Free Letter - District Court of Delaware - Delaware

Case 1 :O7—cv-00065-JJF Document 34 Filed O3/31/2008 Page 1 of 3
— -55. "¤¥TQ·i. Qi-. ":;‘= "=.‘:, 'g="J:" " l
@.__ `- ..;-‘ . ..;2-
B » , m"”" T”TT`i” ”””” TTTTTTTiTTT"”T"i m”mM” CTT
. . 302—429~42l2
P.O. Box 25130 · Wilmington, DE · 19899 CdaViS@bay3rd1&W`c0m
Zip Code For Deliveries 19801
March 31, 2008 -
VIA E-FILING AND HAND DELIVERY
The Honorable Joseph I. Farnan, I r.
United States District Court
J. Cateb Boggs Federal Building
844 N. King Street
Lock Box 27
Wilmington, DE 19801
RE: Chrfss W Street v. End ofthe Road Trust, et ol.
Case No. 07-cv—65 (HF) ;
Dear Judge Farnan:
Bayard represents the Plaintiff, Chriss W. Street in the aboveweferenced Q
action. In consideration of the burden imposed on the District Court judges bythe
current vacancy on the bench, we respectfully write to bring to Your Honor’s
attention certain authority that permits the United States Bankruptcy Court for the ` -
District of Delaware (the “Bankruptcy Court”) to decide the Motion to Remand to i
Court of Chancery ofthe State of Delaware and for Abstention Under 28 U.S.C. ¤
§ 1334(c) (DI. 5) (the “Motion to Ren1and”) tiled by Mr. Street.
By way of brief background, in January 2007, Mr. Street commenced this
. action in the Chancery Court of the State of Delaware (the "Chancery Court") {
seeking advancement of fees and expenses to cover, inter alia, the litigation costs _
that he is incurring in an adversary proceeding (the “Bankruptcy Proceeding")
commenced against him in his former capacity as trustee of The End of the Road ‘
Trust and an officer of American Trailer Industries, Inc. in the Bankruptcy Court. _
The Defendants in this action are the Ptaintiffs in the Bankruptcy Proceeding and
Mr. Street has contractual rights to advance payment of these costs under certain
agreements with the Defendants.
. _ In February 2007, the Defendants removed the Chancery Court action to
the District Court.; On February 14, 2007, Mr. Street tiled the Motion to Remand I
‘ The Notice of Removal to Federal Court [D.I. 1} tiled by the Defendants states that the E
removai ofthe Chance Court action is pursuant to 28 U.S.C. §§ 1441, 1446 and 1452. SWL,
or git eo
i` t
www.bayardlaw.com Phone: (302) 655-5000 Fax: (302) 658-6395 t r
{eeriiisowii 6*****

Case 1:O7—cv-00065-JJF Document 34 Filed O3/31/2008 Page 2 of 3 -
The Honorable Joseph J. Farnan, lr.
l)/l&1'Cl’1 3l, 2008
`rr ’ E‘· ° Page 2 of 3
seeking to remand the action to the Chancery Court. The Motion to Remand has
been fully briefed since June 10, 2007, including a surreply and response to a
' surreply that were authorized by The Honorable Mary Pat Thynge. In September
2007, Magistrate Judge Thynge offered to decide the Motion to Remand if the
parties consented, but the Plaintiffs were unwilling to do so. Since then, the case
has been assigned to Your Honor.
Rule 9027 ofthe Federal Rules of Bankruptcy Procedure (the "Bankn1ptcy
Rules") provides the procedure once a case is removed under ll U.S.C. § 1452
and states, in relevant part, as follows:
(d) Remand — A motion for remand of the removed claim or
cause of action shall be governed by Rule 9014 and served on
the parties to the removed claim or cause of action.
(e) Procedure after removal —— (1) After removal of a claim or
cause of action to a district court the district court or, if the case
under the Code has been referred to a bankruptcy judge of the
district, the bankruptcy judge, may issue all necessary orders
and process to bring before it all proper parties whether served
by process issued by the court from which the claim or cause of
action was removed or otherwise. Fed. R. Bankr. P.
‘ 9027(e)(1)(emphasis added)
"Rule 9027(e) provides that in a district (like Delaware) where ‘any and
all proceedings arising under title ll or arising in or related to a case under title
. ll shall be referred to the bankruptcy judges for the district,’ 28 U.S.C. § l57(a),
the bankruptcy judge may then ‘issue all necessary orders and process ...’ in said
removed case." Int'! Investors, LDC v. Tricord Systems, Inc. (In re Tricord
Systems, Inc.), 2003 Bankr. LEXIS 384 (Banlcr. D. Del. 2003).
The Advisory Committee Notes to the l99l amendments of Rule 9027
explain that "subdivision (e), redesignated as subdivision (d), [was} amended to
delete the restriction that limits the role of the bankruptcy court to the tiling of a
report and recommendation for disposition of a motion for remand under 28
U.S.C. § l452(b). This amendment is consistent with § 309(c) of the Judicial
Improvements Act of 1990, which amended § l452(b) so that it allows an appeal ‘
to the district court of a bankruptcy court’s order determining a motion for
However, the Defendants cannot remove the Chancery Court action pursuant to section
, l441. The Defendants concede that diversity jurisdiction does not exist under 28 U.S.C.
§ 1332. See Defendants Answering Brief in Opposition to ?laintiff Chriss W. Street’s
Motion to Remand to Court of Chancery of the State of Delaware or for Abstention
Under 28 U.S.C. § l334(c)[D.l. 8}. Therefore, removal of the Chancery Court action is
pursuant to section 1452.
{U077l4S0;vl}

Case 1:O7—cv-00065-JJF Document 34 Filed O3/31/2008 Page 3 of 3
The Honorable Joseph J. Farnan, J r.
n at T, Mama si, 2008
remand. This subdivision is also amended to clarify that the motion is a contested
matter governed by Rule 90l4."
· Thus, pursuant to Rule 9027 of the Bankruptcy Rules, the Banl Court may decide the Motion to Remand. Mr. Street respectfully presents the
foregoing as a possible alternative for adjudication ofthe Motion to Rernand. As
further discussed in my letter tiled on February 15, 2008, activity in the
Bankruptcy Proceeding has increased exponentially since the tiling and brieling
of the Motion to Remand. Mr. Street has incurred and paid legal fees and
expenses in regard to the Bankruptcy Proceeding and other matters for which he
is entitled to advancement under the agreements in excess of $750,000. As a
result of these considerable costs, Mr. Street has sold his residence to obtain funds
necessary to defend the Bankruptcy Proceeding. Accordingly, any further delay
in the process to a final decision on the Motion to Remand and Mr. Street’s
advancement claim may seriously and adversely affect his ability to defend
himself.
Counsel is available at the convenience ofthe Court to discuss this matter
further.
Respepifully submitted,
Charlene D. Davis
CDD/ABS I
cc: Neil B. Glassman, Esquire
Ashley B. Stitzer, Esquire
Scott G. Wilcox, Esquire
Phillip Greer, Esquire (Via Email)
David L. Finger, Esquire (Via Email and U.S. Mail First Class) i
Robert T. Kugler, Esquire (Via Email and U.S. Mail First Class)
Robert L. Deli/lay, Esquire (Via Email and U.S. Mail First Class)
Sarah E. Doerr, Esquire (Via Email and U.S. Mail First Class)
Iacob B. Sellers, Esquire (Via Email and U.S. Mail First Class)
{0077l¢‘i50;v1}