United States District Court, D. Delaware
IN RE ENERGY FUTURE HOLDING CORP., et al., Debtors.
DEBTORS ENERGY FUTURE HOLDINGS CORP., et al, AND THE EFH PLAN ADMINISTRATOR BOARD, Appellees. SHIRLEY FENICLE, INDIVIDUALLY, AND AS SUCCESSOR-IN-INTEREST TO THE ESTATE OF GEORGE FENICLE, DAVID WILLIAM FAHY, JOHN H. JONES, DAVID HEINMANN, HAROLD BISSELL, KURT CARLSON, ROBERT ALBINI, INDIVIDUALLY, AND AS SUCCESSOR-IN-INTEREST TO THE ESTATE OF GINO ALBINI, AND DENIS BERGSCHNEIDER, Appellants;
K. Hogan, HOGAN MCDANIEL, Wilmington, DE, attorney for
M. Kelleher (argued) and Jeanna M. Koski, CAPLIN &
DRYSDALE, CHARTERED, Washington, DC, attorneys for Appellants
Shirley Fenicle, individually and as successor-in-interest to
the Estate of George Fenicle, and David William Fahy.
Kazan, KAZAN MCCLAPN SATTERLEY & GREENWOOD, Oakland, CA,
attorney for Appellants Shirley Fenicle, individually and as
successor-in-interest to the Estate of George Fenicle, and
Jeffrey M. Schlerf, FOX ROTHSCHILD LLP, Wilmington, DE;
Thomas E. Lauria, Matthew C. Brown, and Joseph A. Pack, WHITE
& CASE LLP, Miami, FL; J. Christopher Shore (argued),
WHITE & CASE LLP, New York, NY, attorneys for Appellee
Reorganized EFH/EFIH Debtors.
M. Madron, RICHARDS, LAYTON & FINGER, P.A., Wilmington,
DE; Mark McKane (argued), KIRKLAND & ELLIS LLP, San
Francisco, CA; James H.M. Sprayregen, Marc Kieselstein, Chad
J. Husnick, KIRKLAND & ELLIS LLP, Chicago, IL; Aparna
Yenamandra, KIRKLAND & ELLIS LLP, New York, NY, attorneys
for Appellee EFH Plan Administrator Board.
ANDREWS, U.S. DISTRICT JUDGE.
pending before the Court is an appeal from the Bankruptcy
Court's Order Confirming the First Amended Joint Plan of
Reorganization of Energy Future Holdings Corp. ("the
Confirmation Order"). (D.I. 1-1). Also pending is
Appellees' Motion to Dismiss the Appeal. (D.I. 40). The
parties have fully briefed the issues. (D.I. 30, 40, 54, 59).
The Court held oral argument on December 13, 2018. (D.I. 64).
For the following reasons, the Court dismisses the appeal as
Future Holdings Corp. ("EFH") and several
subsidiaries (together, the "Debtors") filed
Chapter 11 petitions on April 29, 2014. (D.I. 30 at 13). A
subsidiary of EFH, Debtor Energy Future Intermediate Holding
Company LLC, held approximately 80% ownership interest in
Oncor Electric Delivery Company LLC ("Oncor").
(Id.). Oncor is subject to the regulatory authority
of the Public Utility Commission of Texas ("PUCT").
(Id.) Previous plans were approved by the Bankruptcy
Court but did not become effective because PUCT did not
approve the necessary transactions. (Id.) The
Confirmed Plan incorporates a merger transaction between
Sempra Energy ("Sempra") and Debtor EFH.
(Id.). PUCT approved the transaction with Sempra,
and the Confirmed Plan became effective March 9, 2018.
(Id; D.I. 40 at 33).
EECI, Inc., EEC Holdings, Inc., LSGT Gas Co. LLC, and LSGT
SACROC, Inc. (the "Asbestos Debtors") are
wholly-owned subsidiaries of EFH. (D.I. 30 at 14). The
Asbestos Debtors were in the business of building,
maintaining, and servicing power plants. (Id.)
Workers in those power plants were exposed to asbestos.
(Id.) The last of the Asbestos Debtors'
operating assets were sold in 2004 and the proceeds of those
sales were up-streamed to EFH as interest bearing loans.
the bankruptcy proceedings, the Debtors moved the Bankruptcy
Court to set a bar date for all prepetition claims (the
"Bar Date Motion"). (Id. at 15). The
United States Trustee appointed an official creditors'
committee comprising five unsecured creditors of EFH, EFIH,
EFIH Finance, Inc., and EECI (the "E-Side
Committee"). (D.I. 30 at 16; D.I. 40 at 19). After
hearing objections on the Bar Date Motion, the Bankruptcy
Court ordered that there would be a bar date for all
prepetition claims, including those of Unmanifested Asbestos
Claimants. (D.I. 30 at 16; D.I. 40 at 20). This order
was not appealed by any party. (D.I. 40 at 21). As the
bankruptcy proceedings continued, Appellants made repeated
efforts to ensure that the Unmanifested Asbestos Claims were
not discharged. (D.I. 40 at 24-30).
Confirmation Order was entered on February 27, 2018. (B.D.I.
12763). The Confirmation Order approved the
reorganization plan ("the Plan"), including the
Merger Agreement, a central piece of the restructuring
transactions. The Plan and Merger Agreement, as
approved, provided for the restructuring of the EFH and
Asbestos Debtors, including the sale of the EFH Debtors to
Sempra. Appellants did not seek a stay of either the Order
authorizing the merger agreement or the Confirmation Order.
Appellants filed a timely notice of appeal on March 9, 2018.
(D.I. 1). On appeal, Appellants assert, among other things,
that the Bankruptcy Court erred in discharging the claims of
Unmanifested Asbestos Claimants who failed to timely file
proofs of claim. (D.I. 30 at 21).
Appellees move to dismiss this appeal
on the following grounds: statutory mootness, equitable
mootness, untimeliness, and standing. (D.I. 40 at 22).
Appellees also argue that the Bankruptcy Court did not
violate Due Process by discharging the claims of the
Unmanifested Asbestos Creditors who failed to timely file
proofs of claim. (Id. at 56). The constitutional
issue is an interesting one. Courts should, however, avoid