 3J22/2016 I 8, , /2/2016 ~ 4/18/2016 BRADFORD SOAP ~ ~ 23 4/8/2016 ~ _..._ WORKS INC _.'_ BRADFORD SOAP ' _ /6/ ~ 9, i _..._ 9, _... _ /16/Z016 4/22/ _..._.. --_ 24 4/15/2016 I j WORKS INC. ~ gg /12/2016 9, , /22/2016 5/9/2016