Portland Duck, LLC v. Duck Ventures, LLC et al

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UNITED STATES BANKRUPTCY COURT
DISTRICT OF MAINE
In re:
Portland Duck, LLC
Debtor
Chapter 11
Case No. 25-10205
Portland Duck, LLC
Plaintiff
v.
Duck Ventures, LLC
and
Splash Ventures, LLC
Defendants
Adversary Proceeding
No. 26-01004
ORDER GRANTING DEFENDANTS’ REQUEST FOR PERMISSIVE ABSTENTION
The plaintiff in this adversary proceeding—Portland Duck, LLC—is also a debtor in a
chapter 11 case. 	In that case, the Court confirmed Portland Duck’s plan of reorganization, and
that plan became effective a few days later. 	About three weeks after that, Portland Duck filed a
complaint to begin this adversary proceeding. 	The five-count complaint asserts state law claims
against the defendants, arising from a “Demise 	Charter Agreement with Exclusive Option to
Purchase” that involved Portland Duck and the defendants. 	The complaint does not assert
entitlement to relief under the Bankruptcy Code.
In response to the complaint, the defendants asked the Court to dismiss this adversary
proceeding [Dkt. No. 6]. 	See 	Fed. R. Civ. P. 12(b), 41(b); Fed. R. Bankr. P. 7012(b), 7041.
They contend that dismissal is warranted on 	multiple grounds—one being that this Court lacks
subject-matter jurisdiction over the claims in the complaint. 	See 	11 U.S.C. § 1334(b); Fed. R.
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Civ. P. 12(b)(1). 	And, if the Court were to conclude otherwise as to subject-matter jurisdiction,
the defendants ask that this Court exercise its discretion, under 28 U.S.C. § 1334(c)(1), to abstain
from deciding any matters presented in the complaint. 	In a written response, Portland Duck
opposed dismissal and, during a hearing on the defendants’ motion, added its opposition to
abstention.
Some additional background information is useful here. 	The circumstances depicted in
Portland Duck’s complaint occurred largely, if 	not entirely, before Portland Duck filed its
chapter 11 case. 	And, in that case, Portland Duck referenced its potential causes of action
against the defendants on its schedule of assets and in the confirmed plan—assigning a value of
“Unknown” to such assets. 	Under the plan, those assets were vested in Portland Duck on
confirmation, with no restriction on future disposition of the assets (e.g., no requirement to
pursue any cause of action or to seek Court approval of any settlement). 	The plan also showed
no apparent ability for Portland Duck to afford any significant litigation against the defendants.
The plan does, however, provide that a specific category of net proceeds from the causes of
action (i.e., net proceeds not encumbered by a specific bank’s lien) would be used to pay the
holders of allowed general unsecured claims. 	But no such net proceeds were factored into
Portland Duck’s projected disposable income or, 	in turn, included in the actual payment amounts
promised to the holders of allowed general unsecured claims. 	That is, the confirmed plan did
not and does not rely on any particular result 	from a cause of action—and any net proceeds that
might later flow to holders of allowed general unsecured claims would effectively be an
unexpected bonus.
Leading up to plan confirmation, one of the defendants (Duck Ventures, LLC)
participated in the handful of hearings on various fairly routine matters, raised objections to plan
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confirmation, and was granted limited relief from the automatic stay on the Court’s own motion
during a confirmation hearing. 	The other defendant did not participate in events in the chapter
11 case. 	And neither defendant filed a proof of claim.
This background from the chapter 11 case and other contextual factors would inform an
analysis of whether this Court has post-confirmation subject-matter jurisdiction over the claims in
the complaint. 	See, e.g., Boston Reg’l Med. Ctr., Inc. v. Reynolds (In re Boston Reg’l Med. Ctr.,
Inc., 410 F.3d 100, 106-07 (1st Cir. 2005).1 	The result of such an analysis would be a close call,
particularly where the debtor has reorganized its affairs and expects to continue conducting
business after emerging from chapter 11. 	That call, however, need not be made, as the Court is
persuaded that abstention would best serve the interest of justice here. 	See 	United States v. Paolo
(In re Paolo), 619 F.3d 100, 104 (1st Cir. 2010). 	Among other reasons, the parties’ briefs and
arguments reveal, quite clearly, that their dispute treads into unsettled areas of non-bankruptcy law.
Further, the chapter 11 case, which appears to be nearing its natural end, seemingly gave this Court
only a basic familiarity with the parties’ dispute—not such an in-depth primer that it would make
sense for this Court to venture forward (to the extent that it has subject-matter jurisdiction). 	The
better choice is to abstain, so that the parties can seek resolution elsewhere.
Thus, the defendants’ motion [Dkt. No. 6] is 	granted only to the extent that abstention
under 28 U.S.C. § 1334(c)(1) was requested. 	Accordingly, this Court necessarily expresses no
1 	During the hearing on the defendants’ motion, counsel to Portland Duck agreed that only the “related
to” prong of this Court’s jurisdiction under 28 U.S.C. § 1334(b) could apply to the claims in the
complaint. 	He also noted that the confirmed plan contained language about this Court retaining
jurisdiction over adversary proceedings. 	That language, however, did not cover all adversary
proceedings—only those commenced before the plan’s effective date, 	which this adversary proceeding
was not. 	In any event, as counsel also agreed, 	section 1334 rather than a plan’s language would
determine whether this Court has subject-matter jurisdiction. 	See 	Gupta v. Quincy Med. Ctr., 858 F.3d
657, 664 (1st Cir. 2017).
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view on Portland Duck’s claims or on the defendants’ asserted grounds for dismissal—or on the
parties’ arguments about where their dispute should 	be decided. 	The Court Clerk is directed to
close this adversary proceeding in due course.2
Dated: September 25, 2026
Michael A. Fagone
United States Bankruptcy Judge
District of Maine
2 	To the extent that this closure could be construed as an involuntary dismissal, such dismissal is without
prejudice.
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