Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

IN RE E. & SO. DIST. ASBESTOS LITIG.

August 26, 1992

IN RE JOINT EASTERN & SOUTHERN DISTRICTS ASBESTOS LITIGATION. IN RE JOHNS-MANVILLE CORPORATION, ET AL., DEBTORS. BERNADINE K. FINDLEY, AS EXECUTRIX OF THE ESTATE OF HILLIARD FINDLEY, ET AL., PLAINTIFFS,
v.
DONALD M. BLINKEN, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Richard Mills, District Judge:

OPINION

Are collateral attacks interposed against a foreign contempt judgment and resulting sanctions, registered for enforcement in this district pursuant to 28 U.S.C. § 1962, properly considered by this Court?

In this case, absolutely not!

I. Factual Background

On August 26, 1982, Manville Corporation and certain affiliated entities ("Manville") filed a petition for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. On August 22, 1986, Manville proposed the Second Amended and Restated Plan of Reorganization (the "Plan") which created the Manville Personal Injury Settlement Trust (the "Trust"). The Trust was created for the payment of all asbestos related claims incurred by Manville.

Shortly after the Trust's establishment, it experienced substantial asset shortages due to escalating litigation costs including associated attorney's fees. On July 20, 1990, the reference of the Manville bankruptcy to the Bankruptcy Court for the Southern District of New York was partially withdrawn pursuant to 28 U.S.C. § 157(d) and United States District Judge Jack B. Weinstein, of the Eastern District of New York, was granted supervisory responsibility over the Plan to protect the Trust's assets and prevent further frustration of the Plan. Soon thereafter, the district courts for the Eastern and Southern Districts of New York, and the bankruptcy court for the Southern District of New York (the "Courts"), entered a temporary stay of payments from, and a stay on the enforceability of, judgments and settlements against, the Trust pending revision of its operations.

On November 19, 1990, certain claimants of the Trust filed in the Courts a class action (the "Findley Class Action") against the Trust's trustees to compel them to revise the Trust's obligations and payment procedures. The Findley Class Action was assigned to Judge Weinstein and was consolidated with the bankruptcy proceedings before the Courts.

In an order issued on November 23, 1990, following a show cause hearing, the Courts: (1) conditionally certified the Findley Class Action and appointed representative counsel; and (2) enjoined all pending litigation against the Trust to halt further dissipation of the Trust's assets during the pendency of the Findley Class Action. In subsequent contempt proceedings against Attorney James Walker held before Judge Weinstein, Walker was found to have received a copy of the Courts' November 23, 1990 order enjoining actions against the Trust. Attorney Walker does not contest this finding.

On February 13, 1991, the Courts entered an order and partial judgment certifying a non-opt-out class pursuant to Federal Rule of Civil Procedure 23(b)(1)(B) consisting of all trust claimants. Pursuant to that order, the Courts stayed "[e]xecution or other enforcement of judgments against the Trust and/or its assets . . ." and "negotiating settlements or from taking any action in connection with claims pending or hereafter commenced against the Trust." In later contempt proceedings against Walker, Judge Weinstein found that Walker received notice of the Courts' order of February 13 and that he knew it enjoined him from actions against the Trust. Again, Walker does not contest that finding.

On February 25, 1991, in the Illinois Circuit Court for McLean County, Walker obtained ex parte judgments against Bankers Trust in the amount of $3,118,511.57. On March 27, 1991, Walker caused garnishment summons to issue to five Chicago banks to enforce the Bankers Trust judgments.

On April 19, 1991, upon the Trust's and Bankers Trust's application, the Courts entered an order directing Walker to appear on April 23, 1991, and show cause why he should not be held in contempt for his actions in violation of the Courts' orders of November 23, 1990 and February 13, 1991. Walker was served by both facsimile transmission and personal service on April 19, 1991. Following Walker's failure to appear, Judge Weinstein found Walker in civil contempt on April 24, 1991. In its order of contempt, the Courts referred to United States Magistrate Judge John L. Caden the issue of appropriate sanctions.

On May 13, 1991, Magistrate Judge Caden awarded to the Trust $52,085.30 in attorneys' fees and expenses associated with Walker's contemptuous behavior. On June 10, 1991, Magistrate Judge Caden assessed against Walker an additional $7,000 in sanctions and $22,569.71 in attorneys' fees and expenses. Both awards included the calculation of interest thereon at a rate of 6.07 and 6.09 percent respectively.

On October 21, 1991, the judgment entered against Walker was registered in this district pursuant to 28 U.S.C. ยง 1963. On that same day, a Citation to Discover Assets issued against Walker upon the application of the Trust. On November 18, 1991, Walker filed with this Court a motion for an order quashing the Citation to Discover Assets, for a dismissal of the supplementary proceedings and for a determination that the registered judgment is ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.