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6500 Cherrywood Ln - Greenbelt, MD 20770 - Main Tel: 301-344-8018 map
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The Plaintiff in this adversary proceeding successfully reorganized its business under chapter 11. Years after the confirmation of the Plaintiff’s plan, the Defendants filed state court litigation against the Plaintiff for injuries allegedly sustained from exposure to asbestos prior to the filing of the Plaintiff’s bankruptcy case. The question before the Court is whether the Defendants’ claims are barred by the discharge in the Plaintiff’s chapter 11 case under sections 524(a) and 1141(d) of the Bankruptcy Code and its confirmed plan of reorganization.

Based on the undisputed material facts, the Court concludes that the Defendants’ alleged claims against the Plaintiff were prepetition “claims” under section 101. The Court further determines that, despite the Plaintiff’s reasonable due diligence during its claims identification process, the Defendants were unknown creditors at the time of the Plaintiff’s chapter 11 case. Consequently, the publication notice of the claims bar date in the Plaintiff’s chapter 11 case, which was approved by the Court, satisfied the notice and due process requirements of the Bankruptcy Code, the U.S. Constitution, and the Supreme Court’s decision in Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950). The Court underscores that this result is supported by the Plaintiff’s actions in its bankruptcy case, what was reasonable and practicable for the Plaintiff to undertake at that time, and the delicate balancing tests underlying both the Bankruptcy Code and the Supreme Court’s approach to notice and due process in Mullane. The Court thus will grant the Plaintiff’s Motion for Summary Judgment as to the remaining Defendants’ claims.

PDF File: 
Entered: 
2020-03-02
Case: 
19-00199
Judge: 
Michelle M. Harner