Free Response to Motion - District Court of Delaware - Delaware

Case 1:08-cv-00270-SLR

Document 7

Filed 05/09/2008

Page 1 of 4

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE In re: ) ) EXAERIS, INC., and ) INYX USA, LTD.,1 ) ) Debtors. ) ____________________________________) ) DR. JACK KACHKAR, ) ) Appellant ) v. ) ) WESTERNBANK PUERTO RICO, ) STEPHEN S. GRAY, Chapter 11 ) Trustee of INYX USA, LTD. ) ) Appellees. ) ) Chapter 11 Case No. 07-10887 (KG) Case No. 07-10888 (KG)

Civil Action No. 07-621 (GMS) Civil Action No. 08-270 (UNA)

PRELIMINARY OBJECTION OF WESTERNBANK PUERTO RICO TO APPELLANT'S MOTION FOR AN ORDER (I) CONSOLIDATING APPEALS AND (II) EXCUSING PARTIES FROM THE MEDIATION REQUIREMENTS OF THIS COURT'S JULY 23, 2004 STANDING ORDER Westernbank Puerto Rico ("Westernbank"), by and through its undersigned counsel, submits this preliminary objection to the motion (the "Motion") submitted by Appellant Jack Kachkar ("Appellant") for an order (i) consolidating the above-captioned appeals, and (ii) excusing the parties from the obligation to mediate pursuant to this Court's Standing Order In Re: Procedures Governing Mediation of

1

The Exaeris, Inc. and Inyx USA, Ltd. bankruptcy cases were jointly administered at the outset of their cases at Bankruptcy Case No. 07-10887. However, on December 6, 2007, the Bankruptcy Court vacated the order for joint administration.

NY2:\1873262\03\145F203!.DOC\80741.0003

WCSR 3897013v1

Case 1:08-cv-00270-SLR

Document 7

Filed 05/09/2008

Page 2 of 4

Appeals from the Bankruptcy Court for the District of Delaware, dated July 23, 2004 (the "Standing Order"), and respectfully represents as follows: 1. On September 17, 2007, Appellant filed an appeal (the "First

Appeal") from the September 7, 2007 order of the Bankruptcy Court titled "Final Order as to Debtor Inyx USA, Ltd. (Case No. 07-10888) (I) Authorizing the Use of Cash Collateral pursuant to 11 U.S.C. § 363, (II) Granting Adequate Protection To Westernbank Puerto Rico as the Prepetition Lender, (III) Authorizing Postpetition Financing, (IV) Granting Liens and Superpriority Administrative Expense Status Pursuant to 11 U.S.C. §§ 363 and 364, and (V) Modifying Automatic Stay Pursuant to 11 U.S.C. § 362." 2. The First Appeal was docketed in this Court on October 11, 2007

[07-621 D.I. 5]. Pursuant to the Standing Order, the parties participated in mediation but were unable to reach a resolution. See Letter to Clerk of Court from Vincent J. Poppiti regarding completion of mediation, dated February 5, 2008 [07-621 D.I. 7]. 3. Pursuant to the Stipulated Briefing Schedule [07-621 D.I. 9], the

parties have fully briefed the First Appeal. Westernbank and Stephen S. Gray, chapter 11 trustee for Inyx USA, Ltd., as appellees, have filed applications for oral argument. [07621 D.I. 17 & 18, respectively]. 4. On April 14, 2008, Appellant filed an appeal (the "Second

Appeal") from the April 3, 2008 order of the Bankruptcy Court titled "Final Order (I) Authorizing the Use of Cash Collateral Pursuant to 11 U.S.C. § 363, (II) Granting Adequate Protection to Westernbank Puerto Rico as the Prepetition Lender, (III) Authorizing Further Postpetition Financing, (IV) Granting Liens and Superpriority
NY2:\1873262\03\145F203!.DOC\80741.0003

2

WCSR 3897013v1

Case 1:08-cv-00270-SLR

Document 7

Filed 05/09/2008

Page 3 of 4

Administrative Expense Status Pursuant to 11 U.S.C. §§ 363 and 364, and (V) Modifying Automatic Stay Pursuant to 11 U.S.C. § 362." 5. The Second Appeal was docketed in this Court on May 7, 2008

[08-270, D.I. 5]. Mediation has not yet taken place, as required by the Standing Order, and a judge has not been assigned to the Second Appeal. 6. On May 8, 2008, Appellant filed the instant Motion seeking to

consolidate the First and Second Appeals, and to be excused from the obligation to mediate the Second Appeal in accordance with the Standing Order [08-270, D.I. 6, 07621 D.I. 19]. Objection 7. Westernbank files this preliminary objection out of an abundance

of caution, in the event the Court views the Motion as a motion for a procedural order pursuant to Rule 8011(b) of the Federal Rules of Bankruptcy Procedure. The Motion requires a substantive inquiry regarding the facts surrounding each appeal, and does not seek a procedural order. It should not be granted without a full and comprehensive hearing. 8. Westernbank objects to the Motion, and intends to file a

supplemental objection with the Court on a timely basis. The First and Second Appeals concern separate orders, entered over six months apart from one another based upon

NY2:\1873262\03\145F203!.DOC\80741.0003

3

WCSR 3897013v1

Case 1:08-cv-00270-SLR

Document 7

Filed 05/09/2008

Page 4 of 4

distinct factual records. WHEREFORE Westernbank respectfully requests that the Court deny the Motion, and grant such other and further relief as may be just. Dated: May 9, 2008 Wilmington, Delaware /s/ Steven K Kortanek___________ Steven K. Kortanek, Esq. (Del. Bar No. 2078) John H. Strock, Esq. (Del. Bar No. 4965) WOMBLE CARLYLE SANDRIDGE & RICE, PLLC 222 Delaware Avenue, Suite 1501 Wilmington, Delaware 19801 Telephone: (302) 252-4320 Facsimile: (302) 252-4330 ­ and ­ Harvey R. Miller Shai Y. Waisman WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 Attorneys for Westernbank Puerto Rico

NY2:\1873262\03\145F203!.DOC\80741.0003

4

WCSR 3897013v1

Case 1:08-cv-00270-SLR

Document 7-2

Filed 05/09/2008

Page 1 of 2

CERTIFICATE OF SERVICE I, Heidi E. Sasso, certify that I am not less than 18 years of age, and that service of the foregoing document was made on May 9, 2008 upon:

Sheldon K. Rennie, Esq. Anthony Sacullo, Esq Fox Rothschild LLP 919 N. Market Street, Ste. 1300 Wilmington, DE 19801 Michael Menkowitz, Esq. Fox Rothschild O'Brien & Frankel 2000 Market Street, 10th Floor Philadelphia, PA 19103 Bruce Grohsgal, Esq. Pachulski Stang Ziehl & Jones 919 Market Street, Ste. 1700 Wilmington, DE 19801 Christopher Ward, Esq. Klehr Harrison Harvey Branzburg & Ellers LLP 919 Market Street, Ste. 1000 Wilmington, DE 19801 Richard L. Schepacarter United States Trustee 844 King Street, Room 2207 Lockbox #35 Wilmington, DE 19899-0035

Ballard Spahr Andrews & Ingersoll, LLP Attn.: Tobey M. Daluz, Esquire 919 N. Market Street, 12th Floor Wilmington, Delaware 19801 Under penalty of perjury, I declare that the foregoing is true and correct.

__5/9/2008_________ Date
Document #: 41517

_______/s/ Heidi E. Sasso________ Heidi E. Sasso

WCSR

3847079v1

Case 1:08-cv-00270-SLR

Document 7-2

Filed 05/09/2008

Page 2 of 2

Document #: 41517

WCSR

3847079v1