Case Type:
Case Status:
Reversed and Remanded
16-3419 (8th Circuit, Jan 26,2018) Published
In this well-written opinion [author's opinion], the Eighth Circuit concluded that due process requires only that the debtor provide notice to "reasonably ascertainable," not "reasonably foreseeable," creditors. A creditor is reasonably ascertainable if its, his or her identity can be determined by a reasonably diligent search of the debtor's records. A creditor is not readily ascertainable if the claim is conjectural (e.g., a non-employee with a toxic tort claim) and the creditor's identify cannot be found from a reasonably diligent search of the debtor's records.
Procedural context:
The district court denied a summary judgment motion that argued that the plaintiff's claim had been discharged by confirmation of the Lyondell's Chapter 11 plan. The district court ruled that Lyondell's publication notice of the claims bar date was insufficient. Rather, due process required actual notice to the plaintiff's deceased spouse, even though he had never been an employee of Lyondell or the other debtors. The district court concluded that it had been reasonably foreseeable by Lyondell, as a debtor in possession, that the plaintiff's deceased spouse had a claim. Based on Lyondell's pre-bankruptcy notice of benzene issues, Lyondell should have foreseen claims from third-parties (such as the plaintiff) resulting from benzene exposure. The district court thus concluded that due process required that such parties receive actual, not just publication, notice of the claims bar date.
The plaintiff's deceased spouse was a commercial truck driver who had picked up deliveries of benzene-containing pyrolysis gasoline for his employers at a facility owned by Lyondell and the other defendant-appellants. In 2012, the spouse was diagnosed with a disease related to benzene exposure. The disease transformed into acute myeloid leukemia, and the plaintiff's spouse passed away. The widow sued Lyondell, alleging that benzene exposure at the Lyondell facility caused the disease. In 2009, Lyondell and affiliated companies filed Chapter 11 petitions. Lyondell's bankruptcy plan was confirmed in 2010. The plan discharged all debts. Lyondell and the other defendant-appellants moved for summary judgment based on the bankruptcy discharge. The district court denied the summary judgment motion, ruling that the publication notice of the claims bar date did not satisfy due process.

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