Centric Brands Inc.

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
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In re: 	Chapter 11
Centric Brands, Inc., 	Case No. 20-22637 (SHL)
Debtor. 	(Confirmed)
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MEMORANDUM OF DECISION AND ORDER
Before the Court is a motion filed pro se by Alicia Allen in the above captioned case of
Centric Brands, Inc. (the “Reorganized Debtor” or the “Debtor”). See Objection of Alicia Allen,
dated March 26, 2022 [ECF No. 1061] (the “Reconsideration Motion”).1 The Reconsideration
Motion seeks the reconsideration of this Court’s prior Memorandum of Decision in In re Centric
Brands, Inc., 2022 WL 884191 (Bankr. S.D.N.Y. Mar. 25, 2022). For the reasons set forth
below, the Reconsideration Motion is denied.
DISCUSSION
Familiarity with the underlying facts of this matter is presumed, including with this
Court’s prior Memorandum of Decision granting the Debtor’s Objections to proofs of claim filed
by Ms. Allen. See generally In re Centric Brands, Inc., 2022 WL 884191. After the Court
entered that Memorandum of Decision on March 25, 2022, Ms. Allen filed her Reconsideration
Motion by email to the Court on March 26, 2022. See Reconsideration Motion. Ms. Allen
subsequently filed a Notice of Appeal with the District Court on March 28, 2022. See Notice of
Appeal [ECF No. 1062]. The Court “retains jurisdiction to decide [the Reconsideration Motion],
despite the subsequent filing of a notice of appeal.” In re Livecchi, 2014 WL 7013463, at *3
(Bankr. W.D.N.Y. Dec. 11, 2014) (citing In re Evans, AP No. 05–03017 at *3 (Bankr. N.D. Fla.
1 	Unless otherwise indicated, references to the Case Management/Electronic Case Filing (“ECF”) docket are
to Case No. 20-22637.
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2006) and 10 COLLIER ON BANKRUPTCY ¶ 8002.08 (Alan N. Resnick & Henry J. Sommer
eds., 16th ed.)); see also In re Actrade Fin. Techs. Ltd., 2009 Bankr. LEXIS 890, at *10 n.4
(Bankr. S.D.N.Y. Apr. 13, 2009) (retaining jurisdiction under Rule 8002(b) when the motion for
reconsideration and the notice of appeal were filed concurrently). As in Livecchi, Ms. Allen filed
her Notice of Appeal after she filed her Reconsideration Motion, and Federal Rule of Bankruptcy
Procedure 8002(b), “an adaptation of Rule 4(a) of the Federal Rules of Appellate Procedure,
suspends the time limits for appeals, where a timely motion is brought under Rule 9023 FRBP or
Rule 9024 FRBP.” In re Livecchi, 2014 WL 7013463, at *3 (citing Fed. R. Bankr. P. 8002(b)(2),
(3), and (4)). “Consequently, the appeal is merely suspended until the [Reconsideration Motion]
is decided by this Court.” Id.
A. Reconsideration
The Reconsideration Motion seeks relief under Rule 9023 of the Federal Rules of
Bankruptcy Procedure, which makes Rule 59(e) of the Federal Rules of Civil Procedure
applicable to cases under the Bankruptcy Code. See Fed. R. Bankr. P. 9023. Rule 59(e)
authorizes the filing of a “motion to alter or amend a judgment.” Fed. R. Civ. P. 59(e).
Reconsideration is “an extraordinary remedy to be employed sparingly in the interests of finality
and conservation of scarce judicial resources.” In re Health Management Sys. Inc. Sec. Litig.,
113 F. Supp. 2d 613, 614 (S.D.N.Y. 2000) (quoting Wendy’s Int’l, Inc. v. Nu–Cape
Construction, Inc., 169 F.R.D. 680, 685 (M.D. Fla. 1996)). The burden rests with the movant.
See In re Crozier Bros., Inc., 60 B.R. 683, 688 (Bankr. S.D.N.Y. 1986). The standard for
granting a motion to alter or amend a judgment under Federal Rule 59(e) is “strict, and
reconsideration will generally be denied. . . .” Analytical Surveys, Inc. v. Tonga Partners, L.P.,
684 F.3d 36, 52 (2d Cir. 2012) (quoting Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir.
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1995)). “A motion to amend the judgment will be granted only if the movant presents matters or
controlling decisions which the court overlooked that might have materially influenced its earlier
decision.” In Design v. Lauren Knitwear Corp., 1992 U.S. Dist. LEXIS 2203, at *3 (S.D.N.Y.
Feb. 24, 1992) (citing Morser v. AT & T Information Systems, 715 F. Supp. 516, 517 (S.D.N.Y.
1989); Travelers Insurance Co. v. Buffalo Reinsurance Co., 739 F. Supp. 209, 211 (S.D.N.Y.
1990)).
A motion under Rule 59(e) “must be narrowly construed and strictly applied in order to
discourage litigants from making repetitive arguments on issues that have been thoroughly
considered by the court.” Kim v. Bryant, 2021 U.S. Dist. LEXIS 165018, at *2 (S.D.N.Y. Aug.
27, 2021) (quoting Range Road Music, Inc. v. Music Sales Corp., 90 F. Supp. 2d 390, 391-92
(S.D.N.Y. 2000)). Such a request for relief “is not a vehicle for relitigating old issues, presenting
the case under new theories, securing a rehearing on the merits, or otherwise taking a ‘second
bite at the apple.’” Tonga Partners, 684 F.3d at 52 (quoting Sequa Corp. v. GBJ Corp., 156 F.3d
136, 144 (2d Cir. 1998)). Nor is it “an opportunity for a party to ‘plug[ ] the gaps of a lost
motion with additional matters.’” Cruz v. Barnhart, 2006 U.S. Dist. LEXIS 8368, at *4
(S.D.N.Y. Mar. 7, 2006) (quoting Carolco Pictures Inc. v. Sirota, 700 F. Supp. 169, 170
(S.D.N.Y. 1988)). “Arguments raised for the first time on a motion for reconsideration are
therefore untimely.” Cruz, 2006 U.S. Dist. LEXIS 8368, at *4 (citing Nat’l Union Fire Ins. Co.
of Pittsburgh, Pa. v. Stroh Cos., Inc., 265 F.3d 97, 115–16 (2d Cir. 2001)). “[I]t is improper for
the movant to present new material ‘because[,] by definition[,] material that has not been
previously presented cannot have been previously ‘overlooked’ by the court.’” In Design, 1992
U.S. Dist. LEXIS 2203, at *3 (quoting Consolidated Gold Fields, PLC v. Anglo Am. Corp. of
South Africa Ltd., 713 F. Supp. 1457, 1476 (S.D.N.Y. 1989)).
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In seeking reconsideration of the Court’s prior Memorandum of Decision, Ms. Allen
essentially argues that the Court did not address all the issues before it and that the Court
misinterpreted facts and evidence in the record. See Reconsideration Motion at 1–4. These
arguments are without merit. First, Ms. Allen argues that the Court failed to address her claim
that she was illegally terminated. Id. at 1. But as the Court found in the Memorandum of
Decision, Ms. Allen executed the Separation Agreement waiving such claims knowingly and
voluntarily, and her arguments that she signed the Separation Agreement under duress or
fraudulent inducement lacked merit. See In re Centric Brands, Inc., 2022 WL 884191, at *9–11.
Second, Ms. Allen correctly notes that the email she submitted as evidence to the Court—which
showed the Debtor’s Human Resources personnel encouraging her to seek medical attention—
was sent to her after she signed the Separation Agreement. However, this email—and the timing
of this email—was not a dispositive factor in the Court’s Memorandum of Decision. Rather, the
Court cited the email to provide context to the overall tone of the emails between Ms. Allen and
the Debtor’s HR personnel. See id. at 10. Based on the emails and this additional context, the
Court concluded that “[t]here is no evidence here that [the Debtor] used high pressure or
deceptive tactics; nor is there any evidence of a wrongful threat . . . [;] at all times, [Ms. Allen]
was free to reject the terms of the agreement, which [s]he did not.” Id. (internal quotations and
citation omitted). Third, Ms. Allen seems to assert that the Court mistakenly stated that she
received FMLA benefits, but the Court simply noted that HR personnel were responsive in her
requests to take leave under the FMLA, not that she received these benefits. Id. Finally, as
discussed in the prior Memorandum of Decision, Ms. Allen’s contention that she gave names,
dates, and locations as to when false promises were made aimed at fraudulently inducing her to
sign the Separation Agreement is also without merit. The emails that Ms. Allen submitted as
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evidence of these alleged false promises demonstrate only that the Debtor’s HR personnel were
responsive to Ms. Allen’s queries and are insufficient to “allege facts that give rise to a strong
inference of fraudulent intent.” Id. at 11 (quoting McCormack v. IBM, 145 F. Supp. 3d 258,
268–69 (S.D.N.Y. 2015)).
Accordingly, Ms. Allen has not met the burden necessary for reconsideration of the
Court’s Memorandum of Decision, and the Reconsideration Motion is therefore denied.
Given the filing of the Reconsideration Motion immediately after the Memorandum of
Decision, the Court did not enter an order to memorialize the Court’s Decision. With the
Reconsideration Motion decided, the Court now turns to that task.
B. Order Granting Reorganized Debtor’s Objection to Proof of Claim Numbers 469
and 1382 Filed by Alicia Allen
Upon the objection (the “Objection”)2 of Centric Brands LLC, the successor to debtor
Centric Brands Inc., (the “Reorganized Debtor”), for entry of an order (this “Order”) reducing and
allowing Claim No. 469 and disallowing and expunging Claim No. 1382 pursuant to sections
502(b) and 507 of the Bankruptcy Code, and rule 3007 of the Bankruptcy Rules as more fully set
forth in the Objection; and this Court having jurisdiction over this matter pursuant to 28 U.S.C. §§
157 and 1334; this Court having found that this is a core proceeding pursuant to 28 U.S.C.
§ 157(b)(2); and this Court having found that venue of this proceeding and the Objection in this
district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and due and sufficient notice of the
Objection having been given under the particular circumstances; and it appearing that no other or
further notice is necessary; and it appearing that the relief requested in the Objection is in the best
interests of the Reorganized Debtor, its estate, its creditors, and other parties in interest; and this
2 	Capitalized terms used but otherwise not defined herein shall have the meanings set forth in the Objection.
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Court having reviewed the Objection and having heard the statements in support of the relief
requested therein at multiple hearings before this Court (the “Hearings”); and this Court having
determined that the legal and factual bases set forth in the Objection and at the Hearings establish
just cause for the relief granted herein; and after due deliberation thereon; and good and sufficient
cause appearing therefor; and for the reasons set forth in the Court’s prior Memorandum of
Decision, In re Centric Brands, Inc., 2022 WL 884191, it is HEREBY ORDERED THAT:
1. 	The Decision entered on March 25, 2022 is adopted by this Order and incorporated
herein by reference.
2. 	The Allen Claims identified as Claim Nos. 469 and 1382 are reduced and allowed
and disallowed and expunged, respectively, as follows:
a. 	Claim No. 469 is reduced by $5,806.72 and allowed as an unsecured priority claim
in the gross amount of $5,330.35.
b. 	Claim No. 1382 is disallowed and expunged in its entirety.
3. 	Pursuant to the terms of the Claimant’s Severance Agreement, the Reorganized
Debtor shall pay the balance of the Severance Amount for Claim No. 469, and is permitted, but is
not required, to deduct withholding taxes, payments for social security, and other deductions from
the allowed gross claim of $5,330.35.
4. 	Prime Clerk LLC, the Reorganized Debtor’s noticing and claims agent, is
authorized to update the Claims Register to reflect the relief granted in this Order.
5. 	The Debtors are authorized to take all actions necessary to effectuate the relief
granted pursuant to this Order.
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6. 	The Court retains exclusive jurisdiction with respect to all matters arising from or
related to the implementation, interpretation, and enforcement of this Order.
7. 	The Debtor shall serve a copy of this Memorandum of Decision and Order on Ms.
Allen forthwith by overnight mail and email (if available) and file proof of such service on the
Case Management/Electronic Case Filing Docket within three days of such service.
IT IS SO ORDERED.
Dated: April 15, 2022
New York, New York
/s/ Sean H. Lane
UNITED STATES BANKRUPTCY JUDGE
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