maintained by John DeGroote Services, LLC, Trustee

 

Case Update – February 7, 2013

February 8th, 2013 - Case Updates

The hearing before the United States Bankruptcy Court for the Southern District of New York on the Motion for an Order (A) Enforcing Confirmation Order, (B) Holding F. Edwin Harbach, Roderick C. McGeary, and Eddie R. Munson in Contempt, and (C) Imposing Sanctions for Willful Violation of Confirmation Injunction (see prior update) took place on January 31, 2013, and a transcript of the hearing can be found here.

On February 7, 2013, the Court entered an Order finding that:

1.         The Confirmation Order is binding on the Former Directors; and

2.         The Former Directors filed a lawsuit against John DeGroote on November 15, 20[12], in the Circuit Court of Fairfax County, Virginia, (the “New Virginia Lawsuit”) in violation of the exclusive jurisdiction provision contained in 34(c) of the Confirmation Order and the doctrine arising from Barton v. Barbour, 104 U.S. 126 (1881).

The Court further ordered that:

A)        The Former Directors are enjoined from prosecuting or continuing the claims brought in the New Virginia Lawsuit in any forum other than that of the Honorable Robert E. Gerber of the United States Bankruptcy Court for the Southern District of New York;

B)        The Former Directors shall, within 10 business days of the date of the Order, voluntarily dismiss the New Virginia Lawsuit without prejudice or move to transfer it to the Court of the Honorable Robert E. Gerber of the United States Bankruptcy Court for the Southern District of New York and, both during and after such 10 business day period, exercise reasonable diligence to pursue approval of such motion to transfer; and

C)        The requests for a finding of contempt and imposition of sanctions contained in the Motion shall be continued sine die pending an evidentiary hearing on those issues if they are not by then moot.

(Update:  A Consent Order transferring the New Virginia Lawsuit to the United States Bankruptcy Court for the Southern District of New York was entered on February 22, 2013.)