In re Forever Propane Sales & Serv., Inc.
In re Forever Propane Sales & Serv., Inc.
Opinion of the Court
THIS CASE is before the Court without a hearing upon Forever Propane Sales & Service, Inc.'s (the "Debtor" or "Debtor-in-Possession") Amended Motion for Reconsideration of Order of Abstention and Dismissal (the "Motion for Reconsideration") [ECF 34]. This Court entered an Order to Show Cause Why this Court Should Not Abstain from Hearing this Case Pursuant to
I. The Law
The "Eleventh Circuit has not directly addressed the issue of abstention under § 305," FMB Bancshares, Inc. v. Trapeza CDO XII, Ltd. (In re FMB Bancshares, Inc.) ,
(1) whether another forum is available or there is already pending action in another court; (2) whether the creditor and debtor are actively engaged in an out of court workout; (3) the purpose for which bankruptcy jurisdiction has been sought; (4) whether the bankruptcy will unnecessarily interfere with state or federal regulatory schemes; and (5) the effect the bankruptcy proceeding will have on the debtor's business.
In FMB Bancshares , the court determined whether abstention was appropriate in considering whether the "two-party dispute ... would be more appropriately decided in a court of general jurisdiction."
In In re C & C Dev. Grp., LLC , No. 11-32362-BKC-AJC,
II. Discussion
The Debtor argues that the case should not have been dismissed and this Court should not have abstained because this case is not a two-party dispute. [ECF 34]. The Debtor urges this Court to recognize the presence of creditors additional to the Fair Labor Standards Act ("FLSA") claim made by the FLSA plaintiff, John C. Rosado, such as Caterpillar Financial Services Corporation, American Express National Bank, Manchester Tank & Equipment, and Lank Oil. [ECF 34, Exhibit A, B, C]. The latter two-Manchester Tank and Lank Oil-have not filed proofs of claim in this case. American Express has filed a proof of claim [POC 2-1] for an unsecured claim of $ 42,085.98, but upon further review of the statements attached to the proof of claim, it does not appear that the Debtor has been delinquent on any payments and does in fact keep current evidenced by the lack of interest charged. Caterpillar Financial Services was represented at the Order to Show Cause hearing, but assured the Court that it is "adequately protected."
*699If this Court were to reverse its decision of abstention and proceed with the bankruptcy, John C. Rosado's claim would have to be litigated from the start, whereas if this Court left the abstention Order as is, the ongoing litigation on the FLSA claim would just continue to run its course without restarting the clock back to zero. The FLSA case would proceed in the District Court before Magistrate Judge Edwin G. Torres, a judge and court with considerable FLSA experience and expertise-which is wholly lacking in this Court. Similar to the C & C case, where the two-party dispute at issue was subject to a number of bona fide disputes rendering the state court more appropriate, John C. Rosado's FLSA claim here is also contingent, unliquidated, and disputed and would be more appropriate to litigate in another forum.
Unlike in FMB Bancshares , this Court is sure that the main creditor disputing the Debtor has a non-bankruptcy remedy since litigation has been ongoing in the FLSA claim and a trial date has been set. Moreover, it would be in the best interest of the Debtor and the creditors for this Court to abstain because two of the creditors who have filed proofs of claim are not actively litigating their claims giving rise to any disputes. As stated on the record at the Show Cause hearing on February 12, 2019, "there is just not enough complication in the facts [of this case] to stop the other litigation."
Here, while it is true that Mr. Rosado's FLSA claim is not the Debtor's only creditor rendering this not a two-party dispute per se , the mere presence of other creditors who have no actual contentious issue with the Debtor does turn this case into a dispute between only two of the parties. American Express filed a proof of claim [POC 2-1], but it did not appear at the Order to Show Cause hearing. Perhaps American Express did not appear because its most recent bill for the Debtor is current, and it shows payments of $ 40,000.00, $ 27,514.13, and $ 5,000.00 made to the creditor at the end of November and early December of 2018. American Express has available non-bankruptcy, state court remedies if collection were an issue, which it does not seem to be.
Caterpillar Financial Services also filed a proof of claim [POC 1-1], but as stated on the record at the Order to Show Cause hearing on February 12, 2019, by Megan Murray, counsel for Caterpillar, this creditor does not have a "dog in the fight" because they are over secured and adequately protected.
Therefore, as stated on the record at the Show Cause hearing on February 12, 2019, since "this is a two-party dispute, and because the FLSA claim will almost certainly proceed against the individual defendant [whether or not the debtor corporation's bankruptcy proceeds], the efficient use of judicial labor speaks in favor of abstention."
Upon consideration, it is hereby ORDERED that the Motion for Reconsideration [ECF 34] is DENIED .
Reference
- Full Case Name
- IN RE: FOREVER PROPANE SALES & SERVICE, INC., Debtor.
- Status
- Published