Opinion ID: 152730
Heading Depth: 2
Heading Rank: 2

Heading: Disputes over Certain PD Claims

Text: Seven PD claims filed by the Colleges and allowed by the Administrator (the Allowed Claims) are at issue in this proceeding. When the Administrator submitted the Allowed Claims to the Trust for payment, the Trustees originally refused to pay on grounds that the Colleges failed to satisfy the legal prerequisites for payment. The Trust then commenced adversary proceedings against the Colleges in bankruptcy court. In opposing motions, each party sought an order from the bankruptcy court upholding its respective interpretation of the Plan Documents. The dispute largely related to the relative authority of the Administrator and the Trustees over PD claims. On April 1, 2004, the bankruptcy court granted the Colleges' motion for summary judgment and directed the Trust to pay the Colleges' Allowed Claims. See generally Asbestos Settlement Trust. v. Claremont McKenna College ( In re Celotex Corp. ), Adv. No. 02-522 (Bankr. M.D. Fla. April 1, 2004). While the Trust did not pay the Colleges after the bankruptcy order, the Trustees' later decision to pay the Allowed Claims was in response to this Court's decision in a dispute between the Trust and another PD claimant, the City of New York. See generally Asbestos Settlement Trust v. City of New York ( In re Celotex Corp. ), 487 F.3d 1320 (11th Cir.2007) (NYC Appeal). The Trust had disputed certain allowed PD claims of the City of New York (the NYC Claims). The bankruptcy court ultimately granted summary judgment in favor of the City of New York and ordered the Trust to pay the NYC Claims. In connection with the bankruptcy court's determination, the court approved an agreement between the Trust and the City of New York regarding the calculation of the liquidated amount for the NYC Claims. Under the terms of the agreement, if payment of the NYC Claims was ultimately directed by a final non-appealable order, the Trust's payment amount to the City of New York would include an additional amount based upon the rate of return earned by the Trust on its investment portfolio during the pendency of the appeal. Meanwhile, the Trust and the Colleges never reached a similar agreement as to the actual amounts to be paid on the Colleges' Allowed Claims. After the district court affirmed the bankruptcy court's order requiring the Trust to pay the NYC Claims, the Trust appealed to this Court. See generally NYC Appeal, 487 F.3d 1320. The Colleges' Allowed Claims remained in the bankruptcy court during the pendency of the NYC Appeal. On appeal, this Court considered the relative powers of the Trustees and the Administrator under the Plan Documents. See generally NYC Appeal, 487 F.3d 1320. This Court determined, among other matters, that the Plan Documents did not confer to the Trustees the power to independently review and overrule the Administrator's decisions in resolving PD claims. Id. at 1329-30, 1332, 1334. Furthermore, this Court found that the Administrator's actions and decisions were subject to review only for abuse of discretion. Id. at 1337-38.