- Case Type:
- Case Status:
- United States Bankruptcy Appellate Panel of the Sixth Circuit No. 20-8017 (6th Circuit, Feb 01,2021) Published
- The Court of Appeals dismissed CONSOL's appeal of the Settlement Order and Opinion entered by the Bankruptcy Court for lack of standing. The Court of Appeals held that the Settlement Order did not determine CONSOL's liability under the Coal Act instead leaving that determination for another forum. Therefore, because CONSOL did not have a direct, pecuniary interest, CONSOL was not a person aggrieved
- Procedural context:
- CONSOL appealed the order entered in April 2020 which granted the Debtors' motion to strike, and CONSOL appealed the order granting the Settlement Motion approving the settlement between the Debtors and the Retiree Committee. The Debtors' Chapter 11 plan was confirmed in August 2020, but CONSOL did not appeal this order. CONSOL argued that it had standing to appeal, because the bankruptcy court interfered with its contract rights and impaired its litigation defenses.
- About six years prior to the Debtors filing bankruptcy, CONSOL sold some mining operations to the Debtors. The Coal Act created the 1992 Plan which receives monthly premiums to help provide future benefits to retirees and provides that if a mining company quits operating the prior employer of the defunct company's employees may be liable for certain benefits. The Debtors operated the coal mining operations and provided certain medical and retirement benefits to retirees, spouses, and dependents. The in 2019, the Debtors filed Chapter 11 bankruptcy after arranging financing and the sale of the Debtors' assets. The Debtors moved the bankruptcy court to have a committee appointed to represent the interests of the Debtors' retirees. The Debtors and the Retiree Committee agreed to Settlement under four major terms including (1) the Debtors' obligation to provide benefits through May 1, 2020; (2) cooperation among the parties to transition all beneficiaries to ensure no gap would occur; (3) the posted security would disburse $12.5 million to the 1992 Plan and the Debtors would receive the balance, and (4) the Debtors would cooperate to hold CONSOl responsible under the Coal Act going forward. The Debtors then filed a Settlement Motion under Federal Rule of Bankruptcy Procedure 9019. CONSOL filed an objection asserting that the Coal Act obligations cannot be modified without satisfying 11 U.S.C. § 1114(g), and CONSOL supplemented its objection with five declarations. CONSOL's objection specifically did not concede liability and sought future litigation to determine CONSOL's obligations under the Coal Act. The Debtors then moved to strike CONSOL's declarations, which the bankruptcy court granted. The bankruptcy court then held an evidentiary hearing on the Settlement Motion, which it granted, but it made no findings or conclusions regarding CONSOL's obligations under the Coal Act. The bankruptcy court entered its orders in April 2020. The bankruptcy court then confirmed the Debtors' Chapter 11 plan in August 2020.
- The Hons. Croom, Dales, and Wise
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