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UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF DELAWARE
IN RE:
ANDERSON NEWS, LLC,
Debtor.
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Chapter 11
Case No. 09-10695 (CSS)
AMERICAN MEDIA, INC., BAUER
MAGAZINE L.P., BAUER PUBLISHING
COMPANY, L.P., HEINRICH BAUER
NORTH AMERICA, INC., HEINRICH
BAUER PUBLISHING, L.P., CURTIS
CIRCULATION COMPANY, LLC, KABLE
DISTRIBUTION SERVICES, INC., and TIME
WARNER RETAIL SALES & MARKETING,
INC., on behalf of ANDERSON NEWS, LLC,
DEBTOR and DEBTOR IN POSSESSION
Plaintiffs,
vs.
ANDERSON MANAGEMENT SERVICES,
INC., ANDERSON MEDIA CORPORATION,
ANDERSON NEWS COMPANY
SOUTHWEST, LLC, ANDERSON
SERVICES, LLC, BROOKVALE HOLDINGS,
LLC, DISPLAY SERVICES, INC., FIRST
MEDIA CAPITAL CORPORATION,
MSOLUTIONS, LLC, PROLOGIX
DISTRIBUTION SERVICES EAST, LLC
and TWIN RIVERS TECHNOLOGY GROUP,
LLC,
Defendants.
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Adv. Proc. No. 11-53811 (CSS)
Case No. 15-mc-00199-UNA
MOTION TO CONSOLIDATE THE REQUEST FOR
AUTHORIZATION FOR INTERLOCUTORY APPEAL AND THE
RELATED OBJECTION UNDER BANKRUPTCY RULE 9033
Anderson Media Corporation (“Anderson Media”), Anderson News Company
Southwest, LLC (“Anderson News Southwest”), Anderson Services, LLC (“Anderson
Services”), Brookvale Holdings, LLC (“Brookvale”), and First Media Capital Corporation
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(“FMC,” and collectively with Anderson Media, Anderson News Southwest, Anderson Services,
and Brookvale, the “Consolidation Movants” or “Movants”) file this motion to consolidate (the
“Consolidation Motion”) two directly related matters, one of which is currently pending before
this District Court and the other which has not yet been docketed in this Court but is expected to
be very soon. The Consolidation Motion is made pursuant to Federal Rule of Bankruptcy
Procedure 8013. The two matters that should be consolidated for consideration because they
deal with the same factual and legal issues are the request for authorization for an Interlocutory
Appeal (the “Interlocutory Appeal Motion”) and the directly related objection under Federal
Rule of Bankruptcy Procedure 9033 (the “Rule 9033 Objection”)1. Both the Interlocutory
Appeal Motion and the Rule 9033 Objection arise out of the Bankruptcy Court’s July 8, 2015
Order (Bankruptcy D.I. 265, 266). A copy of the July 8, 2015 Order is attached as Exhibit A
hereto. A copy of the Interlocutory Appeal Motion and the Rule 9033 Objection are attached
respectively as Exhibit B and Exhibit C hereto.
I. SUMMARY OF COMMON QUESTIONS OF LAW AT ISSUE
In both the Interlocutory Appeal Motion and the Rule 9033 Objection, the Movants seek
targeted, limited relief. First, the Movants seek an order excising the Bankruptcy Court’s
statement in its July 8, 2015 Order that “this is a core proceeding pursuant to 28 U.S.C.
§ 157(b)(2),” because this is legally incorrect under Executive Benefits Insurance Agency v.
Arkison, 134 S. Ct. 2165 (2014) (“Arkison”). As explained in the Interlocutory Appeal Motion
and the Rule 9033 Objection and below, the determination that the bankruptcy adversary
proceeding is “core” is not correct legally under the Supreme Court’s binding decisions in
Arkison and Stern v. Marshall, 131 S. Ct. 2594 (2011) (“Stern”) even though the fraudulent
conveyance claims asserted in Count XVI of the Complaint in the Adversary Proceeding are
1 The Response to the Rule 9033 Objection has already been docketed in this case as Docket Entry #3.
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“core” under 28 U.S.C. § 157(b)(2)(H). These matters are “Stern claims” under Arkison because
FMC, Anderson Media, Anderson Services, and Anderson News Southwest2 did not file proofs
of claim in the Anderson News bankruptcy case (the “Bankruptcy Case”) and have not
consented, either explicitly or implicitly, to the exercise of judicial power or the entry of final
orders by the Bankruptcy Court. This is not in dispute, and the Movants have consistently been
explicit in not consenting to the Bankruptcy Court’s exercise of judicial power or the entry of
final orders. See Wellness Int’l Network, Ltd. v. Sharif, 135 S. Ct. 1932 (2015) (“Wellness”).3
Thus, Arkison applies fully.
Second, because Arkison controls this case, the Movants seek an order requiring the
Bankruptcy Court to recast its July 8, 2015 Order as proposed findings of fact and conclusions of
law because under the Supreme Court’s binding decisions in Arkison and Stern, the Bankruptcy
Court cannot enter an order with respect to the Movants as the July 8, 2015 Order purports to do,
but instead is required to issue proposed findings of fact and conclusions of law.4 As the
Supreme Court’s explained in Arkison:
Accordingly, because these Stern claims fit comfortably within the category
of claims governed by § 157(c)(1), the Bankruptcy Court would have been permitted
to follow the procedures required by that provision, i.e., to submit proposed findings
of fact and conclusions of law to the District Court to be reviewed de novo.
2 This same analysis applies to Brookvale because the claims against it are outside the scope of its proof of
claim, and because no objection has been filed to its proof of claim.
3 See also Motion to Withdraw the Reference (Bankr. D.I. 17); Motion to Stay Adversary Proceeding (Bankr.
D.I. 18); Motion to Determine Core and Non-Core Status of Claims (Bankr. D.I. 19); Motion to Dismiss (Bankr. D.I.
20); Scheduling Orders (Bankr. D.I. 57, 167, 183, 188, 199); Motions to Vacate (Bankr. D.I. 66, 123); Rule 9033
Objections (Bankr. D.I. 67, 124); Answers of Anderson Media, Anderson News Southwest, Anderson Services,
Brookvale, and FMC (Bankr. D.I. 70, 71, 72, 73, 77); and Motion for Summary Judgment on Count XVI and related
submissions (Bankr. D.I. 195, 204, 224).
4 The need to properly recast orders, such as the July 8, 2015 Order, as Proposed Findings of Fact and
Conclusions of Law was recognized earlier this year by Chief Bankruptcy Judge Shannon in Gavin v. Tousignant (In
re Ultimate Escapes Holdings, LLC), No. 10-12915, Adv. No. 12-50849, 2015 WL 1586644 (Bankr. D. Del. Feb. 5,
2015) when that court withdrew an order and reissued it as Proposed Findings of Fact and Conclusions of Law. See
also SNMP Research International, Inc. v. Nortel Networks Inc. (In re Nortel Networks Inc.), 2015 WL 3506697
(Bankr. D. Del. June 2, 2015).
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134 S. Ct. at 2174.
The Movants first filed their Rule 9033 Objection on July 15, 2015, requesting the
substantive relief detailed above. Out of an abundance of caution, the Movants then filed their
Interlocutory Appeal Motion on July 24, 2015, to ensure that if the Rule 9033 Objection was not
considered by the District Court for any reason, they would then proceed with their request that
the July 8, 2015 Order be subject to interlocutory appeal and substantive review by this Court, as
an Article III Court, under applicable law.
It is relevant to note that the Movants are not appealing the denial of their Motion for
Summary Judgment. Thus, the technical legal issue being presented is limited, but is nonetheless
significant in the context of the law in applying the ruling in Arkison consistent with Wellness
and Stern. As the Rule 9033 Objection and the Interlocutory Appeal Motion each address and
request relief concerning this identical question of law, consolidation is appropriate.
II. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
The underlying Adversary Proceeding involves a Complaint that seeks to avoid certain
transfers under the Bankruptcy Laws and Delaware’s Uniform Fraudulent Transfer Act, Del.
Code Ann. tit. 6, § 1301 et. seq. The Complaint was filed after the Bankruptcy Court granted
derivative standing to the Plaintiffs to pursue potential avoidance claims specifically identified in
the Report of Don A. Beskrone, Esquire (the “Examiner’s Report”), the Examiner for the
Bankruptcy Estate of Anderson News, LLC (the “Debtor”).
The Movants filed a Motion for Summary Judgment (Bankruptcy D.I. 195, 196, 200,
201, 202, 204, 205, 207, 224, 225, 228, 229, 230) in reliance on Celotex Corp. v. Catrett, 477
U.S. 317 (1986) and Executive Benefits Insurance Agency v. Arkison, 134 S. Ct. 2165 (2014),
and asked that a recommendation be made to the District Court to enter summary judgment on
Count XVI of the Complaint. Specifically, the first page of the Motion for Summary Judgment
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on Count XVI states the following:
As contemplated by the United States Supreme Court’s decisions in Stern
v. Marshall, 564 U.S. 2 (2011) and Executive Benefits Insurance Agency v.
Arkison, 134 S. Ct. 2165 (2014), the Bankruptcy Court may issue proposed
findings of fact and conclusions of law on the instant motion for summary
judgment with final relief being required to be issued by a United States District
Court Judge. In brief, Count XVI is deemed non-core under Arkison and only the
District Court may enter a final order because the [Movants] have not consented
to entry of final orders by the Bankruptcy Court and have not filed proofs of
claims in the Debtor’s bankruptcy case.
The Conclusion in the Brief in Support stated that:
The [Movants] are entitled to have the Bankruptcy Court issue proposed
findings of fact and conclusions of law recommending that the District Court
grant summary judgment on Count XVI, and that the District Court then issue a
final order granting the [Movants] summary judgment on Count XVI.
After briefing and oral argument on June 11, 2015, the Bankruptcy Court issued an order
denying the Motion for Summary Judgment (D.I. 251). On June 18, 2015, the Movants moved
to alter and amend to request changes to the June 11, 2015 Order (D.I. 255, 256) (the “Motion to
Alter and Amend”).
Additionally, on June 18, 2015, the Movants moved to (i) extend the time period to object
to the June 11, 2015 Order for 21 days as contemplated by Rule 9033(c) and (ii) to shorten the
time that the Plaintiffs had to respond to the Motion to Alter and Amend.5
Although the Bankruptcy Court granted the June 18, 2015 Motion to Alter and Amend, in
part, the continued inclusion of a finding that “this is a core proceeding pursuant to 28 U.S.C.
§ 157(b)(2)” without recognition of the fact that under Arkison, the ruling can only be proposed
findings of fact and conclusions of law, formed the basis for the Interlocutory Appeal Motion.6
On July 15, 2015, the Movants filed their Rule 9033 Objection to substantively ensure the
5 The Plaintiffs consented to the relief. Accordingly, the Bankruptcy Court entered an order granting the
relief that afternoon (the “June 18, 2015 Order”) (D.I. 260).
6 In granting the Motion to Alter and Amend, in part, the Bankruptcy Court deleted the provision in the June
11, 2015 Order that “the Court has judicial power to enter a final order.”
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same relief sought in the Interlocutory Appeal Motion, which is a recognition that the claims
asserted against the Movants are non-core under Arkison and that the Bankruptcy Court can only
enter proposed findings of fact and conclusions of law.
The filing of the Interlocutory Appeal Motion was precautionary for the Movants because
the Consolidation Movants believe that the provisions for interlocutory appeals under 28 U.S.C.
§ 158(a)(3) are not applicable here because Bankruptcy Rule 9033 is applicable under Arkison,
and thus maintained that the Interlocutory Appeal Motion should be considered if, and only if,
the District Court determines that the procedures of Bankruptcy Rule 9033 do not apply to the
July 8, 2015 Order for any reason. Because the request for Interlocutory Appeal has been
docketed in this Court first in Case No. 15-mc-00199-UNA, even though filed after the Rule
9033 Objection, it is appropriate to consolidate the two pending matters and consider then
together. The docket in this case already reflects recognition of this relationship as the Response
in opposition to the Rule 9033 Objection has been docketed in this case as Docket Entry No. 3.
The Rule 9033 Objection (Bankruptcy D.I. 266) should also be made part of the record in this
case as it preceded the Response at D.I. 3. As discussed below, the common question involved
in the Interlocutory Appeal Motion and Rule 9033 Objection is whether under the controlling
decision in Arkison, the language in the July 8, 2015 Order stating that the issue before the
Bankruptcy Court is “core” must be amended or deleted to recognize that when Stern claims are
presented under Arkison, the matter is not core but is to be treated as being “non-core,” and thus
whether the July 8, 2015 Order must be recast as proposed findings of facts and conclusions of
law.7
III. RELIEF REQUESTED
In considering consolidation under Bankruptcy Rule 8013 in an appellate context, it is
7 See Arkison, supra at p. 4, 134 S. Ct. at 2174.
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appropriate to look at Federal Rule of Civil Procedure 42 for general guidance. Federal Rule
42(a) provides, in relevant part: “If actions before the Court involve a common question of law
or fact the court may: . . . (2) consolidate the actions; or (3) issue any other orders to avoid
unnecessary cost or delay.” Fed. R. Civ. P. 42(a). Under Federal Rule 42(a), “district courts
have ‘broad power’ to consolidate cases that share ‘common question[s] of law or fact.’” A.S. v.
SmithKline Beecham Corp., 769 F.3d 204, 212, (3d Cir. 2014) (quoting Ellerman Lines, Ltd. v.
Atlantic & Gulf Stevedores, Inc., 339 F.2d 673, 675 (3d Cir. 1964)). Further, consolidation of
bankruptcy appeals is contemplated by Bankruptcy Rule 8003(b).8
Here, as discussed above, the issues raised in the Rule 9033 Objection and the
Interlocutory Appeal Motion involve identical questions of law: Does Arkison require excising
the Bankruptcy Court’s statement in its July 8, 2015 Order that “this is a core proceeding
pursuant to 28 U.S.C. § 157(b)(2),” because this is legally incorrect under Arkison, and also that
under Arkison, the July 8, 2015 Order must be recast or treated as proposed findings and
conclusions subject to de novo review by the District Court Judge as an Article III Judge?9 The
efficiency in consolidating the Interlocutory Appeal Motion and the Rule 9033 Objection are
basic and clear.
8 The Bankruptcy Rules changed during this case. Former Bankruptcy Rule 8003 is now Bankruptcy Rule
8004. The instant reference to Bankruptcy Rule 8003 is thus to the current rule.
9 On page 3, ¶3, of the Response to the Interlocutory Appeal Motion, the Respondents state that the Movants
“argue that, under [Stern] and [Arkison], bankruptcy courts lack authority to preside over pretrial matters or even
enter any non-final orders such as denials of motions for summary judgment in adversary proceedings.” That is not
a correct statement of the argument being made. The argument under Arkison is that in Stern matters such as the
case sub judice, the Stern claims make the otherwise “core” issues be deemed to be “non-core” because of the
absence of Article III judicial authority so that while the bankruptcy court cannot enter orders, it can enter proposed
findings of fact and conclusions of law which are then subject to objection and mandatory de novo review under
Bankruptcy Rule 9033. Neither the plain language of Rule 9033 nor 28 U.S.C. § 157(c)(1) contain a final order
requirement, and the constitutional issues raised by Arkison, Wellness, and Stern require and entitle substantive de
novo review by an Article III Court whether or not a ruling is final. Bankruptcy Rule 9033(a) states in relevant part
“In non-core proceedings heard pursuant to 28 U.S.C. §157(c)(1), the bankruptcy judge shall file proposed findings
of fact and conclusions of law;” and 28 U.S.C. § 157(c)(1) states in relevant part “A bankruptcy judge may hear a
proceeding that is not a core proceeding but that is otherwise related to a case under title 11. In such proceeding,
the bankruptcy judge shall submit proposed findings of fact and conclusions of law to the district court,”
(emphasis added). See United States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 241-242 (1989).
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Consolidation of proceedings is appropriate when consolidation would avoid unnecessary
costs and/or delay and promote judicial economy. Liberty Lincoln Mercury, Inc. v. Ford
Marketing Corp., 149 F.R.D. 65, 80-81 (D.N.J. 1993). Indeed, the court must weigh the savings
of time and effort gained by consolidation against the inconvenience, delay or expense that could
result from adjudication of separate appeals. See Waste Distillation Tech., Inc. v. Pan American
Resources, Inc., 775 F. Supp. 759, 761 (D. Del. 1991). Consolidation is intended to “eliminate
unnecessary repetition and confusion.” Miller v. United States Postal Serv., 729 F.2d 1033, 1036
(5th Cir. 1984).
Consolidating these matters will do just that—eliminate the need for unnecessary and
repetitive consideration of identical issues, and therefore preserve judicial economy. In the
instant case, judicial economy and administrative efficiency favor consolidating the Rule 9033
Objection and the Interlocutory Appeal Motion.
In considering the request to consolidate the Rule 9033 Objection and the Interlocutory
Appeal Motion, it should be noted that they involve the same parties and the same issues.
Further, to the extent the Rule 9033 Objection is decided by the District Court, the relief sought
in the Interlocutory Appeal Motion will become moot if it is granted and Arkison is followed
because no further substantive relief is at issue. Consolidating the Rule 9033 Objection and the
Interlocutory Appeal Motion into a single matter will not inconvenience, delay or prejudice the
parties. The briefing is complete and if the District Court wants any additional briefing, it can be
addressed at a single time.
IV. CONCLUSION
For the reasons addressed above, consolidation of the Rule 9033 Objection and the
Interlocutory Appeal Motion represents the most logical and efficient use of this Court’s
resources and time. The Movants respectfully request that the District Court consolidate the
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Rule 9033 Objection and Interlocutory Appeal Motion because they involve a common question
of law that can efficiently and economically be addressed on a consolidated basis, and that the
Movants be granted such other and further relief as may be just and proper.
Dated: August 10, 2015
Wilmington, Delaware
Respectfully submitted,
/s/ Domenic E. Pacitti
KLEHR HARRISON HARVEY &
BRANZBURG LLP
Domenic E. Pacitti (Bar No. 3989)
919 Market Street, Suite 1000
Wilmington, Delaware 19801-3062
Telephone: (302) 552-5511
Facsimile: (302) 426-9193
Morton R. Branzburg
1835 Market Street, Suite 1400
Philadelphia, PA 19103
Telephone: (215) 568-6060
Facsimile: (215) 568-6603
– and –
ALSTON & BIRD LLP
Grant T. Stein
David A. Wender
1201 West Peachtree Street
Atlanta, Georgia 30309
Telephone: (404) 881-7000
Facsimile: (404) 881-7777
Counsel to Anderson Media Corporation,
Anderson News Company Southwest, LLC,
Anderson Services, LLC, Brookvale Holdings,
LLC, and First Media Capital Corporation
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