Case KJC Doc 356 Filed 06/16/16 Page 1 of 8 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

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1 Case KJC Doc 356 Filed 06/16/16 Page 1 of 8 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Abeinsa Holding Inc., et al., Chapter 11 Case No (KJC) Jointly Administered Debtors. Hearing Date: July 7, Objection Deadline: June 30, 2016 WILLIAM KISER AND KELLY KISER S MOTION FOR RELIEF FROM AUTOMATIC STAY UNDER 11 U.S.C. 362 William and Kelly Kiser ( Movants ), move for an Order Granting Relief from Automatic Stay and, in support thereof, would respectfully show as follows: I. BACKGROUND 1. In 2014, Movants filed a legal proceeding styled William Kiser and Kelly Kiser v. Solana Engineering Procurement and Construction dba Teyma USA & Abener Engineering and Construction Services General Partnership, Case No. CV , in the Superior Court for the State of Arizona in and for the County of Maricopa (the Negligence Action ), a copy of the second amended complaint is attached as Ex. A. One of the Debtors, Cal Dive Offshore Contractors, Inc., ( Debtor ) is the defendant in the Negligence Action. 2. The complaint in the Negligence Action alleges that on February 27, 2013, William Kiser was injured on a job site supervised, owned and/or managed by the defendants, 93013: DOCX.1

2 Case KJC Doc 356 Filed 06/16/16 Page 2 of 8 including debtor Teyma USA & Abener Engineering and Construction Services General Partnership, et al. Kelly Kiser is married to William Kiser. Mrs. Kiser asserted a loss of consortium claim in the action. 3. On March 29, 2016, each of the Debtors filed voluntary petitions under Chapter 11 of the United States Bankruptcy Court and thus, the protections of Section 362 attached. 4. By this Motion, Movants seek lift of the automatic stay imposed upon the Negligence Action because the Bankruptcy Court lacks jurisdiction to fully and finally adjudicate Movant s personal injury claims, and is therefore not able to liquidate Movants claim for purposes of the disposition of Debtors bankruptcy case. Further, in the Negligence Action, Movants intend to discover and proceed against funds of the insurance company which allegedly insured Debtors at the time of the incident forming the basis of the Negligence Action. Therefore, lifting the automatic stay will not have an adverse effect on the bankruptcy proceedings. II. ARGUMENT AND AUTHORITIES A. The Bankruptcy Court Lacks Core Jurisdiction to Hear and Liquidate Movant s Negligence Action and, Absent the Parties Consent, the Bankruptcy Court May Not Enter Final Findings and Conclusions Related to the Negligence Action 5. The Bankruptcy Court lacks the ability to liquidate personal injury and wrongful death claims for distribution purposes. 28 U.S.C In fact, the Bankruptcy Code provides personal injury tort and wrongful death claims shall be tried in the District Court in which the bankruptcy case is pending, or in the District Court in the district in which the claim arose, as determined by the District Court in which the bankruptcy case is pending. See 28 U.S.C. 157(b)(5). Thus, while the Bankruptcy Court has core jurisdiction over the determination of 93013: DOCX.1 2

3 Case KJC Doc 356 Filed 06/16/16 Page 3 of 8 claims made against the bankruptcy estate, the Bankruptcy Court may not liquidate personal injury and wrongful death claims for distribution purposes. Id. Further, the right to a jury trial is expressly reserved in the Bankruptcy Code, and therefore cannot be involuntarily waived due to the mere filing of a bankruptcy petition. See 28 U.S.C. 1411(a) ( this chapter and title 11 do not affect any right to trial by jury that an individual has under applicable non-bankruptcy law with regard to a personal injury or wrongful death claim. ). 6. In these related to, or non-core, matters, the Bankruptcy Court can enter findings and conclusions subject to a clearly erroneous review by the District Court only if the parties consent. Absent the parties consent, the District Court will review the Bankruptcy Court s findings and conclusions de novo. 28 U.S.C. 157(c)(1). Thus, where the parties do not consent, there is the possibility of two trials of the same matter which would be both inefficient and unnecessary. See In re Clay, 35 F.3d 190, 195 (5th Cir. 1994) ( If anything, jury trials in bankruptcy courts would impede efficiency. These speedy courts were not designed to conduct long jury trials, and most bankruptcy judges and lawyers are unused to jury procedures. ). 7. Therefore, in the absence of jurisdiction to liquidate Movants claim and because any adjudication of Movants claim by the Bankruptcy Court will be reviewed de novo by the District Court, there exist grounds for granting this Motion for Relief from Automatic Stay. B. Cause Exists to Lift of the Automatic Stay 8. Section 362(d)(1) of the Bankruptcy Code states: On request of a party in interest and after notice and a hearing, the court shall grant relief from the stay provided under subsection (a) of this section, such as by terminating, annulling, modifying, or conditioning such stay... for cause : DOCX.1 3

4 Case KJC Doc 356 Filed 06/16/16 Page 4 of 8 This provision clearly specifies that where cause exists, the bankruptcy court shall grant relief from the automatic stay, if requested to do so by a party in interest. 11 U.S.C. 362(d)(1) (emphasis added). 9. Cause is not defined in the Code whether cause exists to annul or modify the stay is determined on a case-by-case basis. See e.g., In re Rexene Products Co., 141 BR 574, 576 (Bankr. D. Del. 1992). In Re Rexene provides a balancing test of three factors to determine whether cause exists: (a) whether any great prejudice to either the bankrupt estate or debtor will result from allowing the civil suit; (b) whether the hardship to the non-bankrupt party by the maintenance of the stay considerably outweighs the hardship to the debtor; and (c) whether the creditor has a probability of prevailing on the merits. 10. In Re Rexene, 141 B.R. at 576. These factors are not determinative: Courts have wide latitude in crafting relief from the automatic stay. See Bladino v. Wilson (In re Wilson), 116 F.3d 87, 90 (3d Cir. 1997); Siciliano, 13 F.3d 748, 751 (3d Cir.1994). According to the court in In Re Rexene, the legislative history to section 362 provides that cause may be established by a single factor such as lack of any connection with or interference with the pending bankruptcy case. In Re Rexene, 141 B.R. at 576 (citing H.R. rep. No , 95th Cong., 1st Sess., (1977). 11. While a party requesting relief from the stay bears the initial burden to show that cause exists, once a prima facie case of cause is shown, the party opposing relief has the ultimate burden of disproving the existence of cause. Id. at 577; 11 U.S.C. 362(g). As 93013: DOCX.1 4

5 Case KJC Doc 356 Filed 06/16/16 Page 5 of 8 explained below, the facts and circumstances here weigh heavily in favor of granting Movants relief from the stay. (i). No Prejudice Will Occur. 12. It is believed that the Debtors have insurance coverage for Movants claims. Thus, no prejudice will inure to the Debtors or the Debtors estates because Movants seek to recover only from the proceeds of available insurance coverage, and agree to not pursue the Debtors estates to the extent that any judgment exceeds available coverage. In re Memorial Corp., 382 B.R. 652, , (Bankr. D. Del. 2008), rev d on other grounds, 400 B.R. 420 (D. Del. 2009). The Debtors have no protectable interest in the insurance policy s proceeds, because the proceeds will be available only to creditors with the type of claims covered by the policy. Id. In such cases, there can be no legitimate complaint that the estates will be dissipated by allowing the litigation to go forward. Id. at 689 (Bankr. D. Del. 2008). Insurance proceeds are unnecessary to Debtors reorganization, and are not property in which the Debtors have equity. Therefore, neither the bankrupt estates nor the Debtors themselves will suffer prejudice much less great prejudice if the stay is annulled and lifted as to those proceeds only. Id.; and see International Bus. Mach. v. Ferstrom Stor. and Van Co. (In re Ferstrom Stor. and Van Co.), 938 F.2d 731, (7th Cir. 1991) ( [D]ebtor-defendants suffer little prejudice when they are sued by plaintiffs who seek nothing more than declarations of liability that can serve as a predicate for a recovery against insurers, sureties, or guarantors. ). 13. For these reasons, as well as the benefit to the Court from the judicial economy which can be realized by reducing Movants claim to a liquidated sum, the Court should annul 93013: DOCX.1 5

6 Case KJC Doc 356 Filed 06/16/16 Page 6 of 8 the stay with regard to the Negligence Action, and allow Movants to pursue their claims to the extent of the Debtors available insurance coverage. (ii). The Hardship to Movant by Maintenance of the Stay Considerably Outweighs Any Hardship to Debtors if the Stay is Lifted. 14. If the automatic stay is not annulled and modified, Movants will have to wait an inordinately long time to have their claims decided. The memories of the parties and witnesses to the lawsuit will fade, which will hinder Movants efforts to obtain accurate and complete discovery in that case. A number of Courts have attributed a considerable weight to the fact that a plaintiff, by having to wait, may effectively be denied an opportunity to litigate: The aging of evidence, loss of witnesses, and crowded court dockets are factors which contribute to these hardships. In re Bock Laundry Machine Co., 37 B.R. 564, 566 (Bankr. N.D. Ohio 1984); In re Memorial Corp, 382 B.R. at 690 (lifting stay because, among other reasons, movant was prejudiced by the lapse of time in terms of its ability to effectively prosecute its claims ); see also In re Robertson, 244 B.R. 880, 883 (Bankr. N.D. Ga. 2000). 15. In sum, the automatic stay is causing significant hardship to the Movants with no corresponding benefit to the Debtors. Indeed, the only party that stands to benefit financially if the stay is not lifted is [the Debtors insurance company]. In re Robertson, 244 B.R. at 883. [I]t would be grossly unfair for [the insurance company] to benefit at Movant s expense. Id; see also Awashi v. Jet Florida System, Inc., 883 F.2d 970 (11th Cir. 1989) ( The fresh start policy is not intended to provide a method by which an insurer can escape its obligations based simply on the financial misfortunes of the insured. ) : DOCX.1 6

7 Case KJC Doc 356 Filed 06/16/16 Page 7 of 8 (iii). The Movant Can Demonstrate Probability of Success On the Merits. 16. The required showing on the third factor, probability of success on the merits, is very slight. In Re Rexene, 141 B.R. at 578 (citation omitted). The third prong simply requires Movants to make a more than vague initial showing that they can establish a prima facie case. Id. (citing Peterson v. Cundy (In re Peterson), 116 B.R. 247, 250 (D. Colo. 1990) (foregoing merits analysis entirely in a relief from stay motion merely to liquidate claim)). Courts have also found that [o]nly strong defenses to state court proceedings can prevent a bankruptcy court from granting relief from the stay. Id. at 578 (quoting Fonseca v. Philadelphia Housing Authority (In re Fonseca), 110 B.R. 191, 196 (Bankr. E.D. Pa. 1990)). 17. On this point, Movants complaint, attached as Ex. A, reflects that he sustained injuries on February 27, 2013 while working on site managed/owned or operated by one of the Debtors. But for the negligence this Debtor, it is alleged, Movant would not have suffered the injuries and damages underlying his claims. Accordingly, Movants has met the low threshold of proving the likelihood of success on the merits. III. CONCLUSION 18. By this Motion, Movants seek authority from this Court to proceed with the Negligence Action to judgment to liquidate Movants claim against the Debtor. Movants also seeks authority, to the extent it may be necessary, to execute, levy, and collect upon such judgment as may be obtained by Movants in the action from Debtor s insurance carrier only. WHEREFORE, the Movants respectfully request that this Court enter an Order, in the form attached hereto, (i) granting the Motion (ii) annulling the automatic stay as to Movants (iii) modifying the automatic stay to allow Movants to liquidate their claims against the Debtors and 93013: DOCX.1 7

8 Case KJC Doc 356 Filed 06/16/16 Page 8 of 8 to proceed against insurance proceeds and (iv) granting such other and further relief as this Court may deem is just and proper. SMITH, KATZENSTEIN & JENKINS LLP /s/ Kathleen M. Miller Kathleen M. Miller (DE ID 2898) The Brandywine Building 1000 West Street, Suite 1501 P.O. Box 410 Wilmington, Delaware (302) (phone) (302) (fax) kmiller@skjlaw.com June 16, 2016 Attorneys for Movants 93013: DOCX.1 8

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15 Case KJC Doc Filed 06/16/16 Page 1 of 1 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Abeinsa Holding Inc., et al., Debtors. Chapter 11 Case No (KJC) Jointly Administered Hearing Date: July 7, 11:00 a.m. Objection Deadline: June 30, 2016 NOTICE OF WILLIAM KISER AND KELLY KISER S MOTION FOR RELIEF FROM AUTOMATIC STAY UNDER 11 U.S.C. 362 PLEASE TAKE NOTICE that on June 16, 2016, the Motion of William Kiser and Kelly Kiser for Relief from Automatic Stay under 11 U.S.C. 362 of the Bankruptcy Code (the Motion ) was filed in the United States Bankruptcy Court for the District of Delaware, 824 Market Street, 3rd Floor, Wilmington, Delaware PLEASE TAKE FURTHER NOTICE that objections or responses, if any, to the Motion must be filed ON OR BEFORE JUNE 30, 2016 with the United States Bankruptcy Court for the District of Delaware and at the same time be served upon the undersigned counsel. PLEASE TAKE FURTHER NOTICE THAT A HEARING ON THE MOTION WILL BE HELD ON JULY 7, 2016 AT 11:00 A.M., if necessary. IF YOU FAIL TO FILE A RESPONSE IN ACCORDANCE WITH THIS NOTICE THE COURT MAY GRANT THE RELIEF REQUESTED IN THE MOTION WITHOUT FURTHER NOTICE OR HEARING. SMITH, KATZENSTEIN & JENKINS LLP /s/ Kathleen M. Miller Kathleen M. Miller (DE ID 2898) The Brandywine Building 1000 West Street, Suite 1501 P.O. Box 410 Wilmington, Delaware (302) (phone) (302) (fax) kmiller@skjlaw.com June 16, 2016 Attorneys for Movants

16 Case KJC Doc Filed 06/16/16 Page 1 of 2 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Abeinsa Holding Inc., et al., Chapter 11 Case No (KJC) Jointly Administered Debtors. Rel. Dkt. No. ORDER GRANTING WILLIAM KISER AND KELLY KISER S MOTION FOR RELIEF FROM AUTOMATIC STAY UNDER 11 U.S.C. 362 Upon consideration of the Motion of William and Kelly Kiser (the Movants ) for Relief from the Automatic Stay Under Section 362 of the Bankruptcy Code (the Motion ) and any objection thereto and after due deliberation and sufficient cause appearing therefore: IT IS HEREBY ORDERED that: 1. The Motion is GRANTED as set forth herein. 2. The automatic stay of 11 U.S.C. 362 is hereby annulled for the sole purpose of: permitting Movants claims against Debtors in the case filed in the Superior Court for the State of Arizona in and for the County of Maricopa, styled William Kiser and Kelly Kiser v. Solana Engineering Procurement and Construction dba Teyma USA & Abener Engineering and Construction Services General Partnership, Case No. CV (the Action ). 3. The automatic stay of 11 U.S.C. 362 is hereby modified for the sole purpose of: (1) permitting Movant to prosecute the Action against the Debtors with respect to their claims 93013: DOCX.1

17 Case KJC Doc Filed 06/16/16 Page 2 of 2 against them, to final judgment or resolution (including any appeals taken by any of the parties thereto); (b) permitting the Movants to recover and collect any such settlement or judgment solely from the proceeds of Debtors insurance coverage; and (c) permitting the Movants to recover from any non-debtor third parties. 4. Except for the limited purpose set forth above, the automatic stay shall remain in effect. 5. Nothing in this Order shall be deemed or construed to impact, impair, affect, determine, release, waive, modify, limit, or expand: (i) the availability of insurance coverage with respect to the Action; (ii) the terms and conditions of any applicable insurance policies; or (iii) any rights, remedies, defenses to coverage, and other defenses of any insurance carrier under or for any insurance policies (including the right of any insurance carrier to disclaim coverage), nor otherwise alter any insurance carrier s existing indemnity payment obligations; and (iv) any rights of the Movant with respect to any such insurance policies or carriers. Furthermore, nothing in this Order shall affect the existing obligations of any insurance carrier to pay defense fees or expenses or the existing arrangements for the payment thereof. 6. The Court has and will retain jurisdiction to enforce this Order. Dated:, 2016 THE HONORABLE KEVIN J. CAREY UNITED STATES BANKRUPTCY COURT JUDGE 93013: DOCX.1 2

18 Case KJC Doc Filed 06/16/16 Page 1 of 1 CERTIFICATE OF SERVICE I hereby certify that on this 16 th day of June 2016 a copy of the WILLIAM KISER AND KELLY KISER S MOTION FOR RELIEF FROM AUTOMATIC STAY UNDER 11 U.S.C. 362 was served on the following by first class mail: Baker & Hostetler LLP Attn: Christopher J. Giaimo, Esq Connecticut Avenue, NW Suite 1100 Washington, DC Baker & Hostetler LLP Attn: Jorian L. Rose, Esq. 45 Rockefeller Plaza New York, NY DLA Piper LLP (US) R. Craig Martin, Esq North Market Street Suite 2100 Wilmington, DE DLA Piper LLP (US) Richard A. Chesley 203 North LaSalle Street, Suite 1900 Chicago, IL Fogel & McEvily, LLP Attn: Don Fogel 3401 Allen Parkway, Ste. 100 Houston, TX77019 Freshfields Bruckhaus Deringer US LLP Attn: Linda H. Martin Abbey Walsh David Y. Livshiz Philip Underwood 601 Lexington Avenue, 31 st Floor New York, NY Hogan Lovells US LLP Attn: Christopher R. Donoho III, Esq., Ronald Silverman, Esq., M. Shane Johnson, Esq., Raphaella S. Ricciardi, Esq., Vivian Ban, Esq. 875 Third Avenue New York, NY Morris, Nichols, Arsht & Tunnell LLP Attn: Robert J. Dehney, Andrew R. Remming, Marcy J. McLaughlin 1201 North Market Street, Suite 1600 Wilmington, DE Office of the United States Trustee Hannah Mufson McCollum & Richard L. Schepacarter 844 King St., Ste Wilmington, DE PNC Bank, National Association Attn: Government Services Mastin, Suite 700 Overland Park, KS Potter Anderson & Corroon LLP Attn: Jeremy W. Ryan, R. Stephen McNeill, Emery Abdel-Latif 1313 North Market Street, Sixth Floor P.O. Box 951 Wilmington, DE Synchrony Bank c/o Recovery Management Systems Corporation 25 SE 2nd Avenue, Suite 1120 Miami, FL /s/ Kathleen M. Miller Kathleen M. Miller (2898)