Culligan Ltd. and Michael Morrison

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
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In re:
Chapter 15
CULLIGAN LTD., 1
Case No. 20-12192 (JLG)
Debtor in Foreign Proceedings.
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ERRATA ORDER REGARDING MEMORANDUM DECISION AND ORDER
ON MOTION FOR (I) RECOGNITION OF THE BERMUDA LIQUIDATION
AS A FOREIGN MAIN PROCEEDING AND (II) CERTAIN RELATED RELIEF
This matter having come up on the Court’s own motion, it is hereby ORDERED:
1. 	The Court’s Memorandum Decision and Order On Motion For (I) Recognition of the
Bermuda Liquidation as a Foreign Main Proceeding and (II) Certain Related Relief, dated
July 2, 2021 [ECF No. 58] (the “Memorandum Decision”) is corrected in the manner
described below:
a. 	The following footnote 3 on pages 2 and 3 of the Memorandum Decision:
The New York Plaintiffs are a group of minority shareholders of the Debtor: Culligan
Soft Water Company; Cecil R. Hall; C&D Of Rochester, LLC; Driessen Water, Inc.;
Michael A. Bannister; T&B Enterprises, Inc.; California Water & Filter, Inc.; Shar Sher I,
Inc.; Water Quality Improvement, Inc.; Culligan Southwest, Inc.; Carey Water
Conditioning, Inc.; Michael Carey; Eric B. Clarke; Culligan Water Conditioning (Barrie)
Ltd.; Arthur H. Cooksey, Jr.; Corbett’s Water Conditioning, Inc.; Glen Craven; Culligan
Water Conditioning Horicon, LLP; Henry T. Wood; Mayer Soft Water Co., Inc.;
Timothy Fatheree And Sue Fatheree; Clean Water, Inc.; Catherine Gilby; Canatxx, Inc.;
Quality Water Enterprises, Inc.; Robert R. Heffernan; Charles F. Hurst; Karger
Enterprises, Inc.; Keppler Water Treatment, Inc.; Robert Kitzman And Tracy Kitzman;
Ladwig Enterprises, Inc.; Richard Lambert And Marianne Conrad; Low Country Water
Conditioning, Inc.; Gina Larson; Michael G. Macaulay; Vetter’s, Inc.; Robert W.
Mccollum And Barbara N. Mccollum; Richard C. Meier; Donald E. Meredith;
Cleanwater Corporation Of America; John Mollman And Janette Mollman; The Good
Water Company Ltd.; E&H Parks, Inc.; Maumee Valley Bottlers, Inc.; Schry Water
Conditioning, Inc.; Schry Water Treatment, Inc.; Winslow Stenseng; Stewart Water
Conditioning, Ltd.; Bret P. Tangley; B.A.R. Water Corporation; Trilli Holdings, Inc.;
Bruce Van Camp; Walter C. Voigt And Charlotte P. Voigt; Marin H2o, Inc.; Allan C.
Windover; Everett Windover; Culligan Soft Water Service (Que) Inc.; G.R. Mccoy;
Richard N. Wendt; Richard Sample And Marie Sample; The Water Meister, Inc.; Alex
1 	Culligan Ltd. is a Bermuda exempted company registered with the Registrar of Companies in Bermuda under
registration number 35591. Culligan’s registered office is located at c/o KPMG Advisory Limited, Crown House,
4 Par-la-Ville Road, Hamilton, Bermuda.
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Connelly; Go Water, Inc.; Van D. Waugh; Melissa Grill; Petro's Water Conditioning Of
Johnson County, Inc.; Water Treatment Services Of Shelbyville, Inc.; Countryside
Management, Inc.; Gulf Coast Water Conditioning, Inc.; Adrian Water Conditioning,
Inc.; Canney’s Water Treatment, Inc.
shall be corrected to read as follows:
The New York Plaintiffs are a group of minority shareholders of the Debtor: Culligan
Soft Water Company; Cecil R. Hall; C&D Of Rochester, LLC; Driessen Water, Inc.;
Michael A. Bannister; T&B Enterprises, Inc.; California Water & Filter, Inc.; Shar Sher I,
Inc.; Water Quality Improvement, Inc.; Culligan Southwest, Inc.; Carey Water
Conditioning, Inc.; Michael Carey; Eric B. Clarke; Culligan Water Conditioning (Barrie)
Ltd.; Arthur H. Cooksey, Jr.; Corbett’s Water Conditioning, Inc.; Glen Craven; Culligan
Water Conditioning Horicon, LLP; Henry T. Wood; Mayer Soft Water Co., Inc.;
Timothy Fatheree and Sue Fatheree; Clean Water, Inc.; Catherine Gilby; Canatxx, Inc.;
Quality Water Enterprises, Inc.; Robert R. Heffernan; Charles F. Hurst; Karger
Enterprises, Inc.; Keppler Water Treatment, Inc.; Robert Kitzman and Tracy Kitzman;
Ladwig Enterprises, Inc.; Richard Lambert And Marianne Conrad; Low Country Water
Conditioning, Inc.; Gina Larson; Michael G. Macaulay; Vetter’s, Inc.; Robert W.
Mccollum And Barbara N. Mccollum; Richard C. Meier; Donald E. Meredith;
Cleanwater Corporation Of America; John Mollman And Janette Mollman; The Good
Water Company Ltd.; E&H Parks, Inc.; Maumee Valley Bottlers, Inc.; Schry Water
Conditioning, Inc.; Schry Water Treatment, Inc.; Winslow Stenseng; Stewart Water
Conditioning, Ltd.; Bret P. Tangley; B.A.R. Water Corporation; Trilli Holdings, Inc.;
Bruce Van Camp; Walter C. Voigt and Charlotte P. Voigt; Marin H2o, Inc.; Allan C.
Windover; Everett Windover; Culligan Soft Water Service (Que) Inc.; G.R. Mccoy;
Richard N. Wendt; Richard Sample and Marie Sample; The Water Meister, Inc.; Alex
Connelly; Go Water, Inc.; Van D. Waugh; Melissa Grill; Petro's Water Conditioning Of
Johnson County, Inc.; Water Treatment Services Of Shelbyville, Inc.; Countryside
Management, Inc.; Gulf Coast Water Conditioning, Inc.; Adrian Water Conditioning,
Inc.; Canney’s Water Treatment, Inc.
b. 	The following footnote 6 on pages 3 and 4 of the Memorandum Decision:
At the hearing on the Recognition Motion, the Court admitted the following declarations,
and all parties waived their rights to cross examine the declarants: Declaration of C.
Christian R. Luthi in Support of the Motion for (I) Recognition of the Bermuda
Liquidation as a Foreign Main Proceeding and (II) Certain Related Relief [ECF No. 6]
(the “Luthi Decl.”); Declaration of Charles Thresh in Support of the Motion for (I)
Recognition of the Bermuda Liquidation as a Foreign Main Proceeding and (II) Certain
Related Relief [ECF No. 7] (the “Original Thresh Decl.”); Declaration of Peter A. Singler
in Support of Objection of New York Plaintiffs to Chapter 15 Recognition of Foreign
Proceeeding (sic) [ECF No. 22] (the “Singler Decl.”); Reply Declaration of Charles
Thresh in Further Support of the Motion for (I) Recognition of the Bermuda
Liquidationas (sic) a Foreign Main Proceeding and (II) Certain Related Relief [ECF No.
26] (the “Reply Thresh Decl.”); Reply Declaration of David a. Berger in Further Support
of the Motion for (I) Recognition of the Bermuda Liquidation as a Foreign Main
Proceeding and (II) Certain Related Relief [ECF No. 27] (the “Reply Berger Decl.” and,
collectively with the Luthi Decl., the Original Thresh Decl., the Singler Decl., and the
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Reply Thresh Decl., the “Declarations”). In addition, the Foreign Representatives have
filed the Corporate Statement and Lists Pursuant to Federal Rules of Bankruptcy
Procedure 1007(a)(4) and 7007.1 and Local Rule 1007-3 [ECF No. 4] (the “Corporate
Statement”). Unless otherwise stated, the facts herein are based upon the Corporate
Statement and the Declarations.
shall be corrected to read as follows:
At the hearing on the Recognition Motion, the Court admitted the following declarations,
and all parties waived their rights to cross examine the declarants: Declaration of C.
Christian R. Luthi in Support of the Motion for (I) Recognition of the Bermuda
Liquidation as a Foreign Main Proceeding and (II) Certain Related Relief [ECF No. 6]
(the “Luthi Decl.”); Declaration of Charles Thresh in Support of the Motion for (I)
Recognition of the Bermuda Liquidation as a Foreign Main Proceeding and (II) Certain
Related Relief [ECF No. 7] (the “Original Thresh Decl.”); Declaration of Peter A. Singler
in Support of Objection of New York Plaintiffs to Chapter 15 Recognition of Foreign
Proceeeding (sic) [ECF No. 22] (the “Singler Decl.”); Reply Declaration of Charles
Thresh in Further Support of the Motion for (I) Recognition of the Bermuda
Liquidationas (sic) a Foreign Main Proceeding and (II) Certain Related Relief [ECF No.
26] (the “Reply Thresh Decl.”); Reply Declaration of David a. Berger in Further Support
of the Motion for (I) Recognition of the Bermuda Liquidation as a Foreign Main
Proceeding and (II) Certain Related Relief [ECF No. 27] (the “Reply Berger
Decl.” and, collectively with the Luthi Decl., the Original Thresh Decl., the
Singler Decl., and the Reply Thresh Decl., the “Declarations”). In addition, the
Foreign Representatives have filed the Corporate Statement and Lists Pursuant to
Federal Rules of Bankruptcy Procedure 1007(a)(4) and 7007.1 and Local Rule
1007-3 [ECF No. 4] (the “Corporate Statement”). Unless otherwise stated, the
facts herein are based upon the Corporate Statement and the Declarations.
c. 	The following footnote 9 on page 6 of the Memorandum Decision:
An Executive and Organization and Lability Policy (the “E&O Policy”) issued to
the Debtor is currently providing coverage for certain of the defense costs accrued
in the New York Action. Id. ¶ 43. However, the fees of the Foreign
Representatives in connection with their work supporting the effort of Debtor’s
counsel in the New York Action are not covered under the E&O Policy and are
therefore chargeable to the Debtor’s estate. Id. However, some, but not all, of the
Foreign Representatives' fees in connection with this chapter 15 proceeding will
be covered under the E&O Policy. Id. ¶ 44.
shall be corrected to read as follows:
An Executive and Organization and Liability Policy (the “E&O Policy”) issued to
the Debtor is currently providing coverage for certain of the defense costs accrued
in the New York Action. Id. ¶ 43. However, the fees of the Foreign
Representatives in connection with their work supporting the effort of Debtor’s
counsel in the New York Action are not covered under the E&O Policy and are
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therefore chargeable to the Debtor’s estate. Id. However, some, but not all, of the
Foreign Representatives' fees in connection with this chapter 15 proceeding will
be covered under the E&O Policy. Id. ¶ 44.
d. 	The following sentence on page 7 of the Memorandum Decision:
In part, the Liquidation Order provides, as follows:
 	Culligan Limited be wound up by this Court under the provisions of
the Companies Act 1981.
 	Mike W. Morrison and Charles Thresh of KPMG do continue as
joint liquidators of the Company, and in respect of any act which,
under the Companies Act 1981, is required to be done by a liquidator
or authorized by him, the joint liquidators may do such act or give
such authorization either jointly or by acting on behalf of both.
 	The period for convening for the first meetings of creditors and
contributors as set out in the Rules be and is hereby extended six
months from the date of this Order.
 	The costs of the Petitioner be paid out of the assets of the Company
as an expense of the liquidation.
Reply Berger Decl. ¶ 50; id. Ex. A.
shall be corrected to read as follows:
In part, the Liquidation Order provides, as follows:
 	Culligan Limited be wound up by this Court under the provisions of
the Companies Act 1981.
 	Mike W. Morrison and Charles Thresh of KPMG do continue as
joint liquidators of the Company, and in respect of any act which,
under the Companies Act 1981, is required to be done by a liquidator
or authorized by him, the joint liquidators may do such act or give
such authorization either jointly or by acting on behalf of both.
 	The period for convening for the first meetings of creditors and
contributors as set out in the Rules be and is hereby extended six
months from the date of this Order.
 	The costs of the Petitioner be paid out of the assets of the Company
as an expense of the liquidation.
Original Thresh Decl. ¶ 50; id., Ex. A.
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e. 	The following sentence on page 8 of the Memorandum Decision:
On April 29, 2013, upon their appointment in as joint liquidators of the Debtor in
the MVL, the Foreign Representatives, wrote to the New York Plaintiffs’ counsel
to inquire about the substance of the allegations in the First Amended Complaint,
and in subsequent correspondence, requested that the New York Plaintiffs take no
further action in light of the alleged change in control of the Debtor.
shall be corrected to read as follows:
On April 29, 2013, upon their appointment as joint liquidators of the Debtor in the
MVL, the Foreign Representatives wrote to the New York Plaintiffs’ counsel to
inquire about the substance of the allegations in the First Amended Complaint,
and in subsequent correspondence, requested that the New York Plaintiffs take no
further action in light of the alleged change in control of the Debtor.
f. 	The following sentence on page 10 of the Memorandum Decision:
In March 2020, the New York Court dismissed the New York Plaintiffs’ Fourth
Amended Complaint for failure to adequately plead that New York Plaintiffs had
made a demand on the Foreign Representatives or that it would have been futile to
have made such a demand.
shall be corrected to read as follows:
In March 2020, the New York Court dismissed the New York Plaintiffs’ Fourth
Amended Complaint for failure to adequately plead that the New York Plaintiffs
had made a demand on the Foreign Representatives or that it would have been
futile to have made such a demand.
g. 	The following sentence on page 13 of the Memorandum Decision:
See In re Millard, 501 B.R. 644, 653–54 (Bankr. S.D.N.Y. 2013) (noting that
“section 1517(a) imposes a mandatory requirement, in the first instance, for
recognition when its requirements have been met.”); see also In re Bear Stearns
High-Grade Structured Credit Strategies Master Fund, Ltd., 374 B.R. 122, 126-
27 (Bankr. S.D.N.Y. 2007) (hereinafter Bear Stearns I), aff'd, 389 B.R. 325
(S.D.N.Y. 2008) (hereinafter Bear Stearns II) (“[T]he recognition must be coded
as either main or nonmain.”); In re Oi Brasil Holdings Cooperatief U.S., 578 B.R.
169, 194 (Bankr. S.D.N.Y. 2017), reconsideration denied, 582 B.R.358 (Bankr.
S.D.N.Y. 2018) (“Recognition is mandatory if all three requirements of Section
1517(a) are met”).
shall be corrected to read as follows:
See In re Millard, 501 B.R. 644, 653–54 (Bankr. S.D.N.Y. 2013) (noting that
“section 1517(a) imposes a mandatory requirement, in the first instance, for
recognition when its requirements have been met”); see also In re Bear Stearns
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High-Grade Structured Credit Strategies Master Fund, Ltd., 374 B.R. 122, 126-
27 (Bankr. S.D.N.Y. 2007) (hereinafter Bear Stearns I), aff'd, 389 B.R. 325
(S.D.N.Y. 2008) (hereinafter Bear Stearns II) (“[T]he recognition must be coded
as either main or nonmain.”); In re Oi Brasil Holdings Cooperatief U.S., 578 B.R.
169, 194 (Bankr. S.D.N.Y. 2017), reconsideration denied, 582 B.R.358 (Bankr.
S.D.N.Y. 2018) (“Recognition is mandatory if all three requirements of Section
1517(a) are met.”).
h. 	The following sentence on page 14 of the Memorandum Decision:
They also complain that the that the Debtor did not commence this chapter 15
case to assist in an unfinished liquidation proceeding in Bermuda—which they
maintain is virtually completed.
shall be corrected to read as follows:
They also complain that the Debtor did not commence this chapter 15 case to
assist in an unfinished liquidation proceeding in Bermuda—which they maintain
is virtually completed.
i. 	The following sentence on page 18 of the Memorandum Decision:
See 11 U.S.C. § 1516(a) (“If the decision [commencing the foreign proceeding]
. . . indicates . . . that the person or body is a foreign representative, the court is
entitled to so presume.”); see also In re SphinX, Ltd., 351 B.R. 103, 116-17
(Bankr. S.D.N.Y. 2006) (hereinafter “SPhinX I”), aff’d sub nom., Krys v. Official
Comm. of Unsecured Creditors of Refco Inc. (In re SphinX Ltd.), 371 B.R. 10
(S.D.N.Y. 2007) (holding that section 101(24) of Bankruptcy Code was satisfied
where foreign representatives submitted a “copy of the Cayman Court’s order
appointing them to administer the [d]ebtors’ winding up under [Cayman law] and
authorizing their commencement of these chapter 15 cases”).
shall be corrected to read as follows:
See 11 U.S.C. § 1516(a) (“If the decision [commencing the foreign proceeding]
. . . indicates . . . that the person or body is a foreign representative, the court is
entitled to so presume.”). See also In re SPhinX, Ltd., 351 B.R. 103, 116-17
(Bankr. S.D.N.Y. 2006) (hereinafter “SPhinX I”), aff’d sub nom., Krys v. Official
Comm. of Unsecured Creditors of Refco Inc. (In re SPhinX Ltd.), 371 B.R. 10
(S.D.N.Y. 2007) (holding that section 101(24) of Bankruptcy Code was satisfied
where foreign representatives submitted a “copy of the Cayman Court’s order
appointing them to administer the [d]ebtors’ winding up under [Cayman law] and
authorizing their commencement of these chapter 15 cases”).
j. 	The following sentence on pages 25 and 26 of the Memorandum Decision:
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See In re Servicos de Petroleo Constellation S.A., 600 B.R. at 283-83 (“By virtue
of being incorporated in the BVI [the foreign debtor] is subject to the BVI’s laws,
regulations, and jurisdiction, including with respect to potential corporate
disputes.” Although Brazilian and Luxembourg law was relevant to the chapter 15
case, the court found that on balance, the factor weighed in favor of finding a BVI
COMI because “the company always maintains the direct governance of BVI
law.”); see also In re Betcorp, 400 B.R. at 292 (“The voluntary winding up is
being conducted pursuant to the Australian Corporations Act, and therefore this s
the law that would apply to most disputes.”).
shall be corrected to read as follows:
See In re Servicos de Petroleo Constellation S.A., 600 B.R. at 283-83 (“By virtue
of being incorporated in the BVI [the foreign debtor] is subject to the BVI’s laws,
regulations, and jurisdiction, including with respect to potential corporate
disputes.” Although Brazilian and Luxembourg law was relevant to the chapter 15
case, the court found that on balance, the factor weighed in favor of finding a BVI
COMI because “the company always maintains the direct governance of BVI
law.”); see also In re Betcorp, 400 B.R. at 292 (“The voluntary winding up is
being conducted pursuant to the Australian Corporations Act, and therefore this is
the law that would apply to most disputes.”).
k. 	The following sentence on page 39 of the Memorandum Decision:
Based on the foregoing analysis, the Court overrules the Objection, grants the
Recognition Motion, and finds that: (i) the Bermuda Liquidation is a foreign main
proceeding; the Foreign Representatives are the foreign representatives of the
Debtor, and (iii) the Chapter 15 Petition meets the requirements of section 1515 of
the Bankruptcy Code, without prejudice to the rights of the Foreign
Representatives to seek further relief under 11 U.S.C. § 1521 or the New York
Plaintiffs to seek relief from the automatic stay to continue the prosecution of the
New York Action.
shall be corrected to read as follows:
Based on the foregoing analysis, the Court overrules the Objection, grants the
Recognition Motion, and finds that: (i) the Bermuda Liquidation is a foreign main
proceeding; (ii) the Foreign Representatives are the foreign representatives of the
Debtor; and (iii) the Chapter 15 Petition meets the requirements of section 1515
of the Bankruptcy Code, without prejudice to the rights of the Foreign
Representatives to seek further relief under 11 U.S.C. § 1521 or the New York
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Plaintiffs to seek relief from the automatic stay to continue the prosecution of the
New York Action.
2. 	Future references to the Memorandum Decision shall be to the Memorandum Decision as
corrected hereby, a copy of which is attached hereto as Exhibit A.
Dated: July 14, 2021
New York, NY
/s/ James L. Garrity, Jr.
Honorable James L. Garrity, Jr.
United States Bankruptcy Judge
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