In re Lightning Techs., Inc.

641 B.R. 872

IN RE: LIGHTNING TECHNOLOGIES, INC., Debtor.

Case No. 21-41019-tjt

United States Bankruptcy Court, E.D. Michigan, Southern Division.

Signed July 15, 2022

Marc N. Swanson, Steven A. Roach, Ronald A. Spinner, Miller, Canfield, Paddock and Stone, P.L.C., Detroit, Michigan, Attorneys for Palltronics, Inc.

Jacob L. Carlton, John T. Piggins, Miller Johnson, Grand Rapids, Michigan, Attorneys for PALIoT Solutions, LLC.

ORDER GRANTING PALLTRONICS INC.’S MOTION TO ENFORCE SALE ORDER AND FINDING OF CIVIL CONTEMPT AGAINST PALIOT SOLUTIONS, INC.

Thomas J. Tucker, United States Bankruptcy Judge

This case came before the Court on June 29, 2022, for a further telephonic hearing on the motion entitled "Palltronics Inc.’s Motion to Enforce Sale Order and Finding of Civil Contempt Against Paliot Solutions LLC" (Docket # 340, the "Motion").¹ Confirming action taken by the Court during the June 29, 2022 hearing, and for the reasons stated by the Court on the record during that hearing, the Court entered an order on June 29, 2022, conditionally granting the Motion, in part. (Docket # 408, the "June 29 Order"). As stated in the June 29 Order, the condition to granting the Motion was that this Court "must first find that it has subject matter jurisdiction to grant such relief to Palltronics on the Motion (the ‘subject matter jurisdiction issue’)." The June 29 Order set a schedule for the parties to file supplemental briefs, addressing the subject matter jurisdiction issue.

The parties filed their supplemental briefs, (Docket ## 410, 413), and the Court has reviewed them. In its supplemental brief, PALIoT states that it no longer contests that this Court has subject matter jurisdiction. It states: "PALIoT does not contest that an action to enforce the terms of the sale order arises in a case under title 11." (Docket # 410 at 1) (footnote omitted).²

The Court finds and concludes that it has subject matter jurisdiction to grant the relief described in this Order, below, on the Motion, and that the Motion is a core proceeding. These conclusions are based on, and for the reasons stated by the Court in, this Court's two bench opinions that were cited in the Court's Order filed on March 2, 2022 (Docket # 347 at 2 n.1). See Tr. of September 19, 2012 Bench Op. in M-Heat Investors, LLC v. Jost , Adv. No. 12-4868 (Docket # 30), at 21-28 (finding subject matter jurisdiction under 28 U.S.C. § 1334(b) ’s "arising under title 11" clause and under 28 U.S.C. § 157(b)(2)(N) ); Tr. of July 27, 2016 Bench Op. in Telesource Services, Inc. v. SoTel Systems, LLC , Adv. No. 16-4356 (Docket # 36) (finding subject matter jurisdiction under 28 U.S.C. § 1334(b), under both the "arising under title 11" clause and the "arising in ... cases under title 11" clause). See also Tenet Healthsystem Philadelphia, Inc. v. Nat'l. Union of Hospital and Health Care Employees, AFSCME, AFL-CIO, Dist. 1199C (In re Allegheny Health, Ed. and Research Foundation, et al. ), 383 F.3d 169, 176 (3d Cir. 2004) (holding that adversary proceeding was a core proceeding over which bankruptcy court had subject matter jurisdiction, "because it required the [bankruptcy] court to interpret and give effect to its previous sale orders" and that a "motion to enforce [a] bankruptcy sale order is a core proceeding," quoting In re Marcus Hook Dev. Park, Inc. , 943 F.2d 261, 267 (3d Cir. 1991) ).

Accordingly, and based on the June 29 Order, and for the reasons stated by the Court on the record during the June 29, 2022 hearing, the Court makes the following findings and enters this Order.

The Court finds that PALIoT Solutions, Inc. ("PALIoT") has violated, and is in civil contempt of, this Court's May 13, 2021 Order entitled "Order Authorizing (I) the Sale of Substantially All of Debtor's Assets Pursuant to 11 U.S.C. §§ 105, 363 and 365, (II) the Assumption and Assignment of Certain Executory Contracts and Unexpired Leases in Connection Therewith, (III) the Sale of Debtor's Assets Free and Clear of Liens, Claims, Encumbrances and Other Interests, and (IV) Granting Related Relief" (Docket # 244).

IT IS ORDERED that:

1. The Motion is granted.

2. Palltronics is awarded its reasonable attorneys’ fees and costs related to or arising from the drafting, filing and prosecution of the Motion, which will include, but not be limited to, its reasonable fees and costs related to or arising from the discovery with LinkedIn. Palltronics must file a statement of such costs and fees no later than July 29, 2022. PALIoT must file any...