*The Clerk of Court is directed to amend the official caption as shown above. 1 10-4170-bk In re DPH Holdings Corp. 

### UNITED STATES COURT OF APPEALS **FOR THE SECOND CIRCUIT** 

## SUMMARY ORDER

**R ULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT**  **. C**  **ITATION TO A SUMMARY ORDER FILED ON OR AFTER**  **J ANUARY**  **1, 2007,**  **IS PERMITTED AND IS GOVERNED BY F** **EDERAL R** **ULE OF A** **PPELLATE P** **ROCEDURE 32.1**  **AND THIS COURT ’**  **S L** **OCAL R** **ULE 32.1.1.**  **W HEN CITING A SUMMARY ORDER IN A**  **DOCUMENT FILED WITH THIS COURT ,**  **A PARTY MUST CITE EITHER THE F** **EDERAL A** **PPENDIX OR AN ELECTRONIC DATABASE**  **( WITH THE NOTATION**  **“ SUMMARY ORDER** **”). A**  **PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL**  **. At a stated term of the United States Court of Appeals**  1 **for the Second Circuit, held at the Daniel Patrick Moynihan** 2 **United States Courthouse, 500 Pearl Street, in the City of** 3 **New York, on the 29 th** **day of November, two thousand eleven.** 4 5 **PRESENT: DENNIS JACOBS,** 6 **Chief Judge ,**  7 **ROBERT D. SACK,** 8 **REENA RAGGI,** 9 **Circuit Judges .**  10 11 - - - - - - - - - - - - - - - - - - - -X 12 **IN RE DPH HOLDINGS CORP. :**  13 14 **Ace Am. Ins. Co. and Pac. Employers** 15 **Ins. Co.,** 16 **Plaintiffs-Appellees ,**  17 18 **-v.- 10-4170-bk** 19 20 **DPH Holdings Corp.,** 21 **Defendant-Appellee** 22 23 **and** 24 25 **State of Mich. Workers’ Comp. Ins.** 26 **Agency and State of Mich. Funds** 27 **Admin.** 28 **Defendants-Appellants .**  * 29 - - - - - - - - - - - - - - - - - - - -X 302 **FOR DEFENDANTS-APPELLANTS:** Melanie L. Cyganowski, 1 Otterbourg, Steindler, Houston & 2 Rosen, P.C., New York, NY (on 3 brief Richard G. Haddad and Mark 4 S. Sedlander, Otterbourg, 5 Steindler, Houston & Rosen, 6 P.C., New York, NY; and Bill 7 Schuette, B. Eric Restuccia, 8 Susan Przekop-Shaw, and Dennis 9 J. Raterink, Office of the 10 Attorney General, State of 11 Michigan, Lansing, MI). 12 13 **FOR PLAINTIFFS-APPELLEES:** Jonathan D. Hacker, O’Melveny & 14 Myers, LLP, Washington, D.C. (on 15 brief Anton Metlitsky, O’Melveny 16 & Myers, LLP, Washington D.C.; 17 Lewis R. Olshin, Wendy M. 18 Simkulak, Lawrence J. Kotler, 19 and William C. Heuer, Duane 20 Morris LLP, New York, NY; Robert 21 G. Kamenec, Plunkett Cooney, 22 Bloomfield Hills, MI; and Martin 23 G. Bunin, Catherin R. Fenoglio, 24 and William Hao, Alston & Bird 25 LLP, New York, NY). 26 27 **FOR DEFENDANT-APPELLEE:** Albert Hogan III, Skadden, Arps, 28 Slate, Meagher & Flom LLP, 29 Chicago, IL (on brief John K. 30 Lyons, Skadden, Arps, Slate, 31 Meagher & Flom LLP, Chicago, 32 IL). 33 34 Appeal from a judgment of the United States District 35 Court for the Southern District of New York (Marrero, J. ). 36 37 **UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,** 38

**AND DECREED**that the District Court’s judgment is **AFFIRMED**

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403 Defendants-Appellants (State of Michigan Funds 1 Administration and State of Michigan Workers’ Compensation 2 Agency, collectively “Michigan Defendants”) brought this 3 collateral-order appeal of the District Court’s decision 4 denying, in relevant part, their motion to dismiss the 5 adversary complaint brought by Plaintiffs-Appellees Ace 6 American Insurance Company and Pacific Employers Insurance 7 Company (collectively, “the Insurers”) against Appellee8 Defendant DPH Holdings Corporation and the Michigan 9 Defendants. We assume the parties’ familiarity with the 10 underlying facts, the procedural history of the case, and 11 the issues on appeal. 12 **[1]** The Michigan Defendants argue that the Bankruptcy Court 13 lacks jurisdiction because the adversary proceeding is not a 14 core or a non-core proceeding. Whether a proceeding is core 15 or non-core is beside the point for determining jurisdiction 16 because “[t]hat allocation [of core and non-core] does not 17 implicate questions of subject matter jurisdiction.” Stern 18 v. Marshall , 131 S. Ct. 2594, 2607 (2011). So long as a 19 proceeding is one or the other, the Bankruptcy Court 20 possessed subject-matter jurisdiction. We conclude that the 21 adversary proceeding falls within the Bankruptcy Court’s 22 subject-matter jurisdiction as a core proceeding. 234 A core proceeding is one that arises under Title 11 or 1 arises in a case under Title 11. 28 U.S.C. § 157(b)(1); see 2
Stern , 131 S. Ct. at 2604-05. Section 157(b)(2) provides a 3 non-exhaustive list of core proceedings, including: “matters 4 concerning the administration of the estate,” proceedings 5 seeking the “allowance or disallowance of claims against the 6 estate,” and “other proceedings affecting the liquidation of 7 the assets of the estate or the adjustment of the debtor8 creditor . . . relationship.” 28 U.S.C. § 157(b)(2)(A), 9 (B), (O). This Circuit interprets “core proceedings” as 10 broadly as permitted under the Constitution. U.S. Lines, 11 Inc. v. Am. S.S. Owners Mut. Prot. & Indem. Ass’n., Inc. (In 12 re U.S. Lines, Inc.) , 197 F.3d 631, 637 (2d Cir. 1999). 13 If (as here) an adversary proceeding involves a 14 contract matter, whether it is core depends on “(1) whether 15 the contract is antecedent to the reorganization petition[] 16 and (2) the degree to which the proceeding is independent of 17 the reorganization.” Id. The degree to which the 18 proceeding is independent of reorganization “hinges on ‘the 19 nature of the proceeding.’” Id. (quoting S.G. Phillips 20 Constructors, Inc. v. City of Burlington (In re S.G. 21 Phillips Constructors, Inc.) , 45 F.3d 702, 707 (2d Cir. 22 1995)). “Proceedings can be core by virtue of their nature 23 if either (1) the type of proceeding is unique to or 245 uniquely affected by the bankruptcy proceedings or (2) the 1 proceedings directly affect a core bankruptcy function.” 2 Id. (internal citations omitted). It is not enough that a 3 claim somehow affects the property of the estate. Id. 4 This contract-based adversary proceeding is core. Six 5 of the eighteen contracts at issue are post -petition 6 contracts, which are part of the estate. Proceedings 7 involving those contracts are core. Id. (citing Ben Cooper, 8 Inc. v. Ins. Co. (In re Ben Cooper, Inc.) , 896 F.2d 1394, 9 1399-1400 (2d Cir.), vacated on other grounds , 498 U.S. 964, 10 opinion reinstated , 924 F.2d 36 (2d Cir. 1991)). 11 Moreover, the proceeding as to the pre -petition 12 contracts is also core because the nature of the adversary 13 proceeding is one that is likely to “directly affect a core 14 bankruptcy function.” U.S. Lines, Inc. , 197 F.3d at 637. 15 The adversary proceeding bears upon Delphi’s liability for 16 workers’ compensation claims. If, as the Insurers believe, 17 Delphi assumed the pre-petition contracts and agreed to be 18 liable for all amounts owed to injured employees up to the 19 retention limits, then the $67 million reimbursement claim 20 filed against Delphi by the Insurers would be disallowed 21 because Delphi itself would pay the underlying liability. 22 If, as the Michigan Defendants believe, the Insurers -- and 23 not Delphi -- are liable for the injured workers’ claims, 246 then the Michigan Defendants’ claims against Delphi would be 1 disallowed because the claims would run against the Insurers 2 instead. Core proceedings include those seeking the 3 “allowance or disallowance of claims against the estate,” 28 4 U.S.C. § 157(b)(2)(B), and, here, the resolution of whether 5 Delphi’s estate is liable for those workers’ claims will 6 determine whether the claims asserted against the estate 7 should be allowed or disallowed. 8 The contract matter is also core because its resolution 9 “concern[s] the administration of the estate” and “affect[s] 10 the liquidation of the assets of the estate.” 28 U.S.C. § 11 158(b)(2)(A), (O). Resolution of the workers’-compensation12 liability issue could also have substantial implications on 13 both the estate and the priority of the creditors and could 14 “set the table for the determination of matters under title 15 11.” SeePSINet, Inc. v. Cisco Sys. Capital Corp. (In re 16 PSINet, Inc.) , 271 B.R. 1, 12 (Bankr. S.D.N.Y. 2001). 17 The adversary proceeding arose post-confirmation; but 18 that does not change this result. A party can invoke the 19 authority of the bankruptcy court to exercise post20 confirmation jurisdiction if the matter has a close nexus to 21 the bankruptcy plan, seeReese v. Beacon Hotel Corp. , 149 22 F.2d 610, 611 (2d Cir. 1945) (limiting reservation of post23 confirmation jurisdiction to that “requisite to effectuate a 247 plan of reorganization”); Penthouse Media Group v. Guccione 1 (In re General Media Inc.) , 335 B.R. 66, 73-74 (Bankr. 2 S.D.N.Y. 2005) (discussing Binder v. Price Waterhouse & Co. 3 (In re Resorts Int’l, Inc.) , 372 F.3d 154, 168-69 (3d Cir. 4 2004)), and the plan provides for the retention of such 5 jurisdiction, Hosp. & Univ. Prop. Damage Claimants v. Johns6 Manville Corp. (In re Johns-Manville Corp.) , 7 F.3d 32, 34 7 (2d Cir. 1993). This case fits those well-established 8 criteria. The resolution of Delphi’s liability for the 9 workers’ compensation claim will impact the implementation, 10 execution, and administration of its confirmation plan, and 11 the plan provides for the retention of the Bankruptcy 12 Court’s jurisdiction over disputes such as that raised in 13 the adversary proceeding. Resorts Int’l, Inc. , 372 F.3d at 14 167. 15 **[2]** The Michigan Defendants’ sovereign-immunity defense 16 fares no better. The States’ ratification of the Consti17 tution signified their agreement “not to assert any sov18 ereign immunity defense they might have had in proceedings 19 brought pursuant to ‘Laws on the subject of Bankruptcies.’” 20 Cent. Va. Comm. Coll. v. Katz , 546 U.S. 356, 377 (2006) 21 (quoting U.S. C ONST ., art. I, § 8, cl. 2); accordid. at 369 22 n. 9. The scope of the States’ waiver of sovereign immunity 238 includes proceedings implicating the bankruptcy court’s 1 traditional in remauthority -- “a narrow jurisdiction that 2 does not implicate state sovereignty to nearly the same 3 degree as other kinds of jurisdiction,” id. at 378; see also 4 Tenn. Student Assistance Corp. v. Hood , 541 U.S. 440, 448 5 (2004) -- as well as “proceedings necessary to effectuate 6 the in rem jurisdiction of bankruptcy courts,” Katz , 546 7 U.S. at 378. Since the adversary proceeding here is an in 8

rem proceeding (or, at least, is otherwise necessary to 9 effectuate the in remjurisdiction of the Bankruptcy Court), 10 it does not offend the Michigan Defendants’ sovereign 11 immunity. 12 The Michigan Defendants’ argue that the adversary 13 proceeding is only nominally about the insurance contracts 14 and is actually about whether the Insurers are liable under 15 Michigan law for filing Form 400 Notices of coverage. We 16 disagree. As the District Court and the Bankruptcy Court 17 concluded, the dispute at issue in the adversary proceeding 18 is one sounding in contract. The adversary complaint makes 19 clear that the proceeding is focused on the parties’ 20 responsibilities under the contracts. SeeCompl. at ¶¶ 1, 21 37, 46. There is no Form 400-based claim in the Insurers’ 22 adversary complaint. Although the Michigan Defendants may 23 ultimately prevail on the merits on their Form 400 theory, 249 that argument ultimately bears on the merits of whether the 1 Insurers are liable apart from their contractual 2 obligations, which is not the question before us on 3 collateral review of the District Court’s denial of the 4 motion to dismiss the adversary complaint. 5 Once it is determined that the adversary proceeding is 6 concerned with the insurance contracts, it follows that the 7 adversary proceeding implicates the Bankruptcy Court’s in 8

rem jurisdiction. The contracts, which include potential 9 liabilities and responsibilities for Delphi, are part of 10 Delphi’s estate. See11 U.S.C. § 541(a)(1), (7); accordSt. 11 Clare's Hosp. & Health Ctr. v. Ins. Co. of N. Am. (In re St. 12 Clare's Hosp. & Health Ctr.) , 934 F.2d 15, 18-19 (2d Cir. 13 1991); Johns-Manville Corp. v. Chubb Indem. Ins. Co. (In re 14 Johns-Manville Corp.) , 600 F.3d 135, 153 n.13 (2d Cir. 2010) 15 (per curiam ). The interpretation and reformation of those 16 contracts involve adjudication of the estate: the res

. 17 Because the contracts between the Insurers and Delphi are 18 part of Delphi’s estate and the district courts “have 19 exclusive jurisdiction . . . of all the property, wherever 20 located, of the debtor as of the commencement of [a case 21 under Title 11] and of property of the estate,” the 22 adversary proceeding implicates the in remauthority of the 231 Pursuant to 28 U.S.C. § 157(a), the District Court’s authority has been delegated by the United States District Court for the Southern District of New York to the United States Bankruptcy Court for the Southern District of New York. See alsoStanding Order of Referral of Cases to Bankruptcy Judges, United States District Court for the Southern District of New York(July 10, 1984).

2This decision is limited to the matters before us. We express no view and render no decision as to whether the Bankruptcy Court has jurisdiction over any claim or challenge to the liability of the Insurers for filing the Form 400 Notices. Likewise, we express no view and render no decision as to whether resolution of any such claim brought in federal court against the Michigan Defendants would invade their sovereign immunity. 10 lower courts. 28 U.S.C. § 1334(e). 1In addition, to the 1 extent that the contract question will decide whether Delphi 2 is liable for its employees’ workers’ compensation claims, 3 the adversary proceeding could have substantial 4 ramifications for the size of the estate, the allowance and 5 disallowance of claims against it, and the priority of 6 creditors, all of which implicates the in remjurisdiction 7 of the bankruptcy court. 8 We have considered all of the Michigan Defendants’ 9 additional arguments and find them to be without merit. 2 10 Accordingly, the judgment of the District Court is **AFFIRMED**

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12 FOR THE COURT: 13 Catherine O’Hagan Wolfe, Clerk 14 15 16