Source: http://de.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20131115_0000575.DDE.htm/qx
Timestamp: 2017-01-22 22:19:37
Document Index: 629099909

Matched Legal Cases: ['§ 101', '§ 363', '§8121', '§ 1452', '§ 1334', '§ 8106', '§ 8121']

| In re Winstar Holdings, Inc.
In re Winstar Holdings, Inc.
IN RE WINSTAR COMMUNICATIONS, INC., et al, Debtors.v.THE BLACKSTONE GROUP, LP, IMP ALA PARTNERS, LLC, and CITICORP., Defendants. WINSTAR HOLDINGS, LLC and IDT CORP., Plaintiffs, WINSTAR HOLDINGS, LLC, and IDT CORP. Appellants,v.THE BLACKSTONE GROUP, LP, IMPALA PARTNERS, LLC, and CITICORP, Appellees. Bankr. Case No. 01-1430-KJC Adv. Pro. No. 08-50296-KJC
At Wilmington this 15th day of November, 2013, this matter coming before the Court upon an appeal from an order of the Honorable Kevin J. Carey, U.S.B.J. (the "Appeal") (D.I. 1), and having considered the parties' papers submitted in connection therewith; IT IS ORDERED that the Appeal is DENIED, and the order of the Bankruptcy Court dated August 11, 2010 - "Order and Decree Denying Plaintiffs' Motion for Remand or Abstention, Granting Defendants' Motions to Dismiss, and Dismissing Complaint" (the "Order") - is AFFIRMED, for the reasons that follow:
Background.[1] On April 18, 2001, Winstar Communications, Inc. and certain of its subsidiaries ("Old Winstar") filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. §§ 101, et seq., in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"); the Chapter 11 cases later converted to ones under Chapter 7. (See D.I. 2 Ex. 25, August 11, 2010 Memorandum Opinion (the "Opinion"), Adv. Pro. No. 08-50296-KJC, D.I. 48 at 4) Old Winstar had sold certain of its assets (the "Asset Sale") pursuant to 11 U.S.C. § 363, to Winstar Holdings, LLC ("New Winstar") and IDT Corp. ("IDT") (together, "Plaintiffs" or "Appellants") in late 2001. (See Opinion at 1-2)
In connection with the Asset Sale, The Blackstone Group, LLC ("Blackstone") was retained as Old Winstar's financial advisor, and Impala Partners, LLC ("Impala") was retained as its restructuring advisor. (See Opinion at 2; see also D.I. 11 at 1, 6) Citicorp was Old Winstar's largest creditor during bankruptcy. (See Opinion at 2; see also D.I. 11 at 1) (Blackstone, Impala and Citicorp will be collectively referred to as "Defendants" or "Appellees.")
The subject adversarial action (the "Adversary Proceeding") arose out of the $42.5 million Asset Sale from Old Winstar to New Winstar and Defendants' roles in connection with the deal. (See Opinion at 1-2) Plaintiffs challenged the deal by asserting claims against Defendants for fraud, aiding and abetting fraud, negligent misrepresentation, negligence, and civil conspiracy. (See Adv. Pro. No. 08-50296-KJC, D.I. 1, Opinion at 2; D.I. 2 Ex. a; see also D.I. 9 at 2-3) Appellants summarize the history of their challenge as follows:
[0]n May 10, 2007, [Plaintiffs] filed a Complaint in the Supreme Court of the State of New York, County of New York, asserting New York state law claims against [Defendants]. Plaintiffs requested a jury trial and alleged that Defendants, two of which are headquartered in New York, were liable for misrepresentations and omissions that occurred during meetings held in New York prior to Plaintiffs' purchase of assets from [Old Winstar], a bankrupt company headquartered in New York.
The Bankruptcy Court denied Plaintiffs' Motion to Remand and granted Defendants' Motion to Dismiss the Complaint as barred by Delaware's three-year statute of limitations, which it found applied because of the Delaware borrowing statute, 10 Del. C. §8121.
New Winstar filed a Notice of Appeal on August 25, 2010 (see D.I. 12 Ex. 27, Adv. Pro. No. 08-50296-KJC, D.I. 51), which was entered on the docket of this Court on October 1, 2010 (see D.I. 1, 3). New Winstar seeks reversal of the Bankruptcy Court's Order (see D.I. 1, 2 Ex. 26, Adv. Pro. No. 08-50296-KJC, D.I. 49) and either equitable remand to New York State Court under 28 U.S.C. § 1452(b) or permissive abstention under 28 U.S.C. § 1334(c)(2) (see generally D.I. 9, 15; see also D.I. 2 at 19-20).
Contentions. On appeal, New Winstar argues that the Bankruptcy Court erred in applying Delaware's statute of limitations, 10 Del. C. § 8106, and "borrowing statute, " 10 Del. C. § 8121, to the Adversary Proceeding. (See generally D.I. 9, 15; see also D.I. 2 at 19-20) In Appellants' view, New York has the "most significant" relationship to Plaintiffs' claims, so New York's longer six-year statute of limitations should apply. (See D.I. 9 at 2, 7-8; D.I. 15 at 6-7) Plaintiffs' complaint alleged that Defendants' misdeeds occurred during the due diligence period of November 30 through December 5, 2001. (See Adv. Pro. No. 08-50296-KJC, D.I. 2 Ex. A; Opinion at 14; see also D.I. 9 at 2-3) The asset purchase agreement ("APA") was executed on December 18, 2001 and approved by the Bankruptcy Court the next day; the Asset Sale closed on December 20, 2001. (See Adv. Pro. No. 08-50296-KJC, D.I. 2 Ex. A; Opinion at 14-15; see also D.I. 9 at 3)
If New York's six-year statute of limitations is applicable, then Plaintiffs' May 2007 complaint was timely filed. Alternatively, if, as the Bankruptcy Court concluded, Delaware's three-year statute of limitations applies, ...