Legal Case Summary

Emerald in rate Emerald getter and diacetyl plaintiffs and Ms. Isaacson Good morning

. May I please the court Nancy Isaacson for the appellants I asshole claimants and I'd like to reserve three minutes for re-gluinal yes that's fine how do you pronounce it again excuse me how do you pronounce that chemical diacetyl diacetyl flavoring and butter popcorn all right May I please the court my clients the appellants here are a discrete group of holders of toward claims and I'll refer to them for purposes of this argument as the diacetyl claimants and they have asserted in various state court actions personal injuries against the debt or Emerald those injuries result from exposure to the chemical diacetyl Emerald manufactured and distributed that chemical and to avoid the liability to my clients Emerald sold demonstrably all of their assets the case pretty much we we've heard and adjusted how do you decide whether a client is generalized or individualized well what's the Citiquan oh of that determination this court already has determined the roadmap for making that determination in the the food town case the insurance the pension that wasn't a personal injury case it was not a personal injury case but the question was who is the injured party was the debtor injured or was it the pension plan and there is sufficient holdings in that case that make the roadmap for how this court should decide whether or not personal injury claimants have personal personalized claims with the equitable remedy to assert a successful liability is it dependent on who's getting sued excuse me does it depend on who's getting sued is it does it depend on whether the suit is against the debtor or whether it turns on who is injured is the debtor injured or is the individual claimants injured how would a recovery on your claim for successor liability against a moron not benefit all the creditors of Emerald generally it is an equitable remedy that's tied to the underlying personal injury claim of the individual diastyl claimants that's your claim against Emerald right but I'm talking about the successor liability claim against Imora how would claim for successor liability against a moral your claim not benefit all creditors it's too it's it's an equitable remedy to to compensate for the damages that the personal injury claimants suffered so can so can a contract creditor a commercial creditor those are just general one secured creditors you're on it they don't have particular ice claims how do you know well you're insecure too I mean why is one your position is that that underlying claim is not property of the trustee if the debtor is in bankruptcy that's correct why let me continue with Judge Barry's question what is why makes your claim individualized I'm a contract creditor I got stuck for $100,000 I feel pretty injured myself because my company has got stuck for $100,000 in bankruptcy why is it my claim as a as a contract creditor individualized because under New Jersey state law toward claimants with personal injury claims like presented in this case are given special and higher treatment and acknowledgement in litigation and they are treated differently and they are different than general and secure creditors

. A contract claimant also could sue under let's say this is not in bankruptcy a contract claimant against a debtor not in bankruptcy could also sue on the theory of business continuation and succeeded successor liability

. No I would suggest to the court that that contract creditor would have to have an underlying claim of some personal injury i

.e a business tort some underlying personal claim

. Trustee could of the trustee could sue that no you're on it Trustee could not sue the business tort on behalf of that that creditor you're not suggesting that to bring a claim of successor liability there must be a personal injury component there must be a personalized for a creditor to bring in a bankruptcy situation for a creditor to bring outside of the bankruptcy proceeding a successful liability claim against a successor in interest to the debtor there has to be a personal claim an underlying personal claim personal personal particularized claim like a business tort like a discrimination and employment claim a personal claim to that creditor not a general claim like a general in this case a trustee in bankruptcy on behalf of all the creditors who have filed a prusive claim including personal injury claimants as well as trade creditors why can't he sue umberl on the theory that they have that they're just successors to the predecessor business and uh that that uh uh all the creditor should uh now have a claim because it's the same company with another name if the trustee had a claim against aroma the respondent the appley here if the trustee thought that there is a claim that aroma is really the successor the alter ego the mere continuation of product line etc etc same personnel same creditors same everything the trustee that's an asset of the estate under 541 11 u

.s

.d

. second 541 and that the trustee brings that claim the trustee settled this the claims against aroma as a fraudulent transfer claim as the motion as you'll see in the motion do you see the claim? the settlement was for a fraudulent transfer claim and then the settlement and the release language released had this very broad release to which a diacyl claim is subjected so the trustee would have resolved to do that but if the trustee did not settle that claim and and instead of settling it elected to pursue a business continuation product line continuation uh he would have that right to do on behalf of not only the personal injury uh claimants who filed proof of claim but as on the trade creditors as well contract creditors if the claim if the claim was one for alter ego meerkat a general claim like that yes or on our yes you the trustee would have the right to pursue that kind of claim because they they do seem like they're so personal you know the injuries involved and when when you get money for your injuries you're compensating an individual for the injuries that must stay but you're suggesting now an answer to this question that the trustee can bring all of those claims against no I'm sorry I'm sorry I may have misunderstood Judge Collins question the trustee can bring the claim on behalf of the debtor and the debtor estate if there is damage to the debtor by the conduct of aroma for the benefit of the credit the personal injury claim is not personal injuries for more no that the trustee has no right to bring personal injury claims business to reclaims for the missing the right personal injury claims against or against immoral correct pending in the bankruptcy they were they're a creditor in the bankruptcy case against the state relief against the law tomorrow yeah uh you acknowledge that all this is based on whether or not they're a successor product line liability under new Jersey state law if we were to hold your favor that this is a personal claim not a generalized claim you acknowledge to you not that you still must prove in state court you have our decision have no effect upon whether in fact you have a meritorious product line successor claim in state court that would you not to prove that separated apart from our determination that this is a personal not a generalized claim that's correct Your honor however I'd like to correct your statement we are not the d'Asl claim is due not a leg of product line defect claim against aroma we're looking to to assert the equitable remedy of successful liability on aroma which this court in the food town case said is is very appropriate but my basic point is that any decision by us and your favor does not resolve whether or not you have a meritorious claim in state court correct your honor that's for the state court to determine can can you talk about McCain you're familiar with the king the king yeah and the statement there that claims based upon successor liability should be asserted by the trustee on behalf of law creditors that statement was made in conjunction with the nature of the claims that were asserted in that litigation you mean the decision is based on the nature of the crime that it was because of what yes because the underlying claim was as opposed to whether the trustee has the right to bring all claims for the benefit of all the creditors the court needs to understand the nature of the claim that was being pursued in the in the keen litigate in the keen case and that was a chapter five trustee bankruptcy court cause of action it was not a particular claim of a creditor is it your is it your point that because your claim involves torsious conduct or it's a personal injury tort if therefore it's individualized and therefore it is not part of the state correct your honor there I don't think that the bankruptcy court or the district court or my app or aroma disagrees that the personal injury claim is a personalized claim I don't think that's not the issue the issue is whether the equitable remedy that we that are diacyl claim and seek to pursue a successful liability liability to compensate for those injuries is property of the estate you cite one case to show that personal injury cases asserting successor liability are not property of the estate right that was the RDM holdings case there yes and that was a case that applied Michigan law which is different in this connection than New Jersey or New York law there is there are so you don't really have there are no case there's there's there's really no case law out there that directly addresses this issue we have the food town case which is a guide on how to analyze who's the injured party who gets to assert the claim and whether or not it's an acidity of the estate and that case was cited just for to show the court that there is some there is something out there that has addressed it but there really are no cases that are directly that there's a whole lot of case well but that was the one case you cited and the problem is that this is a this is a claim against Ameral it's a claim against the third party what about the other creditors what if what if they had claims against the third party why should you in a sense jump a line why should you have priority why why should you then take first from that third party to the disadvantage of all the other creditors indicate in the bankruptcy I would suggest to the court that if one of the creditors that your honors is speaking about was a victim of employment discrimination or had a had a personal tort claim against the debtor that creditor could pursue aroma on the same theory that the diastole claim is represented and it's and it's in that this particular debtor just happened to have had this is the body of creditors it has general unsecured creditors and it has personal injury creditors okay I am not unsympathetic to the problem that is presented in this case by these individuals who suffered serious personal injury and don't appear to have recourse but nonetheless what is the rule that we would be looking to state if we give you the right to sue here a third party in other cases then you have personal injury claimants would then be given priority I suppose over all other it's not prior to rule no it's not priority your honor it's allowing it's allowing the tort claimants to avail themselves of state law and pursue the claims and state law yeah but and it's not it's it's not giving priority because other creditors have claims against a moral why would you be able to go after a moral and and take those assets to the disadvantage of other creditors who may have whatever types of claims they may have contractual claims for example because the code the code the bankruptcy code is is in place to equalize distribution to unscrupulous creditors okay so we general general general and to equalize to monetize assets of the estate and distribute them pro-rattards to the extent that they exist to general and secure creditors with the recovery with the money that you recover going to a pot or would that go to the individual goes to the individual and as as an aside to this argument the debtor filed a chapter seven bankruptcy petition so the tort claimants here the diastinal claimants do not have the protections that it would have had had with respect to insurance and channeling and equal distribution of of insurance proceeds all of the claim the tort claimants we're not in that situation here we chapter seven debtors corporate debtors that have these tort claims against them are not obligated to provide a trust or another mechanism in order to satisfy these general general but the bank trustee can the bank of trustee could also file a claim against umora can on a business continuation of access reliability theory can can he not the trustee way that claim in conjunction with its settlement of the fraudulent transfer I know but I'm I'm asking as a matter of law the trustee could file a file could file could have if he didn't settle a case file a business continuation claim against which is the same claim that you're individually no it's not your honor what is it if that's by question what is the difference between the trustee as representative of all those creditors claim for business continuation and you're claimed as an individual when you're already you filed a proof of claim in the bankruptcy the trustee has a has the duty to monetize assets of the estate the assets of the estate include causes of action whether they're under the bankruptcy code or whether they're under a state law why doesn't it include the cause of action for individual tort that these people were exposed to that is a personal claim that is not a claim that the trustee has standing to pursue only tell me why that's that's your position what facts make that individual and the contract the tradesman's claim for goods sold and delivered not individual there was no disagreement either at the trial court or from my or from a Roma that the general and secured creditor body is a general and secured creditor and they are the ones that the trustee is in place to monetize assets to satisfy and your one of the general it's not anymore before before you filed your application you were you filed a proof of claim excuse me you filed a proof of claim so before you went and filed a third party actions you were a general and secured credit like a trade tradesman but sets the diastole claimants apart is that the diastole claimants obtained sterile leave under 366 section 362 and agreed to pursue only assets that it could recover in the state court and would not go and recover against the assets that are recovered by the data there are no facts unique to you that would be different from other credit there are absolutely unique facts the personal injuries it's not a new jersey state long remeer it established continuation took a continuation of tomorrow there are no facts unique to you that would distinguish you from other creditors in terms of the successor liability theory honestly you know I don't know because we haven't done no no discovery on that topic however what I will say is that this is not the cause of action it's not a cause of that cause of action it's not an independent cause of action for successor liability it's an equitable remedy and that there's a difference between asserting successor liability or alter ego or mere continuation or piercing the corporate bail as a primary cause of action versus as an equitable remedy to satisfy a damage claim would it be the case that if somebody has a breach of contract action against this third party that they too could proceed with that breach of contract came and say this is individualized and we should be able to pursue no because the contract creditors or general and secure creditors their injury is just the same as their injury their damage is just the same as if the debtor didn't pay it's it's Xerox bill so what's the difference between your claim here and buildings by Jamie and and teen and teen as matter of fact was an asbestos injury type case but the cause of action that that to which they they wanted to attach the successor liability claim was the trust was a fraudulent conveyance action not the asbestos claim had they sued had those claim and sued they had that they pursued their asbestos claim they would have been fraudulent it was a fraudulent trust not an individualized but you have to get over to the other side of the room you have you have somebody part of me you want a little bit more regular thank you you honor just to land down thank you you honor made please the court i'm Chris landow and i'm here today for a robot i'd like to begin by addressing the question the judge cowon before you address that question educate us on what is the difference how do you determine whether something is individualized or a generalized claim that's exactly your question that i was going to address that's the question i was about to say they were on the same way on the same way because that is the critical question and the answer is is it a claim that could be pursued by all other creditors in other words the question is is it a generic successor liability claim or is it some kind of a particularized one that is unique that involves facts or relationships that are special to that particular creditor i think this goes back to a question the judge very asked a moment ago the opposing counsel's successor liability claim here this is very critical is a mere continuation claim there is nothing about their status as personal injury uh plant this that is unique to that claim they don't allege in particular that the product line exception uh is applicable that exception is unique to personal injury by the continuing business exactly but they don't fall within the product line exception because aroma the the the alleged successor does not has never manufactured uh diacetyl at any time before or after and they don't dispute that so that's why they have an alleged the one category of successor liability that might make them different and might be you know something your argument is good with and excellent but we're faced with the food town and although you might I I see that as being almost a hurdle which is very difficult here for you unless it goes a block uh because even though it was a different type of claim they're recognized in the food town the basic right of it of someone such as the uh plaintiffs of this case have this individual their claim is individual it's not like every trace of its claim sure well I certainly hope I can persuade you that food town you know it's why food absolutely in food town the the um the the creditors there that were trustees of the multi-employer pension plan they were pursuing an aristocrame that was special to them as trustees of that claim it was not a mere continuation claim that would apply to say the same thing their claim is not their claim is they got injured not not the not the body of credit no but you're on a let's not conflate the two claims you've got their underlying claim against the debtor right and nobody is disputing that their personal injury claim against emerald the debtor is individualized as is frankly every claim against the debtor and I think this goes back to some of the questions that were asked earlier if if I'm the landlord of the debtor I have an individualized claim to against the debtor that's not a generic claim contract claims are individualized claims everybody has an individualized claim against the debtor because everybody has some relationship that is not the same as every other creditor against the debtor there's some basis for recovery against the debtor again we're not talking here about the claim against the debtor we're talking here about the claim against the alleged successor in the food town case that the claim there was was an erissa successor liability claim the court made clear this was not a general generic state law successor liability claim this was a specific claim informed by a rissa principle the landlord of this debtor could not have brought that successor liability claim and by the way and putting aside parenthetically the fact that in food town the court noted that it was not proper to the state because that claim did not even arise until after the bankruptcy so that's a whole other reason to distinguish food town but again I think it's absolutely critical to understand the point that successor liability claims come in different shapes and sizes we are certainly not standing here today and saying that every single successor liability claim no matter what belongs to the trustee but you argue it on the one hand that personal injury products claim against the debtor are individualized correct while at the same time you're arguing that the identical claim asserted against the successor is a generalized claim that's that that I think is it can't be it can't be in both houses I with respect I disagree and I we pointed you to all these cases such as saying Paul and Cork that distinguish between the two claims in other words the the the one is the claim again you can't conflate the two claims and and I think there is something I would concede initially counterintuitive about thinking wait a second successor liability how is that kind of different and they make this argument they say it is inextricably linked to the underlying claim that you would acknowledge can be made if not this case what is what is it what give me some example sure of what food town is certainly individualized successor liability claim well that your your adversary's position and I don't know whether it's to be gainset is that a different setting but the same thing it's individualized to that person that has the personal injury just like in food town it was an individualized thing outside of the business but you're on again I think we just have to keep in mind the difference between the claim against the debtor which is individualized for food town one of their examples which you which you can see are individualized well if they if they were bringing a product line exception claim that is not a successor liability claim that could be brought by all creditors the landlord could not bring a product line exception claim their problem here and this is really the heart of the case that their successor liability claim and again whether you call it a claim or a theory of liability really doesn't matter the question is the state law for purposes of bankruptcy code section 541 defines property state very broadly and looks to state law so the question is the state law create some basis of liability if a parent acknowledged that if we were to hold in her favor I'm not saying we will or will not that that does that has nothing to do with whether or not she has a meritorious claim it's state court in other words that's for another day we don't decide whether or not they have a legitimate on the merits claim for whatever it is successor product line you know well that certainly but that does it but that doesn't solve the problem that we have to as to whether or not this is the individualized or generalized claim no the fact that you say that she may not have a merits claim because and I don't think she's claiming a product line I wasn't you need to say that you're on I'm sorry if I was not well if I was not clear on that she's not I don't think she's claiming that but whatever she's claiming for liability is is not for us we're only interested in whether or not I agree and I wasn't I was not wanting to tell me how this differs from food town again in food town food town is a classic example of a successor liability claim again let's let's keep the world divided into two parts one is claims against the debtor okay and food town had a claim against the debtor they filed a proof of claim yes just like a trace that claim and then we're recognized because their claim was different according to food town that that that they had a right to go outside of the settlement so to speak of a trustee correct but let me make clear you under we are not suggesting that their claims against the debtor emerald are are the property of the trustee we're only talking here my claim is a wrong claim is against the debtor or it's it's a little unclear there are or can be claims against emerald by the individual personal injury plaintiffs absolutely emerald the debtor they have that they have that in the estate absolutely are and they're pursuing that and the and the and the property of the estate here is you say the successor liability precisely precise and we yes and the reason and so that's the question is what is the property of the estate and to the extent the question is is the successor liability claim against emerald against aroma yes it's very confusing I wish this were like company and companies either very similar correct your honor that's exactly the key point that we're talking here about who who has the white really who has standing to bring a successor liability claim there's trustee have a right to sue on his all behalf for the personal injury of the plaintiffs in this case and no okay then if he does it who has that right the plaintiffs we know nobody is just reading so that's not that's not a property of the estate absolutely not absolutely not the question here is the successor liability it's the ability to estate okay to come and say we want to appears to be a we want to say something I don't see this being a question for us whether there is or is not successor liability I think your the appellant put that the rest we're just deciding we're not deciding whether they have it don't have no and I'm sorry again I am trying to talk about who has standing to pursue a successor liability claim so I'm not saying if the trustee does not have standing to pursue a claim on behalf of these plaintiffs but are the personal injury not a personal injury that's the key to for successor liability you see another way do the plaintiffs do have standing to bring the plaintiffs have standing to bring the personal injury claim against the debtor the debtor has standing to bring the successor liability claim against my client a romon for the benefit of all of the creditors not just personal injury creditors this is a generic mere continuation claim this benefits the landlord this benefits the contract person the nature of this particular successor liability claim but of course the plaintiffs can't sue the debtor the well the plaintiffs can sue the debt I mean they can pursue relief but they can't sue they actually have had the stay lifted to pursue individual lawsuits against the the debt or nominally and they're allowed to go after the insurance proceeds so the debt the plaintiffs in this case actually I think there was a statement made earlier that they have no records that's not a point you did say that not all successor liability claims are claims against your state not all successor liability again successor liability claims by definition are not claims against this day I think what I was trying to say at least is that not all successor liability claims are created equal some successor liability claims could be brought equally by all creditors those are generic ones if that is the case and if the estate can bring that claim as I believe it is undisputed that under New Jersey and New York law the estate the debtor has the ability to pierce its own corporate veil for the benefit of all its creditors and and so to the extent that that's true which is which is conceded here it the right to do that the right to bring that successor again we can't conflate the individualized nature of their personal injury claim against the debtor and then the right to pursue the successor against successor on successor liability and in that claim also assert the the injuries of the plaintiffs in this case because that that's not the answer question could he bring that type of claim could who bring that claim the trustee the trustee no no the successor so excuse excuse he could bring a claim on behalf of all creditors but and a trade creditor then might be reabersed if it's successful but he the trustee cannot bring a claim and as part of that claim seek a on behalf of the estate the damages which have caused to the the personal injury of these claimants again that's not well again that would be subsumed because again the nature of the claim he would bring is a generic mere continuation claim if it's a mere continuation claim it's basically saying you are us you are responsible for the pot of money for all of our debts so that benefit how does that help the plaintiffs and how does that and how does that do anything for the personal injury plaintiffs if he's successful it's saying this is you're just another corporation with our name and therefore you're liable for it it opens the door it actually benefits all the door to what to to having basically all of emeral's assets the alleged successor available as funds of the estate okay but then but then somewhere in the line the plaintiffs the individual plaintiffs with personal injuries have to sue and prove liability on and any and any award precisely just just met it and any award would not go to the estate it would go to the individual plaintiffs well again the the the debtor has proven that the there's continuation liabilities exactly so that pot of money is then there then when the debtor so there's some pot of money what pot of money for the plaintiffs the plaintiffs have had proven there in title anything they have no judgment they have nothing well again you're on the they have a claim that's on on the on the right but I think that that goes to the how do you then what is the logistics of the remedy for the successor claim again we are starting here with the proposition and I I don't believe this is contested under state law that the debtor here could pursue this generic mere continuation claim which the nature of it says you know something you just changed the sign above the door you are liable for all the debtors that's so then you you quantify the damages to that I think you would have to be structured in a way that you couldn't necessarily quantify the damages for mere continuation until the the plaintiffs have made their claim against the debtor and the trustee is successful as continuation claim and gets a judgment how does that benefit the personal injury plaintiffs they don't have a judgment for anything they have an unadjudicated un uh un un undocumented claim that's unadjudicated but you're assuming that that that that the order is such that that's already all all finished I mean again you're talking though about me it could it seems to me that the damages in that mere continuation claim are basically or the remedy in that mere continuation claim is to open the pocket of the alleged successor for all of the debts of the debtor that's what a mere continuation is it says basically you are the same thing this is there there's no real distinction here so suddenly it's like how does the how does the plaintiffs the uh the personal injury plaintiffs get remuterated they prove their case against the debtor again that nobody is disputing that they have a cause of action against the debtor that is personal to them just like a creditor so what you're doing here is you're having the trustee bring this cause of action for the benefit of all creditors if you don't do that your honor you'll have the creditors in a race I think this was a question that judge flank this that's earlier they will be in a race to the courthouse to see who can get a very party first there was a dialogue in the uh in one of the proceedings in which the trustees of was referencing whether these claim tied in fact they released by the trustee when there was this negotiation and I suppose this global release of all claims and at the appendix page 1277 the attorney the trustees attorney said that the claim does not belong to this estate the trustee can't release are you familiar with that statement we are I think that it was uncontested your honor that the judge did not make a determination at the moment back of a second the trustee released all the claims that the trustee had on behalf of the estate that was part of the settlement but to suggest that the plaintiffs claims were not part of the package of this release well again and there was a a proviso added there that says really with the truism that this does not release claims that that are the property of the plaintiffs and are not property to state I mean that that goes without saying the trustee nobody denies attorney would rework the statement where it should be done over about don't you think well I think that the half of the trustee the critical point though your honor just for is that the bankruptcy court approved the settlement later made a statement in deciding actually the chief thought the property that the successor liability claims as well as the direct liability claims were their property the the bankruptcy court made clear and this is at page 1383 of the appended that at the time of approving the settlement so this was what the judge was thinking when she was approving the fairness of the settlement that released all of the trustees claims the court made no definitive ruling or finding at that time as to whether the claims that issue here fell within the estates release claims under the approved settlement but rather reserve her future date when that issue would arise that issue is currently raised so it's not as if there had been a determination one way or the other by the court is it the case that all personal injury towards no matter what what shape they take or what form of the nature and extent of the injuries are property against the debtor and now become property of the estate I don't think any personal injury claims against the debtor are property of the state emerald had a bunch of trucks that delivered the chemicals and one of those trucks ran over somebody and that person quadriplegic with massive injuries sure now that person wants to file a claim sure but of course emerald is now in bankruptcy right so they have the same right as the other creditors of emerald to get a their pro rata equitable share of emerald assets that would include but your position is they cannot now go under successive liability and go after emerald well again they can't go after aroma a role in a successor liability theory that could be brought by any other one because then you're creating a race to the courthouse again once you acknowledge that the bankruptcy trustee okay could they were the same same shoes as the plaintiffs in this case correct then again I would just refer you to the the the sample complaint and the appendix which is I can't not thinking it's a very harsh result I mean I'm suggesting that it's wrong but I really I honestly I hope I can persuade you otherwise because basically this is just the way the bankruptcy courts bankruptcy works that the nobody's taking anything away from these folks the way it works is that you want the bankruptcy trustee to marshal all the assets of the estate once you conclude that a mere continuation claim is the is an asset of the state because it's generalized would benefit all creditors you want that to be presumed but one of the assets of the estate is not the entitlement of the personal injury plaintiffs to be remunerated for their personal injury but that's not that's not personal injury claim against the debtor emerald I get the question the point here is though that there is a claim against anyone that the debtor or a successor but but again you're honor every if every if the successor liability claim that they have is the same as every other creditor you would be creating you'd be rewarding those creditors the successor liability is that's the successor liability claim is the same but the claim of the individuals is not no and that's what I mean I apologize about yeah well no you're you're the one that's complaining stop to hear that the difference is that the individual has a claim for damages to him yes for damages to the estate correct they're correct but the way that the individual does that is the individual goes after the state the individual nobody's denying the individual has their share to a pro-rider right at the estate and and one thing that is critical to keep in mind is that the insurance assets related ties to Dicell remained in the estate and are available to these folks and the state has been lifted and in fact in their lawsuits they have sued 30 other manufacturers so again I don't want you to get the impression that these folks are left without a remedy their remedy as as the remedy of any other creditor is for the the the debtor to go after the trustees to go after the pot of money and then distribute those in an equitably and orderly way against among the creditors of the estate very good mr

. and now thank you very much rebuttal miss out isocin thank you your honors I would like to reiterate the impact of the food town case on how the court needs to decide the amount of this before the court today and I call the court to the attention of page 171 of that decision this court said in in addressing the buildings by jamey case in the buildings by jamey case consistent with our decision here under new jersey law an alter ego action is an equitable remedy it is not an independent cause of action it is not the main cause of action that my clients are bringing my clients are bringing a personal injury tort claim in the state court against the debtor as a nominal defendant and the mere continuation claim is the equitable remedy for the damages sustained because of those injuries and this court went on to say as a result the injury is personal to the appellance the pension plan in the food town case you know I still wonder this idea of allowing the plaintiffs though and again I'm sympathetic to the plaintiffs in this case to essentially get in the front of the line when it comes to distributing assets that should be available to all the creditors which is the purpose of the trustee if if the match all of the possible assets and then distribute those assets equitably amongst all the creditors but if if personal injury plaintiffs are then allowed to proceed with their claims that is to the disadvantage of other claim

. Personal injury claimants are not going to participate like the general and secured creditors are participating from the trustees liquidating the assets of the estate the personal injury claimants are unliquidated contingent claims that have been sent back to the state court that they have stay-releaped to go pursue insurance proceeds or whatever whatever source of recovery those claimants can but just still going after Ameral and let's say you have the the situation Ameral is the person that you're suing right what Ameral is the debtor aroma is the third is the is the if I aroma aroma is the successor yeah you know I wonder how they got the same name so yeah yeah I think it was purposeful I don't know the information about that but you're suing aroma and and what if the hadn't been the what if the trustee had not settled all those cases with aroma and and aroma was still subject to being sued by other third by other creditors aroma would have the same argument that it if you're sent here if those creditors did not if those creditors did not have a particularized injury I mean the personal injury plaintiffs in this case are creditors aren't they absolutely and you're on your your credit questions my adversary about the quadriplegic and and the truck that claimant is in the same position as the diacetyl plaintiffs and would have the same right to go after whatever assets to recover for for his or her damages and you you uh uh for your personal injury claim you you don't share any part of the uh trustee is the same do not do not do not trustee if if there's a hit on successor liability and Amora is found to be a mere continuation of Emerald then any pot goes into the estate it's not a pot or it's not a pot not not for the plaintiffs it's not the plaintiffs but you have a client against the estate I apologize for interrupting your honor if my client if an individual diacetyl claimant gets an award for five hundred thousand dollars and it collects two hundred thousand dollars from the insurance company if you can can satisfy the rest of the damage claim if it's successful on the successor liability claim from aroma it's not a general hot it is a specific remedy to satisfy the diacetyl individual diacetyl plaintiffs damage awards thank you thank you very excellent our item is very difficult case that we will have to work on thank you will take

Emerald in rate Emerald getter and diacetyl plaintiffs and Ms. Isaacson Good morning. May I please the court Nancy Isaacson for the appellants I asshole claimants and I'd like to reserve three minutes for re-gluinal yes that's fine how do you pronounce it again excuse me how do you pronounce that chemical diacetyl diacetyl flavoring and butter popcorn all right May I please the court my clients the appellants here are a discrete group of holders of toward claims and I'll refer to them for purposes of this argument as the diacetyl claimants and they have asserted in various state court actions personal injuries against the debt or Emerald those injuries result from exposure to the chemical diacetyl Emerald manufactured and distributed that chemical and to avoid the liability to my clients Emerald sold demonstrably all of their assets the case pretty much we we've heard and adjusted how do you decide whether a client is generalized or individualized well what's the Citiquan oh of that determination this court already has determined the roadmap for making that determination in the the food town case the insurance the pension that wasn't a personal injury case it was not a personal injury case but the question was who is the injured party was the debtor injured or was it the pension plan and there is sufficient holdings in that case that make the roadmap for how this court should decide whether or not personal injury claimants have personal personalized claims with the equitable remedy to assert a successful liability is it dependent on who's getting sued excuse me does it depend on who's getting sued is it does it depend on whether the suit is against the debtor or whether it turns on who is injured is the debtor injured or is the individual claimants injured how would a recovery on your claim for successor liability against a moron not benefit all the creditors of Emerald generally it is an equitable remedy that's tied to the underlying personal injury claim of the individual diastyl claimants that's your claim against Emerald right but I'm talking about the successor liability claim against Imora how would claim for successor liability against a moral your claim not benefit all creditors it's too it's it's an equitable remedy to to compensate for the damages that the personal injury claimants suffered so can so can a contract creditor a commercial creditor those are just general one secured creditors you're on it they don't have particular ice claims how do you know well you're insecure too I mean why is one your position is that that underlying claim is not property of the trustee if the debtor is in bankruptcy that's correct why let me continue with Judge Barry's question what is why makes your claim individualized I'm a contract creditor I got stuck for $100,000 I feel pretty injured myself because my company has got stuck for $100,000 in bankruptcy why is it my claim as a as a contract creditor individualized because under New Jersey state law toward claimants with personal injury claims like presented in this case are given special and higher treatment and acknowledgement in litigation and they are treated differently and they are different than general and secure creditors. A contract claimant also could sue under let's say this is not in bankruptcy a contract claimant against a debtor not in bankruptcy could also sue on the theory of business continuation and succeeded successor liability. No I would suggest to the court that that contract creditor would have to have an underlying claim of some personal injury i.e a business tort some underlying personal claim. Trustee could of the trustee could sue that no you're on it Trustee could not sue the business tort on behalf of that that creditor you're not suggesting that to bring a claim of successor liability there must be a personal injury component there must be a personalized for a creditor to bring in a bankruptcy situation for a creditor to bring outside of the bankruptcy proceeding a successful liability claim against a successor in interest to the debtor there has to be a personal claim an underlying personal claim personal personal particularized claim like a business tort like a discrimination and employment claim a personal claim to that creditor not a general claim like a general in this case a trustee in bankruptcy on behalf of all the creditors who have filed a prusive claim including personal injury claimants as well as trade creditors why can't he sue umberl on the theory that they have that they're just successors to the predecessor business and uh that that uh uh all the creditor should uh now have a claim because it's the same company with another name if the trustee had a claim against aroma the respondent the appley here if the trustee thought that there is a claim that aroma is really the successor the alter ego the mere continuation of product line etc etc same personnel same creditors same everything the trustee that's an asset of the estate under 541 11 u.s.d. second 541 and that the trustee brings that claim the trustee settled this the claims against aroma as a fraudulent transfer claim as the motion as you'll see in the motion do you see the claim? the settlement was for a fraudulent transfer claim and then the settlement and the release language released had this very broad release to which a diacyl claim is subjected so the trustee would have resolved to do that but if the trustee did not settle that claim and and instead of settling it elected to pursue a business continuation product line continuation uh he would have that right to do on behalf of not only the personal injury uh claimants who filed proof of claim but as on the trade creditors as well contract creditors if the claim if the claim was one for alter ego meerkat a general claim like that yes or on our yes you the trustee would have the right to pursue that kind of claim because they they do seem like they're so personal you know the injuries involved and when when you get money for your injuries you're compensating an individual for the injuries that must stay but you're suggesting now an answer to this question that the trustee can bring all of those claims against no I'm sorry I'm sorry I may have misunderstood Judge Collins question the trustee can bring the claim on behalf of the debtor and the debtor estate if there is damage to the debtor by the conduct of aroma for the benefit of the credit the personal injury claim is not personal injuries for more no that the trustee has no right to bring personal injury claims business to reclaims for the missing the right personal injury claims against or against immoral correct pending in the bankruptcy they were they're a creditor in the bankruptcy case against the state relief against the law tomorrow yeah uh you acknowledge that all this is based on whether or not they're a successor product line liability under new Jersey state law if we were to hold your favor that this is a personal claim not a generalized claim you acknowledge to you not that you still must prove in state court you have our decision have no effect upon whether in fact you have a meritorious product line successor claim in state court that would you not to prove that separated apart from our determination that this is a personal not a generalized claim that's correct Your honor however I'd like to correct your statement we are not the d'Asl claim is due not a leg of product line defect claim against aroma we're looking to to assert the equitable remedy of successful liability on aroma which this court in the food town case said is is very appropriate but my basic point is that any decision by us and your favor does not resolve whether or not you have a meritorious claim in state court correct your honor that's for the state court to determine can can you talk about McCain you're familiar with the king the king yeah and the statement there that claims based upon successor liability should be asserted by the trustee on behalf of law creditors that statement was made in conjunction with the nature of the claims that were asserted in that litigation you mean the decision is based on the nature of the crime that it was because of what yes because the underlying claim was as opposed to whether the trustee has the right to bring all claims for the benefit of all the creditors the court needs to understand the nature of the claim that was being pursued in the in the keen litigate in the keen case and that was a chapter five trustee bankruptcy court cause of action it was not a particular claim of a creditor is it your is it your point that because your claim involves torsious conduct or it's a personal injury tort if therefore it's individualized and therefore it is not part of the state correct your honor there I don't think that the bankruptcy court or the district court or my app or aroma disagrees that the personal injury claim is a personalized claim I don't think that's not the issue the issue is whether the equitable remedy that we that are diacyl claim and seek to pursue a successful liability liability to compensate for those injuries is property of the estate you cite one case to show that personal injury cases asserting successor liability are not property of the estate right that was the RDM holdings case there yes and that was a case that applied Michigan law which is different in this connection than New Jersey or New York law there is there are so you don't really have there are no case there's there's there's really no case law out there that directly addresses this issue we have the food town case which is a guide on how to analyze who's the injured party who gets to assert the claim and whether or not it's an acidity of the estate and that case was cited just for to show the court that there is some there is something out there that has addressed it but there really are no cases that are directly that there's a whole lot of case well but that was the one case you cited and the problem is that this is a this is a claim against Ameral it's a claim against the third party what about the other creditors what if what if they had claims against the third party why should you in a sense jump a line why should you have priority why why should you then take first from that third party to the disadvantage of all the other creditors indicate in the bankruptcy I would suggest to the court that if one of the creditors that your honors is speaking about was a victim of employment discrimination or had a had a personal tort claim against the debtor that creditor could pursue aroma on the same theory that the diastole claim is represented and it's and it's in that this particular debtor just happened to have had this is the body of creditors it has general unsecured creditors and it has personal injury creditors okay I am not unsympathetic to the problem that is presented in this case by these individuals who suffered serious personal injury and don't appear to have recourse but nonetheless what is the rule that we would be looking to state if we give you the right to sue here a third party in other cases then you have personal injury claimants would then be given priority I suppose over all other it's not prior to rule no it's not priority your honor it's allowing it's allowing the tort claimants to avail themselves of state law and pursue the claims and state law yeah but and it's not it's it's not giving priority because other creditors have claims against a moral why would you be able to go after a moral and and take those assets to the disadvantage of other creditors who may have whatever types of claims they may have contractual claims for example because the code the code the bankruptcy code is is in place to equalize distribution to unscrupulous creditors okay so we general general general and to equalize to monetize assets of the estate and distribute them pro-rattards to the extent that they exist to general and secure creditors with the recovery with the money that you recover going to a pot or would that go to the individual goes to the individual and as as an aside to this argument the debtor filed a chapter seven bankruptcy petition so the tort claimants here the diastinal claimants do not have the protections that it would have had had with respect to insurance and channeling and equal distribution of of insurance proceeds all of the claim the tort claimants we're not in that situation here we chapter seven debtors corporate debtors that have these tort claims against them are not obligated to provide a trust or another mechanism in order to satisfy these general general but the bank trustee can the bank of trustee could also file a claim against umora can on a business continuation of access reliability theory can can he not the trustee way that claim in conjunction with its settlement of the fraudulent transfer I know but I'm I'm asking as a matter of law the trustee could file a file could file could have if he didn't settle a case file a business continuation claim against which is the same claim that you're individually no it's not your honor what is it if that's by question what is the difference between the trustee as representative of all those creditors claim for business continuation and you're claimed as an individual when you're already you filed a proof of claim in the bankruptcy the trustee has a has the duty to monetize assets of the estate the assets of the estate include causes of action whether they're under the bankruptcy code or whether they're under a state law why doesn't it include the cause of action for individual tort that these people were exposed to that is a personal claim that is not a claim that the trustee has standing to pursue only tell me why that's that's your position what facts make that individual and the contract the tradesman's claim for goods sold and delivered not individual there was no disagreement either at the trial court or from my or from a Roma that the general and secured creditor body is a general and secured creditor and they are the ones that the trustee is in place to monetize assets to satisfy and your one of the general it's not anymore before before you filed your application you were you filed a proof of claim excuse me you filed a proof of claim so before you went and filed a third party actions you were a general and secured credit like a trade tradesman but sets the diastole claimants apart is that the diastole claimants obtained sterile leave under 366 section 362 and agreed to pursue only assets that it could recover in the state court and would not go and recover against the assets that are recovered by the data there are no facts unique to you that would be different from other credit there are absolutely unique facts the personal injuries it's not a new jersey state long remeer it established continuation took a continuation of tomorrow there are no facts unique to you that would distinguish you from other creditors in terms of the successor liability theory honestly you know I don't know because we haven't done no no discovery on that topic however what I will say is that this is not the cause of action it's not a cause of that cause of action it's not an independent cause of action for successor liability it's an equitable remedy and that there's a difference between asserting successor liability or alter ego or mere continuation or piercing the corporate bail as a primary cause of action versus as an equitable remedy to satisfy a damage claim would it be the case that if somebody has a breach of contract action against this third party that they too could proceed with that breach of contract came and say this is individualized and we should be able to pursue no because the contract creditors or general and secure creditors their injury is just the same as their injury their damage is just the same as if the debtor didn't pay it's it's Xerox bill so what's the difference between your claim here and buildings by Jamie and and teen and teen as matter of fact was an asbestos injury type case but the cause of action that that to which they they wanted to attach the successor liability claim was the trust was a fraudulent conveyance action not the asbestos claim had they sued had those claim and sued they had that they pursued their asbestos claim they would have been fraudulent it was a fraudulent trust not an individualized but you have to get over to the other side of the room you have you have somebody part of me you want a little bit more regular thank you you honor just to land down thank you you honor made please the court i'm Chris landow and i'm here today for a robot i'd like to begin by addressing the question the judge cowon before you address that question educate us on what is the difference how do you determine whether something is individualized or a generalized claim that's exactly your question that i was going to address that's the question i was about to say they were on the same way on the same way because that is the critical question and the answer is is it a claim that could be pursued by all other creditors in other words the question is is it a generic successor liability claim or is it some kind of a particularized one that is unique that involves facts or relationships that are special to that particular creditor i think this goes back to a question the judge very asked a moment ago the opposing counsel's successor liability claim here this is very critical is a mere continuation claim there is nothing about their status as personal injury uh plant this that is unique to that claim they don't allege in particular that the product line exception uh is applicable that exception is unique to personal injury by the continuing business exactly but they don't fall within the product line exception because aroma the the the alleged successor does not has never manufactured uh diacetyl at any time before or after and they don't dispute that so that's why they have an alleged the one category of successor liability that might make them different and might be you know something your argument is good with and excellent but we're faced with the food town and although you might I I see that as being almost a hurdle which is very difficult here for you unless it goes a block uh because even though it was a different type of claim they're recognized in the food town the basic right of it of someone such as the uh plaintiffs of this case have this individual their claim is individual it's not like every trace of its claim sure well I certainly hope I can persuade you that food town you know it's why food absolutely in food town the the um the the creditors there that were trustees of the multi-employer pension plan they were pursuing an aristocrame that was special to them as trustees of that claim it was not a mere continuation claim that would apply to say the same thing their claim is not their claim is they got injured not not the not the body of credit no but you're on a let's not conflate the two claims you've got their underlying claim against the debtor right and nobody is disputing that their personal injury claim against emerald the debtor is individualized as is frankly every claim against the debtor and I think this goes back to some of the questions that were asked earlier if if I'm the landlord of the debtor I have an individualized claim to against the debtor that's not a generic claim contract claims are individualized claims everybody has an individualized claim against the debtor because everybody has some relationship that is not the same as every other creditor against the debtor there's some basis for recovery against the debtor again we're not talking here about the claim against the debtor we're talking here about the claim against the alleged successor in the food town case that the claim there was was an erissa successor liability claim the court made clear this was not a general generic state law successor liability claim this was a specific claim informed by a rissa principle the landlord of this debtor could not have brought that successor liability claim and by the way and putting aside parenthetically the fact that in food town the court noted that it was not proper to the state because that claim did not even arise until after the bankruptcy so that's a whole other reason to distinguish food town but again I think it's absolutely critical to understand the point that successor liability claims come in different shapes and sizes we are certainly not standing here today and saying that every single successor liability claim no matter what belongs to the trustee but you argue it on the one hand that personal injury products claim against the debtor are individualized correct while at the same time you're arguing that the identical claim asserted against the successor is a generalized claim that's that that I think is it can't be it can't be in both houses I with respect I disagree and I we pointed you to all these cases such as saying Paul and Cork that distinguish between the two claims in other words the the the one is the claim again you can't conflate the two claims and and I think there is something I would concede initially counterintuitive about thinking wait a second successor liability how is that kind of different and they make this argument they say it is inextricably linked to the underlying claim that you would acknowledge can be made if not this case what is what is it what give me some example sure of what food town is certainly individualized successor liability claim well that your your adversary's position and I don't know whether it's to be gainset is that a different setting but the same thing it's individualized to that person that has the personal injury just like in food town it was an individualized thing outside of the business but you're on again I think we just have to keep in mind the difference between the claim against the debtor which is individualized for food town one of their examples which you which you can see are individualized well if they if they were bringing a product line exception claim that is not a successor liability claim that could be brought by all creditors the landlord could not bring a product line exception claim their problem here and this is really the heart of the case that their successor liability claim and again whether you call it a claim or a theory of liability really doesn't matter the question is the state law for purposes of bankruptcy code section 541 defines property state very broadly and looks to state law so the question is the state law create some basis of liability if a parent acknowledged that if we were to hold in her favor I'm not saying we will or will not that that does that has nothing to do with whether or not she has a meritorious claim it's state court in other words that's for another day we don't decide whether or not they have a legitimate on the merits claim for whatever it is successor product line you know well that certainly but that does it but that doesn't solve the problem that we have to as to whether or not this is the individualized or generalized claim no the fact that you say that she may not have a merits claim because and I don't think she's claiming a product line I wasn't you need to say that you're on I'm sorry if I was not well if I was not clear on that she's not I don't think she's claiming that but whatever she's claiming for liability is is not for us we're only interested in whether or not I agree and I wasn't I was not wanting to tell me how this differs from food town again in food town food town is a classic example of a successor liability claim again let's let's keep the world divided into two parts one is claims against the debtor okay and food town had a claim against the debtor they filed a proof of claim yes just like a trace that claim and then we're recognized because their claim was different according to food town that that that they had a right to go outside of the settlement so to speak of a trustee correct but let me make clear you under we are not suggesting that their claims against the debtor emerald are are the property of the trustee we're only talking here my claim is a wrong claim is against the debtor or it's it's a little unclear there are or can be claims against emerald by the individual personal injury plaintiffs absolutely emerald the debtor they have that they have that in the estate absolutely are and they're pursuing that and the and the and the property of the estate here is you say the successor liability precisely precise and we yes and the reason and so that's the question is what is the property of the estate and to the extent the question is is the successor liability claim against emerald against aroma yes it's very confusing I wish this were like company and companies either very similar correct your honor that's exactly the key point that we're talking here about who who has the white really who has standing to bring a successor liability claim there's trustee have a right to sue on his all behalf for the personal injury of the plaintiffs in this case and no okay then if he does it who has that right the plaintiffs we know nobody is just reading so that's not that's not a property of the estate absolutely not absolutely not the question here is the successor liability it's the ability to estate okay to come and say we want to appears to be a we want to say something I don't see this being a question for us whether there is or is not successor liability I think your the appellant put that the rest we're just deciding we're not deciding whether they have it don't have no and I'm sorry again I am trying to talk about who has standing to pursue a successor liability claim so I'm not saying if the trustee does not have standing to pursue a claim on behalf of these plaintiffs but are the personal injury not a personal injury that's the key to for successor liability you see another way do the plaintiffs do have standing to bring the plaintiffs have standing to bring the personal injury claim against the debtor the debtor has standing to bring the successor liability claim against my client a romon for the benefit of all of the creditors not just personal injury creditors this is a generic mere continuation claim this benefits the landlord this benefits the contract person the nature of this particular successor liability claim but of course the plaintiffs can't sue the debtor the well the plaintiffs can sue the debt I mean they can pursue relief but they can't sue they actually have had the stay lifted to pursue individual lawsuits against the the debt or nominally and they're allowed to go after the insurance proceeds so the debt the plaintiffs in this case actually I think there was a statement made earlier that they have no records that's not a point you did say that not all successor liability claims are claims against your state not all successor liability again successor liability claims by definition are not claims against this day I think what I was trying to say at least is that not all successor liability claims are created equal some successor liability claims could be brought equally by all creditors those are generic ones if that is the case and if the estate can bring that claim as I believe it is undisputed that under New Jersey and New York law the estate the debtor has the ability to pierce its own corporate veil for the benefit of all its creditors and and so to the extent that that's true which is which is conceded here it the right to do that the right to bring that successor again we can't conflate the individualized nature of their personal injury claim against the debtor and then the right to pursue the successor against successor on successor liability and in that claim also assert the the injuries of the plaintiffs in this case because that that's not the answer question could he bring that type of claim could who bring that claim the trustee the trustee no no the successor so excuse excuse he could bring a claim on behalf of all creditors but and a trade creditor then might be reabersed if it's successful but he the trustee cannot bring a claim and as part of that claim seek a on behalf of the estate the damages which have caused to the the personal injury of these claimants again that's not well again that would be subsumed because again the nature of the claim he would bring is a generic mere continuation claim if it's a mere continuation claim it's basically saying you are us you are responsible for the pot of money for all of our debts so that benefit how does that help the plaintiffs and how does that and how does that do anything for the personal injury plaintiffs if he's successful it's saying this is you're just another corporation with our name and therefore you're liable for it it opens the door it actually benefits all the door to what to to having basically all of emeral's assets the alleged successor available as funds of the estate okay but then but then somewhere in the line the plaintiffs the individual plaintiffs with personal injuries have to sue and prove liability on and any and any award precisely just just met it and any award would not go to the estate it would go to the individual plaintiffs well again the the the debtor has proven that the there's continuation liabilities exactly so that pot of money is then there then when the debtor so there's some pot of money what pot of money for the plaintiffs the plaintiffs have had proven there in title anything they have no judgment they have nothing well again you're on the they have a claim that's on on the on the right but I think that that goes to the how do you then what is the logistics of the remedy for the successor claim again we are starting here with the proposition and I I don't believe this is contested under state law that the debtor here could pursue this generic mere continuation claim which the nature of it says you know something you just changed the sign above the door you are liable for all the debtors that's so then you you quantify the damages to that I think you would have to be structured in a way that you couldn't necessarily quantify the damages for mere continuation until the the plaintiffs have made their claim against the debtor and the trustee is successful as continuation claim and gets a judgment how does that benefit the personal injury plaintiffs they don't have a judgment for anything they have an unadjudicated un uh un un undocumented claim that's unadjudicated but you're assuming that that that that the order is such that that's already all all finished I mean again you're talking though about me it could it seems to me that the damages in that mere continuation claim are basically or the remedy in that mere continuation claim is to open the pocket of the alleged successor for all of the debts of the debtor that's what a mere continuation is it says basically you are the same thing this is there there's no real distinction here so suddenly it's like how does the how does the plaintiffs the uh the personal injury plaintiffs get remuterated they prove their case against the debtor again that nobody is disputing that they have a cause of action against the debtor that is personal to them just like a creditor so what you're doing here is you're having the trustee bring this cause of action for the benefit of all creditors if you don't do that your honor you'll have the creditors in a race I think this was a question that judge flank this that's earlier they will be in a race to the courthouse to see who can get a very party first there was a dialogue in the uh in one of the proceedings in which the trustees of was referencing whether these claim tied in fact they released by the trustee when there was this negotiation and I suppose this global release of all claims and at the appendix page 1277 the attorney the trustees attorney said that the claim does not belong to this estate the trustee can't release are you familiar with that statement we are I think that it was uncontested your honor that the judge did not make a determination at the moment back of a second the trustee released all the claims that the trustee had on behalf of the estate that was part of the settlement but to suggest that the plaintiffs claims were not part of the package of this release well again and there was a a proviso added there that says really with the truism that this does not release claims that that are the property of the plaintiffs and are not property to state I mean that that goes without saying the trustee nobody denies attorney would rework the statement where it should be done over about don't you think well I think that the half of the trustee the critical point though your honor just for is that the bankruptcy court approved the settlement later made a statement in deciding actually the chief thought the property that the successor liability claims as well as the direct liability claims were their property the the bankruptcy court made clear and this is at page 1383 of the appended that at the time of approving the settlement so this was what the judge was thinking when she was approving the fairness of the settlement that released all of the trustees claims the court made no definitive ruling or finding at that time as to whether the claims that issue here fell within the estates release claims under the approved settlement but rather reserve her future date when that issue would arise that issue is currently raised so it's not as if there had been a determination one way or the other by the court is it the case that all personal injury towards no matter what what shape they take or what form of the nature and extent of the injuries are property against the debtor and now become property of the estate I don't think any personal injury claims against the debtor are property of the state emerald had a bunch of trucks that delivered the chemicals and one of those trucks ran over somebody and that person quadriplegic with massive injuries sure now that person wants to file a claim sure but of course emerald is now in bankruptcy right so they have the same right as the other creditors of emerald to get a their pro rata equitable share of emerald assets that would include but your position is they cannot now go under successive liability and go after emerald well again they can't go after aroma a role in a successor liability theory that could be brought by any other one because then you're creating a race to the courthouse again once you acknowledge that the bankruptcy trustee okay could they were the same same shoes as the plaintiffs in this case correct then again I would just refer you to the the the sample complaint and the appendix which is I can't not thinking it's a very harsh result I mean I'm suggesting that it's wrong but I really I honestly I hope I can persuade you otherwise because basically this is just the way the bankruptcy courts bankruptcy works that the nobody's taking anything away from these folks the way it works is that you want the bankruptcy trustee to marshal all the assets of the estate once you conclude that a mere continuation claim is the is an asset of the state because it's generalized would benefit all creditors you want that to be presumed but one of the assets of the estate is not the entitlement of the personal injury plaintiffs to be remunerated for their personal injury but that's not that's not personal injury claim against the debtor emerald I get the question the point here is though that there is a claim against anyone that the debtor or a successor but but again you're honor every if every if the successor liability claim that they have is the same as every other creditor you would be creating you'd be rewarding those creditors the successor liability is that's the successor liability claim is the same but the claim of the individuals is not no and that's what I mean I apologize about yeah well no you're you're the one that's complaining stop to hear that the difference is that the individual has a claim for damages to him yes for damages to the estate correct they're correct but the way that the individual does that is the individual goes after the state the individual nobody's denying the individual has their share to a pro-rider right at the estate and and one thing that is critical to keep in mind is that the insurance assets related ties to Dicell remained in the estate and are available to these folks and the state has been lifted and in fact in their lawsuits they have sued 30 other manufacturers so again I don't want you to get the impression that these folks are left without a remedy their remedy as as the remedy of any other creditor is for the the the debtor to go after the trustees to go after the pot of money and then distribute those in an equitably and orderly way against among the creditors of the estate very good mr. and now thank you very much rebuttal miss out isocin thank you your honors I would like to reiterate the impact of the food town case on how the court needs to decide the amount of this before the court today and I call the court to the attention of page 171 of that decision this court said in in addressing the buildings by jamey case in the buildings by jamey case consistent with our decision here under new jersey law an alter ego action is an equitable remedy it is not an independent cause of action it is not the main cause of action that my clients are bringing my clients are bringing a personal injury tort claim in the state court against the debtor as a nominal defendant and the mere continuation claim is the equitable remedy for the damages sustained because of those injuries and this court went on to say as a result the injury is personal to the appellance the pension plan in the food town case you know I still wonder this idea of allowing the plaintiffs though and again I'm sympathetic to the plaintiffs in this case to essentially get in the front of the line when it comes to distributing assets that should be available to all the creditors which is the purpose of the trustee if if the match all of the possible assets and then distribute those assets equitably amongst all the creditors but if if personal injury plaintiffs are then allowed to proceed with their claims that is to the disadvantage of other claim. Personal injury claimants are not going to participate like the general and secured creditors are participating from the trustees liquidating the assets of the estate the personal injury claimants are unliquidated contingent claims that have been sent back to the state court that they have stay-releaped to go pursue insurance proceeds or whatever whatever source of recovery those claimants can but just still going after Ameral and let's say you have the the situation Ameral is the person that you're suing right what Ameral is the debtor aroma is the third is the is the if I aroma aroma is the successor yeah you know I wonder how they got the same name so yeah yeah I think it was purposeful I don't know the information about that but you're suing aroma and and what if the hadn't been the what if the trustee had not settled all those cases with aroma and and aroma was still subject to being sued by other third by other creditors aroma would have the same argument that it if you're sent here if those creditors did not if those creditors did not have a particularized injury I mean the personal injury plaintiffs in this case are creditors aren't they absolutely and you're on your your credit questions my adversary about the quadriplegic and and the truck that claimant is in the same position as the diacetyl plaintiffs and would have the same right to go after whatever assets to recover for for his or her damages and you you uh uh for your personal injury claim you you don't share any part of the uh trustee is the same do not do not do not trustee if if there's a hit on successor liability and Amora is found to be a mere continuation of Emerald then any pot goes into the estate it's not a pot or it's not a pot not not for the plaintiffs it's not the plaintiffs but you have a client against the estate I apologize for interrupting your honor if my client if an individual diacetyl claimant gets an award for five hundred thousand dollars and it collects two hundred thousand dollars from the insurance company if you can can satisfy the rest of the damage claim if it's successful on the successor liability claim from aroma it's not a general hot it is a specific remedy to satisfy the diacetyl individual diacetyl plaintiffs damage awards thank you thank you very excellent our item is very difficult case that we will have to work on thank you will take

Emerald in rate Emerald getter and diacetyl plaintiffs and Ms. Isaacson Good morning. May I please the court Nancy Isaacson for the appellants I asshole claimants and I'd like to reserve three minutes for re-gluinal yes that's fine how do you pronounce it again excuse me how do you pronounce that chemical diacetyl diacetyl flavoring and butter popcorn all right May I please the court my clients the appellants here are a discrete group of holders of toward claims and I'll refer to them for purposes of this argument as the diacetyl claimants and they have asserted in various state court actions personal injuries against the debt or Emerald those injuries result from exposure to the chemical diacetyl Emerald manufactured and distributed that chemical and to avoid the liability to my clients Emerald sold demonstrably all of their assets the case pretty much we we've heard and adjusted how do you decide whether a client is generalized or individualized well what's the Citiquan oh of that determination this court already has determined the roadmap for making that determination in the the food town case the insurance the pension that wasn't a personal injury case it was not a personal injury case but the question was who is the injured party was the debtor injured or was it the pension plan and there is sufficient holdings in that case that make the roadmap for how this court should decide whether or not personal injury claimants have personal personalized claims with the equitable remedy to assert a successful liability is it dependent on who's getting sued excuse me does it depend on who's getting sued is it does it depend on whether the suit is against the debtor or whether it turns on who is injured is the debtor injured or is the individual claimants injured how would a recovery on your claim for successor liability against a moron not benefit all the creditors of Emerald generally it is an equitable remedy that's tied to the underlying personal injury claim of the individual diastyl claimants that's your claim against Emerald right but I'm talking about the successor liability claim against Imora how would claim for successor liability against a moral your claim not benefit all creditors it's too it's it's an equitable remedy to to compensate for the damages that the personal injury claimants suffered so can so can a contract creditor a commercial creditor those are just general one secured creditors you're on it they don't have particular ice claims how do you know well you're insecure too I mean why is one your position is that that underlying claim is not property of the trustee if the debtor is in bankruptcy that's correct why let me continue with Judge Barry's question what is why makes your claim individualized I'm a contract creditor I got stuck for $100,000 I feel pretty injured myself because my company has got stuck for $100,000 in bankruptcy why is it my claim as a as a contract creditor individualized because under New Jersey state law toward claimants with personal injury claims like presented in this case are given special and higher treatment and acknowledgement in litigation and they are treated differently and they are different than general and secure creditors. A contract claimant also could sue under let's say this is not in bankruptcy a contract claimant against a debtor not in bankruptcy could also sue on the theory of business continuation and succeeded successor liability. No I would suggest to the court that that contract creditor would have to have an underlying claim of some personal injury i.e a business tort some underlying personal claim. Trustee could of the trustee could sue that no you're on it Trustee could not sue the business tort on behalf of that that creditor you're not suggesting that to bring a claim of successor liability there must be a personal injury component there must be a personalized for a creditor to bring in a bankruptcy situation for a creditor to bring outside of the bankruptcy proceeding a successful liability claim against a successor in interest to the debtor there has to be a personal claim an underlying personal claim personal personal particularized claim like a business tort like a discrimination and employment claim a personal claim to that creditor not a general claim like a general in this case a trustee in bankruptcy on behalf of all the creditors who have filed a prusive claim including personal injury claimants as well as trade creditors why can't he sue umberl on the theory that they have that they're just successors to the predecessor business and uh that that uh uh all the creditor should uh now have a claim because it's the same company with another name if the trustee had a claim against aroma the respondent the appley here if the trustee thought that there is a claim that aroma is really the successor the alter ego the mere continuation of product line etc etc same personnel same creditors same everything the trustee that's an asset of the estate under 541 11 u.s.d. second 541 and that the trustee brings that claim the trustee settled this the claims against aroma as a fraudulent transfer claim as the motion as you'll see in the motion do you see the claim? the settlement was for a fraudulent transfer claim and then the settlement and the release language released had this very broad release to which a diacyl claim is subjected so the trustee would have resolved to do that but if the trustee did not settle that claim and and instead of settling it elected to pursue a business continuation product line continuation uh he would have that right to do on behalf of not only the personal injury uh claimants who filed proof of claim but as on the trade creditors as well contract creditors if the claim if the claim was one for alter ego meerkat a general claim like that yes or on our yes you the trustee would have the right to pursue that kind of claim because they they do seem like they're so personal you know the injuries involved and when when you get money for your injuries you're compensating an individual for the injuries that must stay but you're suggesting now an answer to this question that the trustee can bring all of those claims against no I'm sorry I'm sorry I may have misunderstood Judge Collins question the trustee can bring the claim on behalf of the debtor and the debtor estate if there is damage to the debtor by the conduct of aroma for the benefit of the credit the personal injury claim is not personal injuries for more no that the trustee has no right to bring personal injury claims business to reclaims for the missing the right personal injury claims against or against immoral correct pending in the bankruptcy they were they're a creditor in the bankruptcy case against the state relief against the law tomorrow yeah uh you acknowledge that all this is based on whether or not they're a successor product line liability under new Jersey state law if we were to hold your favor that this is a personal claim not a generalized claim you acknowledge to you not that you still must prove in state court you have our decision have no effect upon whether in fact you have a meritorious product line successor claim in state court that would you not to prove that separated apart from our determination that this is a personal not a generalized claim that's correct Your honor however I'd like to correct your statement we are not the d'Asl claim is due not a leg of product line defect claim against aroma we're looking to to assert the equitable remedy of successful liability on aroma which this court in the food town case said is is very appropriate but my basic point is that any decision by us and your favor does not resolve whether or not you have a meritorious claim in state court correct your honor that's for the state court to determine can can you talk about McCain you're familiar with the king the king yeah and the statement there that claims based upon successor liability should be asserted by the trustee on behalf of law creditors that statement was made in conjunction with the nature of the claims that were asserted in that litigation you mean the decision is based on the nature of the crime that it was because of what yes because the underlying claim was as opposed to whether the trustee has the right to bring all claims for the benefit of all the creditors the court needs to understand the nature of the claim that was being pursued in the in the keen litigate in the keen case and that was a chapter five trustee bankruptcy court cause of action it was not a particular claim of a creditor is it your is it your point that because your claim involves torsious conduct or it's a personal injury tort if therefore it's individualized and therefore it is not part of the state correct your honor there I don't think that the bankruptcy court or the district court or my app or aroma disagrees that the personal injury claim is a personalized claim I don't think that's not the issue the issue is whether the equitable remedy that we that are diacyl claim and seek to pursue a successful liability liability to compensate for those injuries is property of the estate you cite one case to show that personal injury cases asserting successor liability are not property of the estate right that was the RDM holdings case there yes and that was a case that applied Michigan law which is different in this connection than New Jersey or New York law there is there are so you don't really have there are no case there's there's there's really no case law out there that directly addresses this issue we have the food town case which is a guide on how to analyze who's the injured party who gets to assert the claim and whether or not it's an acidity of the estate and that case was cited just for to show the court that there is some there is something out there that has addressed it but there really are no cases that are directly that there's a whole lot of case well but that was the one case you cited and the problem is that this is a this is a claim against Ameral it's a claim against the third party what about the other creditors what if what if they had claims against the third party why should you in a sense jump a line why should you have priority why why should you then take first from that third party to the disadvantage of all the other creditors indicate in the bankruptcy I would suggest to the court that if one of the creditors that your honors is speaking about was a victim of employment discrimination or had a had a personal tort claim against the debtor that creditor could pursue aroma on the same theory that the diastole claim is represented and it's and it's in that this particular debtor just happened to have had this is the body of creditors it has general unsecured creditors and it has personal injury creditors okay I am not unsympathetic to the problem that is presented in this case by these individuals who suffered serious personal injury and don't appear to have recourse but nonetheless what is the rule that we would be looking to state if we give you the right to sue here a third party in other cases then you have personal injury claimants would then be given priority I suppose over all other it's not prior to rule no it's not priority your honor it's allowing it's allowing the tort claimants to avail themselves of state law and pursue the claims and state law yeah but and it's not it's it's not giving priority because other creditors have claims against a moral why would you be able to go after a moral and and take those assets to the disadvantage of other creditors who may have whatever types of claims they may have contractual claims for example because the code the code the bankruptcy code is is in place to equalize distribution to unscrupulous creditors okay so we general general general and to equalize to monetize assets of the estate and distribute them pro-rattards to the extent that they exist to general and secure creditors with the recovery with the money that you recover going to a pot or would that go to the individual goes to the individual and as as an aside to this argument the debtor filed a chapter seven bankruptcy petition so the tort claimants here the diastinal claimants do not have the protections that it would have had had with respect to insurance and channeling and equal distribution of of insurance proceeds all of the claim the tort claimants we're not in that situation here we chapter seven debtors corporate debtors that have these tort claims against them are not obligated to provide a trust or another mechanism in order to satisfy these general general but the bank trustee can the bank of trustee could also file a claim against umora can on a business continuation of access reliability theory can can he not the trustee way that claim in conjunction with its settlement of the fraudulent transfer I know but I'm I'm asking as a matter of law the trustee could file a file could file could have if he didn't settle a case file a business continuation claim against which is the same claim that you're individually no it's not your honor what is it if that's by question what is the difference between the trustee as representative of all those creditors claim for business continuation and you're claimed as an individual when you're already you filed a proof of claim in the bankruptcy the trustee has a has the duty to monetize assets of the estate the assets of the estate include causes of action whether they're under the bankruptcy code or whether they're under a state law why doesn't it include the cause of action for individual tort that these people were exposed to that is a personal claim that is not a claim that the trustee has standing to pursue only tell me why that's that's your position what facts make that individual and the contract the tradesman's claim for goods sold and delivered not individual there was no disagreement either at the trial court or from my or from a Roma that the general and secured creditor body is a general and secured creditor and they are the ones that the trustee is in place to monetize assets to satisfy and your one of the general it's not anymore before before you filed your application you were you filed a proof of claim excuse me you filed a proof of claim so before you went and filed a third party actions you were a general and secured credit like a trade tradesman but sets the diastole claimants apart is that the diastole claimants obtained sterile leave under 366 section 362 and agreed to pursue only assets that it could recover in the state court and would not go and recover against the assets that are recovered by the data there are no facts unique to you that would be different from other credit there are absolutely unique facts the personal injuries it's not a new jersey state long remeer it established continuation took a continuation of tomorrow there are no facts unique to you that would distinguish you from other creditors in terms of the successor liability theory honestly you know I don't know because we haven't done no no discovery on that topic however what I will say is that this is not the cause of action it's not a cause of that cause of action it's not an independent cause of action for successor liability it's an equitable remedy and that there's a difference between asserting successor liability or alter ego or mere continuation or piercing the corporate bail as a primary cause of action versus as an equitable remedy to satisfy a damage claim would it be the case that if somebody has a breach of contract action against this third party that they too could proceed with that breach of contract came and say this is individualized and we should be able to pursue no because the contract creditors or general and secure creditors their injury is just the same as their injury their damage is just the same as if the debtor didn't pay it's it's Xerox bill so what's the difference between your claim here and buildings by Jamie and and teen and teen as matter of fact was an asbestos injury type case but the cause of action that that to which they they wanted to attach the successor liability claim was the trust was a fraudulent conveyance action not the asbestos claim had they sued had those claim and sued they had that they pursued their asbestos claim they would have been fraudulent it was a fraudulent trust not an individualized but you have to get over to the other side of the room you have you have somebody part of me you want a little bit more regular thank you you honor just to land down thank you you honor made please the court i'm Chris landow and i'm here today for a robot i'd like to begin by addressing the question the judge cowon before you address that question educate us on what is the difference how do you determine whether something is individualized or a generalized claim that's exactly your question that i was going to address that's the question i was about to say they were on the same way on the same way because that is the critical question and the answer is is it a claim that could be pursued by all other creditors in other words the question is is it a generic successor liability claim or is it some kind of a particularized one that is unique that involves facts or relationships that are special to that particular creditor i think this goes back to a question the judge very asked a moment ago the opposing counsel's successor liability claim here this is very critical is a mere continuation claim there is nothing about their status as personal injury uh plant this that is unique to that claim they don't allege in particular that the product line exception uh is applicable that exception is unique to personal injury by the continuing business exactly but they don't fall within the product line exception because aroma the the the alleged successor does not has never manufactured uh diacetyl at any time before or after and they don't dispute that so that's why they have an alleged the one category of successor liability that might make them different and might be you know something your argument is good with and excellent but we're faced with the food town and although you might I I see that as being almost a hurdle which is very difficult here for you unless it goes a block uh because even though it was a different type of claim they're recognized in the food town the basic right of it of someone such as the uh plaintiffs of this case have this individual their claim is individual it's not like every trace of its claim sure well I certainly hope I can persuade you that food town you know it's why food absolutely in food town the the um the the creditors there that were trustees of the multi-employer pension plan they were pursuing an aristocrame that was special to them as trustees of that claim it was not a mere continuation claim that would apply to say the same thing their claim is not their claim is they got injured not not the not the body of credit no but you're on a let's not conflate the two claims you've got their underlying claim against the debtor right and nobody is disputing that their personal injury claim against emerald the debtor is individualized as is frankly every claim against the debtor and I think this goes back to some of the questions that were asked earlier if if I'm the landlord of the debtor I have an individualized claim to against the debtor that's not a generic claim contract claims are individualized claims everybody has an individualized claim against the debtor because everybody has some relationship that is not the same as every other creditor against the debtor there's some basis for recovery against the debtor again we're not talking here about the claim against the debtor we're talking here about the claim against the alleged successor in the food town case that the claim there was was an erissa successor liability claim the court made clear this was not a general generic state law successor liability claim this was a specific claim informed by a rissa principle the landlord of this debtor could not have brought that successor liability claim and by the way and putting aside parenthetically the fact that in food town the court noted that it was not proper to the state because that claim did not even arise until after the bankruptcy so that's a whole other reason to distinguish food town but again I think it's absolutely critical to understand the point that successor liability claims come in different shapes and sizes we are certainly not standing here today and saying that every single successor liability claim no matter what belongs to the trustee but you argue it on the one hand that personal injury products claim against the debtor are individualized correct while at the same time you're arguing that the identical claim asserted against the successor is a generalized claim that's that that I think is it can't be it can't be in both houses I with respect I disagree and I we pointed you to all these cases such as saying Paul and Cork that distinguish between the two claims in other words the the the one is the claim again you can't conflate the two claims and and I think there is something I would concede initially counterintuitive about thinking wait a second successor liability how is that kind of different and they make this argument they say it is inextricably linked to the underlying claim that you would acknowledge can be made if not this case what is what is it what give me some example sure of what food town is certainly individualized successor liability claim well that your your adversary's position and I don't know whether it's to be gainset is that a different setting but the same thing it's individualized to that person that has the personal injury just like in food town it was an individualized thing outside of the business but you're on again I think we just have to keep in mind the difference between the claim against the debtor which is individualized for food town one of their examples which you which you can see are individualized well if they if they were bringing a product line exception claim that is not a successor liability claim that could be brought by all creditors the landlord could not bring a product line exception claim their problem here and this is really the heart of the case that their successor liability claim and again whether you call it a claim or a theory of liability really doesn't matter the question is the state law for purposes of bankruptcy code section 541 defines property state very broadly and looks to state law so the question is the state law create some basis of liability if a parent acknowledged that if we were to hold in her favor I'm not saying we will or will not that that does that has nothing to do with whether or not she has a meritorious claim it's state court in other words that's for another day we don't decide whether or not they have a legitimate on the merits claim for whatever it is successor product line you know well that certainly but that does it but that doesn't solve the problem that we have to as to whether or not this is the individualized or generalized claim no the fact that you say that she may not have a merits claim because and I don't think she's claiming a product line I wasn't you need to say that you're on I'm sorry if I was not well if I was not clear on that she's not I don't think she's claiming that but whatever she's claiming for liability is is not for us we're only interested in whether or not I agree and I wasn't I was not wanting to tell me how this differs from food town again in food town food town is a classic example of a successor liability claim again let's let's keep the world divided into two parts one is claims against the debtor okay and food town had a claim against the debtor they filed a proof of claim yes just like a trace that claim and then we're recognized because their claim was different according to food town that that that they had a right to go outside of the settlement so to speak of a trustee correct but let me make clear you under we are not suggesting that their claims against the debtor emerald are are the property of the trustee we're only talking here my claim is a wrong claim is against the debtor or it's it's a little unclear there are or can be claims against emerald by the individual personal injury plaintiffs absolutely emerald the debtor they have that they have that in the estate absolutely are and they're pursuing that and the and the and the property of the estate here is you say the successor liability precisely precise and we yes and the reason and so that's the question is what is the property of the estate and to the extent the question is is the successor liability claim against emerald against aroma yes it's very confusing I wish this were like company and companies either very similar correct your honor that's exactly the key point that we're talking here about who who has the white really who has standing to bring a successor liability claim there's trustee have a right to sue on his all behalf for the personal injury of the plaintiffs in this case and no okay then if he does it who has that right the plaintiffs we know nobody is just reading so that's not that's not a property of the estate absolutely not absolutely not the question here is the successor liability it's the ability to estate okay to come and say we want to appears to be a we want to say something I don't see this being a question for us whether there is or is not successor liability I think your the appellant put that the rest we're just deciding we're not deciding whether they have it don't have no and I'm sorry again I am trying to talk about who has standing to pursue a successor liability claim so I'm not saying if the trustee does not have standing to pursue a claim on behalf of these plaintiffs but are the personal injury not a personal injury that's the key to for successor liability you see another way do the plaintiffs do have standing to bring the plaintiffs have standing to bring the personal injury claim against the debtor the debtor has standing to bring the successor liability claim against my client a romon for the benefit of all of the creditors not just personal injury creditors this is a generic mere continuation claim this benefits the landlord this benefits the contract person the nature of this particular successor liability claim but of course the plaintiffs can't sue the debtor the well the plaintiffs can sue the debt I mean they can pursue relief but they can't sue they actually have had the stay lifted to pursue individual lawsuits against the the debt or nominally and they're allowed to go after the insurance proceeds so the debt the plaintiffs in this case actually I think there was a statement made earlier that they have no records that's not a point you did say that not all successor liability claims are claims against your state not all successor liability again successor liability claims by definition are not claims against this day I think what I was trying to say at least is that not all successor liability claims are created equal some successor liability claims could be brought equally by all creditors those are generic ones if that is the case and if the estate can bring that claim as I believe it is undisputed that under New Jersey and New York law the estate the debtor has the ability to pierce its own corporate veil for the benefit of all its creditors and and so to the extent that that's true which is which is conceded here it the right to do that the right to bring that successor again we can't conflate the individualized nature of their personal injury claim against the debtor and then the right to pursue the successor against successor on successor liability and in that claim also assert the the injuries of the plaintiffs in this case because that that's not the answer question could he bring that type of claim could who bring that claim the trustee the trustee no no the successor so excuse excuse he could bring a claim on behalf of all creditors but and a trade creditor then might be reabersed if it's successful but he the trustee cannot bring a claim and as part of that claim seek a on behalf of the estate the damages which have caused to the the personal injury of these claimants again that's not well again that would be subsumed because again the nature of the claim he would bring is a generic mere continuation claim if it's a mere continuation claim it's basically saying you are us you are responsible for the pot of money for all of our debts so that benefit how does that help the plaintiffs and how does that and how does that do anything for the personal injury plaintiffs if he's successful it's saying this is you're just another corporation with our name and therefore you're liable for it it opens the door it actually benefits all the door to what to to having basically all of emeral's assets the alleged successor available as funds of the estate okay but then but then somewhere in the line the plaintiffs the individual plaintiffs with personal injuries have to sue and prove liability on and any and any award precisely just just met it and any award would not go to the estate it would go to the individual plaintiffs well again the the the debtor has proven that the there's continuation liabilities exactly so that pot of money is then there then when the debtor so there's some pot of money what pot of money for the plaintiffs the plaintiffs have had proven there in title anything they have no judgment they have nothing well again you're on the they have a claim that's on on the on the right but I think that that goes to the how do you then what is the logistics of the remedy for the successor claim again we are starting here with the proposition and I I don't believe this is contested under state law that the debtor here could pursue this generic mere continuation claim which the nature of it says you know something you just changed the sign above the door you are liable for all the debtors that's so then you you quantify the damages to that I think you would have to be structured in a way that you couldn't necessarily quantify the damages for mere continuation until the the plaintiffs have made their claim against the debtor and the trustee is successful as continuation claim and gets a judgment how does that benefit the personal injury plaintiffs they don't have a judgment for anything they have an unadjudicated un uh un un undocumented claim that's unadjudicated but you're assuming that that that that the order is such that that's already all all finished I mean again you're talking though about me it could it seems to me that the damages in that mere continuation claim are basically or the remedy in that mere continuation claim is to open the pocket of the alleged successor for all of the debts of the debtor that's what a mere continuation is it says basically you are the same thing this is there there's no real distinction here so suddenly it's like how does the how does the plaintiffs the uh the personal injury plaintiffs get remuterated they prove their case against the debtor again that nobody is disputing that they have a cause of action against the debtor that is personal to them just like a creditor so what you're doing here is you're having the trustee bring this cause of action for the benefit of all creditors if you don't do that your honor you'll have the creditors in a race I think this was a question that judge flank this that's earlier they will be in a race to the courthouse to see who can get a very party first there was a dialogue in the uh in one of the proceedings in which the trustees of was referencing whether these claim tied in fact they released by the trustee when there was this negotiation and I suppose this global release of all claims and at the appendix page 1277 the attorney the trustees attorney said that the claim does not belong to this estate the trustee can't release are you familiar with that statement we are I think that it was uncontested your honor that the judge did not make a determination at the moment back of a second the trustee released all the claims that the trustee had on behalf of the estate that was part of the settlement but to suggest that the plaintiffs claims were not part of the package of this release well again and there was a a proviso added there that says really with the truism that this does not release claims that that are the property of the plaintiffs and are not property to state I mean that that goes without saying the trustee nobody denies attorney would rework the statement where it should be done over about don't you think well I think that the half of the trustee the critical point though your honor just for is that the bankruptcy court approved the settlement later made a statement in deciding actually the chief thought the property that the successor liability claims as well as the direct liability claims were their property the the bankruptcy court made clear and this is at page 1383 of the appended that at the time of approving the settlement so this was what the judge was thinking when she was approving the fairness of the settlement that released all of the trustees claims the court made no definitive ruling or finding at that time as to whether the claims that issue here fell within the estates release claims under the approved settlement but rather reserve her future date when that issue would arise that issue is currently raised so it's not as if there had been a determination one way or the other by the court is it the case that all personal injury towards no matter what what shape they take or what form of the nature and extent of the injuries are property against the debtor and now become property of the estate I don't think any personal injury claims against the debtor are property of the state emerald had a bunch of trucks that delivered the chemicals and one of those trucks ran over somebody and that person quadriplegic with massive injuries sure now that person wants to file a claim sure but of course emerald is now in bankruptcy right so they have the same right as the other creditors of emerald to get a their pro rata equitable share of emerald assets that would include but your position is they cannot now go under successive liability and go after emerald well again they can't go after aroma a role in a successor liability theory that could be brought by any other one because then you're creating a race to the courthouse again once you acknowledge that the bankruptcy trustee okay could they were the same same shoes as the plaintiffs in this case correct then again I would just refer you to the the the sample complaint and the appendix which is I can't not thinking it's a very harsh result I mean I'm suggesting that it's wrong but I really I honestly I hope I can persuade you otherwise because basically this is just the way the bankruptcy courts bankruptcy works that the nobody's taking anything away from these folks the way it works is that you want the bankruptcy trustee to marshal all the assets of the estate once you conclude that a mere continuation claim is the is an asset of the state because it's generalized would benefit all creditors you want that to be presumed but one of the assets of the estate is not the entitlement of the personal injury plaintiffs to be remunerated for their personal injury but that's not that's not personal injury claim against the debtor emerald I get the question the point here is though that there is a claim against anyone that the debtor or a successor but but again you're honor every if every if the successor liability claim that they have is the same as every other creditor you would be creating you'd be rewarding those creditors the successor liability is that's the successor liability claim is the same but the claim of the individuals is not no and that's what I mean I apologize about yeah well no you're you're the one that's complaining stop to hear that the difference is that the individual has a claim for damages to him yes for damages to the estate correct they're correct but the way that the individual does that is the individual goes after the state the individual nobody's denying the individual has their share to a pro-rider right at the estate and and one thing that is critical to keep in mind is that the insurance assets related ties to Dicell remained in the estate and are available to these folks and the state has been lifted and in fact in their lawsuits they have sued 30 other manufacturers so again I don't want you to get the impression that these folks are left without a remedy their remedy as as the remedy of any other creditor is for the the the debtor to go after the trustees to go after the pot of money and then distribute those in an equitably and orderly way against among the creditors of the estate very good mr. and now thank you very much rebuttal miss out isocin thank you your honors I would like to reiterate the impact of the food town case on how the court needs to decide the amount of this before the court today and I call the court to the attention of page 171 of that decision this court said in in addressing the buildings by jamey case in the buildings by jamey case consistent with our decision here under new jersey law an alter ego action is an equitable remedy it is not an independent cause of action it is not the main cause of action that my clients are bringing my clients are bringing a personal injury tort claim in the state court against the debtor as a nominal defendant and the mere continuation claim is the equitable remedy for the damages sustained because of those injuries and this court went on to say as a result the injury is personal to the appellance the pension plan in the food town case you know I still wonder this idea of allowing the plaintiffs though and again I'm sympathetic to the plaintiffs in this case to essentially get in the front of the line when it comes to distributing assets that should be available to all the creditors which is the purpose of the trustee if if the match all of the possible assets and then distribute those assets equitably amongst all the creditors but if if personal injury plaintiffs are then allowed to proceed with their claims that is to the disadvantage of other claim. Personal injury claimants are not going to participate like the general and secured creditors are participating from the trustees liquidating the assets of the estate the personal injury claimants are unliquidated contingent claims that have been sent back to the state court that they have stay-releaped to go pursue insurance proceeds or whatever whatever source of recovery those claimants can but just still going after Ameral and let's say you have the the situation Ameral is the person that you're suing right what Ameral is the debtor aroma is the third is the is the if I aroma aroma is the successor yeah you know I wonder how they got the same name so yeah yeah I think it was purposeful I don't know the information about that but you're suing aroma and and what if the hadn't been the what if the trustee had not settled all those cases with aroma and and aroma was still subject to being sued by other third by other creditors aroma would have the same argument that it if you're sent here if those creditors did not if those creditors did not have a particularized injury I mean the personal injury plaintiffs in this case are creditors aren't they absolutely and you're on your your credit questions my adversary about the quadriplegic and and the truck that claimant is in the same position as the diacetyl plaintiffs and would have the same right to go after whatever assets to recover for for his or her damages and you you uh uh for your personal injury claim you you don't share any part of the uh trustee is the same do not do not do not trustee if if there's a hit on successor liability and Amora is found to be a mere continuation of Emerald then any pot goes into the estate it's not a pot or it's not a pot not not for the plaintiffs it's not the plaintiffs but you have a client against the estate I apologize for interrupting your honor if my client if an individual diacetyl claimant gets an award for five hundred thousand dollars and it collects two hundred thousand dollars from the insurance company if you can can satisfy the rest of the damage claim if it's successful on the successor liability claim from aroma it's not a general hot it is a specific remedy to satisfy the diacetyl individual diacetyl plaintiffs damage awards thank you thank you very excellent our item is very difficult case that we will have to work on thank you will take

Emerald in rate Emerald getter and diacetyl plaintiffs and Ms. Isaacson Good morning. May I please the court Nancy Isaacson for the appellants I asshole claimants and I'd like to reserve three minutes for re-gluinal yes that's fine how do you pronounce it again excuse me how do you pronounce that chemical diacetyl diacetyl flavoring and butter popcorn all right May I please the court my clients the appellants here are a discrete group of holders of toward claims and I'll refer to them for purposes of this argument as the diacetyl claimants and they have asserted in various state court actions personal injuries against the debt or Emerald those injuries result from exposure to the chemical diacetyl Emerald manufactured and distributed that chemical and to avoid the liability to my clients Emerald sold demonstrably all of their assets the case pretty much we we've heard and adjusted how do you decide whether a client is generalized or individualized well what's the Citiquan oh of that determination this court already has determined the roadmap for making that determination in the the food town case the insurance the pension that wasn't a personal injury case it was not a personal injury case but the question was who is the injured party was the debtor injured or was it the pension plan and there is sufficient holdings in that case that make the roadmap for how this court should decide whether or not personal injury claimants have personal personalized claims with the equitable remedy to assert a successful liability is it dependent on who's getting sued excuse me does it depend on who's getting sued is it does it depend on whether the suit is against the debtor or whether it turns on who is injured is the debtor injured or is the individual claimants injured how would a recovery on your claim for successor liability against a moron not benefit all the creditors of Emerald generally it is an equitable remedy that's tied to the underlying personal injury claim of the individual diastyl claimants that's your claim against Emerald right but I'm talking about the successor liability claim against Imora how would claim for successor liability against a moral your claim not benefit all creditors it's too it's it's an equitable remedy to to compensate for the damages that the personal injury claimants suffered so can so can a contract creditor a commercial creditor those are just general one secured creditors you're on it they don't have particular ice claims how do you know well you're insecure too I mean why is one your position is that that underlying claim is not property of the trustee if the debtor is in bankruptcy that's correct why let me continue with Judge Barry's question what is why makes your claim individualized I'm a contract creditor I got stuck for $100,000 I feel pretty injured myself because my company has got stuck for $100,000 in bankruptcy why is it my claim as a as a contract creditor individualized because under New Jersey state law toward claimants with personal injury claims like presented in this case are given special and higher treatment and acknowledgement in litigation and they are treated differently and they are different than general and secure creditors. A contract claimant also could sue under let's say this is not in bankruptcy a contract claimant against a debtor not in bankruptcy could also sue on the theory of business continuation and succeeded successor liability. No I would suggest to the court that that contract creditor would have to have an underlying claim of some personal injury i.e a business tort some underlying personal claim. Trustee could of the trustee could sue that no you're on it Trustee could not sue the business tort on behalf of that that creditor you're not suggesting that to bring a claim of successor liability there must be a personal injury component there must be a personalized for a creditor to bring in a bankruptcy situation for a creditor to bring outside of the bankruptcy proceeding a successful liability claim against a successor in interest to the debtor there has to be a personal claim an underlying personal claim personal personal particularized claim like a business tort like a discrimination and employment claim a personal claim to that creditor not a general claim like a general in this case a trustee in bankruptcy on behalf of all the creditors who have filed a prusive claim including personal injury claimants as well as trade creditors why can't he sue umberl on the theory that they have that they're just successors to the predecessor business and uh that that uh uh all the creditor should uh now have a claim because it's the same company with another name if the trustee had a claim against aroma the respondent the appley here if the trustee thought that there is a claim that aroma is really the successor the alter ego the mere continuation of product line etc etc same personnel same creditors same everything the trustee that's an asset of the estate under 541 11 u.s.d. second 541 and that the trustee brings that claim the trustee settled this the claims against aroma as a fraudulent transfer claim as the motion as you'll see in the motion do you see the claim? the settlement was for a fraudulent transfer claim and then the settlement and the release language released had this very broad release to which a diacyl claim is subjected so the trustee would have resolved to do that but if the trustee did not settle that claim and and instead of settling it elected to pursue a business continuation product line continuation uh he would have that right to do on behalf of not only the personal injury uh claimants who filed proof of claim but as on the trade creditors as well contract creditors if the claim if the claim was one for alter ego meerkat a general claim like that yes or on our yes you the trustee would have the right to pursue that kind of claim because they they do seem like they're so personal you know the injuries involved and when when you get money for your injuries you're compensating an individual for the injuries that must stay but you're suggesting now an answer to this question that the trustee can bring all of those claims against no I'm sorry I'm sorry I may have misunderstood Judge Collins question the trustee can bring the claim on behalf of the debtor and the debtor estate if there is damage to the debtor by the conduct of aroma for the benefit of the credit the personal injury claim is not personal injuries for more no that the trustee has no right to bring personal injury claims business to reclaims for the missing the right personal injury claims against or against immoral correct pending in the bankruptcy they were they're a creditor in the bankruptcy case against the state relief against the law tomorrow yeah uh you acknowledge that all this is based on whether or not they're a successor product line liability under new Jersey state law if we were to hold your favor that this is a personal claim not a generalized claim you acknowledge to you not that you still must prove in state court you have our decision have no effect upon whether in fact you have a meritorious product line successor claim in state court that would you not to prove that separated apart from our determination that this is a personal not a generalized claim that's correct Your honor however I'd like to correct your statement we are not the d'Asl claim is due not a leg of product line defect claim against aroma we're looking to to assert the equitable remedy of successful liability on aroma which this court in the food town case said is is very appropriate but my basic point is that any decision by us and your favor does not resolve whether or not you have a meritorious claim in state court correct your honor that's for the state court to determine can can you talk about McCain you're familiar with the king the king yeah and the statement there that claims based upon successor liability should be asserted by the trustee on behalf of law creditors that statement was made in conjunction with the nature of the claims that were asserted in that litigation you mean the decision is based on the nature of the crime that it was because of what yes because the underlying claim was as opposed to whether the trustee has the right to bring all claims for the benefit of all the creditors the court needs to understand the nature of the claim that was being pursued in the in the keen litigate in the keen case and that was a chapter five trustee bankruptcy court cause of action it was not a particular claim of a creditor is it your is it your point that because your claim involves torsious conduct or it's a personal injury tort if therefore it's individualized and therefore it is not part of the state correct your honor there I don't think that the bankruptcy court or the district court or my app or aroma disagrees that the personal injury claim is a personalized claim I don't think that's not the issue the issue is whether the equitable remedy that we that are diacyl claim and seek to pursue a successful liability liability to compensate for those injuries is property of the estate you cite one case to show that personal injury cases asserting successor liability are not property of the estate right that was the RDM holdings case there yes and that was a case that applied Michigan law which is different in this connection than New Jersey or New York law there is there are so you don't really have there are no case there's there's there's really no case law out there that directly addresses this issue we have the food town case which is a guide on how to analyze who's the injured party who gets to assert the claim and whether or not it's an acidity of the estate and that case was cited just for to show the court that there is some there is something out there that has addressed it but there really are no cases that are directly that there's a whole lot of case well but that was the one case you cited and the problem is that this is a this is a claim against Ameral it's a claim against the third party what about the other creditors what if what if they had claims against the third party why should you in a sense jump a line why should you have priority why why should you then take first from that third party to the disadvantage of all the other creditors indicate in the bankruptcy I would suggest to the court that if one of the creditors that your honors is speaking about was a victim of employment discrimination or had a had a personal tort claim against the debtor that creditor could pursue aroma on the same theory that the diastole claim is represented and it's and it's in that this particular debtor just happened to have had this is the body of creditors it has general unsecured creditors and it has personal injury creditors okay I am not unsympathetic to the problem that is presented in this case by these individuals who suffered serious personal injury and don't appear to have recourse but nonetheless what is the rule that we would be looking to state if we give you the right to sue here a third party in other cases then you have personal injury claimants would then be given priority I suppose over all other it's not prior to rule no it's not priority your honor it's allowing it's allowing the tort claimants to avail themselves of state law and pursue the claims and state law yeah but and it's not it's it's not giving priority because other creditors have claims against a moral why would you be able to go after a moral and and take those assets to the disadvantage of other creditors who may have whatever types of claims they may have contractual claims for example because the code the code the bankruptcy code is is in place to equalize distribution to unscrupulous creditors okay so we general general general and to equalize to monetize assets of the estate and distribute them pro-rattards to the extent that they exist to general and secure creditors with the recovery with the money that you recover going to a pot or would that go to the individual goes to the individual and as as an aside to this argument the debtor filed a chapter seven bankruptcy petition so the tort claimants here the diastinal claimants do not have the protections that it would have had had with respect to insurance and channeling and equal distribution of of insurance proceeds all of the claim the tort claimants we're not in that situation here we chapter seven debtors corporate debtors that have these tort claims against them are not obligated to provide a trust or another mechanism in order to satisfy these general general but the bank trustee can the bank of trustee could also file a claim against umora can on a business continuation of access reliability theory can can he not the trustee way that claim in conjunction with its settlement of the fraudulent transfer I know but I'm I'm asking as a matter of law the trustee could file a file could file could have if he didn't settle a case file a business continuation claim against which is the same claim that you're individually no it's not your honor what is it if that's by question what is the difference between the trustee as representative of all those creditors claim for business continuation and you're claimed as an individual when you're already you filed a proof of claim in the bankruptcy the trustee has a has the duty to monetize assets of the estate the assets of the estate include causes of action whether they're under the bankruptcy code or whether they're under a state law why doesn't it include the cause of action for individual tort that these people were exposed to that is a personal claim that is not a claim that the trustee has standing to pursue only tell me why that's that's your position what facts make that individual and the contract the tradesman's claim for goods sold and delivered not individual there was no disagreement either at the trial court or from my or from a Roma that the general and secured creditor body is a general and secured creditor and they are the ones that the trustee is in place to monetize assets to satisfy and your one of the general it's not anymore before before you filed your application you were you filed a proof of claim excuse me you filed a proof of claim so before you went and filed a third party actions you were a general and secured credit like a trade tradesman but sets the diastole claimants apart is that the diastole claimants obtained sterile leave under 366 section 362 and agreed to pursue only assets that it could recover in the state court and would not go and recover against the assets that are recovered by the data there are no facts unique to you that would be different from other credit there are absolutely unique facts the personal injuries it's not a new jersey state long remeer it established continuation took a continuation of tomorrow there are no facts unique to you that would distinguish you from other creditors in terms of the successor liability theory honestly you know I don't know because we haven't done no no discovery on that topic however what I will say is that this is not the cause of action it's not a cause of that cause of action it's not an independent cause of action for successor liability it's an equitable remedy and that there's a difference between asserting successor liability or alter ego or mere continuation or piercing the corporate bail as a primary cause of action versus as an equitable remedy to satisfy a damage claim would it be the case that if somebody has a breach of contract action against this third party that they too could proceed with that breach of contract came and say this is individualized and we should be able to pursue no because the contract creditors or general and secure creditors their injury is just the same as their injury their damage is just the same as if the debtor didn't pay it's it's Xerox bill so what's the difference between your claim here and buildings by Jamie and and teen and teen as matter of fact was an asbestos injury type case but the cause of action that that to which they they wanted to attach the successor liability claim was the trust was a fraudulent conveyance action not the asbestos claim had they sued had those claim and sued they had that they pursued their asbestos claim they would have been fraudulent it was a fraudulent trust not an individualized but you have to get over to the other side of the room you have you have somebody part of me you want a little bit more regular thank you you honor just to land down thank you you honor made please the court i'm Chris landow and i'm here today for a robot i'd like to begin by addressing the question the judge cowon before you address that question educate us on what is the difference how do you determine whether something is individualized or a generalized claim that's exactly your question that i was going to address that's the question i was about to say they were on the same way on the same way because that is the critical question and the answer is is it a claim that could be pursued by all other creditors in other words the question is is it a generic successor liability claim or is it some kind of a particularized one that is unique that involves facts or relationships that are special to that particular creditor i think this goes back to a question the judge very asked a moment ago the opposing counsel's successor liability claim here this is very critical is a mere continuation claim there is nothing about their status as personal injury uh plant this that is unique to that claim they don't allege in particular that the product line exception uh is applicable that exception is unique to personal injury by the continuing business exactly but they don't fall within the product line exception because aroma the the the alleged successor does not has never manufactured uh diacetyl at any time before or after and they don't dispute that so that's why they have an alleged the one category of successor liability that might make them different and might be you know something your argument is good with and excellent but we're faced with the food town and although you might I I see that as being almost a hurdle which is very difficult here for you unless it goes a block uh because even though it was a different type of claim they're recognized in the food town the basic right of it of someone such as the uh plaintiffs of this case have this individual their claim is individual it's not like every trace of its claim sure well I certainly hope I can persuade you that food town you know it's why food absolutely in food town the the um the the creditors there that were trustees of the multi-employer pension plan they were pursuing an aristocrame that was special to them as trustees of that claim it was not a mere continuation claim that would apply to say the same thing their claim is not their claim is they got injured not not the not the body of credit no but you're on a let's not conflate the two claims you've got their underlying claim against the debtor right and nobody is disputing that their personal injury claim against emerald the debtor is individualized as is frankly every claim against the debtor and I think this goes back to some of the questions that were asked earlier if if I'm the landlord of the debtor I have an individualized claim to against the debtor that's not a generic claim contract claims are individualized claims everybody has an individualized claim against the debtor because everybody has some relationship that is not the same as every other creditor against the debtor there's some basis for recovery against the debtor again we're not talking here about the claim against the debtor we're talking here about the claim against the alleged successor in the food town case that the claim there was was an erissa successor liability claim the court made clear this was not a general generic state law successor liability claim this was a specific claim informed by a rissa principle the landlord of this debtor could not have brought that successor liability claim and by the way and putting aside parenthetically the fact that in food town the court noted that it was not proper to the state because that claim did not even arise until after the bankruptcy so that's a whole other reason to distinguish food town but again I think it's absolutely critical to understand the point that successor liability claims come in different shapes and sizes we are certainly not standing here today and saying that every single successor liability claim no matter what belongs to the trustee but you argue it on the one hand that personal injury products claim against the debtor are individualized correct while at the same time you're arguing that the identical claim asserted against the successor is a generalized claim that's that that I think is it can't be it can't be in both houses I with respect I disagree and I we pointed you to all these cases such as saying Paul and Cork that distinguish between the two claims in other words the the the one is the claim again you can't conflate the two claims and and I think there is something I would concede initially counterintuitive about thinking wait a second successor liability how is that kind of different and they make this argument they say it is inextricably linked to the underlying claim that you would acknowledge can be made if not this case what is what is it what give me some example sure of what food town is certainly individualized successor liability claim well that your your adversary's position and I don't know whether it's to be gainset is that a different setting but the same thing it's individualized to that person that has the personal injury just like in food town it was an individualized thing outside of the business but you're on again I think we just have to keep in mind the difference between the claim against the debtor which is individualized for food town one of their examples which you which you can see are individualized well if they if they were bringing a product line exception claim that is not a successor liability claim that could be brought by all creditors the landlord could not bring a product line exception claim their problem here and this is really the heart of the case that their successor liability claim and again whether you call it a claim or a theory of liability really doesn't matter the question is the state law for purposes of bankruptcy code section 541 defines property state very broadly and looks to state law so the question is the state law create some basis of liability if a parent acknowledged that if we were to hold in her favor I'm not saying we will or will not that that does that has nothing to do with whether or not she has a meritorious claim it's state court in other words that's for another day we don't decide whether or not they have a legitimate on the merits claim for whatever it is successor product line you know well that certainly but that does it but that doesn't solve the problem that we have to as to whether or not this is the individualized or generalized claim no the fact that you say that she may not have a merits claim because and I don't think she's claiming a product line I wasn't you need to say that you're on I'm sorry if I was not well if I was not clear on that she's not I don't think she's claiming that but whatever she's claiming for liability is is not for us we're only interested in whether or not I agree and I wasn't I was not wanting to tell me how this differs from food town again in food town food town is a classic example of a successor liability claim again let's let's keep the world divided into two parts one is claims against the debtor okay and food town had a claim against the debtor they filed a proof of claim yes just like a trace that claim and then we're recognized because their claim was different according to food town that that that they had a right to go outside of the settlement so to speak of a trustee correct but let me make clear you under we are not suggesting that their claims against the debtor emerald are are the property of the trustee we're only talking here my claim is a wrong claim is against the debtor or it's it's a little unclear there are or can be claims against emerald by the individual personal injury plaintiffs absolutely emerald the debtor they have that they have that in the estate absolutely are and they're pursuing that and the and the and the property of the estate here is you say the successor liability precisely precise and we yes and the reason and so that's the question is what is the property of the estate and to the extent the question is is the successor liability claim against emerald against aroma yes it's very confusing I wish this were like company and companies either very similar correct your honor that's exactly the key point that we're talking here about who who has the white really who has standing to bring a successor liability claim there's trustee have a right to sue on his all behalf for the personal injury of the plaintiffs in this case and no okay then if he does it who has that right the plaintiffs we know nobody is just reading so that's not that's not a property of the estate absolutely not absolutely not the question here is the successor liability it's the ability to estate okay to come and say we want to appears to be a we want to say something I don't see this being a question for us whether there is or is not successor liability I think your the appellant put that the rest we're just deciding we're not deciding whether they have it don't have no and I'm sorry again I am trying to talk about who has standing to pursue a successor liability claim so I'm not saying if the trustee does not have standing to pursue a claim on behalf of these plaintiffs but are the personal injury not a personal injury that's the key to for successor liability you see another way do the plaintiffs do have standing to bring the plaintiffs have standing to bring the personal injury claim against the debtor the debtor has standing to bring the successor liability claim against my client a romon for the benefit of all of the creditors not just personal injury creditors this is a generic mere continuation claim this benefits the landlord this benefits the contract person the nature of this particular successor liability claim but of course the plaintiffs can't sue the debtor the well the plaintiffs can sue the debt I mean they can pursue relief but they can't sue they actually have had the stay lifted to pursue individual lawsuits against the the debt or nominally and they're allowed to go after the insurance proceeds so the debt the plaintiffs in this case actually I think there was a statement made earlier that they have no records that's not a point you did say that not all successor liability claims are claims against your state not all successor liability again successor liability claims by definition are not claims against this day I think what I was trying to say at least is that not all successor liability claims are created equal some successor liability claims could be brought equally by all creditors those are generic ones if that is the case and if the estate can bring that claim as I believe it is undisputed that under New Jersey and New York law the estate the debtor has the ability to pierce its own corporate veil for the benefit of all its creditors and and so to the extent that that's true which is which is conceded here it the right to do that the right to bring that successor again we can't conflate the individualized nature of their personal injury claim against the debtor and then the right to pursue the successor against successor on successor liability and in that claim also assert the the injuries of the plaintiffs in this case because that that's not the answer question could he bring that type of claim could who bring that claim the trustee the trustee no no the successor so excuse excuse he could bring a claim on behalf of all creditors but and a trade creditor then might be reabersed if it's successful but he the trustee cannot bring a claim and as part of that claim seek a on behalf of the estate the damages which have caused to the the personal injury of these claimants again that's not well again that would be subsumed because again the nature of the claim he would bring is a generic mere continuation claim if it's a mere continuation claim it's basically saying you are us you are responsible for the pot of money for all of our debts so that benefit how does that help the plaintiffs and how does that and how does that do anything for the personal injury plaintiffs if he's successful it's saying this is you're just another corporation with our name and therefore you're liable for it it opens the door it actually benefits all the door to what to to having basically all of emeral's assets the alleged successor available as funds of the estate okay but then but then somewhere in the line the plaintiffs the individual plaintiffs with personal injuries have to sue and prove liability on and any and any award precisely just just met it and any award would not go to the estate it would go to the individual plaintiffs well again the the the debtor has proven that the there's continuation liabilities exactly so that pot of money is then there then when the debtor so there's some pot of money what pot of money for the plaintiffs the plaintiffs have had proven there in title anything they have no judgment they have nothing well again you're on the they have a claim that's on on the on the right but I think that that goes to the how do you then what is the logistics of the remedy for the successor claim again we are starting here with the proposition and I I don't believe this is contested under state law that the debtor here could pursue this generic mere continuation claim which the nature of it says you know something you just changed the sign above the door you are liable for all the debtors that's so then you you quantify the damages to that I think you would have to be structured in a way that you couldn't necessarily quantify the damages for mere continuation until the the plaintiffs have made their claim against the debtor and the trustee is successful as continuation claim and gets a judgment how does that benefit the personal injury plaintiffs they don't have a judgment for anything they have an unadjudicated un uh un un undocumented claim that's unadjudicated but you're assuming that that that that the order is such that that's already all all finished I mean again you're talking though about me it could it seems to me that the damages in that mere continuation claim are basically or the remedy in that mere continuation claim is to open the pocket of the alleged successor for all of the debts of the debtor that's what a mere continuation is it says basically you are the same thing this is there there's no real distinction here so suddenly it's like how does the how does the plaintiffs the uh the personal injury plaintiffs get remuterated they prove their case against the debtor again that nobody is disputing that they have a cause of action against the debtor that is personal to them just like a creditor so what you're doing here is you're having the trustee bring this cause of action for the benefit of all creditors if you don't do that your honor you'll have the creditors in a race I think this was a question that judge flank this that's earlier they will be in a race to the courthouse to see who can get a very party first there was a dialogue in the uh in one of the proceedings in which the trustees of was referencing whether these claim tied in fact they released by the trustee when there was this negotiation and I suppose this global release of all claims and at the appendix page 1277 the attorney the trustees attorney said that the claim does not belong to this estate the trustee can't release are you familiar with that statement we are I think that it was uncontested your honor that the judge did not make a determination at the moment back of a second the trustee released all the claims that the trustee had on behalf of the estate that was part of the settlement but to suggest that the plaintiffs claims were not part of the package of this release well again and there was a a proviso added there that says really with the truism that this does not release claims that that are the property of the plaintiffs and are not property to state I mean that that goes without saying the trustee nobody denies attorney would rework the statement where it should be done over about don't you think well I think that the half of the trustee the critical point though your honor just for is that the bankruptcy court approved the settlement later made a statement in deciding actually the chief thought the property that the successor liability claims as well as the direct liability claims were their property the the bankruptcy court made clear and this is at page 1383 of the appended that at the time of approving the settlement so this was what the judge was thinking when she was approving the fairness of the settlement that released all of the trustees claims the court made no definitive ruling or finding at that time as to whether the claims that issue here fell within the estates release claims under the approved settlement but rather reserve her future date when that issue would arise that issue is currently raised so it's not as if there had been a determination one way or the other by the court is it the case that all personal injury towards no matter what what shape they take or what form of the nature and extent of the injuries are property against the debtor and now become property of the estate I don't think any personal injury claims against the debtor are property of the state emerald had a bunch of trucks that delivered the chemicals and one of those trucks ran over somebody and that person quadriplegic with massive injuries sure now that person wants to file a claim sure but of course emerald is now in bankruptcy right so they have the same right as the other creditors of emerald to get a their pro rata equitable share of emerald assets that would include but your position is they cannot now go under successive liability and go after emerald well again they can't go after aroma a role in a successor liability theory that could be brought by any other one because then you're creating a race to the courthouse again once you acknowledge that the bankruptcy trustee okay could they were the same same shoes as the plaintiffs in this case correct then again I would just refer you to the the the sample complaint and the appendix which is I can't not thinking it's a very harsh result I mean I'm suggesting that it's wrong but I really I honestly I hope I can persuade you otherwise because basically this is just the way the bankruptcy courts bankruptcy works that the nobody's taking anything away from these folks the way it works is that you want the bankruptcy trustee to marshal all the assets of the estate once you conclude that a mere continuation claim is the is an asset of the state because it's generalized would benefit all creditors you want that to be presumed but one of the assets of the estate is not the entitlement of the personal injury plaintiffs to be remunerated for their personal injury but that's not that's not personal injury claim against the debtor emerald I get the question the point here is though that there is a claim against anyone that the debtor or a successor but but again you're honor every if every if the successor liability claim that they have is the same as every other creditor you would be creating you'd be rewarding those creditors the successor liability is that's the successor liability claim is the same but the claim of the individuals is not no and that's what I mean I apologize about yeah well no you're you're the one that's complaining stop to hear that the difference is that the individual has a claim for damages to him yes for damages to the estate correct they're correct but the way that the individual does that is the individual goes after the state the individual nobody's denying the individual has their share to a pro-rider right at the estate and and one thing that is critical to keep in mind is that the insurance assets related ties to Dicell remained in the estate and are available to these folks and the state has been lifted and in fact in their lawsuits they have sued 30 other manufacturers so again I don't want you to get the impression that these folks are left without a remedy their remedy as as the remedy of any other creditor is for the the the debtor to go after the trustees to go after the pot of money and then distribute those in an equitably and orderly way against among the creditors of the estate very good mr. and now thank you very much rebuttal miss out isocin thank you your honors I would like to reiterate the impact of the food town case on how the court needs to decide the amount of this before the court today and I call the court to the attention of page 171 of that decision this court said in in addressing the buildings by jamey case in the buildings by jamey case consistent with our decision here under new jersey law an alter ego action is an equitable remedy it is not an independent cause of action it is not the main cause of action that my clients are bringing my clients are bringing a personal injury tort claim in the state court against the debtor as a nominal defendant and the mere continuation claim is the equitable remedy for the damages sustained because of those injuries and this court went on to say as a result the injury is personal to the appellance the pension plan in the food town case you know I still wonder this idea of allowing the plaintiffs though and again I'm sympathetic to the plaintiffs in this case to essentially get in the front of the line when it comes to distributing assets that should be available to all the creditors which is the purpose of the trustee if if the match all of the possible assets and then distribute those assets equitably amongst all the creditors but if if personal injury plaintiffs are then allowed to proceed with their claims that is to the disadvantage of other claim. Personal injury claimants are not going to participate like the general and secured creditors are participating from the trustees liquidating the assets of the estate the personal injury claimants are unliquidated contingent claims that have been sent back to the state court that they have stay-releaped to go pursue insurance proceeds or whatever whatever source of recovery those claimants can but just still going after Ameral and let's say you have the the situation Ameral is the person that you're suing right what Ameral is the debtor aroma is the third is the is the if I aroma aroma is the successor yeah you know I wonder how they got the same name so yeah yeah I think it was purposeful I don't know the information about that but you're suing aroma and and what if the hadn't been the what if the trustee had not settled all those cases with aroma and and aroma was still subject to being sued by other third by other creditors aroma would have the same argument that it if you're sent here if those creditors did not if those creditors did not have a particularized injury I mean the personal injury plaintiffs in this case are creditors aren't they absolutely and you're on your your credit questions my adversary about the quadriplegic and and the truck that claimant is in the same position as the diacetyl plaintiffs and would have the same right to go after whatever assets to recover for for his or her damages and you you uh uh for your personal injury claim you you don't share any part of the uh trustee is the same do not do not do not trustee if if there's a hit on successor liability and Amora is found to be a mere continuation of Emerald then any pot goes into the estate it's not a pot or it's not a pot not not for the plaintiffs it's not the plaintiffs but you have a client against the estate I apologize for interrupting your honor if my client if an individual diacetyl claimant gets an award for five hundred thousand dollars and it collects two hundred thousand dollars from the insurance company if you can can satisfy the rest of the damage claim if it's successful on the successor liability claim from aroma it's not a general hot it is a specific remedy to satisfy the diacetyl individual diacetyl plaintiffs damage awards thank you thank you very excellent our item is very difficult case that we will have to work on thank you will take

Emerald in rate Emerald getter and diacetyl plaintiffs and Ms. Isaacson Good morning. May I please the court Nancy Isaacson for the appellants I asshole claimants and I'd like to reserve three minutes for re-gluinal yes that's fine how do you pronounce it again excuse me how do you pronounce that chemical diacetyl diacetyl flavoring and butter popcorn all right May I please the court my clients the appellants here are a discrete group of holders of toward claims and I'll refer to them for purposes of this argument as the diacetyl claimants and they have asserted in various state court actions personal injuries against the debt or Emerald those injuries result from exposure to the chemical diacetyl Emerald manufactured and distributed that chemical and to avoid the liability to my clients Emerald sold demonstrably all of their assets the case pretty much we we've heard and adjusted how do you decide whether a client is generalized or individualized well what's the Citiquan oh of that determination this court already has determined the roadmap for making that determination in the the food town case the insurance the pension that wasn't a personal injury case it was not a personal injury case but the question was who is the injured party was the debtor injured or was it the pension plan and there is sufficient holdings in that case that make the roadmap for how this court should decide whether or not personal injury claimants have personal personalized claims with the equitable remedy to assert a successful liability is it dependent on who's getting sued excuse me does it depend on who's getting sued is it does it depend on whether the suit is against the debtor or whether it turns on who is injured is the debtor injured or is the individual claimants injured how would a recovery on your claim for successor liability against a moron not benefit all the creditors of Emerald generally it is an equitable remedy that's tied to the underlying personal injury claim of the individual diastyl claimants that's your claim against Emerald right but I'm talking about the successor liability claim against Imora how would claim for successor liability against a moral your claim not benefit all creditors it's too it's it's an equitable remedy to to compensate for the damages that the personal injury claimants suffered so can so can a contract creditor a commercial creditor those are just general one secured creditors you're on it they don't have particular ice claims how do you know well you're insecure too I mean why is one your position is that that underlying claim is not property of the trustee if the debtor is in bankruptcy that's correct why let me continue with Judge Barry's question what is why makes your claim individualized I'm a contract creditor I got stuck for $100,000 I feel pretty injured myself because my company has got stuck for $100,000 in bankruptcy why is it my claim as a as a contract creditor individualized because under New Jersey state law toward claimants with personal injury claims like presented in this case are given special and higher treatment and acknowledgement in litigation and they are treated differently and they are different than general and secure creditors. A contract claimant also could sue under let's say this is not in bankruptcy a contract claimant against a debtor not in bankruptcy could also sue on the theory of business continuation and succeeded successor liability. No I would suggest to the court that that contract creditor would have to have an underlying claim of some personal injury i.e a business tort some underlying personal claim. Trustee could of the trustee could sue that no you're on it Trustee could not sue the business tort on behalf of that that creditor you're not suggesting that to bring a claim of successor liability there must be a personal injury component there must be a personalized for a creditor to bring in a bankruptcy situation for a creditor to bring outside of the bankruptcy proceeding a successful liability claim against a successor in interest to the debtor there has to be a personal claim an underlying personal claim personal personal particularized claim like a business tort like a discrimination and employment claim a personal claim to that creditor not a general claim like a general in this case a trustee in bankruptcy on behalf of all the creditors who have filed a prusive claim including personal injury claimants as well as trade creditors why can't he sue umberl on the theory that they have that they're just successors to the predecessor business and uh that that uh uh all the creditor should uh now have a claim because it's the same company with another name if the trustee had a claim against aroma the respondent the appley here if the trustee thought that there is a claim that aroma is really the successor the alter ego the mere continuation of product line etc etc same personnel same creditors same everything the trustee that's an asset of the estate under 541 11 u.s.d. second 541 and that the trustee brings that claim the trustee settled this the claims against aroma as a fraudulent transfer claim as the motion as you'll see in the motion do you see the claim? the settlement was for a fraudulent transfer claim and then the settlement and the release language released had this very broad release to which a diacyl claim is subjected so the trustee would have resolved to do that but if the trustee did not settle that claim and and instead of settling it elected to pursue a business continuation product line continuation uh he would have that right to do on behalf of not only the personal injury uh claimants who filed proof of claim but as on the trade creditors as well contract creditors if the claim if the claim was one for alter ego meerkat a general claim like that yes or on our yes you the trustee would have the right to pursue that kind of claim because they they do seem like they're so personal you know the injuries involved and when when you get money for your injuries you're compensating an individual for the injuries that must stay but you're suggesting now an answer to this question that the trustee can bring all of those claims against no I'm sorry I'm sorry I may have misunderstood Judge Collins question the trustee can bring the claim on behalf of the debtor and the debtor estate if there is damage to the debtor by the conduct of aroma for the benefit of the credit the personal injury claim is not personal injuries for more no that the trustee has no right to bring personal injury claims business to reclaims for the missing the right personal injury claims against or against immoral correct pending in the bankruptcy they were they're a creditor in the bankruptcy case against the state relief against the law tomorrow yeah uh you acknowledge that all this is based on whether or not they're a successor product line liability under new Jersey state law if we were to hold your favor that this is a personal claim not a generalized claim you acknowledge to you not that you still must prove in state court you have our decision have no effect upon whether in fact you have a meritorious product line successor claim in state court that would you not to prove that separated apart from our determination that this is a personal not a generalized claim that's correct Your honor however I'd like to correct your statement we are not the d'Asl claim is due not a leg of product line defect claim against aroma we're looking to to assert the equitable remedy of successful liability on aroma which this court in the food town case said is is very appropriate but my basic point is that any decision by us and your favor does not resolve whether or not you have a meritorious claim in state court correct your honor that's for the state court to determine can can you talk about McCain you're familiar with the king the king yeah and the statement there that claims based upon successor liability should be asserted by the trustee on behalf of law creditors that statement was made in conjunction with the nature of the claims that were asserted in that litigation you mean the decision is based on the nature of the crime that it was because of what yes because the underlying claim was as opposed to whether the trustee has the right to bring all claims for the benefit of all the creditors the court needs to understand the nature of the claim that was being pursued in the in the keen litigate in the keen case and that was a chapter five trustee bankruptcy court cause of action it was not a particular claim of a creditor is it your is it your point that because your claim involves torsious conduct or it's a personal injury tort if therefore it's individualized and therefore it is not part of the state correct your honor there I don't think that the bankruptcy court or the district court or my app or aroma disagrees that the personal injury claim is a personalized claim I don't think that's not the issue the issue is whether the equitable remedy that we that are diacyl claim and seek to pursue a successful liability liability to compensate for those injuries is property of the estate you cite one case to show that personal injury cases asserting successor liability are not property of the estate right that was the RDM holdings case there yes and that was a case that applied Michigan law which is different in this connection than New Jersey or New York law there is there are so you don't really have there are no case there's there's there's really no case law out there that directly addresses this issue we have the food town case which is a guide on how to analyze who's the injured party who gets to assert the claim and whether or not it's an acidity of the estate and that case was cited just for to show the court that there is some there is something out there that has addressed it but there really are no cases that are directly that there's a whole lot of case well but that was the one case you cited and the problem is that this is a this is a claim against Ameral it's a claim against the third party what about the other creditors what if what if they had claims against the third party why should you in a sense jump a line why should you have priority why why should you then take first from that third party to the disadvantage of all the other creditors indicate in the bankruptcy I would suggest to the court that if one of the creditors that your honors is speaking about was a victim of employment discrimination or had a had a personal tort claim against the debtor that creditor could pursue aroma on the same theory that the diastole claim is represented and it's and it's in that this particular debtor just happened to have had this is the body of creditors it has general unsecured creditors and it has personal injury creditors okay I am not unsympathetic to the problem that is presented in this case by these individuals who suffered serious personal injury and don't appear to have recourse but nonetheless what is the rule that we would be looking to state if we give you the right to sue here a third party in other cases then you have personal injury claimants would then be given priority I suppose over all other it's not prior to rule no it's not priority your honor it's allowing it's allowing the tort claimants to avail themselves of state law and pursue the claims and state law yeah but and it's not it's it's not giving priority because other creditors have claims against a moral why would you be able to go after a moral and and take those assets to the disadvantage of other creditors who may have whatever types of claims they may have contractual claims for example because the code the code the bankruptcy code is is in place to equalize distribution to unscrupulous creditors okay so we general general general and to equalize to monetize assets of the estate and distribute them pro-rattards to the extent that they exist to general and secure creditors with the recovery with the money that you recover going to a pot or would that go to the individual goes to the individual and as as an aside to this argument the debtor filed a chapter seven bankruptcy petition so the tort claimants here the diastinal claimants do not have the protections that it would have had had with respect to insurance and channeling and equal distribution of of insurance proceeds all of the claim the tort claimants we're not in that situation here we chapter seven debtors corporate debtors that have these tort claims against them are not obligated to provide a trust or another mechanism in order to satisfy these general general but the bank trustee can the bank of trustee could also file a claim against umora can on a business continuation of access reliability theory can can he not the trustee way that claim in conjunction with its settlement of the fraudulent transfer I know but I'm I'm asking as a matter of law the trustee could file a file could file could have if he didn't settle a case file a business continuation claim against which is the same claim that you're individually no it's not your honor what is it if that's by question what is the difference between the trustee as representative of all those creditors claim for business continuation and you're claimed as an individual when you're already you filed a proof of claim in the bankruptcy the trustee has a has the duty to monetize assets of the estate the assets of the estate include causes of action whether they're under the bankruptcy code or whether they're under a state law why doesn't it include the cause of action for individual tort that these people were exposed to that is a personal claim that is not a claim that the trustee has standing to pursue only tell me why that's that's your position what facts make that individual and the contract the tradesman's claim for goods sold and delivered not individual there was no disagreement either at the trial court or from my or from a Roma that the general and secured creditor body is a general and secured creditor and they are the ones that the trustee is in place to monetize assets to satisfy and your one of the general it's not anymore before before you filed your application you were you filed a proof of claim excuse me you filed a proof of claim so before you went and filed a third party actions you were a general and secured credit like a trade tradesman but sets the diastole claimants apart is that the diastole claimants obtained sterile leave under 366 section 362 and agreed to pursue only assets that it could recover in the state court and would not go and recover against the assets that are recovered by the data there are no facts unique to you that would be different from other credit there are absolutely unique facts the personal injuries it's not a new jersey state long remeer it established continuation took a continuation of tomorrow there are no facts unique to you that would distinguish you from other creditors in terms of the successor liability theory honestly you know I don't know because we haven't done no no discovery on that topic however what I will say is that this is not the cause of action it's not a cause of that cause of action it's not an independent cause of action for successor liability it's an equitable remedy and that there's a difference between asserting successor liability or alter ego or mere continuation or piercing the corporate bail as a primary cause of action versus as an equitable remedy to satisfy a damage claim would it be the case that if somebody has a breach of contract action against this third party that they too could proceed with that breach of contract came and say this is individualized and we should be able to pursue no because the contract creditors or general and secure creditors their injury is just the same as their injury their damage is just the same as if the debtor didn't pay it's it's Xerox bill so what's the difference between your claim here and buildings by Jamie and and teen and teen as matter of fact was an asbestos injury type case but the cause of action that that to which they they wanted to attach the successor liability claim was the trust was a fraudulent conveyance action not the asbestos claim had they sued had those claim and sued they had that they pursued their asbestos claim they would have been fraudulent it was a fraudulent trust not an individualized but you have to get over to the other side of the room you have you have somebody part of me you want a little bit more regular thank you you honor just to land down thank you you honor made please the court i'm Chris landow and i'm here today for a robot i'd like to begin by addressing the question the judge cowon before you address that question educate us on what is the difference how do you determine whether something is individualized or a generalized claim that's exactly your question that i was going to address that's the question i was about to say they were on the same way on the same way because that is the critical question and the answer is is it a claim that could be pursued by all other creditors in other words the question is is it a generic successor liability claim or is it some kind of a particularized one that is unique that involves facts or relationships that are special to that particular creditor i think this goes back to a question the judge very asked a moment ago the opposing counsel's successor liability claim here this is very critical is a mere continuation claim there is nothing about their status as personal injury uh plant this that is unique to that claim they don't allege in particular that the product line exception uh is applicable that exception is unique to personal injury by the continuing business exactly but they don't fall within the product line exception because aroma the the the alleged successor does not has never manufactured uh diacetyl at any time before or after and they don't dispute that so that's why they have an alleged the one category of successor liability that might make them different and might be you know something your argument is good with and excellent but we're faced with the food town and although you might I I see that as being almost a hurdle which is very difficult here for you unless it goes a block uh because even though it was a different type of claim they're recognized in the food town the basic right of it of someone such as the uh plaintiffs of this case have this individual their claim is individual it's not like every trace of its claim sure well I certainly hope I can persuade you that food town you know it's why food absolutely in food town the the um the the creditors there that were trustees of the multi-employer pension plan they were pursuing an aristocrame that was special to them as trustees of that claim it was not a mere continuation claim that would apply to say the same thing their claim is not their claim is they got injured not not the not the body of credit no but you're on a let's not conflate the two claims you've got their underlying claim against the debtor right and nobody is disputing that their personal injury claim against emerald the debtor is individualized as is frankly every claim against the debtor and I think this goes back to some of the questions that were asked earlier if if I'm the landlord of the debtor I have an individualized claim to against the debtor that's not a generic claim contract claims are individualized claims everybody has an individualized claim against the debtor because everybody has some relationship that is not the same as every other creditor against the debtor there's some basis for recovery against the debtor again we're not talking here about the claim against the debtor we're talking here about the claim against the alleged successor in the food town case that the claim there was was an erissa successor liability claim the court made clear this was not a general generic state law successor liability claim this was a specific claim informed by a rissa principle the landlord of this debtor could not have brought that successor liability claim and by the way and putting aside parenthetically the fact that in food town the court noted that it was not proper to the state because that claim did not even arise until after the bankruptcy so that's a whole other reason to distinguish food town but again I think it's absolutely critical to understand the point that successor liability claims come in different shapes and sizes we are certainly not standing here today and saying that every single successor liability claim no matter what belongs to the trustee but you argue it on the one hand that personal injury products claim against the debtor are individualized correct while at the same time you're arguing that the identical claim asserted against the successor is a generalized claim that's that that I think is it can't be it can't be in both houses I with respect I disagree and I we pointed you to all these cases such as saying Paul and Cork that distinguish between the two claims in other words the the the one is the claim again you can't conflate the two claims and and I think there is something I would concede initially counterintuitive about thinking wait a second successor liability how is that kind of different and they make this argument they say it is inextricably linked to the underlying claim that you would acknowledge can be made if not this case what is what is it what give me some example sure of what food town is certainly individualized successor liability claim well that your your adversary's position and I don't know whether it's to be gainset is that a different setting but the same thing it's individualized to that person that has the personal injury just like in food town it was an individualized thing outside of the business but you're on again I think we just have to keep in mind the difference between the claim against the debtor which is individualized for food town one of their examples which you which you can see are individualized well if they if they were bringing a product line exception claim that is not a successor liability claim that could be brought by all creditors the landlord could not bring a product line exception claim their problem here and this is really the heart of the case that their successor liability claim and again whether you call it a claim or a theory of liability really doesn't matter the question is the state law for purposes of bankruptcy code section 541 defines property state very broadly and looks to state law so the question is the state law create some basis of liability if a parent acknowledged that if we were to hold in her favor I'm not saying we will or will not that that does that has nothing to do with whether or not she has a meritorious claim it's state court in other words that's for another day we don't decide whether or not they have a legitimate on the merits claim for whatever it is successor product line you know well that certainly but that does it but that doesn't solve the problem that we have to as to whether or not this is the individualized or generalized claim no the fact that you say that she may not have a merits claim because and I don't think she's claiming a product line I wasn't you need to say that you're on I'm sorry if I was not well if I was not clear on that she's not I don't think she's claiming that but whatever she's claiming for liability is is not for us we're only interested in whether or not I agree and I wasn't I was not wanting to tell me how this differs from food town again in food town food town is a classic example of a successor liability claim again let's let's keep the world divided into two parts one is claims against the debtor okay and food town had a claim against the debtor they filed a proof of claim yes just like a trace that claim and then we're recognized because their claim was different according to food town that that that they had a right to go outside of the settlement so to speak of a trustee correct but let me make clear you under we are not suggesting that their claims against the debtor emerald are are the property of the trustee we're only talking here my claim is a wrong claim is against the debtor or it's it's a little unclear there are or can be claims against emerald by the individual personal injury plaintiffs absolutely emerald the debtor they have that they have that in the estate absolutely are and they're pursuing that and the and the and the property of the estate here is you say the successor liability precisely precise and we yes and the reason and so that's the question is what is the property of the estate and to the extent the question is is the successor liability claim against emerald against aroma yes it's very confusing I wish this were like company and companies either very similar correct your honor that's exactly the key point that we're talking here about who who has the white really who has standing to bring a successor liability claim there's trustee have a right to sue on his all behalf for the personal injury of the plaintiffs in this case and no okay then if he does it who has that right the plaintiffs we know nobody is just reading so that's not that's not a property of the estate absolutely not absolutely not the question here is the successor liability it's the ability to estate okay to come and say we want to appears to be a we want to say something I don't see this being a question for us whether there is or is not successor liability I think your the appellant put that the rest we're just deciding we're not deciding whether they have it don't have no and I'm sorry again I am trying to talk about who has standing to pursue a successor liability claim so I'm not saying if the trustee does not have standing to pursue a claim on behalf of these plaintiffs but are the personal injury not a personal injury that's the key to for successor liability you see another way do the plaintiffs do have standing to bring the plaintiffs have standing to bring the personal injury claim against the debtor the debtor has standing to bring the successor liability claim against my client a romon for the benefit of all of the creditors not just personal injury creditors this is a generic mere continuation claim this benefits the landlord this benefits the contract person the nature of this particular successor liability claim but of course the plaintiffs can't sue the debtor the well the plaintiffs can sue the debt I mean they can pursue relief but they can't sue they actually have had the stay lifted to pursue individual lawsuits against the the debt or nominally and they're allowed to go after the insurance proceeds so the debt the plaintiffs in this case actually I think there was a statement made earlier that they have no records that's not a point you did say that not all successor liability claims are claims against your state not all successor liability again successor liability claims by definition are not claims against this day I think what I was trying to say at least is that not all successor liability claims are created equal some successor liability claims could be brought equally by all creditors those are generic ones if that is the case and if the estate can bring that claim as I believe it is undisputed that under New Jersey and New York law the estate the debtor has the ability to pierce its own corporate veil for the benefit of all its creditors and and so to the extent that that's true which is which is conceded here it the right to do that the right to bring that successor again we can't conflate the individualized nature of their personal injury claim against the debtor and then the right to pursue the successor against successor on successor liability and in that claim also assert the the injuries of the plaintiffs in this case because that that's not the answer question could he bring that type of claim could who bring that claim the trustee the trustee no no the successor so excuse excuse he could bring a claim on behalf of all creditors but and a trade creditor then might be reabersed if it's successful but he the trustee cannot bring a claim and as part of that claim seek a on behalf of the estate the damages which have caused to the the personal injury of these claimants again that's not well again that would be subsumed because again the nature of the claim he would bring is a generic mere continuation claim if it's a mere continuation claim it's basically saying you are us you are responsible for the pot of money for all of our debts so that benefit how does that help the plaintiffs and how does that and how does that do anything for the personal injury plaintiffs if he's successful it's saying this is you're just another corporation with our name and therefore you're liable for it it opens the door it actually benefits all the door to what to to having basically all of emeral's assets the alleged successor available as funds of the estate okay but then but then somewhere in the line the plaintiffs the individual plaintiffs with personal injuries have to sue and prove liability on and any and any award precisely just just met it and any award would not go to the estate it would go to the individual plaintiffs well again the the the debtor has proven that the there's continuation liabilities exactly so that pot of money is then there then when the debtor so there's some pot of money what pot of money for the plaintiffs the plaintiffs have had proven there in title anything they have no judgment they have nothing well again you're on the they have a claim that's on on the on the right but I think that that goes to the how do you then what is the logistics of the remedy for the successor claim again we are starting here with the proposition and I I don't believe this is contested under state law that the debtor here could pursue this generic mere continuation claim which the nature of it says you know something you just changed the sign above the door you are liable for all the debtors that's so then you you quantify the damages to that I think you would have to be structured in a way that you couldn't necessarily quantify the damages for mere continuation until the the plaintiffs have made their claim against the debtor and the trustee is successful as continuation claim and gets a judgment how does that benefit the personal injury plaintiffs they don't have a judgment for anything they have an unadjudicated un uh un un undocumented claim that's unadjudicated but you're assuming that that that that the order is such that that's already all all finished I mean again you're talking though about me it could it seems to me that the damages in that mere continuation claim are basically or the remedy in that mere continuation claim is to open the pocket of the alleged successor for all of the debts of the debtor that's what a mere continuation is it says basically you are the same thing this is there there's no real distinction here so suddenly it's like how does the how does the plaintiffs the uh the personal injury plaintiffs get remuterated they prove their case against the debtor again that nobody is disputing that they have a cause of action against the debtor that is personal to them just like a creditor so what you're doing here is you're having the trustee bring this cause of action for the benefit of all creditors if you don't do that your honor you'll have the creditors in a race I think this was a question that judge flank this that's earlier they will be in a race to the courthouse to see who can get a very party first there was a dialogue in the uh in one of the proceedings in which the trustees of was referencing whether these claim tied in fact they released by the trustee when there was this negotiation and I suppose this global release of all claims and at the appendix page 1277 the attorney the trustees attorney said that the claim does not belong to this estate the trustee can't release are you familiar with that statement we are I think that it was uncontested your honor that the judge did not make a determination at the moment back of a second the trustee released all the claims that the trustee had on behalf of the estate that was part of the settlement but to suggest that the plaintiffs claims were not part of the package of this release well again and there was a a proviso added there that says really with the truism that this does not release claims that that are the property of the plaintiffs and are not property to state I mean that that goes without saying the trustee nobody denies attorney would rework the statement where it should be done over about don't you think well I think that the half of the trustee the critical point though your honor just for is that the bankruptcy court approved the settlement later made a statement in deciding actually the chief thought the property that the successor liability claims as well as the direct liability claims were their property the the bankruptcy court made clear and this is at page 1383 of the appended that at the time of approving the settlement so this was what the judge was thinking when she was approving the fairness of the settlement that released all of the trustees claims the court made no definitive ruling or finding at that time as to whether the claims that issue here fell within the estates release claims under the approved settlement but rather reserve her future date when that issue would arise that issue is currently raised so it's not as if there had been a determination one way or the other by the court is it the case that all personal injury towards no matter what what shape they take or what form of the nature and extent of the injuries are property against the debtor and now become property of the estate I don't think any personal injury claims against the debtor are property of the state emerald had a bunch of trucks that delivered the chemicals and one of those trucks ran over somebody and that person quadriplegic with massive injuries sure now that person wants to file a claim sure but of course emerald is now in bankruptcy right so they have the same right as the other creditors of emerald to get a their pro rata equitable share of emerald assets that would include but your position is they cannot now go under successive liability and go after emerald well again they can't go after aroma a role in a successor liability theory that could be brought by any other one because then you're creating a race to the courthouse again once you acknowledge that the bankruptcy trustee okay could they were the same same shoes as the plaintiffs in this case correct then again I would just refer you to the the the sample complaint and the appendix which is I can't not thinking it's a very harsh result I mean I'm suggesting that it's wrong but I really I honestly I hope I can persuade you otherwise because basically this is just the way the bankruptcy courts bankruptcy works that the nobody's taking anything away from these folks the way it works is that you want the bankruptcy trustee to marshal all the assets of the estate once you conclude that a mere continuation claim is the is an asset of the state because it's generalized would benefit all creditors you want that to be presumed but one of the assets of the estate is not the entitlement of the personal injury plaintiffs to be remunerated for their personal injury but that's not that's not personal injury claim against the debtor emerald I get the question the point here is though that there is a claim against anyone that the debtor or a successor but but again you're honor every if every if the successor liability claim that they have is the same as every other creditor you would be creating you'd be rewarding those creditors the successor liability is that's the successor liability claim is the same but the claim of the individuals is not no and that's what I mean I apologize about yeah well no you're you're the one that's complaining stop to hear that the difference is that the individual has a claim for damages to him yes for damages to the estate correct they're correct but the way that the individual does that is the individual goes after the state the individual nobody's denying the individual has their share to a pro-rider right at the estate and and one thing that is critical to keep in mind is that the insurance assets related ties to Dicell remained in the estate and are available to these folks and the state has been lifted and in fact in their lawsuits they have sued 30 other manufacturers so again I don't want you to get the impression that these folks are left without a remedy their remedy as as the remedy of any other creditor is for the the the debtor to go after the trustees to go after the pot of money and then distribute those in an equitably and orderly way against among the creditors of the estate very good mr. and now thank you very much rebuttal miss out isocin thank you your honors I would like to reiterate the impact of the food town case on how the court needs to decide the amount of this before the court today and I call the court to the attention of page 171 of that decision this court said in in addressing the buildings by jamey case in the buildings by jamey case consistent with our decision here under new jersey law an alter ego action is an equitable remedy it is not an independent cause of action it is not the main cause of action that my clients are bringing my clients are bringing a personal injury tort claim in the state court against the debtor as a nominal defendant and the mere continuation claim is the equitable remedy for the damages sustained because of those injuries and this court went on to say as a result the injury is personal to the appellance the pension plan in the food town case you know I still wonder this idea of allowing the plaintiffs though and again I'm sympathetic to the plaintiffs in this case to essentially get in the front of the line when it comes to distributing assets that should be available to all the creditors which is the purpose of the trustee if if the match all of the possible assets and then distribute those assets equitably amongst all the creditors but if if personal injury plaintiffs are then allowed to proceed with their claims that is to the disadvantage of other claim. Personal injury claimants are not going to participate like the general and secured creditors are participating from the trustees liquidating the assets of the estate the personal injury claimants are unliquidated contingent claims that have been sent back to the state court that they have stay-releaped to go pursue insurance proceeds or whatever whatever source of recovery those claimants can but just still going after Ameral and let's say you have the the situation Ameral is the person that you're suing right what Ameral is the debtor aroma is the third is the is the if I aroma aroma is the successor yeah you know I wonder how they got the same name so yeah yeah I think it was purposeful I don't know the information about that but you're suing aroma and and what if the hadn't been the what if the trustee had not settled all those cases with aroma and and aroma was still subject to being sued by other third by other creditors aroma would have the same argument that it if you're sent here if those creditors did not if those creditors did not have a particularized injury I mean the personal injury plaintiffs in this case are creditors aren't they absolutely and you're on your your credit questions my adversary about the quadriplegic and and the truck that claimant is in the same position as the diacetyl plaintiffs and would have the same right to go after whatever assets to recover for for his or her damages and you you uh uh for your personal injury claim you you don't share any part of the uh trustee is the same do not do not do not trustee if if there's a hit on successor liability and Amora is found to be a mere continuation of Emerald then any pot goes into the estate it's not a pot or it's not a pot not not for the plaintiffs it's not the plaintiffs but you have a client against the estate I apologize for interrupting your honor if my client if an individual diacetyl claimant gets an award for five hundred thousand dollars and it collects two hundred thousand dollars from the insurance company if you can can satisfy the rest of the damage claim if it's successful on the successor liability claim from aroma it's not a general hot it is a specific remedy to satisfy the diacetyl individual diacetyl plaintiffs damage awards thank you thank you very excellent our item is very difficult case that we will have to work on thank you will take

Emerald in rate Emerald getter and diacetyl plaintiffs and Ms. Isaacson Good morning. May I please the court Nancy Isaacson for the appellants I asshole claimants and I'd like to reserve three minutes for re-gluinal yes that's fine how do you pronounce it again excuse me how do you pronounce that chemical diacetyl diacetyl flavoring and butter popcorn all right May I please the court my clients the appellants here are a discrete group of holders of toward claims and I'll refer to them for purposes of this argument as the diacetyl claimants and they have asserted in various state court actions personal injuries against the debt or Emerald those injuries result from exposure to the chemical diacetyl Emerald manufactured and distributed that chemical and to avoid the liability to my clients Emerald sold demonstrably all of their assets the case pretty much we we've heard and adjusted how do you decide whether a client is generalized or individualized well what's the Citiquan oh of that determination this court already has determined the roadmap for making that determination in the the food town case the insurance the pension that wasn't a personal injury case it was not a personal injury case but the question was who is the injured party was the debtor injured or was it the pension plan and there is sufficient holdings in that case that make the roadmap for how this court should decide whether or not personal injury claimants have personal personalized claims with the equitable remedy to assert a successful liability is it dependent on who's getting sued excuse me does it depend on who's getting sued is it does it depend on whether the suit is against the debtor or whether it turns on who is injured is the debtor injured or is the individual claimants injured how would a recovery on your claim for successor liability against a moron not benefit all the creditors of Emerald generally it is an equitable remedy that's tied to the underlying personal injury claim of the individual diastyl claimants that's your claim against Emerald right but I'm talking about the successor liability claim against Imora how would claim for successor liability against a moral your claim not benefit all creditors it's too it's it's an equitable remedy to to compensate for the damages that the personal injury claimants suffered so can so can a contract creditor a commercial creditor those are just general one secured creditors you're on it they don't have particular ice claims how do you know well you're insecure too I mean why is one your position is that that underlying claim is not property of the trustee if the debtor is in bankruptcy that's correct why let me continue with Judge Barry's question what is why makes your claim individualized I'm a contract creditor I got stuck for $100,000 I feel pretty injured myself because my company has got stuck for $100,000 in bankruptcy why is it my claim as a as a contract creditor individualized because under New Jersey state law toward claimants with personal injury claims like presented in this case are given special and higher treatment and acknowledgement in litigation and they are treated differently and they are different than general and secure creditors. A contract claimant also could sue under let's say this is not in bankruptcy a contract claimant against a debtor not in bankruptcy could also sue on the theory of business continuation and succeeded successor liability. No I would suggest to the court that that contract creditor would have to have an underlying claim of some personal injury i.e a business tort some underlying personal claim. Trustee could of the trustee could sue that no you're on it Trustee could not sue the business tort on behalf of that that creditor you're not suggesting that to bring a claim of successor liability there must be a personal injury component there must be a personalized for a creditor to bring in a bankruptcy situation for a creditor to bring outside of the bankruptcy proceeding a successful liability claim against a successor in interest to the debtor there has to be a personal claim an underlying personal claim personal personal particularized claim like a business tort like a discrimination and employment claim a personal claim to that creditor not a general claim like a general in this case a trustee in bankruptcy on behalf of all the creditors who have filed a prusive claim including personal injury claimants as well as trade creditors why can't he sue umberl on the theory that they have that they're just successors to the predecessor business and uh that that uh uh all the creditor should uh now have a claim because it's the same company with another name if the trustee had a claim against aroma the respondent the appley here if the trustee thought that there is a claim that aroma is really the successor the alter ego the mere continuation of product line etc etc same personnel same creditors same everything the trustee that's an asset of the estate under 541 11 u.s.d. second 541 and that the trustee brings that claim the trustee settled this the claims against aroma as a fraudulent transfer claim as the motion as you'll see in the motion do you see the claim? the settlement was for a fraudulent transfer claim and then the settlement and the release language released had this very broad release to which a diacyl claim is subjected so the trustee would have resolved to do that but if the trustee did not settle that claim and and instead of settling it elected to pursue a business continuation product line continuation uh he would have that right to do on behalf of not only the personal injury uh claimants who filed proof of claim but as on the trade creditors as well contract creditors if the claim if the claim was one for alter ego meerkat a general claim like that yes or on our yes you the trustee would have the right to pursue that kind of claim because they they do seem like they're so personal you know the injuries involved and when when you get money for your injuries you're compensating an individual for the injuries that must stay but you're suggesting now an answer to this question that the trustee can bring all of those claims against no I'm sorry I'm sorry I may have misunderstood Judge Collins question the trustee can bring the claim on behalf of the debtor and the debtor estate if there is damage to the debtor by the conduct of aroma for the benefit of the credit the personal injury claim is not personal injuries for more no that the trustee has no right to bring personal injury claims business to reclaims for the missing the right personal injury claims against or against immoral correct pending in the bankruptcy they were they're a creditor in the bankruptcy case against the state relief against the law tomorrow yeah uh you acknowledge that all this is based on whether or not they're a successor product line liability under new Jersey state law if we were to hold your favor that this is a personal claim not a generalized claim you acknowledge to you not that you still must prove in state court you have our decision have no effect upon whether in fact you have a meritorious product line successor claim in state court that would you not to prove that separated apart from our determination that this is a personal not a generalized claim that's correct Your honor however I'd like to correct your statement we are not the d'Asl claim is due not a leg of product line defect claim against aroma we're looking to to assert the equitable remedy of successful liability on aroma which this court in the food town case said is is very appropriate but my basic point is that any decision by us and your favor does not resolve whether or not you have a meritorious claim in state court correct your honor that's for the state court to determine can can you talk about McCain you're familiar with the king the king yeah and the statement there that claims based upon successor liability should be asserted by the trustee on behalf of law creditors that statement was made in conjunction with the nature of the claims that were asserted in that litigation you mean the decision is based on the nature of the crime that it was because of what yes because the underlying claim was as opposed to whether the trustee has the right to bring all claims for the benefit of all the creditors the court needs to understand the nature of the claim that was being pursued in the in the keen litigate in the keen case and that was a chapter five trustee bankruptcy court cause of action it was not a particular claim of a creditor is it your is it your point that because your claim involves torsious conduct or it's a personal injury tort if therefore it's individualized and therefore it is not part of the state correct your honor there I don't think that the bankruptcy court or the district court or my app or aroma disagrees that the personal injury claim is a personalized claim I don't think that's not the issue the issue is whether the equitable remedy that we that are diacyl claim and seek to pursue a successful liability liability to compensate for those injuries is property of the estate you cite one case to show that personal injury cases asserting successor liability are not property of the estate right that was the RDM holdings case there yes and that was a case that applied Michigan law which is different in this connection than New Jersey or New York law there is there are so you don't really have there are no case there's there's there's really no case law out there that directly addresses this issue we have the food town case which is a guide on how to analyze who's the injured party who gets to assert the claim and whether or not it's an acidity of the estate and that case was cited just for to show the court that there is some there is something out there that has addressed it but there really are no cases that are directly that there's a whole lot of case well but that was the one case you cited and the problem is that this is a this is a claim against Ameral it's a claim against the third party what about the other creditors what if what if they had claims against the third party why should you in a sense jump a line why should you have priority why why should you then take first from that third party to the disadvantage of all the other creditors indicate in the bankruptcy I would suggest to the court that if one of the creditors that your honors is speaking about was a victim of employment discrimination or had a had a personal tort claim against the debtor that creditor could pursue aroma on the same theory that the diastole claim is represented and it's and it's in that this particular debtor just happened to have had this is the body of creditors it has general unsecured creditors and it has personal injury creditors okay I am not unsympathetic to the problem that is presented in this case by these individuals who suffered serious personal injury and don't appear to have recourse but nonetheless what is the rule that we would be looking to state if we give you the right to sue here a third party in other cases then you have personal injury claimants would then be given priority I suppose over all other it's not prior to rule no it's not priority your honor it's allowing it's allowing the tort claimants to avail themselves of state law and pursue the claims and state law yeah but and it's not it's it's not giving priority because other creditors have claims against a moral why would you be able to go after a moral and and take those assets to the disadvantage of other creditors who may have whatever types of claims they may have contractual claims for example because the code the code the bankruptcy code is is in place to equalize distribution to unscrupulous creditors okay so we general general general and to equalize to monetize assets of the estate and distribute them pro-rattards to the extent that they exist to general and secure creditors with the recovery with the money that you recover going to a pot or would that go to the individual goes to the individual and as as an aside to this argument the debtor filed a chapter seven bankruptcy petition so the tort claimants here the diastinal claimants do not have the protections that it would have had had with respect to insurance and channeling and equal distribution of of insurance proceeds all of the claim the tort claimants we're not in that situation here we chapter seven debtors corporate debtors that have these tort claims against them are not obligated to provide a trust or another mechanism in order to satisfy these general general but the bank trustee can the bank of trustee could also file a claim against umora can on a business continuation of access reliability theory can can he not the trustee way that claim in conjunction with its settlement of the fraudulent transfer I know but I'm I'm asking as a matter of law the trustee could file a file could file could have if he didn't settle a case file a business continuation claim against which is the same claim that you're individually no it's not your honor what is it if that's by question what is the difference between the trustee as representative of all those creditors claim for business continuation and you're claimed as an individual when you're already you filed a proof of claim in the bankruptcy the trustee has a has the duty to monetize assets of the estate the assets of the estate include causes of action whether they're under the bankruptcy code or whether they're under a state law why doesn't it include the cause of action for individual tort that these people were exposed to that is a personal claim that is not a claim that the trustee has standing to pursue only tell me why that's that's your position what facts make that individual and the contract the tradesman's claim for goods sold and delivered not individual there was no disagreement either at the trial court or from my or from a Roma that the general and secured creditor body is a general and secured creditor and they are the ones that the trustee is in place to monetize assets to satisfy and your one of the general it's not anymore before before you filed your application you were you filed a proof of claim excuse me you filed a proof of claim so before you went and filed a third party actions you were a general and secured credit like a trade tradesman but sets the diastole claimants apart is that the diastole claimants obtained sterile leave under 366 section 362 and agreed to pursue only assets that it could recover in the state court and would not go and recover against the assets that are recovered by the data there are no facts unique to you that would be different from other credit there are absolutely unique facts the personal injuries it's not a new jersey state long remeer it established continuation took a continuation of tomorrow there are no facts unique to you that would distinguish you from other creditors in terms of the successor liability theory honestly you know I don't know because we haven't done no no discovery on that topic however what I will say is that this is not the cause of action it's not a cause of that cause of action it's not an independent cause of action for successor liability it's an equitable remedy and that there's a difference between asserting successor liability or alter ego or mere continuation or piercing the corporate bail as a primary cause of action versus as an equitable remedy to satisfy a damage claim would it be the case that if somebody has a breach of contract action against this third party that they too could proceed with that breach of contract came and say this is individualized and we should be able to pursue no because the contract creditors or general and secure creditors their injury is just the same as their injury their damage is just the same as if the debtor didn't pay it's it's Xerox bill so what's the difference between your claim here and buildings by Jamie and and teen and teen as matter of fact was an asbestos injury type case but the cause of action that that to which they they wanted to attach the successor liability claim was the trust was a fraudulent conveyance action not the asbestos claim had they sued had those claim and sued they had that they pursued their asbestos claim they would have been fraudulent it was a fraudulent trust not an individualized but you have to get over to the other side of the room you have you have somebody part of me you want a little bit more regular thank you you honor just to land down thank you you honor made please the court i'm Chris landow and i'm here today for a robot i'd like to begin by addressing the question the judge cowon before you address that question educate us on what is the difference how do you determine whether something is individualized or a generalized claim that's exactly your question that i was going to address that's the question i was about to say they were on the same way on the same way because that is the critical question and the answer is is it a claim that could be pursued by all other creditors in other words the question is is it a generic successor liability claim or is it some kind of a particularized one that is unique that involves facts or relationships that are special to that particular creditor i think this goes back to a question the judge very asked a moment ago the opposing counsel's successor liability claim here this is very critical is a mere continuation claim there is nothing about their status as personal injury uh plant this that is unique to that claim they don't allege in particular that the product line exception uh is applicable that exception is unique to personal injury by the continuing business exactly but they don't fall within the product line exception because aroma the the the alleged successor does not has never manufactured uh diacetyl at any time before or after and they don't dispute that so that's why they have an alleged the one category of successor liability that might make them different and might be you know something your argument is good with and excellent but we're faced with the food town and although you might I I see that as being almost a hurdle which is very difficult here for you unless it goes a block uh because even though it was a different type of claim they're recognized in the food town the basic right of it of someone such as the uh plaintiffs of this case have this individual their claim is individual it's not like every trace of its claim sure well I certainly hope I can persuade you that food town you know it's why food absolutely in food town the the um the the creditors there that were trustees of the multi-employer pension plan they were pursuing an aristocrame that was special to them as trustees of that claim it was not a mere continuation claim that would apply to say the same thing their claim is not their claim is they got injured not not the not the body of credit no but you're on a let's not conflate the two claims you've got their underlying claim against the debtor right and nobody is disputing that their personal injury claim against emerald the debtor is individualized as is frankly every claim against the debtor and I think this goes back to some of the questions that were asked earlier if if I'm the landlord of the debtor I have an individualized claim to against the debtor that's not a generic claim contract claims are individualized claims everybody has an individualized claim against the debtor because everybody has some relationship that is not the same as every other creditor against the debtor there's some basis for recovery against the debtor again we're not talking here about the claim against the debtor we're talking here about the claim against the alleged successor in the food town case that the claim there was was an erissa successor liability claim the court made clear this was not a general generic state law successor liability claim this was a specific claim informed by a rissa principle the landlord of this debtor could not have brought that successor liability claim and by the way and putting aside parenthetically the fact that in food town the court noted that it was not proper to the state because that claim did not even arise until after the bankruptcy so that's a whole other reason to distinguish food town but again I think it's absolutely critical to understand the point that successor liability claims come in different shapes and sizes we are certainly not standing here today and saying that every single successor liability claim no matter what belongs to the trustee but you argue it on the one hand that personal injury products claim against the debtor are individualized correct while at the same time you're arguing that the identical claim asserted against the successor is a generalized claim that's that that I think is it can't be it can't be in both houses I with respect I disagree and I we pointed you to all these cases such as saying Paul and Cork that distinguish between the two claims in other words the the the one is the claim again you can't conflate the two claims and and I think there is something I would concede initially counterintuitive about thinking wait a second successor liability how is that kind of different and they make this argument they say it is inextricably linked to the underlying claim that you would acknowledge can be made if not this case what is what is it what give me some example sure of what food town is certainly individualized successor liability claim well that your your adversary's position and I don't know whether it's to be gainset is that a different setting but the same thing it's individualized to that person that has the personal injury just like in food town it was an individualized thing outside of the business but you're on again I think we just have to keep in mind the difference between the claim against the debtor which is individualized for food town one of their examples which you which you can see are individualized well if they if they were bringing a product line exception claim that is not a successor liability claim that could be brought by all creditors the landlord could not bring a product line exception claim their problem here and this is really the heart of the case that their successor liability claim and again whether you call it a claim or a theory of liability really doesn't matter the question is the state law for purposes of bankruptcy code section 541 defines property state very broadly and looks to state law so the question is the state law create some basis of liability if a parent acknowledged that if we were to hold in her favor I'm not saying we will or will not that that does that has nothing to do with whether or not she has a meritorious claim it's state court in other words that's for another day we don't decide whether or not they have a legitimate on the merits claim for whatever it is successor product line you know well that certainly but that does it but that doesn't solve the problem that we have to as to whether or not this is the individualized or generalized claim no the fact that you say that she may not have a merits claim because and I don't think she's claiming a product line I wasn't you need to say that you're on I'm sorry if I was not well if I was not clear on that she's not I don't think she's claiming that but whatever she's claiming for liability is is not for us we're only interested in whether or not I agree and I wasn't I was not wanting to tell me how this differs from food town again in food town food town is a classic example of a successor liability claim again let's let's keep the world divided into two parts one is claims against the debtor okay and food town had a claim against the debtor they filed a proof of claim yes just like a trace that claim and then we're recognized because their claim was different according to food town that that that they had a right to go outside of the settlement so to speak of a trustee correct but let me make clear you under we are not suggesting that their claims against the debtor emerald are are the property of the trustee we're only talking here my claim is a wrong claim is against the debtor or it's it's a little unclear there are or can be claims against emerald by the individual personal injury plaintiffs absolutely emerald the debtor they have that they have that in the estate absolutely are and they're pursuing that and the and the and the property of the estate here is you say the successor liability precisely precise and we yes and the reason and so that's the question is what is the property of the estate and to the extent the question is is the successor liability claim against emerald against aroma yes it's very confusing I wish this were like company and companies either very similar correct your honor that's exactly the key point that we're talking here about who who has the white really who has standing to bring a successor liability claim there's trustee have a right to sue on his all behalf for the personal injury of the plaintiffs in this case and no okay then if he does it who has that right the plaintiffs we know nobody is just reading so that's not that's not a property of the estate absolutely not absolutely not the question here is the successor liability it's the ability to estate okay to come and say we want to appears to be a we want to say something I don't see this being a question for us whether there is or is not successor liability I think your the appellant put that the rest we're just deciding we're not deciding whether they have it don't have no and I'm sorry again I am trying to talk about who has standing to pursue a successor liability claim so I'm not saying if the trustee does not have standing to pursue a claim on behalf of these plaintiffs but are the personal injury not a personal injury that's the key to for successor liability you see another way do the plaintiffs do have standing to bring the plaintiffs have standing to bring the personal injury claim against the debtor the debtor has standing to bring the successor liability claim against my client a romon for the benefit of all of the creditors not just personal injury creditors this is a generic mere continuation claim this benefits the landlord this benefits the contract person the nature of this particular successor liability claim but of course the plaintiffs can't sue the debtor the well the plaintiffs can sue the debt I mean they can pursue relief but they can't sue they actually have had the stay lifted to pursue individual lawsuits against the the debt or nominally and they're allowed to go after the insurance proceeds so the debt the plaintiffs in this case actually I think there was a statement made earlier that they have no records that's not a point you did say that not all successor liability claims are claims against your state not all successor liability again successor liability claims by definition are not claims against this day I think what I was trying to say at least is that not all successor liability claims are created equal some successor liability claims could be brought equally by all creditors those are generic ones if that is the case and if the estate can bring that claim as I believe it is undisputed that under New Jersey and New York law the estate the debtor has the ability to pierce its own corporate veil for the benefit of all its creditors and and so to the extent that that's true which is which is conceded here it the right to do that the right to bring that successor again we can't conflate the individualized nature of their personal injury claim against the debtor and then the right to pursue the successor against successor on successor liability and in that claim also assert the the injuries of the plaintiffs in this case because that that's not the answer question could he bring that type of claim could who bring that claim the trustee the trustee no no the successor so excuse excuse he could bring a claim on behalf of all creditors but and a trade creditor then might be reabersed if it's successful but he the trustee cannot bring a claim and as part of that claim seek a on behalf of the estate the damages which have caused to the the personal injury of these claimants again that's not well again that would be subsumed because again the nature of the claim he would bring is a generic mere continuation claim if it's a mere continuation claim it's basically saying you are us you are responsible for the pot of money for all of our debts so that benefit how does that help the plaintiffs and how does that and how does that do anything for the personal injury plaintiffs if he's successful it's saying this is you're just another corporation with our name and therefore you're liable for it it opens the door it actually benefits all the door to what to to having basically all of emeral's assets the alleged successor available as funds of the estate okay but then but then somewhere in the line the plaintiffs the individual plaintiffs with personal injuries have to sue and prove liability on and any and any award precisely just just met it and any award would not go to the estate it would go to the individual plaintiffs well again the the the debtor has proven that the there's continuation liabilities exactly so that pot of money is then there then when the debtor so there's some pot of money what pot of money for the plaintiffs the plaintiffs have had proven there in title anything they have no judgment they have nothing well again you're on the they have a claim that's on on the on the right but I think that that goes to the how do you then what is the logistics of the remedy for the successor claim again we are starting here with the proposition and I I don't believe this is contested under state law that the debtor here could pursue this generic mere continuation claim which the nature of it says you know something you just changed the sign above the door you are liable for all the debtors that's so then you you quantify the damages to that I think you would have to be structured in a way that you couldn't necessarily quantify the damages for mere continuation until the the plaintiffs have made their claim against the debtor and the trustee is successful as continuation claim and gets a judgment how does that benefit the personal injury plaintiffs they don't have a judgment for anything they have an unadjudicated un uh un un undocumented claim that's unadjudicated but you're assuming that that that that the order is such that that's already all all finished I mean again you're talking though about me it could it seems to me that the damages in that mere continuation claim are basically or the remedy in that mere continuation claim is to open the pocket of the alleged successor for all of the debts of the debtor that's what a mere continuation is it says basically you are the same thing this is there there's no real distinction here so suddenly it's like how does the how does the plaintiffs the uh the personal injury plaintiffs get remuterated they prove their case against the debtor again that nobody is disputing that they have a cause of action against the debtor that is personal to them just like a creditor so what you're doing here is you're having the trustee bring this cause of action for the benefit of all creditors if you don't do that your honor you'll have the creditors in a race I think this was a question that judge flank this that's earlier they will be in a race to the courthouse to see who can get a very party first there was a dialogue in the uh in one of the proceedings in which the trustees of was referencing whether these claim tied in fact they released by the trustee when there was this negotiation and I suppose this global release of all claims and at the appendix page 1277 the attorney the trustees attorney said that the claim does not belong to this estate the trustee can't release are you familiar with that statement we are I think that it was uncontested your honor that the judge did not make a determination at the moment back of a second the trustee released all the claims that the trustee had on behalf of the estate that was part of the settlement but to suggest that the plaintiffs claims were not part of the package of this release well again and there was a a proviso added there that says really with the truism that this does not release claims that that are the property of the plaintiffs and are not property to state I mean that that goes without saying the trustee nobody denies attorney would rework the statement where it should be done over about don't you think well I think that the half of the trustee the critical point though your honor just for is that the bankruptcy court approved the settlement later made a statement in deciding actually the chief thought the property that the successor liability claims as well as the direct liability claims were their property the the bankruptcy court made clear and this is at page 1383 of the appended that at the time of approving the settlement so this was what the judge was thinking when she was approving the fairness of the settlement that released all of the trustees claims the court made no definitive ruling or finding at that time as to whether the claims that issue here fell within the estates release claims under the approved settlement but rather reserve her future date when that issue would arise that issue is currently raised so it's not as if there had been a determination one way or the other by the court is it the case that all personal injury towards no matter what what shape they take or what form of the nature and extent of the injuries are property against the debtor and now become property of the estate I don't think any personal injury claims against the debtor are property of the state emerald had a bunch of trucks that delivered the chemicals and one of those trucks ran over somebody and that person quadriplegic with massive injuries sure now that person wants to file a claim sure but of course emerald is now in bankruptcy right so they have the same right as the other creditors of emerald to get a their pro rata equitable share of emerald assets that would include but your position is they cannot now go under successive liability and go after emerald well again they can't go after aroma a role in a successor liability theory that could be brought by any other one because then you're creating a race to the courthouse again once you acknowledge that the bankruptcy trustee okay could they were the same same shoes as the plaintiffs in this case correct then again I would just refer you to the the the sample complaint and the appendix which is I can't not thinking it's a very harsh result I mean I'm suggesting that it's wrong but I really I honestly I hope I can persuade you otherwise because basically this is just the way the bankruptcy courts bankruptcy works that the nobody's taking anything away from these folks the way it works is that you want the bankruptcy trustee to marshal all the assets of the estate once you conclude that a mere continuation claim is the is an asset of the state because it's generalized would benefit all creditors you want that to be presumed but one of the assets of the estate is not the entitlement of the personal injury plaintiffs to be remunerated for their personal injury but that's not that's not personal injury claim against the debtor emerald I get the question the point here is though that there is a claim against anyone that the debtor or a successor but but again you're honor every if every if the successor liability claim that they have is the same as every other creditor you would be creating you'd be rewarding those creditors the successor liability is that's the successor liability claim is the same but the claim of the individuals is not no and that's what I mean I apologize about yeah well no you're you're the one that's complaining stop to hear that the difference is that the individual has a claim for damages to him yes for damages to the estate correct they're correct but the way that the individual does that is the individual goes after the state the individual nobody's denying the individual has their share to a pro-rider right at the estate and and one thing that is critical to keep in mind is that the insurance assets related ties to Dicell remained in the estate and are available to these folks and the state has been lifted and in fact in their lawsuits they have sued 30 other manufacturers so again I don't want you to get the impression that these folks are left without a remedy their remedy as as the remedy of any other creditor is for the the the debtor to go after the trustees to go after the pot of money and then distribute those in an equitably and orderly way against among the creditors of the estate very good mr. and now thank you very much rebuttal miss out isocin thank you your honors I would like to reiterate the impact of the food town case on how the court needs to decide the amount of this before the court today and I call the court to the attention of page 171 of that decision this court said in in addressing the buildings by jamey case in the buildings by jamey case consistent with our decision here under new jersey law an alter ego action is an equitable remedy it is not an independent cause of action it is not the main cause of action that my clients are bringing my clients are bringing a personal injury tort claim in the state court against the debtor as a nominal defendant and the mere continuation claim is the equitable remedy for the damages sustained because of those injuries and this court went on to say as a result the injury is personal to the appellance the pension plan in the food town case you know I still wonder this idea of allowing the plaintiffs though and again I'm sympathetic to the plaintiffs in this case to essentially get in the front of the line when it comes to distributing assets that should be available to all the creditors which is the purpose of the trustee if if the match all of the possible assets and then distribute those assets equitably amongst all the creditors but if if personal injury plaintiffs are then allowed to proceed with their claims that is to the disadvantage of other claim. Personal injury claimants are not going to participate like the general and secured creditors are participating from the trustees liquidating the assets of the estate the personal injury claimants are unliquidated contingent claims that have been sent back to the state court that they have stay-releaped to go pursue insurance proceeds or whatever whatever source of recovery those claimants can but just still going after Ameral and let's say you have the the situation Ameral is the person that you're suing right what Ameral is the debtor aroma is the third is the is the if I aroma aroma is the successor yeah you know I wonder how they got the same name so yeah yeah I think it was purposeful I don't know the information about that but you're suing aroma and and what if the hadn't been the what if the trustee had not settled all those cases with aroma and and aroma was still subject to being sued by other third by other creditors aroma would have the same argument that it if you're sent here if those creditors did not if those creditors did not have a particularized injury I mean the personal injury plaintiffs in this case are creditors aren't they absolutely and you're on your your credit questions my adversary about the quadriplegic and and the truck that claimant is in the same position as the diacetyl plaintiffs and would have the same right to go after whatever assets to recover for for his or her damages and you you uh uh for your personal injury claim you you don't share any part of the uh trustee is the same do not do not do not trustee if if there's a hit on successor liability and Amora is found to be a mere continuation of Emerald then any pot goes into the estate it's not a pot or it's not a pot not not for the plaintiffs it's not the plaintiffs but you have a client against the estate I apologize for interrupting your honor if my client if an individual diacetyl claimant gets an award for five hundred thousand dollars and it collects two hundred thousand dollars from the insurance company if you can can satisfy the rest of the damage claim if it's successful on the successor liability claim from aroma it's not a general hot it is a specific remedy to satisfy the diacetyl individual diacetyl plaintiffs damage awards thank you thank you very excellent our item is very difficult case that we will have to work on thank you will take

Emerald in rate Emerald getter and diacetyl plaintiffs and Ms. Isaacson Good morning. May I please the court Nancy Isaacson for the appellants I asshole claimants and I'd like to reserve three minutes for re-gluinal yes that's fine how do you pronounce it again excuse me how do you pronounce that chemical diacetyl diacetyl flavoring and butter popcorn all right May I please the court my clients the appellants here are a discrete group of holders of toward claims and I'll refer to them for purposes of this argument as the diacetyl claimants and they have asserted in various state court actions personal injuries against the debt or Emerald those injuries result from exposure to the chemical diacetyl Emerald manufactured and distributed that chemical and to avoid the liability to my clients Emerald sold demonstrably all of their assets the case pretty much we we've heard and adjusted how do you decide whether a client is generalized or individualized well what's the Citiquan oh of that determination this court already has determined the roadmap for making that determination in the the food town case the insurance the pension that wasn't a personal injury case it was not a personal injury case but the question was who is the injured party was the debtor injured or was it the pension plan and there is sufficient holdings in that case that make the roadmap for how this court should decide whether or not personal injury claimants have personal personalized claims with the equitable remedy to assert a successful liability is it dependent on who's getting sued excuse me does it depend on who's getting sued is it does it depend on whether the suit is against the debtor or whether it turns on who is injured is the debtor injured or is the individual claimants injured how would a recovery on your claim for successor liability against a moron not benefit all the creditors of Emerald generally it is an equitable remedy that's tied to the underlying personal injury claim of the individual diastyl claimants that's your claim against Emerald right but I'm talking about the successor liability claim against Imora how would claim for successor liability against a moral your claim not benefit all creditors it's too it's it's an equitable remedy to to compensate for the damages that the personal injury claimants suffered so can so can a contract creditor a commercial creditor those are just general one secured creditors you're on it they don't have particular ice claims how do you know well you're insecure too I mean why is one your position is that that underlying claim is not property of the trustee if the debtor is in bankruptcy that's correct why let me continue with Judge Barry's question what is why makes your claim individualized I'm a contract creditor I got stuck for $100,000 I feel pretty injured myself because my company has got stuck for $100,000 in bankruptcy why is it my claim as a as a contract creditor individualized because under New Jersey state law toward claimants with personal injury claims like presented in this case are given special and higher treatment and acknowledgement in litigation and they are treated differently and they are different than general and secure creditors. A contract claimant also could sue under let's say this is not in bankruptcy a contract claimant against a debtor not in bankruptcy could also sue on the theory of business continuation and succeeded successor liability. No I would suggest to the court that that contract creditor would have to have an underlying claim of some personal injury i.e a business tort some underlying personal claim. Trustee could of the trustee could sue that no you're on it Trustee could not sue the business tort on behalf of that that creditor you're not suggesting that to bring a claim of successor liability there must be a personal injury component there must be a personalized for a creditor to bring in a bankruptcy situation for a creditor to bring outside of the bankruptcy proceeding a successful liability claim against a successor in interest to the debtor there has to be a personal claim an underlying personal claim personal personal particularized claim like a business tort like a discrimination and employment claim a personal claim to that creditor not a general claim like a general in this case a trustee in bankruptcy on behalf of all the creditors who have filed a prusive claim including personal injury claimants as well as trade creditors why can't he sue umberl on the theory that they have that they're just successors to the predecessor business and uh that that uh uh all the creditor should uh now have a claim because it's the same company with another name if the trustee had a claim against aroma the respondent the appley here if the trustee thought that there is a claim that aroma is really the successor the alter ego the mere continuation of product line etc etc same personnel same creditors same everything the trustee that's an asset of the estate under 541 11 u.s.d. second 541 and that the trustee brings that claim the trustee settled this the claims against aroma as a fraudulent transfer claim as the motion as you'll see in the motion do you see the claim? the settlement was for a fraudulent transfer claim and then the settlement and the release language released had this very broad release to which a diacyl claim is subjected so the trustee would have resolved to do that but if the trustee did not settle that claim and and instead of settling it elected to pursue a business continuation product line continuation uh he would have that right to do on behalf of not only the personal injury uh claimants who filed proof of claim but as on the trade creditors as well contract creditors if the claim if the claim was one for alter ego meerkat a general claim like that yes or on our yes you the trustee would have the right to pursue that kind of claim because they they do seem like they're so personal you know the injuries involved and when when you get money for your injuries you're compensating an individual for the injuries that must stay but you're suggesting now an answer to this question that the trustee can bring all of those claims against no I'm sorry I'm sorry I may have misunderstood Judge Collins question the trustee can bring the claim on behalf of the debtor and the debtor estate if there is damage to the debtor by the conduct of aroma for the benefit of the credit the personal injury claim is not personal injuries for more no that the trustee has no right to bring personal injury claims business to reclaims for the missing the right personal injury claims against or against immoral correct pending in the bankruptcy they were they're a creditor in the bankruptcy case against the state relief against the law tomorrow yeah uh you acknowledge that all this is based on whether or not they're a successor product line liability under new Jersey state law if we were to hold your favor that this is a personal claim not a generalized claim you acknowledge to you not that you still must prove in state court you have our decision have no effect upon whether in fact you have a meritorious product line successor claim in state court that would you not to prove that separated apart from our determination that this is a personal not a generalized claim that's correct Your honor however I'd like to correct your statement we are not the d'Asl claim is due not a leg of product line defect claim against aroma we're looking to to assert the equitable remedy of successful liability on aroma which this court in the food town case said is is very appropriate but my basic point is that any decision by us and your favor does not resolve whether or not you have a meritorious claim in state court correct your honor that's for the state court to determine can can you talk about McCain you're familiar with the king the king yeah and the statement there that claims based upon successor liability should be asserted by the trustee on behalf of law creditors that statement was made in conjunction with the nature of the claims that were asserted in that litigation you mean the decision is based on the nature of the crime that it was because of what yes because the underlying claim was as opposed to whether the trustee has the right to bring all claims for the benefit of all the creditors the court needs to understand the nature of the claim that was being pursued in the in the keen litigate in the keen case and that was a chapter five trustee bankruptcy court cause of action it was not a particular claim of a creditor is it your is it your point that because your claim involves torsious conduct or it's a personal injury tort if therefore it's individualized and therefore it is not part of the state correct your honor there I don't think that the bankruptcy court or the district court or my app or aroma disagrees that the personal injury claim is a personalized claim I don't think that's not the issue the issue is whether the equitable remedy that we that are diacyl claim and seek to pursue a successful liability liability to compensate for those injuries is property of the estate you cite one case to show that personal injury cases asserting successor liability are not property of the estate right that was the RDM holdings case there yes and that was a case that applied Michigan law which is different in this connection than New Jersey or New York law there is there are so you don't really have there are no case there's there's there's really no case law out there that directly addresses this issue we have the food town case which is a guide on how to analyze who's the injured party who gets to assert the claim and whether or not it's an acidity of the estate and that case was cited just for to show the court that there is some there is something out there that has addressed it but there really are no cases that are directly that there's a whole lot of case well but that was the one case you cited and the problem is that this is a this is a claim against Ameral it's a claim against the third party what about the other creditors what if what if they had claims against the third party why should you in a sense jump a line why should you have priority why why should you then take first from that third party to the disadvantage of all the other creditors indicate in the bankruptcy I would suggest to the court that if one of the creditors that your honors is speaking about was a victim of employment discrimination or had a had a personal tort claim against the debtor that creditor could pursue aroma on the same theory that the diastole claim is represented and it's and it's in that this particular debtor just happened to have had this is the body of creditors it has general unsecured creditors and it has personal injury creditors okay I am not unsympathetic to the problem that is presented in this case by these individuals who suffered serious personal injury and don't appear to have recourse but nonetheless what is the rule that we would be looking to state if we give you the right to sue here a third party in other cases then you have personal injury claimants would then be given priority I suppose over all other it's not prior to rule no it's not priority your honor it's allowing it's allowing the tort claimants to avail themselves of state law and pursue the claims and state law yeah but and it's not it's it's not giving priority because other creditors have claims against a moral why would you be able to go after a moral and and take those assets to the disadvantage of other creditors who may have whatever types of claims they may have contractual claims for example because the code the code the bankruptcy code is is in place to equalize distribution to unscrupulous creditors okay so we general general general and to equalize to monetize assets of the estate and distribute them pro-rattards to the extent that they exist to general and secure creditors with the recovery with the money that you recover going to a pot or would that go to the individual goes to the individual and as as an aside to this argument the debtor filed a chapter seven bankruptcy petition so the tort claimants here the diastinal claimants do not have the protections that it would have had had with respect to insurance and channeling and equal distribution of of insurance proceeds all of the claim the tort claimants we're not in that situation here we chapter seven debtors corporate debtors that have these tort claims against them are not obligated to provide a trust or another mechanism in order to satisfy these general general but the bank trustee can the bank of trustee could also file a claim against umora can on a business continuation of access reliability theory can can he not the trustee way that claim in conjunction with its settlement of the fraudulent transfer I know but I'm I'm asking as a matter of law the trustee could file a file could file could have if he didn't settle a case file a business continuation claim against which is the same claim that you're individually no it's not your honor what is it if that's by question what is the difference between the trustee as representative of all those creditors claim for business continuation and you're claimed as an individual when you're already you filed a proof of claim in the bankruptcy the trustee has a has the duty to monetize assets of the estate the assets of the estate include causes of action whether they're under the bankruptcy code or whether they're under a state law why doesn't it include the cause of action for individual tort that these people were exposed to that is a personal claim that is not a claim that the trustee has standing to pursue only tell me why that's that's your position what facts make that individual and the contract the tradesman's claim for goods sold and delivered not individual there was no disagreement either at the trial court or from my or from a Roma that the general and secured creditor body is a general and secured creditor and they are the ones that the trustee is in place to monetize assets to satisfy and your one of the general it's not anymore before before you filed your application you were you filed a proof of claim excuse me you filed a proof of claim so before you went and filed a third party actions you were a general and secured credit like a trade tradesman but sets the diastole claimants apart is that the diastole claimants obtained sterile leave under 366 section 362 and agreed to pursue only assets that it could recover in the state court and would not go and recover against the assets that are recovered by the data there are no facts unique to you that would be different from other credit there are absolutely unique facts the personal injuries it's not a new jersey state long remeer it established continuation took a continuation of tomorrow there are no facts unique to you that would distinguish you from other creditors in terms of the successor liability theory honestly you know I don't know because we haven't done no no discovery on that topic however what I will say is that this is not the cause of action it's not a cause of that cause of action it's not an independent cause of action for successor liability it's an equitable remedy and that there's a difference between asserting successor liability or alter ego or mere continuation or piercing the corporate bail as a primary cause of action versus as an equitable remedy to satisfy a damage claim would it be the case that if somebody has a breach of contract action against this third party that they too could proceed with that breach of contract came and say this is individualized and we should be able to pursue no because the contract creditors or general and secure creditors their injury is just the same as their injury their damage is just the same as if the debtor didn't pay it's it's Xerox bill so what's the difference between your claim here and buildings by Jamie and and teen and teen as matter of fact was an asbestos injury type case but the cause of action that that to which they they wanted to attach the successor liability claim was the trust was a fraudulent conveyance action not the asbestos claim had they sued had those claim and sued they had that they pursued their asbestos claim they would have been fraudulent it was a fraudulent trust not an individualized but you have to get over to the other side of the room you have you have somebody part of me you want a little bit more regular thank you you honor just to land down thank you you honor made please the court i'm Chris landow and i'm here today for a robot i'd like to begin by addressing the question the judge cowon before you address that question educate us on what is the difference how do you determine whether something is individualized or a generalized claim that's exactly your question that i was going to address that's the question i was about to say they were on the same way on the same way because that is the critical question and the answer is is it a claim that could be pursued by all other creditors in other words the question is is it a generic successor liability claim or is it some kind of a particularized one that is unique that involves facts or relationships that are special to that particular creditor i think this goes back to a question the judge very asked a moment ago the opposing counsel's successor liability claim here this is very critical is a mere continuation claim there is nothing about their status as personal injury uh plant this that is unique to that claim they don't allege in particular that the product line exception uh is applicable that exception is unique to personal injury by the continuing business exactly but they don't fall within the product line exception because aroma the the the alleged successor does not has never manufactured uh diacetyl at any time before or after and they don't dispute that so that's why they have an alleged the one category of successor liability that might make them different and might be you know something your argument is good with and excellent but we're faced with the food town and although you might I I see that as being almost a hurdle which is very difficult here for you unless it goes a block uh because even though it was a different type of claim they're recognized in the food town the basic right of it of someone such as the uh plaintiffs of this case have this individual their claim is individual it's not like every trace of its claim sure well I certainly hope I can persuade you that food town you know it's why food absolutely in food town the the um the the creditors there that were trustees of the multi-employer pension plan they were pursuing an aristocrame that was special to them as trustees of that claim it was not a mere continuation claim that would apply to say the same thing their claim is not their claim is they got injured not not the not the body of credit no but you're on a let's not conflate the two claims you've got their underlying claim against the debtor right and nobody is disputing that their personal injury claim against emerald the debtor is individualized as is frankly every claim against the debtor and I think this goes back to some of the questions that were asked earlier if if I'm the landlord of the debtor I have an individualized claim to against the debtor that's not a generic claim contract claims are individualized claims everybody has an individualized claim against the debtor because everybody has some relationship that is not the same as every other creditor against the debtor there's some basis for recovery against the debtor again we're not talking here about the claim against the debtor we're talking here about the claim against the alleged successor in the food town case that the claim there was was an erissa successor liability claim the court made clear this was not a general generic state law successor liability claim this was a specific claim informed by a rissa principle the landlord of this debtor could not have brought that successor liability claim and by the way and putting aside parenthetically the fact that in food town the court noted that it was not proper to the state because that claim did not even arise until after the bankruptcy so that's a whole other reason to distinguish food town but again I think it's absolutely critical to understand the point that successor liability claims come in different shapes and sizes we are certainly not standing here today and saying that every single successor liability claim no matter what belongs to the trustee but you argue it on the one hand that personal injury products claim against the debtor are individualized correct while at the same time you're arguing that the identical claim asserted against the successor is a generalized claim that's that that I think is it can't be it can't be in both houses I with respect I disagree and I we pointed you to all these cases such as saying Paul and Cork that distinguish between the two claims in other words the the the one is the claim again you can't conflate the two claims and and I think there is something I would concede initially counterintuitive about thinking wait a second successor liability how is that kind of different and they make this argument they say it is inextricably linked to the underlying claim that you would acknowledge can be made if not this case what is what is it what give me some example sure of what food town is certainly individualized successor liability claim well that your your adversary's position and I don't know whether it's to be gainset is that a different setting but the same thing it's individualized to that person that has the personal injury just like in food town it was an individualized thing outside of the business but you're on again I think we just have to keep in mind the difference between the claim against the debtor which is individualized for food town one of their examples which you which you can see are individualized well if they if they were bringing a product line exception claim that is not a successor liability claim that could be brought by all creditors the landlord could not bring a product line exception claim their problem here and this is really the heart of the case that their successor liability claim and again whether you call it a claim or a theory of liability really doesn't matter the question is the state law for purposes of bankruptcy code section 541 defines property state very broadly and looks to state law so the question is the state law create some basis of liability if a parent acknowledged that if we were to hold in her favor I'm not saying we will or will not that that does that has nothing to do with whether or not she has a meritorious claim it's state court in other words that's for another day we don't decide whether or not they have a legitimate on the merits claim for whatever it is successor product line you know well that certainly but that does it but that doesn't solve the problem that we have to as to whether or not this is the individualized or generalized claim no the fact that you say that she may not have a merits claim because and I don't think she's claiming a product line I wasn't you need to say that you're on I'm sorry if I was not well if I was not clear on that she's not I don't think she's claiming that but whatever she's claiming for liability is is not for us we're only interested in whether or not I agree and I wasn't I was not wanting to tell me how this differs from food town again in food town food town is a classic example of a successor liability claim again let's let's keep the world divided into two parts one is claims against the debtor okay and food town had a claim against the debtor they filed a proof of claim yes just like a trace that claim and then we're recognized because their claim was different according to food town that that that they had a right to go outside of the settlement so to speak of a trustee correct but let me make clear you under we are not suggesting that their claims against the debtor emerald are are the property of the trustee we're only talking here my claim is a wrong claim is against the debtor or it's it's a little unclear there are or can be claims against emerald by the individual personal injury plaintiffs absolutely emerald the debtor they have that they have that in the estate absolutely are and they're pursuing that and the and the and the property of the estate here is you say the successor liability precisely precise and we yes and the reason and so that's the question is what is the property of the estate and to the extent the question is is the successor liability claim against emerald against aroma yes it's very confusing I wish this were like company and companies either very similar correct your honor that's exactly the key point that we're talking here about who who has the white really who has standing to bring a successor liability claim there's trustee have a right to sue on his all behalf for the personal injury of the plaintiffs in this case and no okay then if he does it who has that right the plaintiffs we know nobody is just reading so that's not that's not a property of the estate absolutely not absolutely not the question here is the successor liability it's the ability to estate okay to come and say we want to appears to be a we want to say something I don't see this being a question for us whether there is or is not successor liability I think your the appellant put that the rest we're just deciding we're not deciding whether they have it don't have no and I'm sorry again I am trying to talk about who has standing to pursue a successor liability claim so I'm not saying if the trustee does not have standing to pursue a claim on behalf of these plaintiffs but are the personal injury not a personal injury that's the key to for successor liability you see another way do the plaintiffs do have standing to bring the plaintiffs have standing to bring the personal injury claim against the debtor the debtor has standing to bring the successor liability claim against my client a romon for the benefit of all of the creditors not just personal injury creditors this is a generic mere continuation claim this benefits the landlord this benefits the contract person the nature of this particular successor liability claim but of course the plaintiffs can't sue the debtor the well the plaintiffs can sue the debt I mean they can pursue relief but they can't sue they actually have had the stay lifted to pursue individual lawsuits against the the debt or nominally and they're allowed to go after the insurance proceeds so the debt the plaintiffs in this case actually I think there was a statement made earlier that they have no records that's not a point you did say that not all successor liability claims are claims against your state not all successor liability again successor liability claims by definition are not claims against this day I think what I was trying to say at least is that not all successor liability claims are created equal some successor liability claims could be brought equally by all creditors those are generic ones if that is the case and if the estate can bring that claim as I believe it is undisputed that under New Jersey and New York law the estate the debtor has the ability to pierce its own corporate veil for the benefit of all its creditors and and so to the extent that that's true which is which is conceded here it the right to do that the right to bring that successor again we can't conflate the individualized nature of their personal injury claim against the debtor and then the right to pursue the successor against successor on successor liability and in that claim also assert the the injuries of the plaintiffs in this case because that that's not the answer question could he bring that type of claim could who bring that claim the trustee the trustee no no the successor so excuse excuse he could bring a claim on behalf of all creditors but and a trade creditor then might be reabersed if it's successful but he the trustee cannot bring a claim and as part of that claim seek a on behalf of the estate the damages which have caused to the the personal injury of these claimants again that's not well again that would be subsumed because again the nature of the claim he would bring is a generic mere continuation claim if it's a mere continuation claim it's basically saying you are us you are responsible for the pot of money for all of our debts so that benefit how does that help the plaintiffs and how does that and how does that do anything for the personal injury plaintiffs if he's successful it's saying this is you're just another corporation with our name and therefore you're liable for it it opens the door it actually benefits all the door to what to to having basically all of emeral's assets the alleged successor available as funds of the estate okay but then but then somewhere in the line the plaintiffs the individual plaintiffs with personal injuries have to sue and prove liability on and any and any award precisely just just met it and any award would not go to the estate it would go to the individual plaintiffs well again the the the debtor has proven that the there's continuation liabilities exactly so that pot of money is then there then when the debtor so there's some pot of money what pot of money for the plaintiffs the plaintiffs have had proven there in title anything they have no judgment they have nothing well again you're on the they have a claim that's on on the on the right but I think that that goes to the how do you then what is the logistics of the remedy for the successor claim again we are starting here with the proposition and I I don't believe this is contested under state law that the debtor here could pursue this generic mere continuation claim which the nature of it says you know something you just changed the sign above the door you are liable for all the debtors that's so then you you quantify the damages to that I think you would have to be structured in a way that you couldn't necessarily quantify the damages for mere continuation until the the plaintiffs have made their claim against the debtor and the trustee is successful as continuation claim and gets a judgment how does that benefit the personal injury plaintiffs they don't have a judgment for anything they have an unadjudicated un uh un un undocumented claim that's unadjudicated but you're assuming that that that that the order is such that that's already all all finished I mean again you're talking though about me it could it seems to me that the damages in that mere continuation claim are basically or the remedy in that mere continuation claim is to open the pocket of the alleged successor for all of the debts of the debtor that's what a mere continuation is it says basically you are the same thing this is there there's no real distinction here so suddenly it's like how does the how does the plaintiffs the uh the personal injury plaintiffs get remuterated they prove their case against the debtor again that nobody is disputing that they have a cause of action against the debtor that is personal to them just like a creditor so what you're doing here is you're having the trustee bring this cause of action for the benefit of all creditors if you don't do that your honor you'll have the creditors in a race I think this was a question that judge flank this that's earlier they will be in a race to the courthouse to see who can get a very party first there was a dialogue in the uh in one of the proceedings in which the trustees of was referencing whether these claim tied in fact they released by the trustee when there was this negotiation and I suppose this global release of all claims and at the appendix page 1277 the attorney the trustees attorney said that the claim does not belong to this estate the trustee can't release are you familiar with that statement we are I think that it was uncontested your honor that the judge did not make a determination at the moment back of a second the trustee released all the claims that the trustee had on behalf of the estate that was part of the settlement but to suggest that the plaintiffs claims were not part of the package of this release well again and there was a a proviso added there that says really with the truism that this does not release claims that that are the property of the plaintiffs and are not property to state I mean that that goes without saying the trustee nobody denies attorney would rework the statement where it should be done over about don't you think well I think that the half of the trustee the critical point though your honor just for is that the bankruptcy court approved the settlement later made a statement in deciding actually the chief thought the property that the successor liability claims as well as the direct liability claims were their property the the bankruptcy court made clear and this is at page 1383 of the appended that at the time of approving the settlement so this was what the judge was thinking when she was approving the fairness of the settlement that released all of the trustees claims the court made no definitive ruling or finding at that time as to whether the claims that issue here fell within the estates release claims under the approved settlement but rather reserve her future date when that issue would arise that issue is currently raised so it's not as if there had been a determination one way or the other by the court is it the case that all personal injury towards no matter what what shape they take or what form of the nature and extent of the injuries are property against the debtor and now become property of the estate I don't think any personal injury claims against the debtor are property of the state emerald had a bunch of trucks that delivered the chemicals and one of those trucks ran over somebody and that person quadriplegic with massive injuries sure now that person wants to file a claim sure but of course emerald is now in bankruptcy right so they have the same right as the other creditors of emerald to get a their pro rata equitable share of emerald assets that would include but your position is they cannot now go under successive liability and go after emerald well again they can't go after aroma a role in a successor liability theory that could be brought by any other one because then you're creating a race to the courthouse again once you acknowledge that the bankruptcy trustee okay could they were the same same shoes as the plaintiffs in this case correct then again I would just refer you to the the the sample complaint and the appendix which is I can't not thinking it's a very harsh result I mean I'm suggesting that it's wrong but I really I honestly I hope I can persuade you otherwise because basically this is just the way the bankruptcy courts bankruptcy works that the nobody's taking anything away from these folks the way it works is that you want the bankruptcy trustee to marshal all the assets of the estate once you conclude that a mere continuation claim is the is an asset of the state because it's generalized would benefit all creditors you want that to be presumed but one of the assets of the estate is not the entitlement of the personal injury plaintiffs to be remunerated for their personal injury but that's not that's not personal injury claim against the debtor emerald I get the question the point here is though that there is a claim against anyone that the debtor or a successor but but again you're honor every if every if the successor liability claim that they have is the same as every other creditor you would be creating you'd be rewarding those creditors the successor liability is that's the successor liability claim is the same but the claim of the individuals is not no and that's what I mean I apologize about yeah well no you're you're the one that's complaining stop to hear that the difference is that the individual has a claim for damages to him yes for damages to the estate correct they're correct but the way that the individual does that is the individual goes after the state the individual nobody's denying the individual has their share to a pro-rider right at the estate and and one thing that is critical to keep in mind is that the insurance assets related ties to Dicell remained in the estate and are available to these folks and the state has been lifted and in fact in their lawsuits they have sued 30 other manufacturers so again I don't want you to get the impression that these folks are left without a remedy their remedy as as the remedy of any other creditor is for the the the debtor to go after the trustees to go after the pot of money and then distribute those in an equitably and orderly way against among the creditors of the estate very good mr. and now thank you very much rebuttal miss out isocin thank you your honors I would like to reiterate the impact of the food town case on how the court needs to decide the amount of this before the court today and I call the court to the attention of page 171 of that decision this court said in in addressing the buildings by jamey case in the buildings by jamey case consistent with our decision here under new jersey law an alter ego action is an equitable remedy it is not an independent cause of action it is not the main cause of action that my clients are bringing my clients are bringing a personal injury tort claim in the state court against the debtor as a nominal defendant and the mere continuation claim is the equitable remedy for the damages sustained because of those injuries and this court went on to say as a result the injury is personal to the appellance the pension plan in the food town case you know I still wonder this idea of allowing the plaintiffs though and again I'm sympathetic to the plaintiffs in this case to essentially get in the front of the line when it comes to distributing assets that should be available to all the creditors which is the purpose of the trustee if if the match all of the possible assets and then distribute those assets equitably amongst all the creditors but if if personal injury plaintiffs are then allowed to proceed with their claims that is to the disadvantage of other claim. Personal injury claimants are not going to participate like the general and secured creditors are participating from the trustees liquidating the assets of the estate the personal injury claimants are unliquidated contingent claims that have been sent back to the state court that they have stay-releaped to go pursue insurance proceeds or whatever whatever source of recovery those claimants can but just still going after Ameral and let's say you have the the situation Ameral is the person that you're suing right what Ameral is the debtor aroma is the third is the is the if I aroma aroma is the successor yeah you know I wonder how they got the same name so yeah yeah I think it was purposeful I don't know the information about that but you're suing aroma and and what if the hadn't been the what if the trustee had not settled all those cases with aroma and and aroma was still subject to being sued by other third by other creditors aroma would have the same argument that it if you're sent here if those creditors did not if those creditors did not have a particularized injury I mean the personal injury plaintiffs in this case are creditors aren't they absolutely and you're on your your credit questions my adversary about the quadriplegic and and the truck that claimant is in the same position as the diacetyl plaintiffs and would have the same right to go after whatever assets to recover for for his or her damages and you you uh uh for your personal injury claim you you don't share any part of the uh trustee is the same do not do not do not trustee if if there's a hit on successor liability and Amora is found to be a mere continuation of Emerald then any pot goes into the estate it's not a pot or it's not a pot not not for the plaintiffs it's not the plaintiffs but you have a client against the estate I apologize for interrupting your honor if my client if an individual diacetyl claimant gets an award for five hundred thousand dollars and it collects two hundred thousand dollars from the insurance company if you can can satisfy the rest of the damage claim if it's successful on the successor liability claim from aroma it's not a general hot it is a specific remedy to satisfy the diacetyl individual diacetyl plaintiffs damage awards thank you thank you very excellent our item is very difficult case that we will have to work on thank you will take

Emerald in rate Emerald getter and diacetyl plaintiffs and Ms. Isaacson Good morning. May I please the court Nancy Isaacson for the appellants I asshole claimants and I'd like to reserve three minutes for re-gluinal yes that's fine how do you pronounce it again excuse me how do you pronounce that chemical diacetyl diacetyl flavoring and butter popcorn all right May I please the court my clients the appellants here are a discrete group of holders of toward claims and I'll refer to them for purposes of this argument as the diacetyl claimants and they have asserted in various state court actions personal injuries against the debt or Emerald those injuries result from exposure to the chemical diacetyl Emerald manufactured and distributed that chemical and to avoid the liability to my clients Emerald sold demonstrably all of their assets the case pretty much we we've heard and adjusted how do you decide whether a client is generalized or individualized well what's the Citiquan oh of that determination this court already has determined the roadmap for making that determination in the the food town case the insurance the pension that wasn't a personal injury case it was not a personal injury case but the question was who is the injured party was the debtor injured or was it the pension plan and there is sufficient holdings in that case that make the roadmap for how this court should decide whether or not personal injury claimants have personal personalized claims with the equitable remedy to assert a successful liability is it dependent on who's getting sued excuse me does it depend on who's getting sued is it does it depend on whether the suit is against the debtor or whether it turns on who is injured is the debtor injured or is the individual claimants injured how would a recovery on your claim for successor liability against a moron not benefit all the creditors of Emerald generally it is an equitable remedy that's tied to the underlying personal injury claim of the individual diastyl claimants that's your claim against Emerald right but I'm talking about the successor liability claim against Imora how would claim for successor liability against a moral your claim not benefit all creditors it's too it's it's an equitable remedy to to compensate for the damages that the personal injury claimants suffered so can so can a contract creditor a commercial creditor those are just general one secured creditors you're on it they don't have particular ice claims how do you know well you're insecure too I mean why is one your position is that that underlying claim is not property of the trustee if the debtor is in bankruptcy that's correct why let me continue with Judge Barry's question what is why makes your claim individualized I'm a contract creditor I got stuck for $100,000 I feel pretty injured myself because my company has got stuck for $100,000 in bankruptcy why is it my claim as a as a contract creditor individualized because under New Jersey state law toward claimants with personal injury claims like presented in this case are given special and higher treatment and acknowledgement in litigation and they are treated differently and they are different than general and secure creditors. A contract claimant also could sue under let's say this is not in bankruptcy a contract claimant against a debtor not in bankruptcy could also sue on the theory of business continuation and succeeded successor liability. No I would suggest to the court that that contract creditor would have to have an underlying claim of some personal injury i.e a business tort some underlying personal claim. Trustee could of the trustee could sue that no you're on it Trustee could not sue the business tort on behalf of that that creditor you're not suggesting that to bring a claim of successor liability there must be a personal injury component there must be a personalized for a creditor to bring in a bankruptcy situation for a creditor to bring outside of the bankruptcy proceeding a successful liability claim against a successor in interest to the debtor there has to be a personal claim an underlying personal claim personal personal particularized claim like a business tort like a discrimination and employment claim a personal claim to that creditor not a general claim like a general in this case a trustee in bankruptcy on behalf of all the creditors who have filed a prusive claim including personal injury claimants as well as trade creditors why can't he sue umberl on the theory that they have that they're just successors to the predecessor business and uh that that uh uh all the creditor should uh now have a claim because it's the same company with another name if the trustee had a claim against aroma the respondent the appley here if the trustee thought that there is a claim that aroma is really the successor the alter ego the mere continuation of product line etc etc same personnel same creditors same everything the trustee that's an asset of the estate under 541 11 u.s.d. second 541 and that the trustee brings that claim the trustee settled this the claims against aroma as a fraudulent transfer claim as the motion as you'll see in the motion do you see the claim? the settlement was for a fraudulent transfer claim and then the settlement and the release language released had this very broad release to which a diacyl claim is subjected so the trustee would have resolved to do that but if the trustee did not settle that claim and and instead of settling it elected to pursue a business continuation product line continuation uh he would have that right to do on behalf of not only the personal injury uh claimants who filed proof of claim but as on the trade creditors as well contract creditors if the claim if the claim was one for alter ego meerkat a general claim like that yes or on our yes you the trustee would have the right to pursue that kind of claim because they they do seem like they're so personal you know the injuries involved and when when you get money for your injuries you're compensating an individual for the injuries that must stay but you're suggesting now an answer to this question that the trustee can bring all of those claims against no I'm sorry I'm sorry I may have misunderstood Judge Collins question the trustee can bring the claim on behalf of the debtor and the debtor estate if there is damage to the debtor by the conduct of aroma for the benefit of the credit the personal injury claim is not personal injuries for more no that the trustee has no right to bring personal injury claims business to reclaims for the missing the right personal injury claims against or against immoral correct pending in the bankruptcy they were they're a creditor in the bankruptcy case against the state relief against the law tomorrow yeah uh you acknowledge that all this is based on whether or not they're a successor product line liability under new Jersey state law if we were to hold your favor that this is a personal claim not a generalized claim you acknowledge to you not that you still must prove in state court you have our decision have no effect upon whether in fact you have a meritorious product line successor claim in state court that would you not to prove that separated apart from our determination that this is a personal not a generalized claim that's correct Your honor however I'd like to correct your statement we are not the d'Asl claim is due not a leg of product line defect claim against aroma we're looking to to assert the equitable remedy of successful liability on aroma which this court in the food town case said is is very appropriate but my basic point is that any decision by us and your favor does not resolve whether or not you have a meritorious claim in state court correct your honor that's for the state court to determine can can you talk about McCain you're familiar with the king the king yeah and the statement there that claims based upon successor liability should be asserted by the trustee on behalf of law creditors that statement was made in conjunction with the nature of the claims that were asserted in that litigation you mean the decision is based on the nature of the crime that it was because of what yes because the underlying claim was as opposed to whether the trustee has the right to bring all claims for the benefit of all the creditors the court needs to understand the nature of the claim that was being pursued in the in the keen litigate in the keen case and that was a chapter five trustee bankruptcy court cause of action it was not a particular claim of a creditor is it your is it your point that because your claim involves torsious conduct or it's a personal injury tort if therefore it's individualized and therefore it is not part of the state correct your honor there I don't think that the bankruptcy court or the district court or my app or aroma disagrees that the personal injury claim is a personalized claim I don't think that's not the issue the issue is whether the equitable remedy that we that are diacyl claim and seek to pursue a successful liability liability to compensate for those injuries is property of the estate you cite one case to show that personal injury cases asserting successor liability are not property of the estate right that was the RDM holdings case there yes and that was a case that applied Michigan law which is different in this connection than New Jersey or New York law there is there are so you don't really have there are no case there's there's there's really no case law out there that directly addresses this issue we have the food town case which is a guide on how to analyze who's the injured party who gets to assert the claim and whether or not it's an acidity of the estate and that case was cited just for to show the court that there is some there is something out there that has addressed it but there really are no cases that are directly that there's a whole lot of case well but that was the one case you cited and the problem is that this is a this is a claim against Ameral it's a claim against the third party what about the other creditors what if what if they had claims against the third party why should you in a sense jump a line why should you have priority why why should you then take first from that third party to the disadvantage of all the other creditors indicate in the bankruptcy I would suggest to the court that if one of the creditors that your honors is speaking about was a victim of employment discrimination or had a had a personal tort claim against the debtor that creditor could pursue aroma on the same theory that the diastole claim is represented and it's and it's in that this particular debtor just happened to have had this is the body of creditors it has general unsecured creditors and it has personal injury creditors okay I am not unsympathetic to the problem that is presented in this case by these individuals who suffered serious personal injury and don't appear to have recourse but nonetheless what is the rule that we would be looking to state if we give you the right to sue here a third party in other cases then you have personal injury claimants would then be given priority I suppose over all other it's not prior to rule no it's not priority your honor it's allowing it's allowing the tort claimants to avail themselves of state law and pursue the claims and state law yeah but and it's not it's it's not giving priority because other creditors have claims against a moral why would you be able to go after a moral and and take those assets to the disadvantage of other creditors who may have whatever types of claims they may have contractual claims for example because the code the code the bankruptcy code is is in place to equalize distribution to unscrupulous creditors okay so we general general general and to equalize to monetize assets of the estate and distribute them pro-rattards to the extent that they exist to general and secure creditors with the recovery with the money that you recover going to a pot or would that go to the individual goes to the individual and as as an aside to this argument the debtor filed a chapter seven bankruptcy petition so the tort claimants here the diastinal claimants do not have the protections that it would have had had with respect to insurance and channeling and equal distribution of of insurance proceeds all of the claim the tort claimants we're not in that situation here we chapter seven debtors corporate debtors that have these tort claims against them are not obligated to provide a trust or another mechanism in order to satisfy these general general but the bank trustee can the bank of trustee could also file a claim against umora can on a business continuation of access reliability theory can can he not the trustee way that claim in conjunction with its settlement of the fraudulent transfer I know but I'm I'm asking as a matter of law the trustee could file a file could file could have if he didn't settle a case file a business continuation claim against which is the same claim that you're individually no it's not your honor what is it if that's by question what is the difference between the trustee as representative of all those creditors claim for business continuation and you're claimed as an individual when you're already you filed a proof of claim in the bankruptcy the trustee has a has the duty to monetize assets of the estate the assets of the estate include causes of action whether they're under the bankruptcy code or whether they're under a state law why doesn't it include the cause of action for individual tort that these people were exposed to that is a personal claim that is not a claim that the trustee has standing to pursue only tell me why that's that's your position what facts make that individual and the contract the tradesman's claim for goods sold and delivered not individual there was no disagreement either at the trial court or from my or from a Roma that the general and secured creditor body is a general and secured creditor and they are the ones that the trustee is in place to monetize assets to satisfy and your one of the general it's not anymore before before you filed your application you were you filed a proof of claim excuse me you filed a proof of claim so before you went and filed a third party actions you were a general and secured credit like a trade tradesman but sets the diastole claimants apart is that the diastole claimants obtained sterile leave under 366 section 362 and agreed to pursue only assets that it could recover in the state court and would not go and recover against the assets that are recovered by the data there are no facts unique to you that would be different from other credit there are absolutely unique facts the personal injuries it's not a new jersey state long remeer it established continuation took a continuation of tomorrow there are no facts unique to you that would distinguish you from other creditors in terms of the successor liability theory honestly you know I don't know because we haven't done no no discovery on that topic however what I will say is that this is not the cause of action it's not a cause of that cause of action it's not an independent cause of action for successor liability it's an equitable remedy and that there's a difference between asserting successor liability or alter ego or mere continuation or piercing the corporate bail as a primary cause of action versus as an equitable remedy to satisfy a damage claim would it be the case that if somebody has a breach of contract action against this third party that they too could proceed with that breach of contract came and say this is individualized and we should be able to pursue no because the contract creditors or general and secure creditors their injury is just the same as their injury their damage is just the same as if the debtor didn't pay it's it's Xerox bill so what's the difference between your claim here and buildings by Jamie and and teen and teen as matter of fact was an asbestos injury type case but the cause of action that that to which they they wanted to attach the successor liability claim was the trust was a fraudulent conveyance action not the asbestos claim had they sued had those claim and sued they had that they pursued their asbestos claim they would have been fraudulent it was a fraudulent trust not an individualized but you have to get over to the other side of the room you have you have somebody part of me you want a little bit more regular thank you you honor just to land down thank you you honor made please the court i'm Chris landow and i'm here today for a robot i'd like to begin by addressing the question the judge cowon before you address that question educate us on what is the difference how do you determine whether something is individualized or a generalized claim that's exactly your question that i was going to address that's the question i was about to say they were on the same way on the same way because that is the critical question and the answer is is it a claim that could be pursued by all other creditors in other words the question is is it a generic successor liability claim or is it some kind of a particularized one that is unique that involves facts or relationships that are special to that particular creditor i think this goes back to a question the judge very asked a moment ago the opposing counsel's successor liability claim here this is very critical is a mere continuation claim there is nothing about their status as personal injury uh plant this that is unique to that claim they don't allege in particular that the product line exception uh is applicable that exception is unique to personal injury by the continuing business exactly but they don't fall within the product line exception because aroma the the the alleged successor does not has never manufactured uh diacetyl at any time before or after and they don't dispute that so that's why they have an alleged the one category of successor liability that might make them different and might be you know something your argument is good with and excellent but we're faced with the food town and although you might I I see that as being almost a hurdle which is very difficult here for you unless it goes a block uh because even though it was a different type of claim they're recognized in the food town the basic right of it of someone such as the uh plaintiffs of this case have this individual their claim is individual it's not like every trace of its claim sure well I certainly hope I can persuade you that food town you know it's why food absolutely in food town the the um the the creditors there that were trustees of the multi-employer pension plan they were pursuing an aristocrame that was special to them as trustees of that claim it was not a mere continuation claim that would apply to say the same thing their claim is not their claim is they got injured not not the not the body of credit no but you're on a let's not conflate the two claims you've got their underlying claim against the debtor right and nobody is disputing that their personal injury claim against emerald the debtor is individualized as is frankly every claim against the debtor and I think this goes back to some of the questions that were asked earlier if if I'm the landlord of the debtor I have an individualized claim to against the debtor that's not a generic claim contract claims are individualized claims everybody has an individualized claim against the debtor because everybody has some relationship that is not the same as every other creditor against the debtor there's some basis for recovery against the debtor again we're not talking here about the claim against the debtor we're talking here about the claim against the alleged successor in the food town case that the claim there was was an erissa successor liability claim the court made clear this was not a general generic state law successor liability claim this was a specific claim informed by a rissa principle the landlord of this debtor could not have brought that successor liability claim and by the way and putting aside parenthetically the fact that in food town the court noted that it was not proper to the state because that claim did not even arise until after the bankruptcy so that's a whole other reason to distinguish food town but again I think it's absolutely critical to understand the point that successor liability claims come in different shapes and sizes we are certainly not standing here today and saying that every single successor liability claim no matter what belongs to the trustee but you argue it on the one hand that personal injury products claim against the debtor are individualized correct while at the same time you're arguing that the identical claim asserted against the successor is a generalized claim that's that that I think is it can't be it can't be in both houses I with respect I disagree and I we pointed you to all these cases such as saying Paul and Cork that distinguish between the two claims in other words the the the one is the claim again you can't conflate the two claims and and I think there is something I would concede initially counterintuitive about thinking wait a second successor liability how is that kind of different and they make this argument they say it is inextricably linked to the underlying claim that you would acknowledge can be made if not this case what is what is it what give me some example sure of what food town is certainly individualized successor liability claim well that your your adversary's position and I don't know whether it's to be gainset is that a different setting but the same thing it's individualized to that person that has the personal injury just like in food town it was an individualized thing outside of the business but you're on again I think we just have to keep in mind the difference between the claim against the debtor which is individualized for food town one of their examples which you which you can see are individualized well if they if they were bringing a product line exception claim that is not a successor liability claim that could be brought by all creditors the landlord could not bring a product line exception claim their problem here and this is really the heart of the case that their successor liability claim and again whether you call it a claim or a theory of liability really doesn't matter the question is the state law for purposes of bankruptcy code section 541 defines property state very broadly and looks to state law so the question is the state law create some basis of liability if a parent acknowledged that if we were to hold in her favor I'm not saying we will or will not that that does that has nothing to do with whether or not she has a meritorious claim it's state court in other words that's for another day we don't decide whether or not they have a legitimate on the merits claim for whatever it is successor product line you know well that certainly but that does it but that doesn't solve the problem that we have to as to whether or not this is the individualized or generalized claim no the fact that you say that she may not have a merits claim because and I don't think she's claiming a product line I wasn't you need to say that you're on I'm sorry if I was not well if I was not clear on that she's not I don't think she's claiming that but whatever she's claiming for liability is is not for us we're only interested in whether or not I agree and I wasn't I was not wanting to tell me how this differs from food town again in food town food town is a classic example of a successor liability claim again let's let's keep the world divided into two parts one is claims against the debtor okay and food town had a claim against the debtor they filed a proof of claim yes just like a trace that claim and then we're recognized because their claim was different according to food town that that that they had a right to go outside of the settlement so to speak of a trustee correct but let me make clear you under we are not suggesting that their claims against the debtor emerald are are the property of the trustee we're only talking here my claim is a wrong claim is against the debtor or it's it's a little unclear there are or can be claims against emerald by the individual personal injury plaintiffs absolutely emerald the debtor they have that they have that in the estate absolutely are and they're pursuing that and the and the and the property of the estate here is you say the successor liability precisely precise and we yes and the reason and so that's the question is what is the property of the estate and to the extent the question is is the successor liability claim against emerald against aroma yes it's very confusing I wish this were like company and companies either very similar correct your honor that's exactly the key point that we're talking here about who who has the white really who has standing to bring a successor liability claim there's trustee have a right to sue on his all behalf for the personal injury of the plaintiffs in this case and no okay then if he does it who has that right the plaintiffs we know nobody is just reading so that's not that's not a property of the estate absolutely not absolutely not the question here is the successor liability it's the ability to estate okay to come and say we want to appears to be a we want to say something I don't see this being a question for us whether there is or is not successor liability I think your the appellant put that the rest we're just deciding we're not deciding whether they have it don't have no and I'm sorry again I am trying to talk about who has standing to pursue a successor liability claim so I'm not saying if the trustee does not have standing to pursue a claim on behalf of these plaintiffs but are the personal injury not a personal injury that's the key to for successor liability you see another way do the plaintiffs do have standing to bring the plaintiffs have standing to bring the personal injury claim against the debtor the debtor has standing to bring the successor liability claim against my client a romon for the benefit of all of the creditors not just personal injury creditors this is a generic mere continuation claim this benefits the landlord this benefits the contract person the nature of this particular successor liability claim but of course the plaintiffs can't sue the debtor the well the plaintiffs can sue the debt I mean they can pursue relief but they can't sue they actually have had the stay lifted to pursue individual lawsuits against the the debt or nominally and they're allowed to go after the insurance proceeds so the debt the plaintiffs in this case actually I think there was a statement made earlier that they have no records that's not a point you did say that not all successor liability claims are claims against your state not all successor liability again successor liability claims by definition are not claims against this day I think what I was trying to say at least is that not all successor liability claims are created equal some successor liability claims could be brought equally by all creditors those are generic ones if that is the case and if the estate can bring that claim as I believe it is undisputed that under New Jersey and New York law the estate the debtor has the ability to pierce its own corporate veil for the benefit of all its creditors and and so to the extent that that's true which is which is conceded here it the right to do that the right to bring that successor again we can't conflate the individualized nature of their personal injury claim against the debtor and then the right to pursue the successor against successor on successor liability and in that claim also assert the the injuries of the plaintiffs in this case because that that's not the answer question could he bring that type of claim could who bring that claim the trustee the trustee no no the successor so excuse excuse he could bring a claim on behalf of all creditors but and a trade creditor then might be reabersed if it's successful but he the trustee cannot bring a claim and as part of that claim seek a on behalf of the estate the damages which have caused to the the personal injury of these claimants again that's not well again that would be subsumed because again the nature of the claim he would bring is a generic mere continuation claim if it's a mere continuation claim it's basically saying you are us you are responsible for the pot of money for all of our debts so that benefit how does that help the plaintiffs and how does that and how does that do anything for the personal injury plaintiffs if he's successful it's saying this is you're just another corporation with our name and therefore you're liable for it it opens the door it actually benefits all the door to what to to having basically all of emeral's assets the alleged successor available as funds of the estate okay but then but then somewhere in the line the plaintiffs the individual plaintiffs with personal injuries have to sue and prove liability on and any and any award precisely just just met it and any award would not go to the estate it would go to the individual plaintiffs well again the the the debtor has proven that the there's continuation liabilities exactly so that pot of money is then there then when the debtor so there's some pot of money what pot of money for the plaintiffs the plaintiffs have had proven there in title anything they have no judgment they have nothing well again you're on the they have a claim that's on on the on the right but I think that that goes to the how do you then what is the logistics of the remedy for the successor claim again we are starting here with the proposition and I I don't believe this is contested under state law that the debtor here could pursue this generic mere continuation claim which the nature of it says you know something you just changed the sign above the door you are liable for all the debtors that's so then you you quantify the damages to that I think you would have to be structured in a way that you couldn't necessarily quantify the damages for mere continuation until the the plaintiffs have made their claim against the debtor and the trustee is successful as continuation claim and gets a judgment how does that benefit the personal injury plaintiffs they don't have a judgment for anything they have an unadjudicated un uh un un undocumented claim that's unadjudicated but you're assuming that that that that the order is such that that's already all all finished I mean again you're talking though about me it could it seems to me that the damages in that mere continuation claim are basically or the remedy in that mere continuation claim is to open the pocket of the alleged successor for all of the debts of the debtor that's what a mere continuation is it says basically you are the same thing this is there there's no real distinction here so suddenly it's like how does the how does the plaintiffs the uh the personal injury plaintiffs get remuterated they prove their case against the debtor again that nobody is disputing that they have a cause of action against the debtor that is personal to them just like a creditor so what you're doing here is you're having the trustee bring this cause of action for the benefit of all creditors if you don't do that your honor you'll have the creditors in a race I think this was a question that judge flank this that's earlier they will be in a race to the courthouse to see who can get a very party first there was a dialogue in the uh in one of the proceedings in which the trustees of was referencing whether these claim tied in fact they released by the trustee when there was this negotiation and I suppose this global release of all claims and at the appendix page 1277 the attorney the trustees attorney said that the claim does not belong to this estate the trustee can't release are you familiar with that statement we are I think that it was uncontested your honor that the judge did not make a determination at the moment back of a second the trustee released all the claims that the trustee had on behalf of the estate that was part of the settlement but to suggest that the plaintiffs claims were not part of the package of this release well again and there was a a proviso added there that says really with the truism that this does not release claims that that are the property of the plaintiffs and are not property to state I mean that that goes without saying the trustee nobody denies attorney would rework the statement where it should be done over about don't you think well I think that the half of the trustee the critical point though your honor just for is that the bankruptcy court approved the settlement later made a statement in deciding actually the chief thought the property that the successor liability claims as well as the direct liability claims were their property the the bankruptcy court made clear and this is at page 1383 of the appended that at the time of approving the settlement so this was what the judge was thinking when she was approving the fairness of the settlement that released all of the trustees claims the court made no definitive ruling or finding at that time as to whether the claims that issue here fell within the estates release claims under the approved settlement but rather reserve her future date when that issue would arise that issue is currently raised so it's not as if there had been a determination one way or the other by the court is it the case that all personal injury towards no matter what what shape they take or what form of the nature and extent of the injuries are property against the debtor and now become property of the estate I don't think any personal injury claims against the debtor are property of the state emerald had a bunch of trucks that delivered the chemicals and one of those trucks ran over somebody and that person quadriplegic with massive injuries sure now that person wants to file a claim sure but of course emerald is now in bankruptcy right so they have the same right as the other creditors of emerald to get a their pro rata equitable share of emerald assets that would include but your position is they cannot now go under successive liability and go after emerald well again they can't go after aroma a role in a successor liability theory that could be brought by any other one because then you're creating a race to the courthouse again once you acknowledge that the bankruptcy trustee okay could they were the same same shoes as the plaintiffs in this case correct then again I would just refer you to the the the sample complaint and the appendix which is I can't not thinking it's a very harsh result I mean I'm suggesting that it's wrong but I really I honestly I hope I can persuade you otherwise because basically this is just the way the bankruptcy courts bankruptcy works that the nobody's taking anything away from these folks the way it works is that you want the bankruptcy trustee to marshal all the assets of the estate once you conclude that a mere continuation claim is the is an asset of the state because it's generalized would benefit all creditors you want that to be presumed but one of the assets of the estate is not the entitlement of the personal injury plaintiffs to be remunerated for their personal injury but that's not that's not personal injury claim against the debtor emerald I get the question the point here is though that there is a claim against anyone that the debtor or a successor but but again you're honor every if every if the successor liability claim that they have is the same as every other creditor you would be creating you'd be rewarding those creditors the successor liability is that's the successor liability claim is the same but the claim of the individuals is not no and that's what I mean I apologize about yeah well no you're you're the one that's complaining stop to hear that the difference is that the individual has a claim for damages to him yes for damages to the estate correct they're correct but the way that the individual does that is the individual goes after the state the individual nobody's denying the individual has their share to a pro-rider right at the estate and and one thing that is critical to keep in mind is that the insurance assets related ties to Dicell remained in the estate and are available to these folks and the state has been lifted and in fact in their lawsuits they have sued 30 other manufacturers so again I don't want you to get the impression that these folks are left without a remedy their remedy as as the remedy of any other creditor is for the the the debtor to go after the trustees to go after the pot of money and then distribute those in an equitably and orderly way against among the creditors of the estate very good mr. and now thank you very much rebuttal miss out isocin thank you your honors I would like to reiterate the impact of the food town case on how the court needs to decide the amount of this before the court today and I call the court to the attention of page 171 of that decision this court said in in addressing the buildings by jamey case in the buildings by jamey case consistent with our decision here under new jersey law an alter ego action is an equitable remedy it is not an independent cause of action it is not the main cause of action that my clients are bringing my clients are bringing a personal injury tort claim in the state court against the debtor as a nominal defendant and the mere continuation claim is the equitable remedy for the damages sustained because of those injuries and this court went on to say as a result the injury is personal to the appellance the pension plan in the food town case you know I still wonder this idea of allowing the plaintiffs though and again I'm sympathetic to the plaintiffs in this case to essentially get in the front of the line when it comes to distributing assets that should be available to all the creditors which is the purpose of the trustee if if the match all of the possible assets and then distribute those assets equitably amongst all the creditors but if if personal injury plaintiffs are then allowed to proceed with their claims that is to the disadvantage of other claim. Personal injury claimants are not going to participate like the general and secured creditors are participating from the trustees liquidating the assets of the estate the personal injury claimants are unliquidated contingent claims that have been sent back to the state court that they have stay-releaped to go pursue insurance proceeds or whatever whatever source of recovery those claimants can but just still going after Ameral and let's say you have the the situation Ameral is the person that you're suing right what Ameral is the debtor aroma is the third is the is the if I aroma aroma is the successor yeah you know I wonder how they got the same name so yeah yeah I think it was purposeful I don't know the information about that but you're suing aroma and and what if the hadn't been the what if the trustee had not settled all those cases with aroma and and aroma was still subject to being sued by other third by other creditors aroma would have the same argument that it if you're sent here if those creditors did not if those creditors did not have a particularized injury I mean the personal injury plaintiffs in this case are creditors aren't they absolutely and you're on your your credit questions my adversary about the quadriplegic and and the truck that claimant is in the same position as the diacetyl plaintiffs and would have the same right to go after whatever assets to recover for for his or her damages and you you uh uh for your personal injury claim you you don't share any part of the uh trustee is the same do not do not do not trustee if if there's a hit on successor liability and Amora is found to be a mere continuation of Emerald then any pot goes into the estate it's not a pot or it's not a pot not not for the plaintiffs it's not the plaintiffs but you have a client against the estate I apologize for interrupting your honor if my client if an individual diacetyl claimant gets an award for five hundred thousand dollars and it collects two hundred thousand dollars from the insurance company if you can can satisfy the rest of the damage claim if it's successful on the successor liability claim from aroma it's not a general hot it is a specific remedy to satisfy the diacetyl individual diacetyl plaintiffs damage awards thank you thank you very excellent our item is very difficult case that we will have to work on thank you will take

Emerald in rate Emerald getter and diacetyl plaintiffs and Ms. Isaacson Good morning. May I please the court Nancy Isaacson for the appellants I asshole claimants and I'd like to reserve three minutes for re-gluinal yes that's fine how do you pronounce it again excuse me how do you pronounce that chemical diacetyl diacetyl flavoring and butter popcorn all right May I please the court my clients the appellants here are a discrete group of holders of toward claims and I'll refer to them for purposes of this argument as the diacetyl claimants and they have asserted in various state court actions personal injuries against the debt or Emerald those injuries result from exposure to the chemical diacetyl Emerald manufactured and distributed that chemical and to avoid the liability to my clients Emerald sold demonstrably all of their assets the case pretty much we we've heard and adjusted how do you decide whether a client is generalized or individualized well what's the Citiquan oh of that determination this court already has determined the roadmap for making that determination in the the food town case the insurance the pension that wasn't a personal injury case it was not a personal injury case but the question was who is the injured party was the debtor injured or was it the pension plan and there is sufficient holdings in that case that make the roadmap for how this court should decide whether or not personal injury claimants have personal personalized claims with the equitable remedy to assert a successful liability is it dependent on who's getting sued excuse me does it depend on who's getting sued is it does it depend on whether the suit is against the debtor or whether it turns on who is injured is the debtor injured or is the individual claimants injured how would a recovery on your claim for successor liability against a moron not benefit all the creditors of Emerald generally it is an equitable remedy that's tied to the underlying personal injury claim of the individual diastyl claimants that's your claim against Emerald right but I'm talking about the successor liability claim against Imora how would claim for successor liability against a moral your claim not benefit all creditors it's too it's it's an equitable remedy to to compensate for the damages that the personal injury claimants suffered so can so can a contract creditor a commercial creditor those are just general one secured creditors you're on it they don't have particular ice claims how do you know well you're insecure too I mean why is one your position is that that underlying claim is not property of the trustee if the debtor is in bankruptcy that's correct why let me continue with Judge Barry's question what is why makes your claim individualized I'm a contract creditor I got stuck for $100,000 I feel pretty injured myself because my company has got stuck for $100,000 in bankruptcy why is it my claim as a as a contract creditor individualized because under New Jersey state law toward claimants with personal injury claims like presented in this case are given special and higher treatment and acknowledgement in litigation and they are treated differently and they are different than general and secure creditors. A contract claimant also could sue under let's say this is not in bankruptcy a contract claimant against a debtor not in bankruptcy could also sue on the theory of business continuation and succeeded successor liability. No I would suggest to the court that that contract creditor would have to have an underlying claim of some personal injury i.e a business tort some underlying personal claim. Trustee could of the trustee could sue that no you're on it Trustee could not sue the business tort on behalf of that that creditor you're not suggesting that to bring a claim of successor liability there must be a personal injury component there must be a personalized for a creditor to bring in a bankruptcy situation for a creditor to bring outside of the bankruptcy proceeding a successful liability claim against a successor in interest to the debtor there has to be a personal claim an underlying personal claim personal personal particularized claim like a business tort like a discrimination and employment claim a personal claim to that creditor not a general claim like a general in this case a trustee in bankruptcy on behalf of all the creditors who have filed a prusive claim including personal injury claimants as well as trade creditors why can't he sue umberl on the theory that they have that they're just successors to the predecessor business and uh that that uh uh all the creditor should uh now have a claim because it's the same company with another name if the trustee had a claim against aroma the respondent the appley here if the trustee thought that there is a claim that aroma is really the successor the alter ego the mere continuation of product line etc etc same personnel same creditors same everything the trustee that's an asset of the estate under 541 11 u.s.d. second 541 and that the trustee brings that claim the trustee settled this the claims against aroma as a fraudulent transfer claim as the motion as you'll see in the motion do you see the claim? the settlement was for a fraudulent transfer claim and then the settlement and the release language released had this very broad release to which a diacyl claim is subjected so the trustee would have resolved to do that but if the trustee did not settle that claim and and instead of settling it elected to pursue a business continuation product line continuation uh he would have that right to do on behalf of not only the personal injury uh claimants who filed proof of claim but as on the trade creditors as well contract creditors if the claim if the claim was one for alter ego meerkat a general claim like that yes or on our yes you the trustee would have the right to pursue that kind of claim because they they do seem like they're so personal you know the injuries involved and when when you get money for your injuries you're compensating an individual for the injuries that must stay but you're suggesting now an answer to this question that the trustee can bring all of those claims against no I'm sorry I'm sorry I may have misunderstood Judge Collins question the trustee can bring the claim on behalf of the debtor and the debtor estate if there is damage to the debtor by the conduct of aroma for the benefit of the credit the personal injury claim is not personal injuries for more no that the trustee has no right to bring personal injury claims business to reclaims for the missing the right personal injury claims against or against immoral correct pending in the bankruptcy they were they're a creditor in the bankruptcy case against the state relief against the law tomorrow yeah uh you acknowledge that all this is based on whether or not they're a successor product line liability under new Jersey state law if we were to hold your favor that this is a personal claim not a generalized claim you acknowledge to you not that you still must prove in state court you have our decision have no effect upon whether in fact you have a meritorious product line successor claim in state court that would you not to prove that separated apart from our determination that this is a personal not a generalized claim that's correct Your honor however I'd like to correct your statement we are not the d'Asl claim is due not a leg of product line defect claim against aroma we're looking to to assert the equitable remedy of successful liability on aroma which this court in the food town case said is is very appropriate but my basic point is that any decision by us and your favor does not resolve whether or not you have a meritorious claim in state court correct your honor that's for the state court to determine can can you talk about McCain you're familiar with the king the king yeah and the statement there that claims based upon successor liability should be asserted by the trustee on behalf of law creditors that statement was made in conjunction with the nature of the claims that were asserted in that litigation you mean the decision is based on the nature of the crime that it was because of what yes because the underlying claim was as opposed to whether the trustee has the right to bring all claims for the benefit of all the creditors the court needs to understand the nature of the claim that was being pursued in the in the keen litigate in the keen case and that was a chapter five trustee bankruptcy court cause of action it was not a particular claim of a creditor is it your is it your point that because your claim involves torsious conduct or it's a personal injury tort if therefore it's individualized and therefore it is not part of the state correct your honor there I don't think that the bankruptcy court or the district court or my app or aroma disagrees that the personal injury claim is a personalized claim I don't think that's not the issue the issue is whether the equitable remedy that we that are diacyl claim and seek to pursue a successful liability liability to compensate for those injuries is property of the estate you cite one case to show that personal injury cases asserting successor liability are not property of the estate right that was the RDM holdings case there yes and that was a case that applied Michigan law which is different in this connection than New Jersey or New York law there is there are so you don't really have there are no case there's there's there's really no case law out there that directly addresses this issue we have the food town case which is a guide on how to analyze who's the injured party who gets to assert the claim and whether or not it's an acidity of the estate and that case was cited just for to show the court that there is some there is something out there that has addressed it but there really are no cases that are directly that there's a whole lot of case well but that was the one case you cited and the problem is that this is a this is a claim against Ameral it's a claim against the third party what about the other creditors what if what if they had claims against the third party why should you in a sense jump a line why should you have priority why why should you then take first from that third party to the disadvantage of all the other creditors indicate in the bankruptcy I would suggest to the court that if one of the creditors that your honors is speaking about was a victim of employment discrimination or had a had a personal tort claim against the debtor that creditor could pursue aroma on the same theory that the diastole claim is represented and it's and it's in that this particular debtor just happened to have had this is the body of creditors it has general unsecured creditors and it has personal injury creditors okay I am not unsympathetic to the problem that is presented in this case by these individuals who suffered serious personal injury and don't appear to have recourse but nonetheless what is the rule that we would be looking to state if we give you the right to sue here a third party in other cases then you have personal injury claimants would then be given priority I suppose over all other it's not prior to rule no it's not priority your honor it's allowing it's allowing the tort claimants to avail themselves of state law and pursue the claims and state law yeah but and it's not it's it's not giving priority because other creditors have claims against a moral why would you be able to go after a moral and and take those assets to the disadvantage of other creditors who may have whatever types of claims they may have contractual claims for example because the code the code the bankruptcy code is is in place to equalize distribution to unscrupulous creditors okay so we general general general and to equalize to monetize assets of the estate and distribute them pro-rattards to the extent that they exist to general and secure creditors with the recovery with the money that you recover going to a pot or would that go to the individual goes to the individual and as as an aside to this argument the debtor filed a chapter seven bankruptcy petition so the tort claimants here the diastinal claimants do not have the protections that it would have had had with respect to insurance and channeling and equal distribution of of insurance proceeds all of the claim the tort claimants we're not in that situation here we chapter seven debtors corporate debtors that have these tort claims against them are not obligated to provide a trust or another mechanism in order to satisfy these general general but the bank trustee can the bank of trustee could also file a claim against umora can on a business continuation of access reliability theory can can he not the trustee way that claim in conjunction with its settlement of the fraudulent transfer I know but I'm I'm asking as a matter of law the trustee could file a file could file could have if he didn't settle a case file a business continuation claim against which is the same claim that you're individually no it's not your honor what is it if that's by question what is the difference between the trustee as representative of all those creditors claim for business continuation and you're claimed as an individual when you're already you filed a proof of claim in the bankruptcy the trustee has a has the duty to monetize assets of the estate the assets of the estate include causes of action whether they're under the bankruptcy code or whether they're under a state law why doesn't it include the cause of action for individual tort that these people were exposed to that is a personal claim that is not a claim that the trustee has standing to pursue only tell me why that's that's your position what facts make that individual and the contract the tradesman's claim for goods sold and delivered not individual there was no disagreement either at the trial court or from my or from a Roma that the general and secured creditor body is a general and secured creditor and they are the ones that the trustee is in place to monetize assets to satisfy and your one of the general it's not anymore before before you filed your application you were you filed a proof of claim excuse me you filed a proof of claim so before you went and filed a third party actions you were a general and secured credit like a trade tradesman but sets the diastole claimants apart is that the diastole claimants obtained sterile leave under 366 section 362 and agreed to pursue only assets that it could recover in the state court and would not go and recover against the assets that are recovered by the data there are no facts unique to you that would be different from other credit there are absolutely unique facts the personal injuries it's not a new jersey state long remeer it established continuation took a continuation of tomorrow there are no facts unique to you that would distinguish you from other creditors in terms of the successor liability theory honestly you know I don't know because we haven't done no no discovery on that topic however what I will say is that this is not the cause of action it's not a cause of that cause of action it's not an independent cause of action for successor liability it's an equitable remedy and that there's a difference between asserting successor liability or alter ego or mere continuation or piercing the corporate bail as a primary cause of action versus as an equitable remedy to satisfy a damage claim would it be the case that if somebody has a breach of contract action against this third party that they too could proceed with that breach of contract came and say this is individualized and we should be able to pursue no because the contract creditors or general and secure creditors their injury is just the same as their injury their damage is just the same as if the debtor didn't pay it's it's Xerox bill so what's the difference between your claim here and buildings by Jamie and and teen and teen as matter of fact was an asbestos injury type case but the cause of action that that to which they they wanted to attach the successor liability claim was the trust was a fraudulent conveyance action not the asbestos claim had they sued had those claim and sued they had that they pursued their asbestos claim they would have been fraudulent it was a fraudulent trust not an individualized but you have to get over to the other side of the room you have you have somebody part of me you want a little bit more regular thank you you honor just to land down thank you you honor made please the court i'm Chris landow and i'm here today for a robot i'd like to begin by addressing the question the judge cowon before you address that question educate us on what is the difference how do you determine whether something is individualized or a generalized claim that's exactly your question that i was going to address that's the question i was about to say they were on the same way on the same way because that is the critical question and the answer is is it a claim that could be pursued by all other creditors in other words the question is is it a generic successor liability claim or is it some kind of a particularized one that is unique that involves facts or relationships that are special to that particular creditor i think this goes back to a question the judge very asked a moment ago the opposing counsel's successor liability claim here this is very critical is a mere continuation claim there is nothing about their status as personal injury uh plant this that is unique to that claim they don't allege in particular that the product line exception uh is applicable that exception is unique to personal injury by the continuing business exactly but they don't fall within the product line exception because aroma the the the alleged successor does not has never manufactured uh diacetyl at any time before or after and they don't dispute that so that's why they have an alleged the one category of successor liability that might make them different and might be you know something your argument is good with and excellent but we're faced with the food town and although you might I I see that as being almost a hurdle which is very difficult here for you unless it goes a block uh because even though it was a different type of claim they're recognized in the food town the basic right of it of someone such as the uh plaintiffs of this case have this individual their claim is individual it's not like every trace of its claim sure well I certainly hope I can persuade you that food town you know it's why food absolutely in food town the the um the the creditors there that were trustees of the multi-employer pension plan they were pursuing an aristocrame that was special to them as trustees of that claim it was not a mere continuation claim that would apply to say the same thing their claim is not their claim is they got injured not not the not the body of credit no but you're on a let's not conflate the two claims you've got their underlying claim against the debtor right and nobody is disputing that their personal injury claim against emerald the debtor is individualized as is frankly every claim against the debtor and I think this goes back to some of the questions that were asked earlier if if I'm the landlord of the debtor I have an individualized claim to against the debtor that's not a generic claim contract claims are individualized claims everybody has an individualized claim against the debtor because everybody has some relationship that is not the same as every other creditor against the debtor there's some basis for recovery against the debtor again we're not talking here about the claim against the debtor we're talking here about the claim against the alleged successor in the food town case that the claim there was was an erissa successor liability claim the court made clear this was not a general generic state law successor liability claim this was a specific claim informed by a rissa principle the landlord of this debtor could not have brought that successor liability claim and by the way and putting aside parenthetically the fact that in food town the court noted that it was not proper to the state because that claim did not even arise until after the bankruptcy so that's a whole other reason to distinguish food town but again I think it's absolutely critical to understand the point that successor liability claims come in different shapes and sizes we are certainly not standing here today and saying that every single successor liability claim no matter what belongs to the trustee but you argue it on the one hand that personal injury products claim against the debtor are individualized correct while at the same time you're arguing that the identical claim asserted against the successor is a generalized claim that's that that I think is it can't be it can't be in both houses I with respect I disagree and I we pointed you to all these cases such as saying Paul and Cork that distinguish between the two claims in other words the the the one is the claim again you can't conflate the two claims and and I think there is something I would concede initially counterintuitive about thinking wait a second successor liability how is that kind of different and they make this argument they say it is inextricably linked to the underlying claim that you would acknowledge can be made if not this case what is what is it what give me some example sure of what food town is certainly individualized successor liability claim well that your your adversary's position and I don't know whether it's to be gainset is that a different setting but the same thing it's individualized to that person that has the personal injury just like in food town it was an individualized thing outside of the business but you're on again I think we just have to keep in mind the difference between the claim against the debtor which is individualized for food town one of their examples which you which you can see are individualized well if they if they were bringing a product line exception claim that is not a successor liability claim that could be brought by all creditors the landlord could not bring a product line exception claim their problem here and this is really the heart of the case that their successor liability claim and again whether you call it a claim or a theory of liability really doesn't matter the question is the state law for purposes of bankruptcy code section 541 defines property state very broadly and looks to state law so the question is the state law create some basis of liability if a parent acknowledged that if we were to hold in her favor I'm not saying we will or will not that that does that has nothing to do with whether or not she has a meritorious claim it's state court in other words that's for another day we don't decide whether or not they have a legitimate on the merits claim for whatever it is successor product line you know well that certainly but that does it but that doesn't solve the problem that we have to as to whether or not this is the individualized or generalized claim no the fact that you say that she may not have a merits claim because and I don't think she's claiming a product line I wasn't you need to say that you're on I'm sorry if I was not well if I was not clear on that she's not I don't think she's claiming that but whatever she's claiming for liability is is not for us we're only interested in whether or not I agree and I wasn't I was not wanting to tell me how this differs from food town again in food town food town is a classic example of a successor liability claim again let's let's keep the world divided into two parts one is claims against the debtor okay and food town had a claim against the debtor they filed a proof of claim yes just like a trace that claim and then we're recognized because their claim was different according to food town that that that they had a right to go outside of the settlement so to speak of a trustee correct but let me make clear you under we are not suggesting that their claims against the debtor emerald are are the property of the trustee we're only talking here my claim is a wrong claim is against the debtor or it's it's a little unclear there are or can be claims against emerald by the individual personal injury plaintiffs absolutely emerald the debtor they have that they have that in the estate absolutely are and they're pursuing that and the and the and the property of the estate here is you say the successor liability precisely precise and we yes and the reason and so that's the question is what is the property of the estate and to the extent the question is is the successor liability claim against emerald against aroma yes it's very confusing I wish this were like company and companies either very similar correct your honor that's exactly the key point that we're talking here about who who has the white really who has standing to bring a successor liability claim there's trustee have a right to sue on his all behalf for the personal injury of the plaintiffs in this case and no okay then if he does it who has that right the plaintiffs we know nobody is just reading so that's not that's not a property of the estate absolutely not absolutely not the question here is the successor liability it's the ability to estate okay to come and say we want to appears to be a we want to say something I don't see this being a question for us whether there is or is not successor liability I think your the appellant put that the rest we're just deciding we're not deciding whether they have it don't have no and I'm sorry again I am trying to talk about who has standing to pursue a successor liability claim so I'm not saying if the trustee does not have standing to pursue a claim on behalf of these plaintiffs but are the personal injury not a personal injury that's the key to for successor liability you see another way do the plaintiffs do have standing to bring the plaintiffs have standing to bring the personal injury claim against the debtor the debtor has standing to bring the successor liability claim against my client a romon for the benefit of all of the creditors not just personal injury creditors this is a generic mere continuation claim this benefits the landlord this benefits the contract person the nature of this particular successor liability claim but of course the plaintiffs can't sue the debtor the well the plaintiffs can sue the debt I mean they can pursue relief but they can't sue they actually have had the stay lifted to pursue individual lawsuits against the the debt or nominally and they're allowed to go after the insurance proceeds so the debt the plaintiffs in this case actually I think there was a statement made earlier that they have no records that's not a point you did say that not all successor liability claims are claims against your state not all successor liability again successor liability claims by definition are not claims against this day I think what I was trying to say at least is that not all successor liability claims are created equal some successor liability claims could be brought equally by all creditors those are generic ones if that is the case and if the estate can bring that claim as I believe it is undisputed that under New Jersey and New York law the estate the debtor has the ability to pierce its own corporate veil for the benefit of all its creditors and and so to the extent that that's true which is which is conceded here it the right to do that the right to bring that successor again we can't conflate the individualized nature of their personal injury claim against the debtor and then the right to pursue the successor against successor on successor liability and in that claim also assert the the injuries of the plaintiffs in this case because that that's not the answer question could he bring that type of claim could who bring that claim the trustee the trustee no no the successor so excuse excuse he could bring a claim on behalf of all creditors but and a trade creditor then might be reabersed if it's successful but he the trustee cannot bring a claim and as part of that claim seek a on behalf of the estate the damages which have caused to the the personal injury of these claimants again that's not well again that would be subsumed because again the nature of the claim he would bring is a generic mere continuation claim if it's a mere continuation claim it's basically saying you are us you are responsible for the pot of money for all of our debts so that benefit how does that help the plaintiffs and how does that and how does that do anything for the personal injury plaintiffs if he's successful it's saying this is you're just another corporation with our name and therefore you're liable for it it opens the door it actually benefits all the door to what to to having basically all of emeral's assets the alleged successor available as funds of the estate okay but then but then somewhere in the line the plaintiffs the individual plaintiffs with personal injuries have to sue and prove liability on and any and any award precisely just just met it and any award would not go to the estate it would go to the individual plaintiffs well again the the the debtor has proven that the there's continuation liabilities exactly so that pot of money is then there then when the debtor so there's some pot of money what pot of money for the plaintiffs the plaintiffs have had proven there in title anything they have no judgment they have nothing well again you're on the they have a claim that's on on the on the right but I think that that goes to the how do you then what is the logistics of the remedy for the successor claim again we are starting here with the proposition and I I don't believe this is contested under state law that the debtor here could pursue this generic mere continuation claim which the nature of it says you know something you just changed the sign above the door you are liable for all the debtors that's so then you you quantify the damages to that I think you would have to be structured in a way that you couldn't necessarily quantify the damages for mere continuation until the the plaintiffs have made their claim against the debtor and the trustee is successful as continuation claim and gets a judgment how does that benefit the personal injury plaintiffs they don't have a judgment for anything they have an unadjudicated un uh un un undocumented claim that's unadjudicated but you're assuming that that that that the order is such that that's already all all finished I mean again you're talking though about me it could it seems to me that the damages in that mere continuation claim are basically or the remedy in that mere continuation claim is to open the pocket of the alleged successor for all of the debts of the debtor that's what a mere continuation is it says basically you are the same thing this is there there's no real distinction here so suddenly it's like how does the how does the plaintiffs the uh the personal injury plaintiffs get remuterated they prove their case against the debtor again that nobody is disputing that they have a cause of action against the debtor that is personal to them just like a creditor so what you're doing here is you're having the trustee bring this cause of action for the benefit of all creditors if you don't do that your honor you'll have the creditors in a race I think this was a question that judge flank this that's earlier they will be in a race to the courthouse to see who can get a very party first there was a dialogue in the uh in one of the proceedings in which the trustees of was referencing whether these claim tied in fact they released by the trustee when there was this negotiation and I suppose this global release of all claims and at the appendix page 1277 the attorney the trustees attorney said that the claim does not belong to this estate the trustee can't release are you familiar with that statement we are I think that it was uncontested your honor that the judge did not make a determination at the moment back of a second the trustee released all the claims that the trustee had on behalf of the estate that was part of the settlement but to suggest that the plaintiffs claims were not part of the package of this release well again and there was a a proviso added there that says really with the truism that this does not release claims that that are the property of the plaintiffs and are not property to state I mean that that goes without saying the trustee nobody denies attorney would rework the statement where it should be done over about don't you think well I think that the half of the trustee the critical point though your honor just for is that the bankruptcy court approved the settlement later made a statement in deciding actually the chief thought the property that the successor liability claims as well as the direct liability claims were their property the the bankruptcy court made clear and this is at page 1383 of the appended that at the time of approving the settlement so this was what the judge was thinking when she was approving the fairness of the settlement that released all of the trustees claims the court made no definitive ruling or finding at that time as to whether the claims that issue here fell within the estates release claims under the approved settlement but rather reserve her future date when that issue would arise that issue is currently raised so it's not as if there had been a determination one way or the other by the court is it the case that all personal injury towards no matter what what shape they take or what form of the nature and extent of the injuries are property against the debtor and now become property of the estate I don't think any personal injury claims against the debtor are property of the state emerald had a bunch of trucks that delivered the chemicals and one of those trucks ran over somebody and that person quadriplegic with massive injuries sure now that person wants to file a claim sure but of course emerald is now in bankruptcy right so they have the same right as the other creditors of emerald to get a their pro rata equitable share of emerald assets that would include but your position is they cannot now go under successive liability and go after emerald well again they can't go after aroma a role in a successor liability theory that could be brought by any other one because then you're creating a race to the courthouse again once you acknowledge that the bankruptcy trustee okay could they were the same same shoes as the plaintiffs in this case correct then again I would just refer you to the the the sample complaint and the appendix which is I can't not thinking it's a very harsh result I mean I'm suggesting that it's wrong but I really I honestly I hope I can persuade you otherwise because basically this is just the way the bankruptcy courts bankruptcy works that the nobody's taking anything away from these folks the way it works is that you want the bankruptcy trustee to marshal all the assets of the estate once you conclude that a mere continuation claim is the is an asset of the state because it's generalized would benefit all creditors you want that to be presumed but one of the assets of the estate is not the entitlement of the personal injury plaintiffs to be remunerated for their personal injury but that's not that's not personal injury claim against the debtor emerald I get the question the point here is though that there is a claim against anyone that the debtor or a successor but but again you're honor every if every if the successor liability claim that they have is the same as every other creditor you would be creating you'd be rewarding those creditors the successor liability is that's the successor liability claim is the same but the claim of the individuals is not no and that's what I mean I apologize about yeah well no you're you're the one that's complaining stop to hear that the difference is that the individual has a claim for damages to him yes for damages to the estate correct they're correct but the way that the individual does that is the individual goes after the state the individual nobody's denying the individual has their share to a pro-rider right at the estate and and one thing that is critical to keep in mind is that the insurance assets related ties to Dicell remained in the estate and are available to these folks and the state has been lifted and in fact in their lawsuits they have sued 30 other manufacturers so again I don't want you to get the impression that these folks are left without a remedy their remedy as as the remedy of any other creditor is for the the the debtor to go after the trustees to go after the pot of money and then distribute those in an equitably and orderly way against among the creditors of the estate very good mr. and now thank you very much rebuttal miss out isocin thank you your honors I would like to reiterate the impact of the food town case on how the court needs to decide the amount of this before the court today and I call the court to the attention of page 171 of that decision this court said in in addressing the buildings by jamey case in the buildings by jamey case consistent with our decision here under new jersey law an alter ego action is an equitable remedy it is not an independent cause of action it is not the main cause of action that my clients are bringing my clients are bringing a personal injury tort claim in the state court against the debtor as a nominal defendant and the mere continuation claim is the equitable remedy for the damages sustained because of those injuries and this court went on to say as a result the injury is personal to the appellance the pension plan in the food town case you know I still wonder this idea of allowing the plaintiffs though and again I'm sympathetic to the plaintiffs in this case to essentially get in the front of the line when it comes to distributing assets that should be available to all the creditors which is the purpose of the trustee if if the match all of the possible assets and then distribute those assets equitably amongst all the creditors but if if personal injury plaintiffs are then allowed to proceed with their claims that is to the disadvantage of other claim. Personal injury claimants are not going to participate like the general and secured creditors are participating from the trustees liquidating the assets of the estate the personal injury claimants are unliquidated contingent claims that have been sent back to the state court that they have stay-releaped to go pursue insurance proceeds or whatever whatever source of recovery those claimants can but just still going after Ameral and let's say you have the the situation Ameral is the person that you're suing right what Ameral is the debtor aroma is the third is the is the if I aroma aroma is the successor yeah you know I wonder how they got the same name so yeah yeah I think it was purposeful I don't know the information about that but you're suing aroma and and what if the hadn't been the what if the trustee had not settled all those cases with aroma and and aroma was still subject to being sued by other third by other creditors aroma would have the same argument that it if you're sent here if those creditors did not if those creditors did not have a particularized injury I mean the personal injury plaintiffs in this case are creditors aren't they absolutely and you're on your your credit questions my adversary about the quadriplegic and and the truck that claimant is in the same position as the diacetyl plaintiffs and would have the same right to go after whatever assets to recover for for his or her damages and you you uh uh for your personal injury claim you you don't share any part of the uh trustee is the same do not do not do not trustee if if there's a hit on successor liability and Amora is found to be a mere continuation of Emerald then any pot goes into the estate it's not a pot or it's not a pot not not for the plaintiffs it's not the plaintiffs but you have a client against the estate I apologize for interrupting your honor if my client if an individual diacetyl claimant gets an award for five hundred thousand dollars and it collects two hundred thousand dollars from the insurance company if you can can satisfy the rest of the damage claim if it's successful on the successor liability claim from aroma it's not a general hot it is a specific remedy to satisfy the diacetyl individual diacetyl plaintiffs damage awards thank you thank you very excellent our item is very difficult case that we will have to work on thank you will take

Emerald in rate Emerald getter and diacetyl plaintiffs and Ms. Isaacson Good morning. May I please the court Nancy Isaacson for the appellants I asshole claimants and I'd like to reserve three minutes for re-gluinal yes that's fine how do you pronounce it again excuse me how do you pronounce that chemical diacetyl diacetyl flavoring and butter popcorn all right May I please the court my clients the appellants here are a discrete group of holders of toward claims and I'll refer to them for purposes of this argument as the diacetyl claimants and they have asserted in various state court actions personal injuries against the debt or Emerald those injuries result from exposure to the chemical diacetyl Emerald manufactured and distributed that chemical and to avoid the liability to my clients Emerald sold demonstrably all of their assets the case pretty much we we've heard and adjusted how do you decide whether a client is generalized or individualized well what's the Citiquan oh of that determination this court already has determined the roadmap for making that determination in the the food town case the insurance the pension that wasn't a personal injury case it was not a personal injury case but the question was who is the injured party was the debtor injured or was it the pension plan and there is sufficient holdings in that case that make the roadmap for how this court should decide whether or not personal injury claimants have personal personalized claims with the equitable remedy to assert a successful liability is it dependent on who's getting sued excuse me does it depend on who's getting sued is it does it depend on whether the suit is against the debtor or whether it turns on who is injured is the debtor injured or is the individual claimants injured how would a recovery on your claim for successor liability against a moron not benefit all the creditors of Emerald generally it is an equitable remedy that's tied to the underlying personal injury claim of the individual diastyl claimants that's your claim against Emerald right but I'm talking about the successor liability claim against Imora how would claim for successor liability against a moral your claim not benefit all creditors it's too it's it's an equitable remedy to to compensate for the damages that the personal injury claimants suffered so can so can a contract creditor a commercial creditor those are just general one secured creditors you're on it they don't have particular ice claims how do you know well you're insecure too I mean why is one your position is that that underlying claim is not property of the trustee if the debtor is in bankruptcy that's correct why let me continue with Judge Barry's question what is why makes your claim individualized I'm a contract creditor I got stuck for $100,000 I feel pretty injured myself because my company has got stuck for $100,000 in bankruptcy why is it my claim as a as a contract creditor individualized because under New Jersey state law toward claimants with personal injury claims like presented in this case are given special and higher treatment and acknowledgement in litigation and they are treated differently and they are different than general and secure creditors. A contract claimant also could sue under let's say this is not in bankruptcy a contract claimant against a debtor not in bankruptcy could also sue on the theory of business continuation and succeeded successor liability. No I would suggest to the court that that contract creditor would have to have an underlying claim of some personal injury i.e a business tort some underlying personal claim. Trustee could of the trustee could sue that no you're on it Trustee could not sue the business tort on behalf of that that creditor you're not suggesting that to bring a claim of successor liability there must be a personal injury component there must be a personalized for a creditor to bring in a bankruptcy situation for a creditor to bring outside of the bankruptcy proceeding a successful liability claim against a successor in interest to the debtor there has to be a personal claim an underlying personal claim personal personal particularized claim like a business tort like a discrimination and employment claim a personal claim to that creditor not a general claim like a general in this case a trustee in bankruptcy on behalf of all the creditors who have filed a prusive claim including personal injury claimants as well as trade creditors why can't he sue umberl on the theory that they have that they're just successors to the predecessor business and uh that that uh uh all the creditor should uh now have a claim because it's the same company with another name if the trustee had a claim against aroma the respondent the appley here if the trustee thought that there is a claim that aroma is really the successor the alter ego the mere continuation of product line etc etc same personnel same creditors same everything the trustee that's an asset of the estate under 541 11 u.s.d. second 541 and that the trustee brings that claim the trustee settled this the claims against aroma as a fraudulent transfer claim as the motion as you'll see in the motion do you see the claim? the settlement was for a fraudulent transfer claim and then the settlement and the release language released had this very broad release to which a diacyl claim is subjected so the trustee would have resolved to do that but if the trustee did not settle that claim and and instead of settling it elected to pursue a business continuation product line continuation uh he would have that right to do on behalf of not only the personal injury uh claimants who filed proof of claim but as on the trade creditors as well contract creditors if the claim if the claim was one for alter ego meerkat a general claim like that yes or on our yes you the trustee would have the right to pursue that kind of claim because they they do seem like they're so personal you know the injuries involved and when when you get money for your injuries you're compensating an individual for the injuries that must stay but you're suggesting now an answer to this question that the trustee can bring all of those claims against no I'm sorry I'm sorry I may have misunderstood Judge Collins question the trustee can bring the claim on behalf of the debtor and the debtor estate if there is damage to the debtor by the conduct of aroma for the benefit of the credit the personal injury claim is not personal injuries for more no that the trustee has no right to bring personal injury claims business to reclaims for the missing the right personal injury claims against or against immoral correct pending in the bankruptcy they were they're a creditor in the bankruptcy case against the state relief against the law tomorrow yeah uh you acknowledge that all this is based on whether or not they're a successor product line liability under new Jersey state law if we were to hold your favor that this is a personal claim not a generalized claim you acknowledge to you not that you still must prove in state court you have our decision have no effect upon whether in fact you have a meritorious product line successor claim in state court that would you not to prove that separated apart from our determination that this is a personal not a generalized claim that's correct Your honor however I'd like to correct your statement we are not the d'Asl claim is due not a leg of product line defect claim against aroma we're looking to to assert the equitable remedy of successful liability on aroma which this court in the food town case said is is very appropriate but my basic point is that any decision by us and your favor does not resolve whether or not you have a meritorious claim in state court correct your honor that's for the state court to determine can can you talk about McCain you're familiar with the king the king yeah and the statement there that claims based upon successor liability should be asserted by the trustee on behalf of law creditors that statement was made in conjunction with the nature of the claims that were asserted in that litigation you mean the decision is based on the nature of the crime that it was because of what yes because the underlying claim was as opposed to whether the trustee has the right to bring all claims for the benefit of all the creditors the court needs to understand the nature of the claim that was being pursued in the in the keen litigate in the keen case and that was a chapter five trustee bankruptcy court cause of action it was not a particular claim of a creditor is it your is it your point that because your claim involves torsious conduct or it's a personal injury tort if therefore it's individualized and therefore it is not part of the state correct your honor there I don't think that the bankruptcy court or the district court or my app or aroma disagrees that the personal injury claim is a personalized claim I don't think that's not the issue the issue is whether the equitable remedy that we that are diacyl claim and seek to pursue a successful liability liability to compensate for those injuries is property of the estate you cite one case to show that personal injury cases asserting successor liability are not property of the estate right that was the RDM holdings case there yes and that was a case that applied Michigan law which is different in this connection than New Jersey or New York law there is there are so you don't really have there are no case there's there's there's really no case law out there that directly addresses this issue we have the food town case which is a guide on how to analyze who's the injured party who gets to assert the claim and whether or not it's an acidity of the estate and that case was cited just for to show the court that there is some there is something out there that has addressed it but there really are no cases that are directly that there's a whole lot of case well but that was the one case you cited and the problem is that this is a this is a claim against Ameral it's a claim against the third party what about the other creditors what if what if they had claims against the third party why should you in a sense jump a line why should you have priority why why should you then take first from that third party to the disadvantage of all the other creditors indicate in the bankruptcy I would suggest to the court that if one of the creditors that your honors is speaking about was a victim of employment discrimination or had a had a personal tort claim against the debtor that creditor could pursue aroma on the same theory that the diastole claim is represented and it's and it's in that this particular debtor just happened to have had this is the body of creditors it has general unsecured creditors and it has personal injury creditors okay I am not unsympathetic to the problem that is presented in this case by these individuals who suffered serious personal injury and don't appear to have recourse but nonetheless what is the rule that we would be looking to state if we give you the right to sue here a third party in other cases then you have personal injury claimants would then be given priority I suppose over all other it's not prior to rule no it's not priority your honor it's allowing it's allowing the tort claimants to avail themselves of state law and pursue the claims and state law yeah but and it's not it's it's not giving priority because other creditors have claims against a moral why would you be able to go after a moral and and take those assets to the disadvantage of other creditors who may have whatever types of claims they may have contractual claims for example because the code the code the bankruptcy code is is in place to equalize distribution to unscrupulous creditors okay so we general general general and to equalize to monetize assets of the estate and distribute them pro-rattards to the extent that they exist to general and secure creditors with the recovery with the money that you recover going to a pot or would that go to the individual goes to the individual and as as an aside to this argument the debtor filed a chapter seven bankruptcy petition so the tort claimants here the diastinal claimants do not have the protections that it would have had had with respect to insurance and channeling and equal distribution of of insurance proceeds all of the claim the tort claimants we're not in that situation here we chapter seven debtors corporate debtors that have these tort claims against them are not obligated to provide a trust or another mechanism in order to satisfy these general general but the bank trustee can the bank of trustee could also file a claim against umora can on a business continuation of access reliability theory can can he not the trustee way that claim in conjunction with its settlement of the fraudulent transfer I know but I'm I'm asking as a matter of law the trustee could file a file could file could have if he didn't settle a case file a business continuation claim against which is the same claim that you're individually no it's not your honor what is it if that's by question what is the difference between the trustee as representative of all those creditors claim for business continuation and you're claimed as an individual when you're already you filed a proof of claim in the bankruptcy the trustee has a has the duty to monetize assets of the estate the assets of the estate include causes of action whether they're under the bankruptcy code or whether they're under a state law why doesn't it include the cause of action for individual tort that these people were exposed to that is a personal claim that is not a claim that the trustee has standing to pursue only tell me why that's that's your position what facts make that individual and the contract the tradesman's claim for goods sold and delivered not individual there was no disagreement either at the trial court or from my or from a Roma that the general and secured creditor body is a general and secured creditor and they are the ones that the trustee is in place to monetize assets to satisfy and your one of the general it's not anymore before before you filed your application you were you filed a proof of claim excuse me you filed a proof of claim so before you went and filed a third party actions you were a general and secured credit like a trade tradesman but sets the diastole claimants apart is that the diastole claimants obtained sterile leave under 366 section 362 and agreed to pursue only assets that it could recover in the state court and would not go and recover against the assets that are recovered by the data there are no facts unique to you that would be different from other credit there are absolutely unique facts the personal injuries it's not a new jersey state long remeer it established continuation took a continuation of tomorrow there are no facts unique to you that would distinguish you from other creditors in terms of the successor liability theory honestly you know I don't know because we haven't done no no discovery on that topic however what I will say is that this is not the cause of action it's not a cause of that cause of action it's not an independent cause of action for successor liability it's an equitable remedy and that there's a difference between asserting successor liability or alter ego or mere continuation or piercing the corporate bail as a primary cause of action versus as an equitable remedy to satisfy a damage claim would it be the case that if somebody has a breach of contract action against this third party that they too could proceed with that breach of contract came and say this is individualized and we should be able to pursue no because the contract creditors or general and secure creditors their injury is just the same as their injury their damage is just the same as if the debtor didn't pay it's it's Xerox bill so what's the difference between your claim here and buildings by Jamie and and teen and teen as matter of fact was an asbestos injury type case but the cause of action that that to which they they wanted to attach the successor liability claim was the trust was a fraudulent conveyance action not the asbestos claim had they sued had those claim and sued they had that they pursued their asbestos claim they would have been fraudulent it was a fraudulent trust not an individualized but you have to get over to the other side of the room you have you have somebody part of me you want a little bit more regular thank you you honor just to land down thank you you honor made please the court i'm Chris landow and i'm here today for a robot i'd like to begin by addressing the question the judge cowon before you address that question educate us on what is the difference how do you determine whether something is individualized or a generalized claim that's exactly your question that i was going to address that's the question i was about to say they were on the same way on the same way because that is the critical question and the answer is is it a claim that could be pursued by all other creditors in other words the question is is it a generic successor liability claim or is it some kind of a particularized one that is unique that involves facts or relationships that are special to that particular creditor i think this goes back to a question the judge very asked a moment ago the opposing counsel's successor liability claim here this is very critical is a mere continuation claim there is nothing about their status as personal injury uh plant this that is unique to that claim they don't allege in particular that the product line exception uh is applicable that exception is unique to personal injury by the continuing business exactly but they don't fall within the product line exception because aroma the the the alleged successor does not has never manufactured uh diacetyl at any time before or after and they don't dispute that so that's why they have an alleged the one category of successor liability that might make them different and might be you know something your argument is good with and excellent but we're faced with the food town and although you might I I see that as being almost a hurdle which is very difficult here for you unless it goes a block uh because even though it was a different type of claim they're recognized in the food town the basic right of it of someone such as the uh plaintiffs of this case have this individual their claim is individual it's not like every trace of its claim sure well I certainly hope I can persuade you that food town you know it's why food absolutely in food town the the um the the creditors there that were trustees of the multi-employer pension plan they were pursuing an aristocrame that was special to them as trustees of that claim it was not a mere continuation claim that would apply to say the same thing their claim is not their claim is they got injured not not the not the body of credit no but you're on a let's not conflate the two claims you've got their underlying claim against the debtor right and nobody is disputing that their personal injury claim against emerald the debtor is individualized as is frankly every claim against the debtor and I think this goes back to some of the questions that were asked earlier if if I'm the landlord of the debtor I have an individualized claim to against the debtor that's not a generic claim contract claims are individualized claims everybody has an individualized claim against the debtor because everybody has some relationship that is not the same as every other creditor against the debtor there's some basis for recovery against the debtor again we're not talking here about the claim against the debtor we're talking here about the claim against the alleged successor in the food town case that the claim there was was an erissa successor liability claim the court made clear this was not a general generic state law successor liability claim this was a specific claim informed by a rissa principle the landlord of this debtor could not have brought that successor liability claim and by the way and putting aside parenthetically the fact that in food town the court noted that it was not proper to the state because that claim did not even arise until after the bankruptcy so that's a whole other reason to distinguish food town but again I think it's absolutely critical to understand the point that successor liability claims come in different shapes and sizes we are certainly not standing here today and saying that every single successor liability claim no matter what belongs to the trustee but you argue it on the one hand that personal injury products claim against the debtor are individualized correct while at the same time you're arguing that the identical claim asserted against the successor is a generalized claim that's that that I think is it can't be it can't be in both houses I with respect I disagree and I we pointed you to all these cases such as saying Paul and Cork that distinguish between the two claims in other words the the the one is the claim again you can't conflate the two claims and and I think there is something I would concede initially counterintuitive about thinking wait a second successor liability how is that kind of different and they make this argument they say it is inextricably linked to the underlying claim that you would acknowledge can be made if not this case what is what is it what give me some example sure of what food town is certainly individualized successor liability claim well that your your adversary's position and I don't know whether it's to be gainset is that a different setting but the same thing it's individualized to that person that has the personal injury just like in food town it was an individualized thing outside of the business but you're on again I think we just have to keep in mind the difference between the claim against the debtor which is individualized for food town one of their examples which you which you can see are individualized well if they if they were bringing a product line exception claim that is not a successor liability claim that could be brought by all creditors the landlord could not bring a product line exception claim their problem here and this is really the heart of the case that their successor liability claim and again whether you call it a claim or a theory of liability really doesn't matter the question is the state law for purposes of bankruptcy code section 541 defines property state very broadly and looks to state law so the question is the state law create some basis of liability if a parent acknowledged that if we were to hold in her favor I'm not saying we will or will not that that does that has nothing to do with whether or not she has a meritorious claim it's state court in other words that's for another day we don't decide whether or not they have a legitimate on the merits claim for whatever it is successor product line you know well that certainly but that does it but that doesn't solve the problem that we have to as to whether or not this is the individualized or generalized claim no the fact that you say that she may not have a merits claim because and I don't think she's claiming a product line I wasn't you need to say that you're on I'm sorry if I was not well if I was not clear on that she's not I don't think she's claiming that but whatever she's claiming for liability is is not for us we're only interested in whether or not I agree and I wasn't I was not wanting to tell me how this differs from food town again in food town food town is a classic example of a successor liability claim again let's let's keep the world divided into two parts one is claims against the debtor okay and food town had a claim against the debtor they filed a proof of claim yes just like a trace that claim and then we're recognized because their claim was different according to food town that that that they had a right to go outside of the settlement so to speak of a trustee correct but let me make clear you under we are not suggesting that their claims against the debtor emerald are are the property of the trustee we're only talking here my claim is a wrong claim is against the debtor or it's it's a little unclear there are or can be claims against emerald by the individual personal injury plaintiffs absolutely emerald the debtor they have that they have that in the estate absolutely are and they're pursuing that and the and the and the property of the estate here is you say the successor liability precisely precise and we yes and the reason and so that's the question is what is the property of the estate and to the extent the question is is the successor liability claim against emerald against aroma yes it's very confusing I wish this were like company and companies either very similar correct your honor that's exactly the key point that we're talking here about who who has the white really who has standing to bring a successor liability claim there's trustee have a right to sue on his all behalf for the personal injury of the plaintiffs in this case and no okay then if he does it who has that right the plaintiffs we know nobody is just reading so that's not that's not a property of the estate absolutely not absolutely not the question here is the successor liability it's the ability to estate okay to come and say we want to appears to be a we want to say something I don't see this being a question for us whether there is or is not successor liability I think your the appellant put that the rest we're just deciding we're not deciding whether they have it don't have no and I'm sorry again I am trying to talk about who has standing to pursue a successor liability claim so I'm not saying if the trustee does not have standing to pursue a claim on behalf of these plaintiffs but are the personal injury not a personal injury that's the key to for successor liability you see another way do the plaintiffs do have standing to bring the plaintiffs have standing to bring the personal injury claim against the debtor the debtor has standing to bring the successor liability claim against my client a romon for the benefit of all of the creditors not just personal injury creditors this is a generic mere continuation claim this benefits the landlord this benefits the contract person the nature of this particular successor liability claim but of course the plaintiffs can't sue the debtor the well the plaintiffs can sue the debt I mean they can pursue relief but they can't sue they actually have had the stay lifted to pursue individual lawsuits against the the debt or nominally and they're allowed to go after the insurance proceeds so the debt the plaintiffs in this case actually I think there was a statement made earlier that they have no records that's not a point you did say that not all successor liability claims are claims against your state not all successor liability again successor liability claims by definition are not claims against this day I think what I was trying to say at least is that not all successor liability claims are created equal some successor liability claims could be brought equally by all creditors those are generic ones if that is the case and if the estate can bring that claim as I believe it is undisputed that under New Jersey and New York law the estate the debtor has the ability to pierce its own corporate veil for the benefit of all its creditors and and so to the extent that that's true which is which is conceded here it the right to do that the right to bring that successor again we can't conflate the individualized nature of their personal injury claim against the debtor and then the right to pursue the successor against successor on successor liability and in that claim also assert the the injuries of the plaintiffs in this case because that that's not the answer question could he bring that type of claim could who bring that claim the trustee the trustee no no the successor so excuse excuse he could bring a claim on behalf of all creditors but and a trade creditor then might be reabersed if it's successful but he the trustee cannot bring a claim and as part of that claim seek a on behalf of the estate the damages which have caused to the the personal injury of these claimants again that's not well again that would be subsumed because again the nature of the claim he would bring is a generic mere continuation claim if it's a mere continuation claim it's basically saying you are us you are responsible for the pot of money for all of our debts so that benefit how does that help the plaintiffs and how does that and how does that do anything for the personal injury plaintiffs if he's successful it's saying this is you're just another corporation with our name and therefore you're liable for it it opens the door it actually benefits all the door to what to to having basically all of emeral's assets the alleged successor available as funds of the estate okay but then but then somewhere in the line the plaintiffs the individual plaintiffs with personal injuries have to sue and prove liability on and any and any award precisely just just met it and any award would not go to the estate it would go to the individual plaintiffs well again the the the debtor has proven that the there's continuation liabilities exactly so that pot of money is then there then when the debtor so there's some pot of money what pot of money for the plaintiffs the plaintiffs have had proven there in title anything they have no judgment they have nothing well again you're on the they have a claim that's on on the on the right but I think that that goes to the how do you then what is the logistics of the remedy for the successor claim again we are starting here with the proposition and I I don't believe this is contested under state law that the debtor here could pursue this generic mere continuation claim which the nature of it says you know something you just changed the sign above the door you are liable for all the debtors that's so then you you quantify the damages to that I think you would have to be structured in a way that you couldn't necessarily quantify the damages for mere continuation until the the plaintiffs have made their claim against the debtor and the trustee is successful as continuation claim and gets a judgment how does that benefit the personal injury plaintiffs they don't have a judgment for anything they have an unadjudicated un uh un un undocumented claim that's unadjudicated but you're assuming that that that that the order is such that that's already all all finished I mean again you're talking though about me it could it seems to me that the damages in that mere continuation claim are basically or the remedy in that mere continuation claim is to open the pocket of the alleged successor for all of the debts of the debtor that's what a mere continuation is it says basically you are the same thing this is there there's no real distinction here so suddenly it's like how does the how does the plaintiffs the uh the personal injury plaintiffs get remuterated they prove their case against the debtor again that nobody is disputing that they have a cause of action against the debtor that is personal to them just like a creditor so what you're doing here is you're having the trustee bring this cause of action for the benefit of all creditors if you don't do that your honor you'll have the creditors in a race I think this was a question that judge flank this that's earlier they will be in a race to the courthouse to see who can get a very party first there was a dialogue in the uh in one of the proceedings in which the trustees of was referencing whether these claim tied in fact they released by the trustee when there was this negotiation and I suppose this global release of all claims and at the appendix page 1277 the attorney the trustees attorney said that the claim does not belong to this estate the trustee can't release are you familiar with that statement we are I think that it was uncontested your honor that the judge did not make a determination at the moment back of a second the trustee released all the claims that the trustee had on behalf of the estate that was part of the settlement but to suggest that the plaintiffs claims were not part of the package of this release well again and there was a a proviso added there that says really with the truism that this does not release claims that that are the property of the plaintiffs and are not property to state I mean that that goes without saying the trustee nobody denies attorney would rework the statement where it should be done over about don't you think well I think that the half of the trustee the critical point though your honor just for is that the bankruptcy court approved the settlement later made a statement in deciding actually the chief thought the property that the successor liability claims as well as the direct liability claims were their property the the bankruptcy court made clear and this is at page 1383 of the appended that at the time of approving the settlement so this was what the judge was thinking when she was approving the fairness of the settlement that released all of the trustees claims the court made no definitive ruling or finding at that time as to whether the claims that issue here fell within the estates release claims under the approved settlement but rather reserve her future date when that issue would arise that issue is currently raised so it's not as if there had been a determination one way or the other by the court is it the case that all personal injury towards no matter what what shape they take or what form of the nature and extent of the injuries are property against the debtor and now become property of the estate I don't think any personal injury claims against the debtor are property of the state emerald had a bunch of trucks that delivered the chemicals and one of those trucks ran over somebody and that person quadriplegic with massive injuries sure now that person wants to file a claim sure but of course emerald is now in bankruptcy right so they have the same right as the other creditors of emerald to get a their pro rata equitable share of emerald assets that would include but your position is they cannot now go under successive liability and go after emerald well again they can't go after aroma a role in a successor liability theory that could be brought by any other one because then you're creating a race to the courthouse again once you acknowledge that the bankruptcy trustee okay could they were the same same shoes as the plaintiffs in this case correct then again I would just refer you to the the the sample complaint and the appendix which is I can't not thinking it's a very harsh result I mean I'm suggesting that it's wrong but I really I honestly I hope I can persuade you otherwise because basically this is just the way the bankruptcy courts bankruptcy works that the nobody's taking anything away from these folks the way it works is that you want the bankruptcy trustee to marshal all the assets of the estate once you conclude that a mere continuation claim is the is an asset of the state because it's generalized would benefit all creditors you want that to be presumed but one of the assets of the estate is not the entitlement of the personal injury plaintiffs to be remunerated for their personal injury but that's not that's not personal injury claim against the debtor emerald I get the question the point here is though that there is a claim against anyone that the debtor or a successor but but again you're honor every if every if the successor liability claim that they have is the same as every other creditor you would be creating you'd be rewarding those creditors the successor liability is that's the successor liability claim is the same but the claim of the individuals is not no and that's what I mean I apologize about yeah well no you're you're the one that's complaining stop to hear that the difference is that the individual has a claim for damages to him yes for damages to the estate correct they're correct but the way that the individual does that is the individual goes after the state the individual nobody's denying the individual has their share to a pro-rider right at the estate and and one thing that is critical to keep in mind is that the insurance assets related ties to Dicell remained in the estate and are available to these folks and the state has been lifted and in fact in their lawsuits they have sued 30 other manufacturers so again I don't want you to get the impression that these folks are left without a remedy their remedy as as the remedy of any other creditor is for the the the debtor to go after the trustees to go after the pot of money and then distribute those in an equitably and orderly way against among the creditors of the estate very good mr. and now thank you very much rebuttal miss out isocin thank you your honors I would like to reiterate the impact of the food town case on how the court needs to decide the amount of this before the court today and I call the court to the attention of page 171 of that decision this court said in in addressing the buildings by jamey case in the buildings by jamey case consistent with our decision here under new jersey law an alter ego action is an equitable remedy it is not an independent cause of action it is not the main cause of action that my clients are bringing my clients are bringing a personal injury tort claim in the state court against the debtor as a nominal defendant and the mere continuation claim is the equitable remedy for the damages sustained because of those injuries and this court went on to say as a result the injury is personal to the appellance the pension plan in the food town case you know I still wonder this idea of allowing the plaintiffs though and again I'm sympathetic to the plaintiffs in this case to essentially get in the front of the line when it comes to distributing assets that should be available to all the creditors which is the purpose of the trustee if if the match all of the possible assets and then distribute those assets equitably amongst all the creditors but if if personal injury plaintiffs are then allowed to proceed with their claims that is to the disadvantage of other claim. Personal injury claimants are not going to participate like the general and secured creditors are participating from the trustees liquidating the assets of the estate the personal injury claimants are unliquidated contingent claims that have been sent back to the state court that they have stay-releaped to go pursue insurance proceeds or whatever whatever source of recovery those claimants can but just still going after Ameral and let's say you have the the situation Ameral is the person that you're suing right what Ameral is the debtor aroma is the third is the is the if I aroma aroma is the successor yeah you know I wonder how they got the same name so yeah yeah I think it was purposeful I don't know the information about that but you're suing aroma and and what if the hadn't been the what if the trustee had not settled all those cases with aroma and and aroma was still subject to being sued by other third by other creditors aroma would have the same argument that it if you're sent here if those creditors did not if those creditors did not have a particularized injury I mean the personal injury plaintiffs in this case are creditors aren't they absolutely and you're on your your credit questions my adversary about the quadriplegic and and the truck that claimant is in the same position as the diacetyl plaintiffs and would have the same right to go after whatever assets to recover for for his or her damages and you you uh uh for your personal injury claim you you don't share any part of the uh trustee is the same do not do not do not trustee if if there's a hit on successor liability and Amora is found to be a mere continuation of Emerald then any pot goes into the estate it's not a pot or it's not a pot not not for the plaintiffs it's not the plaintiffs but you have a client against the estate I apologize for interrupting your honor if my client if an individual diacetyl claimant gets an award for five hundred thousand dollars and it collects two hundred thousand dollars from the insurance company if you can can satisfy the rest of the damage claim if it's successful on the successor liability claim from aroma it's not a general hot it is a specific remedy to satisfy the diacetyl individual diacetyl plaintiffs damage awards thank you thank you very excellent our item is very difficult case that we will have to work on thank you will tak