Patrick J. Potter (VSB No. 39766)

PILLSBURY WINTHROP SHAW PITTMAN LLP

1650 Tysons Boulevard, Suite 1400

McLean, Virginia 22102-4856

Telephone: (703) 770-7900

Facsimile: (703) 770-7901

E-mail: patrick.potter@pillsburylaw.com

- and -

William M. Sullivan, Jr. (admitted pro hac 

vice)

PILLSBURY WINTHROP SHAW 

PITTMAN LLP

1200 Seventeenth Street, NW

Washington, DC 20036-3006

Telephone: (202) 663-8027

Facsimile: (202) 663-8007

E-mail: wsullivan@pillsburylaw.com

Andrew M. Troop (admitted pro hac vice)

Samuel S. Cavior (admitted pro hac vice)

Joshua I. Schlenger (admitted pro hac vice)

PILLSBURY WINTHROP SHAW PITTMAN LLP

1540 Broadway

New York, New York 10036-4039

Telephone: (212) 858-1000

Facsimile: (212) 858-1500

E-mail: andrew.troop@pillsburylaw.com

Counsel to Virginia Conservation Legacy Fund, Inc.

and ERP Compliant Fuels, LLC

UNITED STATES BANKRUPTCY COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

RICHMOND DIVISION

In re:

PATRIOT COAL CORPORATION, et al.,

Debtors.

Chapter 11

Case No. 15-32450 (KLP)

Jointly Administered

BLACK DIAMOND COMMERCIAL FINANCE, LLC,

Plaintiff,

-againstVIRGINIA CONSERVATION LEGACY FUND, INC.

and ERP COMPLIANT FUELS, LLC,

Defendants.

Adv. Proc. No. 16-03105 (KLP)

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VIRGINIA CONSERVATION LEGACY FUND, INC. 

and ERP COMPLIANT FUELS, LLC,

Counterclaim-Plaintiffs,

-againstBLACK DIAMOND COMMERCIAL FINANCE, LLC,

Counterclaim-Defendant.

VCLF’S MEMORANDUM OF LAW IN OPPOSITION TO BLACK DIAMOND’S

RENEWED MOTION TO REMAND OR, 

ALTERNATIVELY, FOR DISCRETIONARY ABSTENTION

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TABLE OF CONTENTS

Page

PRELIMINARY STATEMENT .....................................................................................................1

FACTUAL BACKGROUND..........................................................................................................5

A. VCLF and Black Diamond Enter into the Commitment Letter to Facilitate 

the Chapter 11 Plan in the Patriot Chapter 11 Case.................................................5

B. Black Diamond Repudiates the Commitment Letter on the Eve of the 

Closing of the VCLF Transaction............................................................................9

C. Commencement of Action in New York State Court ............................................10

D. Removal to the New York Bankruptcy Court........................................................11

E. The Letter of Credit Facility Threatens to Invoke the Federal Mine Profit 

Interest Provisions of the Plan ...............................................................................12

F. The New York Bankruptcy Court Transfers this Action to this Court..................14

G. Proceedings in this Court.......................................................................................14

ARGUMENT.................................................................................................................................15

I. THIS CASE PROPERLY BELONGS IN THIS COURT.................................................15

II. ONLY THE RAREST, MOST EXCEPTIONAL CIRCUMSTANCES JUSTIFY 

EQUITABLE REMAND AND DISCRETIONARY ABSTENTION..............................16

III. THE FACTORS GOVERNING EQUITABLE REMAND AND 

DISCRETIONARY ABSTENTION ARE NOT MET......................................................18

A. This Case is Properly Before this Court and the Court Has a Duty to 

Resolve It (Bay Vista Factor 1)..............................................................................18

B. This Adversary Proceeding Implicates and Impacts the Plan and the 

Administration of the Patriot Chapter 11 Case (Bay Vista Factors 4 and 5) .........20

C. Remand or Abstention Would Waste Judicial Resources and Create the 

Possibility of Inconsistent Results (Bay Vista Factors 3 and 10)...........................22

D. The Convenience of the Parties Supports Maintaining Jurisdiction in this 

Court (Bay Vista Factors 8 and 9)..........................................................................25

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E. The Fact that this Action Involves State Law Issues and Non-Debtor 

Parties is of No Consequence Given the Circumstances of this Case (Bay 

Vista Factors 2, 6, 7 and 11) ..................................................................................28

F. No Jury Trial Is Implicated (Bay Vista Factor 12).................................................33

CONCLUSION..............................................................................................................................34

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TABLE OF AUTHORITIES

Page(s)

Cases

A.H. Robins Co. v. Dalkon Shield Claimants Trust,

86 F.3d 364 (4th Cir. 1996) .......................................................................................................19

Abner v. Mate Creek Loading, Inc. (In re Mid-Atlantic Res. Corp.),

283 B.R. 176 (S.D. W. Va. 2002)................................................................................. 18, 29, 30

Blanton v. IMN Fin. Corp.,

260 B.R. 257 (M.D.N.C. 2001) .......................................................................................... 19, 30

Commonwealth of Virginia ex rel. Integra Rec LLC v. Countrywide Sec. Corp.,

No. 3:14CV706, 2015 WL 3540473 (E.D. Va. June 3, 2015).................................................. 29

Grausz v. Englander,

321 F.3d 467 (4th Cir. 2003) .................................................................................................... 19

Hilton Worldwide, Inc. v. Caesars Entm’t Corp.,

532 B.R. 259 (E.D. Va. 2015) .................................................................................................. 32

In re Butterfield,

339 B.R. 366 (Bankr. E.D. Va. 2004)................................................................................. 16, 30

In re Donoho,

402 B.R. 687 (Bankr. E.D. Va. 2009)....................................................................................... 31

In re Morgantown Excavators, Inc.,

Adv. Proc. No. 13-24, 2013 WL 4829165 (N.D. W. Va. Sept. 9, 2013)...................... 17, 29, 30

In re Rabex Amuru of N. Carolina, Inc.,

198 B.R. 898 (Bankr. M.D.N.C. 1996)............................................................................... 27, 28

In re Tilley,

42 B.R. 827 (Bankr. E.D. Va. 1984)................................................................................... 23, 31

In re Walters,

Civ. Action No. 5:12–cv–01174, 2013 WL 5505055 (S.D. W. Va. Oct. 2, 2013)................... 31

In re Willett,

No. 95-13066-AM, 1996 WL 910907 (Bankr. E.D. Va. May 9, 1996) ....................... 23, 31, 32

In re Yates,

Nos. 01–32341–T, 02–3053–T, 2002 WL 32140187 (Bankr. E.D. Va. Aug. 16, 2002)...........31

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iv

Kepley Broscious, PLC v. Ahearn (In re Ahearn),

318 B.R. 638 (Bankr. E.D. Va. 2003)................................................................................. 17, 30

Klein v. Vision Lab Telecommc’ns, Inc.,

399 F. Supp. 2d 528 (S.D.N.Y. 2005) ...................................................................................... 25

Margan v. Chemetron Fire Sys., Inc.,

954 F. Supp. 1127 (E.D. Va. 1997) .......................................................................................... 18

Massey Energy Co. v. W. Virginia Consumers for Justice,

351 B.R. 348 (E.D. Va. 2006) ............................................................................................ 23, 31

Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp.,

460 U.S. 1 (1983)...................................................................................................................... 16

Shaia v. Brown (In re Brown),

Nos. 95-34782-T, 96-3125, 1996 WL 757100 (Bankr. E.D. Va. Dec. 5, 1996) ...................... 30

Smith v. McLeskey (In re Bay Vista of Va., Inc.),

394 B.R. 820 (Bankr. E.D. Va. 2008)................................................................................ passim

Stanworth v. Bank of Am., N.A. (In re Stanworth),

543 B.R. 760 (Bankr. E.D. Va. 2016)....................................................................................... 33

Virginia ex rel. Integra REC LLC v. Countrywide Sec. Corp.,

92 F. Supp. 3d 469 (E.D. Va. 2015) ......................................................................................... 29

Statutes and Codes

United States Code

Title 28, section 157............................................................................................................ 11, 25

Title 28, section 158.................................................................................................................. 25

Title 28, section 1331.......................................................................................................... 16, 17

Title 28, section 1334................................................................................................ 3, 14, 16, 18

Title 28, section 1409................................................................................................................ 18

Title 28, section 1446................................................................................................................ 11

Title 28, section 1452.................................................................................................... 16, 17, 25

Rules and Regulations

Federal Rules of Bankruptcy Procedure

Rule 9027.................................................................................................................................. 11

New York Civil Practice Law and Rules

Rule 305.................................................................................................................................... 10

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Other Authorities

Wright & Miller, 14C Fed. Prac. & Proc. Juris. § 3734 (4th ed.)................................................. 18

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1

Defendants/Counterclaim-Plaintiffs Virginia Conservation Legacy Fund, Inc. and ERP 

Compliant Fuels, LLC (collectively, “VCLF”), by their undersigned attorneys, respectfully 

submit this Memorandum of Law in opposition to Plaintiff/Counterclaim-Defendant Black 

Diamond Commercial Finance, LLC’s (“Black Diamond”) Renewed Motion to Remand or, 

Alternatively, for Discretionary Abstention (ECF Doc. No. 12) (the “Renewed Remand 

Motion”).

PRELIMINARY STATEMENT

At the core of this adversary proceeding is a straightforward question: Did Black 

Diamond renege on its promise to finance VCLF’s assumption of more than $400 million of 

Patriot’s1 environmental and employee-related liabilities and VCLF’s acquisition of the two 

Patriot mines with union contracts as part of Patriot’s confirmed liquidating plan of 

reorganization, as required by the express terms of its Commitment Letter with VCLF?

Although Black Diamond contends that it did not breach the Commitment Letter, and that 

instead VCLF did, neither VCLF nor Black Diamond contests that:

• VCLF is a Virginia-based non-profit dedicated, among other things, to reducing 

the growth of carbon emissions and cleaning up land and water contaminated as 

the result of coal mining.

• VCLF’s assumption of environmental and employee-related liabilities and its 

acquisition of two union mines from Patriot were indispensable to Patriot’s 

ability to confirm its liquidating plan of reorganization (the “Plan”).

• The Commitment Letter was only contemplated by VCLF and Black Diamond as 

part of Patriot’s Chapter 11 Case to facilitate confirmation of the Plan.

• The Commitment Letter was executed prior to the confirmation hearing on 

Patriot’s Plan.

 1 “Patriot” means Patriot Coal Corporation and its affiliates that were the debtors and debtors-inpossession in the above-captioned chapter 11 case (the “Chapter 11 Case”).

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• The Commitment Letter was included in Patriot’s “Amended Plan Supplement,” 

distributed to Patriot’s creditors and made a part of the evidentiary record upon 

which this Court relied in entering an order confirming Patriot’s Plan (the 

“Confirmation Order”).

• Black Diamond, which has sufficient resources to litigate in this Court and, in 

fact, has participated in Patriot’s Chapter 11 Case from its start, insisted that this 

Bankruptcy Court approve the Commitment Letter. Black Diamond provided the 

language approving the Commitment Letter that it wanted for inclusion in the 

Confirmation Order (as well as other comments to the Confirmation Order), and 

that language was included in the Confirmation Order. Black Diamond’s 

bankruptcy counsel also participated in and represented Black Diamond at the 

Patriot confirmation hearing, as he had in many prior Patriot hearings before this 

Court.

• Prior to the Plan’s Effective Date, VCLF gave notice that Black Diamond had 

anticipatorily breached the Commitment Letter by adding materially adverse 

conditions beyond those set forth in the Commitment Letter as requirements for 

funding, such as a requirement that VCLF’s principals provide personal 

guaranties.

• Black Diamond rushed to New York State Court on the eve of the Plan becoming

effective and commenced an action for damages against VCLF by way of a 

summary notice proceeding generally reserved for circumstances other than those 

involved in this matter, in order to avoid having this dispute resolved by this 

Court.

• Under the Confirmation Order and the Plan, this Court expressly retained 

jurisdiction over pre-Effective Date disputes involving any document entered into 

by VCLF in connection with its proposed transactions involving Patriot, such as

the Commitment Letter.

• The resolution of this adversary proceeding could impact distributions to other 

Patriot creditors under the terms of the Plan.

• The dispute does not involve unique, unsettled principles of New York law, 

which governs the Commitment Letter.

Based on these uncontested facts, not one, but two federal courts, the United States 

District Court for the Southern District of New York (the “New York District Court”) and the 

United States Bankruptcy Court for the Southern District of New York (the (“New York 

Bankruptcy Court”), have concluded that this dispute (i) “arises in,” or at the very least is 

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“related to” (as those words are used in 28 U.S.C. §1334(b)), the Patriot Chapter 11 Case and 

falls within a Bankruptcy Court’s jurisdiction, and (ii) should be decided by a Bankruptcy Court.

Further, the New York Bankruptcy Court concluded that this adversary proceeding 

properly belongs in this Court. As the New York Bankruptcy Court held in its April 25, 2016 

memorandum opinion and order transferring this adversary proceeding to this Court as its proper 

venue (the “Transfer Order”):

2

 “the outcome of this case affects the interpretation, 

implementation, consummation, or administration of the confirmed Plan,” Transfer Order, at 8; 

and VCLF proved, by a preponderance of the evidence, that “[e]fficiency and the interests of 

justice”—as well as the “convenience of the parties”—“support transfer to [this Court].” Id. at 9 

& n.1.

Admittedly, when transferring this proceeding to this Court, the New York Bankruptcy 

Court declined to rule on Black Diamond’s motion for equitable remand or discretionary 

abstention. Instead, it deferred to this Court to decide these discretionary questions should Black 

Diamond press them again. There is, however, no reason for this Court to exercise discretion to 

send this adversary proceeding to New York State Court. The facts and law compel the 

conclusion that this adversary proceeding should stay in this Court. This Court has, and has 

retained, jurisdiction over the dispute; the Commitment Letter was only entered into as part of 

Patriot’s Chapter 11 Case; the dispute arose in Patriot’s Chapter 11 Case and prior to the 

Effective Date of the Plan; resolution of the dispute requires interpretation of the Plan that this 

Court confirmed and the Commitment Letter this Court approved; resolution of the dispute could 

affect the administration of this Chapter 11 Case and the implementation of Patriot’s Plan 

including creditor recoveries; and, finally, efficiency, the interests of justice, and the convenience 

 2 A copy of the Transfer Order is attached as Exhibit L to the Declaration of C. William Phillips, dated 

May 10, 2016, ECF Doc. No. 14 (“Phillips Declaration” or “Phillips Decl.”).

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of the parties are all furthered by resolution of this dispute in this Court rather than State Court in 

New York.

It is important to note that Black Diamond has not introduced a single fact or legal 

argument to support its contention that this Court should exercise its discretion to remand or 

abstain that was not fully litigated before, and rejected by, the New York Bankruptcy Court. For 

example, Black Diamond argues that this Court should send the case back to New York State 

Court because this case will have “[n]o [i]mpact [u]pon the [b]ankruptcy [p]roceeding,”3 but the 

New York Bankruptcy Court has specifically (and correctly) held to the contrary finding among 

other things, that the interpretation and implementation of the Plan are directly implicated by this 

adversary proceeding. Similarly, Black Diamond argues that the interest of justice will be served 

by having this dispute resolved in New York State Court, but the New York Bankruptcy Court 

has held (again correctly) to the contrary, finding that VCLF proved by a preponderance of the 

evidence that the interest of justice is served by this Court deciding the adversary proceeding. 

Further, Black Diamond argues that this Court should abstain because the dispute involves two 

non-debtor parties. Again, the New York Bankruptcy Court rejected this argument, holding 

(once again correctly) that the “close nexus” between this adversary proceeding, on the one hand, 

and the Plan and the Patriot Chapter 11 Case, on the other, confers subject-matter jurisdiction

over this dispute in this Court. See Transfer Order, at 5-8.

In short, this Court should keep jurisdiction, as the facts and law support the conclusion 

that this Court is the proper court to preside over this adversary proceeding. In contrast, Black 

Diamond has failed to demonstrate any cause for equitable remand or discretionary abstention, or 

 3 See Plaintiff’s Memorandum of Law in Support of Plaintiff’s Renewed Motion to Remand or, 

Alternatively, for Discretionary Abstention (ECF Doc. No. 13) (“Pl.’s Mem.”), at 9.

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any basis to reverse the reasoned conclusions of the New York Bankruptcy Court that 

specifically rejected the very points Black Diamond advances in support of its motion for 

equitable remand or discretionary abstention. As a result, this Court should deny Black 

Diamond’s motion to send this dispute to New York State Court, and find that the adversary 

proceeding is now properly venued before it.

FACTUAL BACKGROUND

A. VCLF and Black Diamond Enter into the Commitment Letter to Facilitate 

the Chapter 11 Plan in the Patriot Chapter 11 Case

On May 12, 2015 (the “Petition Date”), Patriot commenced the Chapter 11 Case. As 

debtor-in-possession, Patriot continued its pre-petition business of, inter alia, operating coal 

mines and selling coal. See Phillips Decl., Ex. H (VCLF’s Answer and Counterclaim, dated 

December 4, 2015) (the “Answer”) ¶ 19.

VCLF is a 501(c)(3) Virginia non-profit entity that seeks to conserve Virginia’s natural 

resources to protect the environment, educate the public, and provide public access and 

enjoyment of the outdoors. Id. ¶ 6. As an integral and indispensable part of Patriot’s chapter 11 

liquidation, VCLF and Patriot entered into an Asset Purchase Agreement, dated August 16, 2015 

(as amended, the “APA”), under which VCLF agreed to acquire certain assets (primarily two 

mines and their related union contracts) and assume certain liabilities (no less than $400 million 

in environmental clean-up liabilities and employee-related liabilities) from Patriot (the “VCLF 

Transaction”). See id. ¶ 14. Effectuating the VCLF Transaction was subject to, among other 

things, the authorization of this Court and confirmation of Patriot’s liquidating Plan. See 

Declaration of Patrick J. Potter (“Potter Decl.”), Ex. 1 (APA), Preamble (“[T]he execution and 

delivery of this Agreement and the Sellers’ ability to consummate the Transaction are subject, 

among other things, to the authorization of the Bankruptcy Court pursuant to section 1129 of the 

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Bankruptcy Code and is expected to be consummated concurrently with the effective date of the 

Plan.”). It is undisputed that the VCLF Transaction was critically important to confirmation of 

Patriot’s Plan.

VCLF and Black Diamond entered into the Commitment Letter on September 21, 2015, 

for the sole purpose of facilitating the VCLF Transaction. See Phillips Decl., Ex. B

(Commitment Letter). Although VCLF’s principal signed the Commitment Letter in New York, 

the primary purpose of VCLF’s trip to New York on September 21, 2015, was not to sign the 

Commitment Letter, but rather—as Black Diamond admits in its Complaint—to attend the 

Patriot bankruptcy auction. See Phillips Decl., Ex. A (Complaint) ¶¶ 26-27. Under the 

Commitment Letter, which is governed by agreement by New York law, Black Diamond agreed, 

inter alia, to provide VCLF with asset-based loans and/or term loans in the aggregate principal 

amount of $25 million for (a) paying certain fees, costs, and expenses in connection with the 

VCLF Transaction, and (b) providing VCLF with working capital from and after the 

consummation of the VCLF Transaction. Phillips Decl., Ex. B (Commitment Letter), at 1. The 

parties did not include a choice-of-forum clause in the Commitment Letter, and further 

“irrevocably waived all right to trial by jury in any action or proceeding arising out of this 

Commitment Letter or the transactions contemplated hereby.” Id. at 4. 

After its execution, the Commitment Letter was filed with this Court prior to the 

confirmation hearing as part of Patriot’s “Amended Plan Supplement” on September 25, 2015, 

together with various other documents related to the feasibility of consummating the VCLF 

Transaction. See Potter Decl., Ex. 2 (Notice of Filing of Amended Plan Supplement, Sept. 25, 

2015, Patriot Chapter 11 Case ECF Doc. No. 1405, at Exhibits I-L, consisting of “VCLF 

Financial Projections,” “VCLF List of Officers and Directors,” “VCLF Operating Agreement,” 

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and “VCLF Financing Commitment Letter,” respectively). The Commitment Letter, thus, was 

provided to Patriot’s creditors as they evaluated the Plan, and it was part of the evidentiary 

record upon which this Court relied in ultimately confirming the Plan.

The VCLF Transaction is not the only way that the Black Diamond corporate family has 

inserted itself into the Patriot Chapter 11 Case. Black Diamond’s affiliate, Black Diamond 

Capital Management, is a member of the so-called “Letter of Credit Facility” in the Patriot 

Chapter 11 Case. While the members of the Letter of Credit Facility are collectively represented 

in the Patriot Chapter 11 Case by Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”), 

Black Diamond appeared—and continues to appear—independently in the Patriot Chapter 11 

Case through Schulte Roth & Zabel LLP (“Schulte”).

On October 8, 2015, a hearing took place before this Court, at which Patriot’s counsel 

announced that the VCLF Transaction would close, and Patriot’s Plan would become effective, 

on October 26, 2015 (the “Effective Date”). At the hearing, Patriot’s counsel further represented 

that the Effective Date needed to occur by October 26th because Patriot expected to run out of 

money before the end of October and its lenders had not agreed to advance additional funds that 

would be required to continue Patriot’s operations. Black Diamond’s counsel participated in this 

hearing. See Phillips Decl., Ex. H (Answer) ¶ 26. Patriot called VCLF’s president as a witness 

at its confirmation hearing to testify about the feasibility of the VCLF Transaction. See id. ¶ 16.

On October 9, 2015, this Court entered the Confirmation Order confirming Patriot’s Plan. 

See Phillips Decl., Ex. C (Confirmation Order, attaching and incorporating the Plan). The 

Confirmation Order approved and incorporated both the APA and the Commitment Letter. With 

respect to the APA, the Confirmation Order stated, inter alia, that “[a]pproval of the VCLF 

APA, and the prompt consummation of the VCLF Transaction contemplated thereby, is in the 

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best interests of the Debtors and their Estates.” Id. (Confirmation Order ¶ 85). With respect to 

the Commitment Letter, the Confirmation Order provides:

The transactions contemplated by the VCLF Commitment Letter 

are hereby approved in all respects. The indebtedness to be 

incurred by VCLF, and the Liens to be granted by VCLF, in 

connection with the transactions contemplated by the VCLF 

Commitment Letter, are valid, binding and enforceable, and 

granted as an inducement to the lenders thereunder to extend the 

credit contemplated thereby, and shall be, and hereby are, deemed 

not to constitute a fraudulent conveyance or fraudulent transfer, 

and shall not otherwise be subject to avoidance under the 

Bankruptcy Code or other applicable law. In addition, the equity 

interests in Healthco (as defined in the VCLF Commitment Letter) 

to be issued to the lender under the VCLF Commitment Letter are 

issued as a further inducement to the lender to extend the credit 

contemplated thereby, shall be deemed to have been issued for fair 

consideration and reasonably equivalent value, and are deemed not 

to constitute a fraudulent conveyance or fraudulent transfer, and 

shall not otherwise be subject to avoidance under the Bankruptcy 

Code or other applicable law.

Id. ¶ 126. This language was inserted into the proposed Confirmation Order word-for-word at 

Black Diamond’s insistence on October 8, 2015, the day before this Court entered the

Confirmation Order. See Potter Decl., Ex. 3 (E-mail from Adam Harris (Black Diamond’s 

counsel) to Stephen Hessler and Ross Kwasteniet (Patriot’s counsel), dated Oct. 8, 2015). 

Indeed, the Commitment Letter was so intertwined with confirmation of the Plan that the Plan 

provides that the members of the Letter of Credit Facility (which includes Black Diamond) may 

be entitled to additional distributions (defined in the Plan as the “Federal Mine Profit Interest”) if 

the Commitment Letter was not consummated and Patriot and VCLF agree to alternative, 

mutually-acceptable third-party financing. See Phillips Decl., Ex. C (Plan, art. I, § A, ¶ 174; id. 

art. IV § H).

The Plan further specifies that this Court retains jurisdiction over, among other things, 

disputes arising in connection with the Commitment Letter. Article XI of the Plan provides:

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Notwithstanding the entry of the Confirmation Order and the 

occurrence of the Effective Date, on and after the Effective Date, 

the Bankruptcy Court shall retain such jurisdiction over the 

Chapter 11 Cases and all matters, arising out of, or related to, the 

Chapter 11 Cases and the Plan, including without limitation 

jurisdiction to: . . .

9. resolve any cases, controversies, suits, disputes, or Causes of 

Action that may arise in connection with the Consummation, 

interpretation, or enforcement of the Plan or any Entity’s 

obligations incurred in connection with the Plan, the Blackhawk 

Transaction Documents, the VCLF Transaction Documents, or any 

actions or courses of dealing related thereto that occurred on or 

prior to the Effective Date[.]

Id. (Plan, art. XI ¶ 9) (emphasis added). The Plan, in turn, defines the “VCLF Transaction 

Documents” as “the VCLF APA and each other document contemplated by the VCLF APA or 

entered into in connection with the VCLF Transaction.” Id. art. I § A ¶ 257.

B. Black Diamond Repudiates the Commitment Letter on the Eve of the Closing 

of the VCLF Transaction

After confirmation of the Plan, but before the Effective Date, Black Diamond breached 

the Commitment Letter. On October 23, 2015, the Friday before the previously-scheduled

Monday Effective Date for the Plan, Black Diamond announced that it would not finance the 

VCLF Transaction on the terms set forth in the Commitment Letter. Instead, Black Diamond 

demanded that VCLF agree to new, onerous financing terms, such as a requirement that VCLF’s 

principals provide a personal guaranty and other provisions that would have put VCLF in 

immediate default and would have allowed Black Diamond to take control of the assets VCLF 

was purchasing in the VCLF Transaction. VCLF never agreed to these substitute lending terms, 

and, on October 25, 2015, the day before the Effective Date, Black Diamond’s counsel 

confirmed in writing that Black Diamond would not perform under the Commitment Letter. 

VCLF separately had confirmed in writing that it considered Black Diamond’s actions a breach 

of the Commitment Letter, terminating VCLF’s obligations under the Commitment Letter. (The 

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details of Black Diamond’s breach of the Commitment Letter are set forth in VCLF’s

counterclaim. See Phillips Decl., Ex. H (Answer ¶¶ 29-41).) Black Diamond’s breach and 

repudiation resulted in VCLF closing on the VCLF Transaction on October 27, 2015, without 

any third-party financing. See id. ¶ 42. While VCLF did subsequently obtain modest third-party 

financing, this amount was far below the $20 million Black Diamond contracted to provide 

VCLF. As a result of Black Diamond’s breach, “VCLF has been forced to operate the coal 

mines purchased from Patriot without the liquidity and access to liquidity that VCLF would have 

enjoyed had Black Diamond provided the financing required by the Commitment Letter.” Id.

C. Commencement of Action in New York State Court

On October 26, 2015, before the VCLF Transaction had closed and the Effective Date of 

the Plan had occurred, Black Diamond commenced this action against VCLF in New York state 

court. Notably, Black Diamond did so by filing a Summons with Notice, without a complaint, a 

summary procedure usually reserved for the rare circumstance in which the statute of limitations 

is about the lapse. Potter Decl., Ex. 4. Indeed, at oral argument before the New York 

Bankruptcy Court on April 21, 2016, described infra, VCLF’s counsel began to explain why it 

was unusual that Black Diamond employed this procedure, but Judge Glenn did not require 

explanation and cut VCLF’s counsel off, noting, “No, I’m aware. I understand what happened 

here.” Potter Decl., Ex. 5 (4/21/16 Oral Arg. Tr.) 37:3-4. Black Diamond purported to serve 

VCLF with the Summons with Notice in Virginia three days later, on October 29, 2015. Potter

Decl., Ex. 6.

On November 2, 2015, VCLF filed a motion to dismiss the Removed Action because the 

Summons with Notice did not comply with the strict jurisdictional requirements of Section 

305(b) of the New York Civil Practice Law and Rules (the “Motion to Dismiss”). The return 

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date of the Motion to Dismiss was November 18, 2015. As of November 2, 2015, Black 

Diamond had still not served VCLF with a complaint.

On November 5, 2015, Black Diamond filed its Complaint. See Phillips Decl., Ex. A

(Complaint, without exhibits). The Complaint contains a single cause of action seeking not less 

than $20 million in damages from VCLF, based on VCLF’s alleged breach of the Commitment 

Letter by purportedly failing to abide by its exclusivity provisions. Id. ¶¶ 60-67 (entitled 

“CLAIM FOR RELIEF—Breaches of Contract Against Virginia Conservation Legacy Fund, Inc. 

and ERP Compliant Fuels, LLC”).

D. Removal to the New York Bankruptcy Court

On November 12, 2015, VCLF filed a Notice of Removal with the New York District 

Court. See Potter Decl., Ex. 7 (Notice of Removal, without exhibits). That same day, VCLF

filed a Notice of Filing of Notice of Removal with the New York state court (with notice to 

Black Diamond), thereby effecting the removal of this action to the federal system. See Potter

Decl., Ex. 8 (Notice of Filing of Notice of Removal, without exhibits); see generally 28 U.S.C. 

§ 1446(d); Fed. R. Bankr. P. 9027(c). Prior to VCLF’s removal of the action, nothing other than 

the filing of the Summons and Notice and the Complaint, and briefing on VCLF’s motion to 

dismiss on narrow jurisdictional grounds (without an order resolving the motion), had occurred 

in state court. No state court judge had been assigned to the case (although Black Diamond had 

filed a letter requesting that the action be handled by the Commercial Division of the New York 

State Court), no response to the Complaint had been filed, and no schedule had been set for the 

resolution of the case. As a result of the removal, no portion of this action remains pending in 

New York State Court.

By order dated November 23, 2015, the New York District Court referred this action to 

the New York Bankruptcy Court pursuant to 28 U.S.C. § 157(a) and the Southern District of 

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New York’s Standing Order of Reference (the “Referral Order”). See Potter Decl., Ex. 9

(Referral Order, at 1-2) (ECF Doc. No. 2-26). The New York District Court noted, as one of the 

bases of its Referral Order, that the Removed Action “arises in and is related to a case under title 

11 of the United States Code.” Id. at 1. The next day, November 24, 2015, VCLF filed a motion 

to transfer this action to this Court (the “Transfer Motion”). See ECF Doc. No. 3-1. On 

November 25, 2015, Black Diamond filed a motion to remand the action to New York state court 

arguing that bankruptcy courts lack subject-matter jurisdiction over this dispute, or, in the 

alternative, that principles of equitable remand or discretionary abstention apply (the “Original 

Remand Motion”). See ECF Doc. No. 3-20. Pursuant to a court-approved and stipulated 

briefing schedule, briefing on both the Transfer Motion and the Original Remand Motion was 

completed by December 31, 2015. See ECF Doc. No. 3-100.

Pursuant to a stipulation with Black Diamond (see ECF Doc. No. 3-68), on December 4, 

2015, VCLF filed its Answer, which set forth a single counterclaim against Black Diamond for 

breach of the Commitment Letter. See Phillips Decl., Ex. H (Answer ¶¶ 44-53).

E. The Letter of Credit Facility Threatens to Invoke the Federal Mine Profit 

Interest Provisions of the Plan

Days after the Effective Date, counsel for the Letter of Credit Facility began contacting 

VCLF’s counsel to discuss distribution of the Federal Mine Profit Interest. On December 7, 

2015, counsel for the Letter of Credit Facility sent a letter to VCLF’s counsel Patrick Potter of 

Pillsbury Winthrop Shaw Pittman LLP (“Pillsbury”). See Phillips Decl., Ex. I (12/7/15 Letter 

from Albert L. Hogan III (Skadden) to Patrick Potter (Pillsbury), re “Federal Mine Profit 

Interest”). The letter asserts that the prerequisites for payment of the Federal Mine Profit Interest 

appear to have been met (given that Black Diamond and VCLF never closed on the Commitment 

Letter). Id. at 2. The letter further threatens that, in the event VCLF “fail[s] to confirm [by 

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December 18, 2015] that the Federal Mine Profit Interest has been triggered; or fail[s] to work 

with us to promptly document that [sic] same, we will seek appropriate relief from the Court.” 

Id. In response to this threat of litigation, VCLF’s counsel advised the Letter of Credit Facility’s 

counsel of VCLF’s triple-pay concerns (once via potential damages to Black Diamond in this 

action, once via the Federal Mine Profit Interest to the Letter of Credit Facility, and once for the 

modest third-party financing that VCLF was ultimately able to procure).

To date, the Letter of Credit Facility has not commenced an action against VCLF, and 

frankly, VCLF hopes that, based on the parties’ dialogue and reason, any litigation with the 

Letter of Credit Facility can be avoided, or at least continue to be deferred. To this end, for 

example, VCLF has, in response to the Letter of Credit Facility’s counsel’s request, kept counsel

apprised as this dispute develops and provided copies of all pleadings, including the relatively 

recent Transfer Order.

Despite all of VCLF’s efforts, the Letter of Credit Facility has not waived rights, if any, it 

may have to the Federal Mine Profit Interest and VCLF has no guaranty that the Letter of Credit 

Facility will not commence a separate action against it to enforce the Federal Mine Profit Interest 

(which VCLF would move to join with this action) or intervene in this action. As a result, VCLF 

is faced with the possibility of a second lawsuit arising from Black Diamond’s breach of the 

Commitment Letter from the Letter of Credit Facility, in an action that may be brought against it 

in this Court to enforce the Federal Mine Profit Interest provisions of the Chapter 11 Plan.

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F. The New York Bankruptcy Court Transfers this Action to this Court

On Thursday, April 21, 2016, the parties argued the Transfer Motion and the Original 

Remand Motion before the New York Bankruptcy Court (Glenn, J.).

4

 In response to Black 

Diamond counsel’s argument that New York State Court is the proper forum for this action, the 

New York Bankruptcy Court noted, among other things, “[Y]our client’s not a stranger to the 

bankruptcy in Virginia. . . . [Y]ou just won the race to the courthouse in filing in New York 

Supreme Court.” Potter Decl., Ex. 5 (4/21/16 Oral Arg. Tr.) 29:13-17.

On Monday, April 25, 2016, the New York Bankruptcy Court granted the Transfer 

Motion and, among other things, (i) held that that there is subject-matter jurisdiction over this 

action under 28 U.S.C. § 1334(b), (ii) denied the portion of the Original Remand Motion 

pertaining to subject-matter jurisdiction with prejudice, and (iii) denied the portion of the 

Original Remand Motion pertaining to equitable remand or discretionary abstention without 

prejudice. See Transfer Order, at 10. On April 26, 2016, the clerk of the New York Bankruptcy 

Court effectuated the transfer of this case to the Eastern District of Virginia, Richmond Division. 

See ECF Doc. No. 2-1.

G. Proceedings in this Court

On May 3, 2016, this Court set an initial status conference for May 11, 2016 (the “Initial 

Status Conference”). See ECF Doc. No. 4. On May 10, 2016, Black Diamond filed the 

Renewed Remand Motion. See ECF Doc. Nos. 12-14. 

At the Initial Status Conference, this Court asked whether any portion of this case 

remains pending in any court in New York, federal or otherwise; all parties responded in the 

negative. All counsel further reported that the parties had reached agreement on a “Joint 

 4 A true and correct copy of the transcript of this oral argument is attached to the Potter Declaration as 

Exhibit 5.

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Scheduling Order,” setting forth deadlines for discovery and dispositive motion practice, 

culminating in a final pre-trial conference in February or March 2017; the Court directed the 

parties to submit the Joint Scheduling Order and said that the Court would so-order it; and the 

Court scheduled oral argument on the Renewed Remand Motion for June 16, 2016. See ECF 

Doc. No. 17.

ARGUMENT

I. THIS CASE PROPERLY BELONGS IN THIS COURT

Common and legal sense dictate that this case be decided in this Court. VCLF is a 

Virginia resident that stepped up to the plate to provide a Virginia-debtor, Patriot, a viable 

opportunity to obtain consensus around a liquidating plan of reorganization by assuming 

substantial clean-up and employee-related liabilities and preserving union jobs, where the 

alternative likely would have been for Patriot to close its doors, leaving many out of work and 

large land areas without a remediation plan. The VCLF Transaction thus was not only integral 

to, but it also was indispensable to, Patriot’s ability to confirm its liquidating Plan. The VCLF 

Transaction, including the Commitment Letter, exists only as a result of the Patriot Chapter 11 

Case. And while the Commitment Letter was entered into by non-debtor parties, it was not only 

a key document executed in connection with the VCLF Transaction, it was part of the 

evidentiary record for confirmation and—at Black Diamond’s insistence—was incorporated into 

and approved by this Court as part of the Confirmation Order. Further, the failure to 

consummate the financing under the Commitment Letter may impact the viability of the Plan by 

endangering VCLF’s liquidity if, for example, VCLF ultimately is required to triple-pay for 

third-party financing. At any rate, it will likely impact creditor distributions under the Plan.

It is no surprise, therefore, that this Court specifically retained jurisdiction over disputes 

like a pre-Effective Date breach of the Commitment Letter or that the New York Bankruptcy 

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Court found section 1334(b) jurisdiction over this action and transferred this adversary 

proceeding to this Court to promote “efficiency . . . [in] the interests of justice . . . and [for] the 

convenience of the parties.” Transfer Order, 8, 9 and n.1. This Court, for a litany of self-evident 

reasons, is the natural venue for resolving a dispute that only exists as a result of, and is so 

intertwined with, Patriot’s Chapter 11 Case and liquidating Plan. Black Diamond’s original, 

rushed filings in New York state court, and its renewed effort to have this case transferred back 

to that court, are nothing more than an effort to upset this common sense conclusion. Equity and 

discretion, while invoked by Black Diamond, do not support a conclusion other than this 

adversary proceeding is now before the proper court.

II. ONLY THE RAREST, MOST EXCEPTIONAL CIRCUMSTANCES JUSTIFY 

EQUITABLE REMAND AND DISCRETIONARY ABSTENTION 

Bankruptcy courts, like other federal courts, remand cases on equitable grounds or 

abstain from a case on discretionary grounds only in extremely limited, clear and compelling 

circumstances. The norm is for a federal court to retain jurisdiction over matters before it. This 

paradigm flows from the applicable statutes and is applied uniformly by federal courts, including 

bankruptcy courts in this district.

Following removal of a civil action from state court to a federal bankruptcy court 

possessing subject-matter jurisdiction under 28 U.S.C. § 1334, the bankruptcy court “may”—but 

is not required to—“remand such claim or cause of action on any equitable ground.” 28 U.S.C. 

§ 1452(b). Alternatively, the bankruptcy court may abstain from hearing such proceeding “in the 

interest of justice, or in the interest of comity with State courts or respect for State law.” 28 

U.S.C. § 1331(c)(1). “The general rule, however, is that a federal court must accept the 

jurisdiction granted it, and only on very rare occasions is discretionary abstention warranted.” In 

re Butterfield, 339 B.R. 366, 373 (Bankr. E.D. Va. 2004) (Tice, J.) (denying motion for 

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discretionary abstention); see also id. at 374 (“A federal district court may decline to exercise its 

jurisdiction because of parallel state-court-litigation only in exceptional circumstances; only the 

clearest of justifications will warrant dismissal.”) (quoting Moses H. Cone Mem’l Hosp. v. 

Mercury Constr. Corp., 460 U.S. 1, 2 (1983) (emphasis added); In re Morgantown Excavators, 

Inc., Adv. Proc. No. 13-24, 2013 WL 4829165, at *3 (N.D. W. Va. Sept. 9, 2013) (“Generally, 

courts agree that abstention should be exercised only in a narrow sphere of cases and that 

abstention should be the exception, not the rule.”) (citing, inter alia, Smith v. McLeskey (In re 

Bay Vista of Va., Inc.), 394 B.R. 820, 845-46 (Bankr. E.D. Va. 2008) (John, J.)).

“The analysis under permissive abstention [28 U.S.C. § 1331(c)(1)] is largely the same as 

under equitable remand [28 U.S.C. § 1452(b)].” Morgantown, 2013 WL 4829165, at *5 & n.4 

(denying motions for permissive abstention and equitable remand applying the same factors); see 

also Kepley Broscious, PLC v. Ahearn (In re Ahearn), 318 B.R. 638, 643 (Bankr. E.D. Va. 2003) 

(Tice, J.) (noting that, because “similar equitable considerations” govern both equitable remand 

and discretionary abstention, the equitable remand issue would be assessed as part of the court’s 

consideration of the discretionary abstention factors). Courts in this district generally consider 

the following factors when adjudicating a motion for discretionary abstention:

(1) the court’s duty to resolve matters properly before it; (2) the 

predominance of state law issues and non-debtor parties; (3) the 

economical use of judicial resources; (4) the effect of remand on 

the administration of the bankruptcy estate; (5) the relatedness or 

remoteness of the action to the bankruptcy case; (6) whether the 

case involves questions of state law better addressed by the state 

court; (7) comity considerations; (8) any prejudice to the 

involuntarily removed parties; (9) forum non conveniens; (10) the 

possibility of inconsistent results; (11) any expertise of the court 

where the action originated; and (12) the existence of a right to a 

jury trial.

Bay Vista, 394 B.R. at 845 (quoting Ahearn, 318 B.R. at 644).

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Allegations in an answer may be considered in adjudicating a motion for remand. See

Margan v. Chemetron Fire Sys., Inc., 954 F. Supp. 1127, 1131 (E.D. Va. 1997) (“the Court may 

look beyond the notice of removal and may consider the case as a whole to determine if removal 

is proper”); Wright & Miller, 14C Fed. Prac. & Proc. Juris. § 3734 (4th ed.) (“[I]n practice, the 

federal courts usually do not limit their inquiry to the face of the plaintiff’s complaint, but rather 

consider the facts disclosed in the record of the case as a whole, in determining the propriety of 

removal.”) (citing authorities).

III. THE FACTORS GOVERNING EQUITABLE REMAND AND DISCRETIONARY 

ABSTENTION ARE NOT MET

As previously noted, common and legal sense make clear that this case is properly before 

this Court. Applying Bay Vista’s twelve factors (which effectively govern both equitable remand 

and discretionary abstention for the reasons set for above) results in the same conclusion. There 

is no basis for sending this action back to New York state court. 

A. This Case is Properly Before this Court and the Court Has a Duty to Resolve

It (Bay Vista Factor 1)

This action is properly before this Court. VCLF timely and properly removed the action 

from New York state court to the New York District Court; the New York District Court referred 

the case to the New York Bankruptcy Court; and the New York Bankruptcy Court transferred the 

case here only after both it and the New York District Court found that section 1334(b) “arising 

in,” or at least “related to,” jurisdiction applied to the dispute and the Patriot Chapter 11 Case.

An adversary proceeding is properly before a bankruptcy court when, inter alia, the 

proceeding “arises in” or is “related to” the underlying chapter 11 case pending before the court, 

and once a case is before the bankruptcy court, it has a duty to resolve it. See 28 U.S.C. §1409; 

Abner v. Mate Creek Loading, Inc. (In re Mid-Atlantic Res. Corp.), 283 B.R. 176, 189, 191 (S.D. 

W. Va. 2002) (denying motion for discretionary remand of mechanics’ lien action that the court 

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determined “arose in” the bankruptcy proceeding, explaining, with respect to the “properly 

before [the bankruptcy court]” factor, that “[a]s previously mentioned, Appellants’ lien is 

inextricably intertwined with the bankruptcy case”); Blanton v. IMN Fin. Corp., 260 B.R. 257, 

265-66 (M.D.N.C. 2001) (“[T]he court recognizes the duty to resolve matters properly before it. 

As discussed earlier, under the broad construction used by the Fourth Circuit, the present action 

‘relates to’ the bankruptcy proceeding. . . . Therefore, the action is properly in federal court, and 

the federal courts have a duty to resolve the matter.”).

Here it is clear that this dispute arises in the Patriot Chapter 11 Case. But for the Patriot 

Chapter 11 case, there would be no Commitment Letter and there would be no lawsuit. See 

Grausz v. Englander, 321 F.3d 467, 471 (4th Cir. 2003) (stating that claims or proceedings 

arising in a case under title 11 “are not based on any right expressly created by Title 11, but 

nevertheless, . . . would have no practical existence but for the bankruptcy”) (emphasis in 

original) (quoting A.H. Robins Co. v. Dalkon Shield Claimants Trust, 86 F.3d 364, 372 (4th Cir. 

1996); see also id. at 472 (holding that professional malpractice claim arose in the bankruptcy 

case even though it was not the “property of [the debtor’s] bankruptcy estate”). And, as the New 

York Bankruptcy Court noted, even if the dispute did not arise in the Patriot Chapter 11 Case, 

the dispute is “related to” the Patriot Chapter 11 Case under all judicial interpretations of “related 

to” jurisdiction.

Furthermore, pursuant to the Transfer Order, it is now law of the case that (i) this Court 

has subject-matter jurisdiction over this action (on the grounds that it either “arises in” or, at a 

minimum, is “related to” the Patriot Chapter 11 Case), as the New York District Court also found 

in its Referral Order; and (ii) this Court is the proper venue for this action. See Transfer Order, 

at 8, 9. Additionally, as noted infra Point III.B, all parties (and the New York Bankruptcy Court) 

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agree that this case falls within the retention-of-jurisdiction clause in the Plan. This Court should 

hold that this case is properly before it and that the Court, therefore, has a duty to resolve it.

B. This Adversary Proceeding Implicates and Impacts the Plan and the 

Administration of the Patriot Chapter 11 Case (Bay Vista Factors 4 and 5)

The dispute between VCLF and Black Diamond arises in, is closely related to, and is 

inexorably intertwined with the Patriot Chapter 11 Case and Plan, and the outcome of this 

adversary proceeding will likely affect the Patriot Chapter 11 Case and Plan. Accordingly, the

fourth and fifth factors of the discretionary abstention analysis—“the effect of remand on the 

administration of the bankruptcy estate” and “the relatedness or remoteness of the action to the 

bankruptcy case” (Bay Vista, 394 B.R. at 845) weigh against remand and abstention. There are 

at least three reasons for this:

First, there is a “close nexus” between this action and the Patriot Chapter 11 Case and its 

resolution will impact the Plan. As the New York Bankruptcy Court held, “the outcome of this 

case affects the interpretation, implementation, consummation, or administration of the

confirmed Plan.” See Transfer Order, at 8. It is not hard to see why. 

• This dispute and the underlying Commitment Letter are inextricably the result of, 

and intertwined with, the Patriot Plan. As the New York Bankruptcy Court 

observed, it “is clear that the confirmation order for the Plan approved and 

incorporated the Commitment Letter into the Plan; it was an important part of the 

Plan for the sale of assets to VCLF, even though an alternate source of financing 

was identified.” Id. at 3. 

• The resolution of the dispute will affect (and has already affected) other Patriot 

creditors under the Plan. In this regard, the New York Bankruptcy Court agreed 

with VCLF that “other parties in the Patriot Coal Case may have a right to 

additional Plan distributions, payable by VCLF (or possibly by Black Diamond, if 

VCLF prevails on its counterclaim) resulting from the failure of VCLF to close 

the asset purchase with the Black Diamond financing.” Id. at 3-4. Indeed, as 

noted supra at 12-13, the Letter of Credit Facility has threatened to sue VCLF to 

recover the distribution of the Federal Mine Profit Interest provided for in the 

Plan.

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• Although Black Diamond downplays the significance of the Letter of Credit 

Facility’s threat by characterizing it as a mere “reservation of rights” letter, and 

noting that it is “unaware of any further actions taken with regards to the above 

payment by VCLF or the Letter of Credit Facility” (Pl.’s Mem. 7), its statements 

are misplaced and miss the point. The Letter of Credit Facility could not have 

been clearer that, in the event VCLF “fail[s] to confirm that the Federal Mine 

Profit Interest has been triggered; or fail[s] to work with us to promptly document 

that [sic] same, we will seek appropriate relief from the Court.” Phillips Decl., 

Ex. I. As noted supra at 12-13, while the Letter of Credit Facility appears to have 

temporarily refrained from mounting such a lawsuit, the Letter of Credit Facility 

has indicated clearly that, based on developments in this action, it might be in its 

interest to file suit against VCLF or intervene in this action. VCLF thus continues 

to be exposed to litigation risk from the Letter of Credit Facility. In turn, to the 

extent that this Court does find VCLF liable to the Letter of Credit Facility for 

payment of the Federal Mine Profit Interest, any damages award to Black 

Diamond would have to be offset by this amount given that one of Black 

Diamond’s affiliates is a member of the Letter of Credit Facility, and the Black 

Diamond family therefore stands to be enriched by double recovery. Remanding 

this case to New York state court also raises the specter of inconsistent judgments 

should the Letter of Credit facility press its claim, as discussed below.

Second, the relatedness of this action to the Patriot Chapter 11 Case and its potential 

effect on the administration of the Patriot estate is clear because this action falls squarely within 

the retention-of-jurisdiction provision of the Plan. Indeed, Black Diamond’s counsel admitted as 

much at oral argument before the New York Bankruptcy Court:

[MR. PHILLIPS:] The retained jurisdiction clause, (indiscernible) 

not only doesn’t mention the commitment letter, but if you have to 

work through it, what it does it says retains that under the VCLF 

transaction documents which mean the asset purchase agreement 

and other documents contemplated by the asset purchase 

agreement, and goes on, it’s the vaguest of definitions. It calls in 

lots of things to us. Does it call in the commitment letter? Sure, 

we don’t contest that it doesn’t. But that’s a very . . . slim read.

4/21/16 Oral Arg. Tr. 19:7-18 (emphasis added). More significantly, the New York Bankruptcy 

Court has held that the dispute falls within the Plan’s retention of jurisdiction to this Court. See

Transfer Order at 4 (“[T]he Court concludes that disputes over whether the Commitment Letter 

was breached, and, if so, by whom, and with what consequences, fall within the retention of 

jurisdiction clause.”).

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Third, this Court’s recently-entered Final Decree closing the chapter 11 cases of certain 

Patriot affiliates makes clear that cases such as the present one, which arise in or are related to 

the Patriot Chapter 11 Case and are transferred to this Court from other jurisdictions, will be 

adjudicated by this Court. See Phillips Decl., Ex. K (3/1/16 Final Decree) ¶ 6 (“Notwithstanding 

entry of this Final Decree, any and all Actions hereafter commenced, continued, or transferred to 

this Court . . . shall be heard and resolved in the Lead Case as though the Chapter 11 Cases 

remained jointly administered.”); see also id. ¶ 5 (defining “Actions” as “adversary proceedings, 

lawsuits, or other actions (whether pending before this Court or otherwise) that could have 

otherwise been commenced in, continued in, or transferred to the Affiliate Cases”). VCLF notes 

that the Final Decree was entered on notice to, among others, Black Diamond and Black 

Diamond did not object.

C. Remand or Abstention Would Waste Judicial Resources and Create the 

Possibility of Inconsistent Results (Bay Vista Factors 3 and 10)

As the New York Bankruptcy Court stated when it transferred this action to this Court, 

“This action is closely related to the Patriot Coal Case, the Virginia Bankruptcy Court is familiar 

with the facts and circumstances giving rise to the claims in this case, and it can be most 

efficiently litigated and resolved in that court.” Transfer Order at 9. The “economical use of 

judicial resources” factor, Bay Vista, 394 B.R. at 845, therefore, supports this Court continuing to 

exercise jurisdiction over this adversary proceeding. Likewise, given that there is no related case 

pending in New York Supreme Court, there is no risk of inconsistent results by this Court 

maintaining jurisdiction over this adversary proceeding.

By contrast, remanding this case to New York Supreme Court would result in a waste of 

judicial resources and could lead to inconsistent results. Black Diamond does not dispute that a 

New York state court would not be as familiar as this Court with the facts and circumstances 

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surrounding this case; this alone would result in the undue prolongation of this action.5

 See Pl.’s 

Mem. 12. Indeed, this Court is not confronted with a well-developed state court action, which 

alone distinguishes this case from several of the cases cited by Black Diamond. See Pl.’s Mem. 

8, 16 (citing In re Tilley, 42 B.R. 827, 828 (Bankr. E.D. Va. 1984) (noting, in support of the 

decision to abstain, that it was “highly relevant” that plaintiff sought removal only after its claim 

was dismissed for failure to comply with discovery requests and a default judgment was entered 

against it on the defendant’s counterclaim); Massey Energy Co. v. W. Virginia Consumers for 

Justice, 351 B.R. 348, 353 (E.D. Va. 2006) (noting that permissive abstention based on comity 

considerations was appropriate where state court litigation was “significantly underway,” and the 

state court had “heard and ruled on a multitude of significant pre-trial motions, scheduled a final 

trial, and organized its regular operations to meet this case’s needs.”); In re Willett, No. 95-

13066-AM, 1996 WL 910907, at *10 (Bankr. E.D. Va. May 9, 1996) (remanding where a state 

court had already adjudicated proceedings in the matter removed to federal court)). No New 

York State Court proceedings are pending. No judge was ever assigned to this action, and no 

schedule was ever set to resolve it. See supra at 10-11. Significantly, the New York Bankruptcy 

Court, a tribunal familiar with both federal bankruptcy courts and the New York State Court’s 

Commercial Division (Black Diamond’s preferred forum), concluded that this case could be 

“most efficiently litigated and resolved” before this Court, rather than before a New York State 

Court judge.

 5 Black Diamond emphasizes the specialization of New York’s Commercial Division. See Pl.s’ Br. 17-

18. However, adjudication in the Commercial Division is no assurance of swift litigation. For 

example, one case that recently completed trial in the Commercial Division, Hellenic-American 

Educational Foundation v. Trustees of Athens College in Greece, No. 603770/07 (Sup. Ct., N.Y. Cty.) 

(Oing, J.), was initially filed in 2007: as a result of drawn-out motion practice, discovery, and a prior 

appeal, the case did not reach trial for almost ten years. By contrast, the parties here have already 

agreed to a scheduling order, which has now been so-ordered by the Court, under which discovery and 

dispositive motion practice will be completed by early 2017. See Scheduling Order, ECF Doc. No. 20.

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Moreover, if this Court were to grant the Renewed Remand Motion, the New York 

court’s ultimate disposition of the case could be inconsistent with subsequent decisions issued by 

this Court in the Patriot Chapter 11 Case. As noted above, this Court may potentially be required 

to adjudicate a dispute between the Letter of Credit Facility and VCLF regarding payment of the 

Federal Mine Profit Interest distribution under the Plan. A suit between the Letter of Credit 

Facility and VCLF would fall squarely within this Court’s jurisdiction, both as a matter of 

federal bankruptcy court subject-matter jurisdiction and the retention-of-jurisdiction provisions 

of the Plan. To the extent that the New York court finds for Black Diamond, but does not take 

the Federal Mine Profit Interest and VCLF’s payment for reduced third-party financing into 

account in calculating damages, the New York court’s judgment would potentially conflict with 

a ruling by this Court that is adverse to VCLF in an adversary proceeding between VCLF and the 

members of the Letter of Credit Facility (including Black Diamond’s affiliate).

Black Diamond’s only explanation for how transferring this action to New York would 

save judicial resources is that there is “a risk that either party could appeal an unfavorable 

outcome based on the absence of subject matter jurisdiction. While the SDNY Bankruptcy Court 

decided that there is subject matter jurisdiction, either party could ultimately dispute that ruling 

on appeal. In that event, the outcome of this case would be delayed and, at worst, this action 

could need to be re-tried in New York Supreme Court.” Pl.’s Mem. 12. This Court should not 

be concerned that Black Diamond may later appeal and argue a lack of subject-matter 

jurisdiction: First, the supposed waste of judicial resources that Black Diamond identifies would 

be of Black Diamond’s own making, as Black Diamond could avert such waste of judicial 

resources by applying for interlocutory appeal of the Transfer Order to the district court now, 

rather than continuing to litigate this case, as it appears to be doing, presumably to hedge its bets 

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on the outcome. Compare 28 U.S.C. § 1452(b) (“An order entered under this subsection 

remanding a claim or cause of action, or a decision not to remand, is not reviewable by appeal or 

otherwise by the court of appeals under section 158(d), 1291, or 1292 of this title or by the 

Supreme Court of the United States under section 1254 of this title.”) (emphasis added) with 28 

U.S.C. § 158(a) (“The district courts of the United States shall have jurisdiction to hear 

appeals . . . with leave of court, from interlocutory orders and decrees, of bankruptcy judges 

entered in cases and proceedings referred to the bankruptcy judges under section 157 of this 

title.”). Indeed, the only case Black Diamond cites to support its “judicial resources” argument 

dealt with the issue of whether to grant an interlocutory appeal precisely in order to avoid the 

risk of double litigation. See Klein v. Vision Lab Telecommc’ns, Inc., 399 F. Supp. 2d 528, 537 

(S.D.N.Y. 2005). Presumably, this is why Black Diamond did not bother to elaborate on the 

“different context” that gave rise to that matter. See Pl.’s Mem. 12. Second, if Black Diamond is 

correct that equitable remand or discretionary abstention should be granted because one party 

might later challenge subject-matter jurisdiction, every litigant would have the absolute ability to 

deprive bankruptcy courts of jurisdiction by simply challenging it. That cannot be the law. 

Finally, it is unlikely that an appellate court would upset the New York Bankruptcy Court’s wellreasoned decision finding of subject-matter jurisdiction here.

D. The Convenience of the Parties Supports Maintaining Jurisdiction in this

Court (Bay Vista Factors 8 and 9)

The two factors relating to the relative convenience or prejudice to the parties —“any 

prejudice to the involuntarily removed parties” and “forum non conveniens” (Bay Vista, 394 

B.R. at 845) — also weigh against equitable remand or discretionary abstention. The 

convenience to the parties in maintaining this action in Virginia is manifest. Indeed, the New 

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York Bankruptcy Court found that “the convenience of the parties . . . support[s] transfer to the 

Virginia Bankruptcy Court.” Transfer Order, at 9 n.1.

VCLF is a non-profit organization that is located in Virginia; Virginia is the location of 

the Patriot Chapter 11 Case, to which this action is related; and, according to the Complaint, 

Black Diamond conducted a significant amount of its due diligence for the Commitment Letter 

in West Virginia. See Phillips Decl., Ex. A (Complaint) ¶ 38. Moreover, Black Diamond has 

demonstrated its willingness and ability to appear before this Court. Black Diamond voluntarily 

appeared in the Patriot Chapter 11 Case through its counsel Schulte.

6

 There is no prejudice to 

Black Diamond in litigating this case in Virginia. Furthermore, that fact that VCLF’s financial 

advisor Teneo is located in New York does not show that Virginia is an inconvenient forum. 

Teneo has not complained that this action is in this Court, and like Black Diamond, Teneo 

participated in the Patriot Chapter 11 Case throughout 2015 and attended the confirmation 

hearing. By contrast, VCLF, as a non-profit, would suffer great prejudice if its principals were 

forced to stay in New York for potentially weeks on end to participate in a trial in this action.

In its moving memorandum of law, Black Diamond places great emphasis on the fact that 

New York is “the venue where the parties met, negotiated, and executed the Commitment Letter”

to support its position that New York is a convenient forum for VCLF. Pl.’s Mem. 17. Black 

Diamond is wrong. As indicated in the Complaint, VCLF came to New York on September 21, 

2015, not to sign the Commitment Letter but to be present at an auction of Patriot’s assets being 

conducted in New York pursuant to an order of this Court. Phillips Decl., Ex. A (Compl. ¶¶ 25-

27, 35-37). The mere fact that VCLF’s principals were presented with a copy of the 

 6 Indeed, regardless of how this Court decides the Renewed Remand Motion, Black Diamond’s litigation 

counsel may be required to appear before this Court anyway should VCLF and the Letter of Credit 

Facility (whose members include a Black Diamond affiliate) litigate a suit over the Federal Mine Profit 

Interest before this Court.

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Commitment Letter by Black Diamond on the sidelines of the Patriot bankruptcy auction (an 

event subject entirely to this Court’s jurisdiction, given its centrality to the Patriot Chapter 11 

Case) hardly shows a legally significant connection between this action and New York for the 

purpose of identifying the most appropriate, convenient forum to resolve this dispute. If 

anything, being in New York when the Commitment Letter was signed might be a factor to 

consider in applying New York law to the Commitment Letter if a choice of law provision did 

not exist, but of course, it does as the parties chose New York law. The truly significant point 

that demonstrates that the signing of the Commitment Letter in New York is irrelevant to venue 

is that is does not contain a forum selection clause. VCLF and Black Diamond had no agreement 

on venue; they placed no priority on New York being the location for dispute resolution; and 

they did not acknowledge any meaningful connection with New York for dispute resolution 

purposes by choosing New York law to govern disputes. If anything, Black Diamond’s 

insistence that the Confirmation Order contain language incorporating and approving the 

Commitment Letter manifests its original intent that disputes arising out of the Commitment 

Letter would be adjudicated by this Court. See supra at 7-8. At bottom, Virginia is the location 

that is most connected to the parties and the subject-matter of this lawsuit that arises solely as a 

result of Patriot’s Chapter 11 Case.

Black Diamond’s reliance on In re Rabex Amuru of N. Carolina, Inc., 198 B.R. 898 

(Bankr. M.D.N.C. 1996), to support abstention is misplaced. Although the court in Rabex did 

abstain in favor of a Japanese court on grounds of forum non conveniens, the case is plainly 

distinguishable from this one. In that case: (i) the plaintiff was a Japanese corporation and the 

individual defendant was a Japanese citizen; (ii) the agreements at issue were “entered into in 

Japan” and concerned funds that “were deposited into a Japanese bank”; (iii) several of the 

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witnesses did not speak English; and (iv) there was a demand for a jury trial. See id. at 900-901. 

None of these extreme factors, which supported abstention in Rabex, are present in this case.

Furthermore, Black Diamond’s choice of a New York forum (see Pl.’s Br. 17) should be 

given no weight. As the New York Bankruptcy Court acknowledged at oral argument, Black 

Diamond only initiated this lawsuit in New York state court so that this dispute would not be 

before this Court and so it might obtain quick leverage over VCLF to conclude financing on 

terms other than as contained in the Commitment Letter. See supra at 14 (noting that Black 

Diamond “raced” to New York State Court to file its complaint before VCLF could act). Black 

Diamond easily could have brought its breach of contract claim against VCLF to the attention of 

this Court through an adversary proceeding in the Patriot Chapter 11 Case, especially given the 

clear language of the Plan’s retention-of-jurisdiction provision, if all it wanted to do was to 

compel VCLF to close on the Commitment Letter as it existed in the record of this Court. 

E. The Fact that this Action Involves State Law Issues and Non-Debtor Parties 

is of No Consequence Given the Circumstances of this Case (Bay Vista

Factors 2, 6, 7 and 11)

Contrary to Black Diamond’s contentions, the fact that this adversary proceeding 

involves non-debtors and claims for breach of contract under New York law does not compel 

equitable remand to, or abstention in favor of, a New York state court, any more than this fact 

prohibited transfer to this Court. See Transfer Order, at 10; see also id. at 5-6 (noting with 

approval VCLF’s argument that this case arises in the Patriot Chapter 11 Case, explaining that “it 

does not matter that the causes of action asserted in the adversary complaint involve exclusively 

state law created claims”). Rather, the connection of these parties and their state law dispute to 

the Patriot Chapter 11 Case confirms that venue in this Court is proper, as many courts have 

found in similar circumstances.

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First, courts routinely decline to remand or abstain from adversary proceedings among 

non-debtors where their dispute arises in or is related to the underlying chapter 11 case. See 

Mid-Atlantic Res., 283 B.R. at 191 (holding that the mere fact that adversary proceeding 

involved non-debtors only did not weigh in favor of abstention where, inter alia, “Appellants’ 

lien is inextricably intertwined with the bankruptcy case”); see also id. at 190 (holding that the 

adversary proceeding “arose in” a case under title 11, notwithstanding that “the present case 

involves only state-law issues”); cf. Virginia ex rel. Integra REC LLC v. Countrywide Sec. Corp., 

92 F. Supp. 3d 469, 473 (E.D. Va. 2015), motion to certify appeal denied sub nom. 

Commonwealth of Virginia ex rel. Integra Rec LLC v. Countrywide Sec. Corp., No. 3:14CV706, 

2015 WL 3540473 (E.D. Va. June 3, 2015) (holding that “related to” jurisdiction existed even 

though “none of the parties in the district court action are debtors in the bankruptcy proceeding,” 

and denying plaintiff’s “Motion to Remand as it pertains to permissive abstention and equitable 

remand” to consider potentially determinative issues of federal common law). This is 

particularly true where the non-debtor’s involvement in the adversary proceeding resulted from 

its participation in the underlying chapter 11 proceeding. See Morgantown Excavators, 2013 

WL 4829165, at *5 (holding that “the non-debtor participation in this adversary proceeding is 

not of a magnitude that causes this court concern” where, inter alia, the non-debtor party 

“allegedly bought an asset of one or both bankruptcy estates in violation of state laws”). As 

demonstrated above, this adversary proceeding arises in, or at a minimum is related to, the 

Patriot Chapter 11 Case. And, both parties to this adversary proceeding participated in 

meaningful ways in the Patriot Chapter 11 Case that gives rises to the contract claims raised in 

this adversary proceeding.

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Second, the presence of state law issues weighs in favor of equitable abstention or 

discretionary remand only where those issues are complex, difficult, or unsettled and are better 

addressed by a state court applying its own laws. See Blanton, 260 B.R. at 266 (denying motion 

for discretionary abstention because, “while the causes of action asserted by Plaintiffs are based 

on state law, they do not involve novel legal questions which would be better resolved by the 

state courts”); Morgantown Excavators, 2013 WL 4829165, at *4 (holding that abstention was 

not warranted in case where “state law issues predominate[d]” because, inter alia, “Plaintiffs do 

not assert that the state-law issues in this case are unique, unsettled or difficult”); Bay Vista, 394 

B.R. at 846 (“[W]ith all deference to the expertise and ability of the State Court to resolve the 

issue of the Complaint regarding the alleged overpayment, the state law issues here are similar to 

issues frequently and routinely resolved by this Court, that of determining how much is owed on 

an instrument applying Virginia law.”); Ahearn, 318 B.R. at 644 (noting that the “purely [ ] state 

law issue” of the “validity of an assignment of a deed of trust note” did not require abstention 

given that “the issue is not complex”); Shaia v. Brown (In re Brown), Nos. 95-34782-T, 96-3125, 

1996 WL 757100, at *3 (Bankr. E.D. Va. Dec. 5, 1996) (Tice, J.) (“Although Virginia law will 

dictate the outcome, I do not find the question so difficult or unsettled that this court cannot 

adjudicate it.”); see also Mid-Atlantic Res., 283 B.R. at 191 (“[T]he Court finds the state-law 

issues raised by Appellants in their action are well within the bankruptcy court’s and this Court’s 

ability to address, particularly to the extent it involves determining the legitimacy and the 

priority of the lien.”). In particular, concerns for comity between state and federal courts are 

reduced when the state law to be applied is contract law, which “does not raise questions of 

important state policy.” See Butterfield, 339 B.R. at 374 (denying motion for abstention on the 

grounds that, while the case raised a “question of contract law [that] arises amidst complex facts 

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of insurance and reinsurance, . . . at its heart it is a question of contract law with no implications 

as to vital state policy”) (emphasis added).

Notably, the cases Black Diamond cites where district or bankruptcy courts hesitated to 

apply state law, and abstained on that basis, did not involve contract law, but rather areas of law 

that relate directly to vital state interests, such as real property, torts, or domestic relations. See 

Massey Energy, 351 B.R. at 354 (“Plaintiffs allege a Virginia common law cause of action for 

defamation coupled by [sic] a claim under the Virginia Business Conspiracy Act, a unique facet 

of Virginia law that has been vigorously litigated in State courts.”); In re Walters, Civ. Action 

No. 5:12–cv–01174, 2013 WL 5505055, at *1, 10 (S.D. W. Va. Oct. 2, 2013) (finding that 

adversary proceeding in which plaintiff “asserted claims of (I) unconscionable inducement; (II) 

illegal loan; (III) fraud; and (IV) illegal debt collection-misrepresentation . . . may present 

unsettled state law issues”); In re Donoho, 402 B.R. 687, 699 (Bankr. E.D. Va. 2009) (“[B]oth 

the complaint and Brennan Title’s demurrer raise important issues of state law concerning the 

duties and liabilities of a real estate settlement agent. Because real estate is an area of the law 

in which state rather than federal interests predominate, it is appropriate the issues raised by the 

complaint and demurrer be considered and resolved by the state courts.”) (emphasis added); In re 

Yates, Nos. 01–32341–T, 02–3053–T, 2002 WL 32140187, at *1 (Bankr. E.D. Va. Aug. 16, 

2002) (Tice, J.) (state court complaint sought to require defendant “to release deeds of trust 

[defendant] holds against real property”); Willett, 1996 WL 910907, at *2 (adversary proceeding 

arising out of state divorce proceeding). Likewise, the cases cited by Black Diamond that 

abstained based on comity considerations overwhelmingly involved situations where a 

significant portion of the suit had already been litigated in state court. See Massey Energy, 351 

B.R. 348 at 354; Tilley, 42 B.R. at 828 (“state court actions were reconsolidated” and “set for 

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joint trial” prior to the filing of the chapter 11 petition); Willett, 1996 WL 910907, at *2 

(involving remand of divorce proceeding that predated the chapter 11 proceeding and that, at the 

time of removal, had already resulted in a final decree of divorce).

Nothing about this dispute implicates unique, complex or unsettled principles of New 

York law or involves a vital New York State interest. Nothing about this dispute implicates 

comity concerns, as there has been no state court action taken in response to this dispute. In 

short, nothing here calls out for the Commercial Division of the New York State Supreme Court 

to be the court to resolve this dispute.

This case does not present novel questions of New York law or questions of New York 

law affecting vital state policy, and Black Diamond agrees. See 4/21/16 Oral Arg. Tr. 28:4-8 

(Mr. Phillips: “The difficulty o[r] unsettled nature of applicable state law, I am not going to 

contend that the state law here is difficult, although there are issues of when contracts may be 

amended and what it takes to amend, which are not straight forward, even under New York 

law.”) (emphasis added). Rather, this case requires primarily a simple application of New York 

contract law.

And, because no vital New York policy needs to be resolved in this adversary 

proceeding, there is no reason, and comity does not require, that this Court should defer in favor 

of any New York state court, including the specialized Commercial Division of the New York 

Supreme Court. The Commercial Division’s expertise is not implicated by, or needed to resolve, 

this dispute that involves a rather straightforward application of New York contract law. Indeed, 

this case is like the scores of other cases in Virginia where federal courts regularly and capably 

apply New York contract law to disputes before them. See, e.g., Hilton Worldwide, Inc. v. 

Caesars Entm’t Corp., 532 B.R. 259, 267 & n.3 (E.D. Va. 2015) (applying New York contract 

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law pursuant to choice-of-law provisions in agreements); Stanworth v. Bank of Am., N.A. (In re 

Stanworth), 543 B.R. 760, 773 (Bankr. E.D. Va. 2016) (Santoro, J.) (“The Choice of Law 

Provision directs that New York law applies. Accordingly, the Court will look to New York law 

to determine whether the Plaintiff may allege noncompliance with the terms of the [Pooling and 

Servicing Agreement] . . . .”). There is no reason for a different result to apply here. As the New 

York Bankruptcy Court observed when summarily dismissing the notion that this Court could 

not apply New York law as well as a New York state court: “You know, I’ve commented in the 

ResCap case that I’ve had to decide law of 26 states in the one case. So I think for a Court in 

Virginia or elsewhere to have to address issues of New York law is—actually it’s pretty 

common. . . . not a problem.”). See Potter Decl., Ex. 5 (4/21/16 Oral Arg. Tr.) 35:18-24.

F. No Jury Trial Is Implicated (Bay Vista Factor 12)

Neither VCLF nor Black Diamond claims a jury trial in this adversary proceeding. 

Consequently, this factor militates against equitable remand or discretionary abstention.

[The remainder of this page is left blank intentionally.]

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CONCLUSION

This Court should not remand this adversary proceeding to, or abstain from this adversary 

proceeding in favor of, a New York state court as Black Diamond has requested. Every factor 

considered by courts in deciding these issues weighs in favor of this adversary proceeding being 

retained and decided by this Court. Accordingly, VCLF respectfully requests that this Court 

deny the Renewed Remand Motion, and grant VCLF such other relief as may be just and proper. 

Dated: June 1, 2016

Richmond, Virginia PILLSBURY WINTHROP SHAW PITTMAN LLP

 /s/ Patrick J. Potter

Patrick J. Potter (VSB No. 39766)

1650 Tysons Boulevard, Suite 1400

McLean, Virginia 22102-4856

Telephone: (703) 770-7900

Facsimile: (703) 770-7901

E-mail: patrick.potter@pillsburylaw.com

William M. Sullivan, Jr. (admitted pro hac 

vice)

PILLSBURY WINTHROP SHAW PITTMAN LLP

1200 Seventeenth Street, NW

Washington, DC 20036-3006

Telephone: (202) 663-8027

Facsimile: (202) 663-8007

E-mail: wsullivan@pillsburylaw.com

Andrew M. Troop (admitted pro hac vice)

Samuel S. Cavior (admitted pro hac vice)

Joshua I. Schlenger (admitted pro hac vice)

PILLSBURY WINTHROP SHAW PITTMAN LLP

1540 Broadway

New York, New York 10036-4039

Telephone: (212) 858-1000

Facsimile: (212) 858-1500

E-mail: andrew.troop@pillsburylaw.com

Counsel to Virginia Conservation Legacy Fund, Inc. 

and ERP Compliant Fuels, LLC

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CERTIFICATE OF SERVICE

I hereby certify that, on June 1, 2016, I caused a true copy of VCLF’s Memorandum of 

Law in Opposition to Black Diamond’s Renewed Motion to Remand or, Alternatively, for 

Discretionary Abstention (the “Document”) to be (i) filed using the Court’s ECF system, which 

caused the Document to be served on all registered users of the ECF system that have requested 

electronic notification of filings in the above-captioned adversary proceeding, and (ii) served by 

First Class Mail and e-mail upon Plaintiff/Counterclaim-Defendant Black Diamond Commercial 

Finance, LLC’s attorneys of record admitted pro hac vice in the above-captioned adversary 

proceeding, listed as follows:

COVINGTON & BURLING LLP

C. William Phillips (cphillips@cov.com)

Dianne F. Coffino (dcoffino@cov.com)

David Z. Pinsky (dpinsky@cov.com)

Alexander Setzepfandt (asetzepfandt@cov.com)

Gillian Kassner (gkassner@cov.com)

The New York Times Building

620 Eighth Avenue

New York, New York 10018-1405

Dated: June 1, 2016

Richmond, Virginia PILLSBURY WINTHROP SHAW PITTMAN LLP

 /s/ Patrick J. Potter

Patrick J. Potter (VSB No. 39766)

1650 Tysons Boulevard, Suite 1400

McLean, Virginia 22102-4856

Telephone: (703) 770-7900

Facsimile: (703) 770-7901

E-mail: patrick.potter@pillsburylaw.com

Counsel to Virginia Conservation Legacy Fund, Inc. 

and ERP Compliant Fuels, LLC

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