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Patrick Donahue v. Vertis

NOT FOR PUBLICATION UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY


December 20, 2010

PATRICK DONAHUE,
PLAINTIFF,
v.
VERTIS, INC., ET AL., DEFENDANTS.

The opinion of the court was delivered by: Mary L. Cooper United States District Judge

OPINION

THE PLAINTIFF bringing this action against the defendants, Vertis, Inc. ("VTI"), USA Direct, LLC ("UDLLC"), Reel Direct, Inc. ("RDI"), and Richard Osbourne, to recover damages for, inter alia, breach of contract (dkt. entry no. 1, Compl.; dkt. entry no. 10, Am. Compl.); and the plaintiff alleging that (1) he was employed by USA Direct, Inc., which Osbourne ran, (2) he "brought in" VTI as a client, (3) USA Direct, Inc., "was acquired by [UDLLC], which is a subsidiary of [VTI]", (4) Osbourne now runs RDI, and (5) all of the defendants conspired to deprive him of the commissions owed for bringing in VTI as a client (see Am. Compl. at 2-5); and VTI AND UDLLC now bringing proceedings for relief under Chapter 11 of the Bankruptcy Code ("Bankruptcy Actions") in the United States Bankruptcy Court for the Southern District of New York ("Bankruptcy Court") (see dkt. entry no. 45, Bankr. Notice; dkt. entry no. 48, Order), see Pet., In re Vertis Holdings, Inc., No. 10-16170 (Bankr. S.D.N.Y. Nov. 17, 2010), ECF No. 1; Pet., In re Webcraft, LLC, No. 10-16173 (Bankr. S.D.N.Y. Nov. 17, 2010), ECF No. 1 (listing "USA Direct, Inc." and "USA Direct, LLC" as names used by debtor); and IT APPEARING that an action is "related to" bankruptcy if "the outcome of that proceeding could conceivably have any effect on the estate being administered in bankruptcy", Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3d Cir. 1984) (emphasis omitted); see In re Combustion Eng'g, 391 F.3d 190, 226 (3d Cir. 2004); and it appearing that the action need not be against only the debtor to be "related to" bankruptcy, Pacor, 743 F.2d at 994; and it appearing that an "action is related to bankruptcy if the outcome could alter the debtor's rights, liabilities, options, or freedom of action (either positively or negatively) and which in any way impacts upon the handling and administration of the bankrupt estate", id.; see In re Combustion Eng'g, 391 F.3d at 226;*fn1 and

THE COURT noting that a district court "may transfer a case or proceeding under title 11 to a district court for another district", 28 U.S.C. § 1412; see 28 U.S.C. § 1409(a) (stating "proceeding arising under title 11 or arising in or related to a case under title 11 may be commenced in the district court in which such case is pending"); Maritime Elec. Co. v. United Jersey Bank, 959 F.2d 1194, 1212 (3d Cir. 1991) (stating district court should transfer claim to proper district court, and claim is then referred to bankruptcy court overseeing bankruptcy case); Abrams v. Gen. Nutrition Cos., No. 06-1820, 2006 WL 2739642, at *8 (D.N.J. Sept. 25, 2006) (finding Section 1412 applies to transfer of action "related to" bankruptcy case); and it appearing that the forum where the bankruptcy case is pending is the proper venue for an action "related to" that bankruptcy case, Abrams, 2006 WL 2739642, at *9; and THE COURT concluding that this action is related to the Bankruptcy Actions, as (1) the outcome here could affect the estates being administered in the Bankruptcy Actions, and (2) the claims against VTI, UDLLC, RDI, and Osbourne are intertwined, see Pacor, 743 F.2d at 994; and the Court finding that the Southern District of New York is the proper forum since this action is related to the Bankruptcy Actions, see 28 U.S.C. § 1412; Abrams, 2006 WL 2739642, at *9; and the Court thus intending to transfer this action to the United States District Court for the Southern District of New York;*fn2 and for good cause appearing, the Court will issue an appropriate order.


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