United States District Court, D. Delaware
In re PHYSIOTHERAPY HOLDINGS, INC. et al, Debtors.
WATER STREET HEALTHCARE PARTNERS, L.P., et al, Defendants. PAH LITIGATION TRUST Plaintiff, PAH LITIGATION TRUST Plaintiff,
WATER STREET HEALTHCARE PARTNERS, L.P., et al, Defendants. C. A. No. 18-1734-LPS
HONORABLE LEONARD P. STARK UNITED STATES DISTRICT JUDGE
reviewed the Proposed Joint Final Pretrial Order (D.I. 101)
("PTO") filed by Plaintiff PAH Litigation Trust
("Plaintiff or "Trust") and Defendants
("Defendants"), IT IS HEREBY
Court ADOPTS Defendants' proposals that
do not require exchanging disclosures of cross-examination
exhibits (PTO at 7-8, 20, 24) and REJECTS
Plaintiffs competing proposals.
unresolved objections to admission of exhibits (PTO at 7, 20)
or use of demonstratives (PTO at 24) shall be brought to the
Court's attention no later than the morning the exhibit
or demonstrative is intended to be used (i.e., 8:30 a.m.,
before the jury arrives at 9:00 a.m.), or the objection shall
be deemed untimely and waived.
Court REJECTS Plaintiffs efforts to reserve
rights to call additional witnesses (PTO at 8-9) and add
exhibits (PTO at 22) and will only permit the parties to make
such additions for good cause. Plaintiffs proposed examples
of good cause may or may not be found to constitute good
parties will exchange demonstratives to be used in opening
statements by 12:00 p.m. on Saturday, July 20, 2019. (PTO at
side is allocated a maximum of fifteen (15) hours for its
trial presentation. Opening statements and closing arguments
will be counted as part of this fifteen hours.
Defendants' request that the Court reconsider its
allocation of time (PTO at 27) is DENIED.
Having become further acquainted with the issues in dispute,
the proposed exhibits, and the witness lists, the Court
remains confident that it has provided each side more than
adequate time to be fully and fairly heard on each issue to
be tried before the jury.
exhibits and other information which are used at trial or
whose contents have been displayed in open Court shall be
treated as public materials. (PTO at 28)
Plaintiffs motion in limine ("MIL") No. 1,
to exclude evidence purportedly contradicting the damages
ruling, will be discussed at the pretrial conference
Plaintiffs MIL No. 2, to exclude evidence relating to the
Noteholders, is DENIED. Such evidence is
relevant at least to assessing the "totality of
circumstances" and whether Defendants acted with intent
to defraud; it also arguably supports Defendants' theory
that PTA's management was not overstating the
company's value. The probative value of the challenged
evidence is not substantially outweighed by the risk of
confusing the jury or unfair prejudice to Plaintiff.
Plaintiffs MIL No. 3, to exclude evidence of agreements not
binding on the Trust, is DENIED. Such
evidence is relevant at least to assessing the "totality
of circumstances" and whether Defendants acted with
intent to defraud; that Court Square released its claims
eight months after purchasing Physiotherapy arguably makes it
less likely there was fraud here. Neither party will be
permitted to "mislead" the jury.
Defendants' MIL No. 1, to preclude use of settlement
agreements, will be discussed at the PTC tomorrow.
Defendants' MIL No. 2, to exclude references to
bankruptcy proceedings for purposes of establishing
liability, is DENIED. Such evidence is
probative of the Debtor's financial condition at the time
of the allegedly fraudulent transfer, notwithstanding that it
occurred in November 2013, 19 months after Court Square's
April 2012 purchase. As Plaintiff writes, "the
bankruptcy is relevant to the Trust's constructive
fraudulent transfer claims, under which the Trust must prove
that the Debtor either (1) became
'insolvent' as a result of a transfer, (2) was left
with 'unreasonably small capital' following a
transfer, or (3) intended to incur or ...