TooBaRoo, LLC v. Western Robidoux, Inc

Summarized by Amir Shachmurove , Brown Rudnick LLP
9 months 3 weeks ago

Case Type:

Business

Case Status:

Affirmed

Citation:

23-3323 (8th Circuit, May 05,2025) Published

Tag(s):

Ruling:

In an appeal arising out of the converted chapter 7 case of Western Robidoux, Inc. (WRI), the U.S. Court of Appeals for the Eighth Circuit (Circuit), as had the U.S. District Court for the Western District of Missouri (DC), affirmed the decision of the U.S. Bankruptcy Court for the Western District of Missouri (BC) to approve a settlement between WRI and two entities - Boehringer Ingelheim Animal Health USA, Inc. (BIVI) and CEVA Animal Health, LLC (CEVA) - against whom it had brought adversary proceedings over the objection of one creditor, TooBaRoo, LLC (TooBaRoo), the appellant.

Procedural context:

In 2019, in the midst of litigation by TooBaRoo against BIVI and CEVA, as indemnitees, and WRI, both entities' contractual indemnitor, WRI filed a voluntary chapter 11 petition in the BC. In November 2020, BIVI and CEVA, two of WRI’s largest creditors, filed administrative expense claims. In response, WRI filed adversary claims against BIVI and CEVA alleging the indemnity payments were recoverable in bankruptcy. Several months later, WRI converted its Chapter 11 case to a Chapter 7 liquidation, and Jill Olsen (Trustee) was appointed trustee for the estate. The Trustee amended the adversary claims, alleging avoidance of fraudulent transfers under the Code and Missouri law, in addition to claims for indemnity and money had and received. BIVI and CEVA response with counterclaims for breach of contract, breach of the duty of good faith and fair dealing, and setoff. BIVI sought $1.5 million in damages; CEVA sought $398,863.14 in damages. In September 2021, BIVI and CEVA filed proofs of claim. Then, after extensive discovery, CEVA, BIVI, and WRI entered into mediation. After a day of mediation, the Trustee reached a settlement with BIVI and CEVA and submitted this proposal for approval under Rule 9019. Only one objector emerged - TooBaRoo, who argued it was in the best interest of the estate and its creditors that the estate. The BC disagreed and approved the settlement; the DC affirmed.

Facts:

BIVI and CEVA, animal health product companies, were longtime clients of WRI, a commercial printing and fulfillment company. As part of these business arrangements, BIVI and CEVA each entered into service contracts that included indemnification provisions pursuant to which WRI agreed to indemnify and defend the companies against certain liabilities and claims. Thus, when TooBaRoo sued BIVI and CEVA in federal court, both entities invoked the indemnification provisions of their longstanding service contracts with WRI. WRI agreed to BIVI's and CEVA's demands for indemnification and made payments to both.

Judge(s):

Raymond Gruender; Jane L. Kelly; and L. Steven Grasz

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