AMR Corporation

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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
CASE NO. 11-15463-shl
- - - - - - - - - - - - - - - x
In re: 	Chapter 11
Case No. 11-15463
AMR CORPORATION, ET AL,
Debtors.
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United States Bankruptcy Court
One Bowling Green
New York, New York
B E F O R E:
HON. SEAN H. LANE
U.S. BANKRUPTCY JUDGE
Re Doc. #11941 (Modified Bench Ruling) Motion to Allow Late
Filed Claim to be entered as timely Filed by Gary Bryant
Re Doc. #11840 (Modified Bench Ruling) Objection of Debtors
Pursuant to 11 U.S.C. Section 502(b) and Fed. R. Bankr. P. 3007
to Proof of Claim Nos. 13478, 13788 and 13865 filed by Lawrence
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M. Meadows
A P P E A R A N C E S :
WEIL, GOTHAL & MANGES LLP
Attorneys for AMR Corporation, et al, Reorganized Debtor
200 Crescent Court
Suite 300
Dallas, TX 	75201
BY: 	STEPHEN A. YOUNGMAN, ESQ.
767 Fifth Avenue
New York, NY 	10153
BY: 	KEVIN H. BOSTEL, ESQ.
GARY BRYANT, PRO SE
VANDERBERG & FELIU
Attorneys for Lawrence M. Meadows
60 East 42nd Street, 51st floor
New York, NY 10165
BY: 	VINCENT J. ROLDAN, VANDERBERG & FELIU
MODIFIED BENCH RULING AS TO BOTH (I) GARY BRYANT AND
(II) LAWRENCE M. MEADOWS
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(I) 	GARY BRYANT
Before the Court is the motion of Gary Bryant for an
order deeming his proof of claim timely filed pursuant to Rule
9006(b)(1) of the Federal Rules of Bankruptcy Procedure and
Section 105(a) of the Bankruptcy Code. 	His motion is at ECF
No. 11941. 	He asserts that he did not receive adequate notice
of the bar date setting the deadline for filing claims in the
above Chapter 11 cases, and therefore, the Court should deem
his proof of claim timely filed.
In the alternative, he maintains that he meets the
excusable neglect standard to permit a late filed claim. 	For
the reasons that follow, the motion will be denied.
The background of this case is fairly simple.
Debtors filed the voluntary petition seeking relief under
Chapter 11 of the Bankruptcy Code on November 29, 2011. 	On
March 30, 2012, the debtors filed the motion seeking to
establish a deadline for filing proofs of claim. 	ECF No. 2086.
On May 4, 2012, the Court entered the bar date order,
which established July 16, 2012, as the bar date in the
debtors’ cases. 	ECF No. 2609.
On May 18, 2012, the debtors’ claims and noticing
agent served, by first class mail, the notice of deadlines for
filing proofs of claim, with an attached proof of claim dated
May 23, 2012. 	ECF 2888.
On May 18, 2012, the bar date notice was mailed to
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Mr. Bryant at 17484 Southwest 34th Court, Miramar, Florida
33029-5588, and it was not returned as undeliverable. 	ECF No.
3215.
On May 31, 2012, the debtors also had the bar date
notice published in ten publications, including the Wall Street
Journal, the New York Times, USA Today, and the Miami Herald.
ECF No. 3215.
On October 21, 2013, the bankruptcy court entered the
confirmation order in these bankruptcy cases. 	The effective
date of the plan was December 9, 2013. 	See ECF 11402.
Almost ten months after the bar date on May 8, 2013,
Mr. Bryant filed suit against AMR in the Southern District of
Florida, alleging that he was forced to resign from his
employment with AMR on September 18, 2011, due to race
discrimination and based on retaliation in violation of Title
VII. 	Bryant v. American Airlines, 2013-cv-21667, Dkt. 30.
After being served with Mr. Bryant’s complaint, AMR filed a
notice of suggestion of bankruptcy with the Florida court. 	Id.
Pursuant to 11 U.S.C. Section 362(a), the Florida court stayed
those proceedings.
Mr. Bryant moved to reopen the case in early January
2014. 	2013-cv-2166, Dkt. 13. 	In March of 2014, the Florida
court entered AMR’s motion to dismiss, agreeing with AMR that
Mr. Bryant’s claims were discharged and enjoined by the plan
and confirmation order, pursuant to Section 1141(d) of the
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Bankruptcy Code. 	Id. at Dkt. 30. 	On April 8, 2014, the
Florida court denied Mr. Bryant’s motion to reopen the case and
set aside the dismissal. 	Id. at Dkt. 32.
Mr. Bryant maintains again that he did not receive
adequate notice because he was not listed as an unsecured
creditor. 	He also relies on the fact that he was engaged in
mediation with AMR as an excuse for filing a late claim.
The standard of review has been well plowed by the
courts. 	A bar date order is an integral part in the
reorganization process. 	See In re Best Products Corp., 140
B.R. 353, 353-57 (Bankr. S.D.N.Y. 1992). 	It enables the
parties in interest to ascertain with reasonable promptness the
identity of those making claims against the estate, and the
general amount of the claims, which is a necessary step toward
achieving the goal of a successful reorganization. 	See id.
If individual creditors were permitted to postpone
indefinitely the effect of the bar date order, the
institutional means for ensuring the sound administration of
the bankruptcy estate would be undermined. 	See First Fidelity
Bank, N.A., v. Hooker Inv., Inc., 937 F.2d 833, 840 (2d Cir.
1991).
So the Court turns first to the issue of whether Mr.
Bryant was provided with adequate notice. 	The constitutional
standard for due process requires that known creditors in a
bankruptcy case receive actual notice of the bar date. 	See New
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York v. N.Y., N.H. & H.R. CO., 344 U.S. 293, 296-97 (1953)
(finding that known creditors must be afforded notice
reasonably calculated under all the circumstances to apprise
them of the pendency of the bar date.). 	In re R.H. Macy & Co.,
161 B.R. 355, 359 (Bankr. S.D.N.Y.) (citing Mullane v. Cent.
Hanover Bank & Trust Co., 339 U.S. 306 (1950)).
Unless a creditor is given reasonable notice of the
bankruptcy proceeding and relevant bar dates, its claim cannot
be constitutional discharged. 	See Grant v. U.S. Home Corp.,
223 B.R. 654, 658 (Bankr. S.D.N.Y. 1998).
In Chapter 11, therefore, a known creditor must
receive adequate notice before its claim is barred forever.
See In re Best Products Corp., 140 B.R. at 357. 	A bar date is
strictly enforced except when a known creditor is not listed on
the schedules and fails to receive actual notice of the bar
date. 	Id. at 358.
It is also well settled law that proof that a letter
was properly addressed and placed in the mail system creates a
presumption that the letter was received in the usual time by
the addressee. 	See Hagner v. U.S., 285 U.S. 427, 430 (1932)
(demonstrating how old this so-called “mail box rule” is).
Thus, upon proof of mailing of a properly addressed letter, a
rebuttable presumption of receipt arises. 	See In re R.H. Macy
& Co., 161 B.R. at 359.
Federal courts in New York have held “quite
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uniformly” that an affidavit of non-receipt is insufficient to
rebut the presumption of receipt created by proof of mailing.
See Cablevision Systems Corp. v. Malandra (In re Malandra), 206
B.R. 667, 673 (Bankr. E.D.N.Y 1997); In re R.H. Macy & Co., 161
B.R. at 360 (opining that movant’s respective self-serving
submissions asserting non-receipt are insufficient to rebut the
presumption of receipt); see also In re Horton, 149 B.R. 49, 58
(Bankr. S.D.N.Y. 1992), (noting that affidavits of creditor’s
employees are merely general denials that a creditor received
the notice, and therefore insufficient to rebut the
presumption).
It is possible under certain circumstances to rebut
the presumption of mailing. 	It does require, however, that
testimony denying receipt be accompanied by detailed evidence
to rebut the presumption, and that evidence includes things
like tracking procedures to catalog the receipt of mail. 	See
Hogarth v. N.Y. City Health & Hospice Corp., No. 97-CV-0625,
2000 WL 375242 (S.D.N.Y. Apr. 12, 2000). 	In Hogarth, the
defense successfully rebutted the presumption that the letter
was delivered by clearly establishing the use of detailed logs
of incoming and outgoing mail that contained no record of the
letter in question. 	See also In re Robinson, 228 B.R. 75, 82
(Bankr. E.D.N.Y. 1998), (ruling that “although the mere denial
of receipt does not rebut the presumption, testimony denying
receipt in combination with evidence of a standardized
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procedure for processing mail can be sufficient to rebut the
presumption.”).
Courts in the Second Circuit do not take this issue
lightly, given the important functions served by the bar date
in bankruptcy cases. 	This heightened burden recognizes that if
a party was permitted to defeat the presumption of receipt of
notice resulting from the certificate of mailing simply by
giving an affidavit to the contrary, the scheme of deadlines
and bar dates under the Bankruptcy Code would come unraveled.
See In re R.H. Macy & Co., 161 B.R. at 360 (quoting In re Trump
Taj Mahal Assoc., 156 B.R. 928, 939 (Bankr. D.N.J. 1993)).
Applying these principles here, the debtors have
submitted evidence that establishes actual notice was provided
to Mr. Bryant. 	More specifically, the debtors provided
evidence that the bar notice was mailed to Mr. Bryant and was
not returned as undeliverable. 	Moreover, the address where Mr.
Bryant was served is the same address that Mr. Bryant provided
in his motion.
Mr. Bryant has not provided sufficient evidence to
overcome the mailbox presumption here, including any evidence
regarding the tracking of his mail. 	Therefore, the Court deems
that the debtors have met their burden of providing Mr. Bryant
with actual notice of the bar date.
It is not entirely clear why the debtors considered
Mr. Bryant to be a known creditor that should receive actual
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notice of the bar date. 	I suspect it is likely because the
events that formed the basis of a Florida lawsuit in the
proposed claim here, took place before the bankruptcy filing,
and were likely the subject of some administrative proceeding.
But in the unlikely event that one considered Mr. Bryant an
unknown creditor, the notice standard would be even lower, and
would be satisfied here as well.
More specifically, the debtors would have provided
Mr. Bryant with adequate notice as an unknown creditor by
publishing the bar date, as they did, in ten local and national
publications. 	See In re BIG, Inc., 476 B.R. 812, 824 (Bankr.
S.D.N.Y. 2012) (holding that publication in the New York Times
provided adequate notice to unknown creditors).
Moving on to the excusable neglect issue, the Court
notes that even assuming that actual notice of the bar date had
been provided, a late filed claim is permissible if the
creditor can establish excusable neglect. 	The standard for
excusable neglect is found in Bankruptcy Rule 9006(b)(1), which
provides that the Court may, for cause shown at any time in its
discretion, on motion made after the expiration of a specific
period, permit the late act to be done where the failure to act
was the result of excusable neglect. 	F.R.B.P. 9006(b)(1).
Under the standard, the Court cannot find, however, that the
movant’s late filed claim is permissible.
The Supreme Court has observed that the term
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excusable neglect, in its ordinary sense, means to give little
attention to or respect to a matter, or to leave undone or
unattended to, especially through carelessness. 	Pioneer Inv.
Servs. v. Brunswick Assocs., 507 U.S. 380, 388 (1993). 	Pioneer
is the case that is cited as the alpha and the omega on the
excusable neglect standard. 	Neglect encompasses both simple
faultless omissions to act, and more commonly, omissions caused
by carelessness. 	Id. at 388. 	Whether claimant’s neglect of a
deadline is excusable, however, is an equitable determination.
Id. at 395.
The Court should consider all the relevant
circumstances, including the dangers of prejudice to the
debtor, the length of the delay, and the delay’s potential
impact on the judicial proceedings. 	Id. at 395. 	In addition,
the Court should consider the reason for the delay, including
whether it was in the reasonable control of the movant, and
whether the movant acted in good faith. 	Id. at 395.
The Second Circuit has adopted a strict standard on
excusable neglect. 	See Asbestos Personal Injury Pl.’s v.
Travelers Indemnity (In re John Manville Corp.), at 476 F.3d
118, 120-24 (2d Cir. 2007); Midland Cogeneration Venture LP v.
Enron Corp. (In re Enron Corp.), 419 F.3d 115, 122 (2d Cir.
2005) (stating that the Second Circuit has taken “a hard line”
in applying the Pioneer test).
As the Court in Enron noted, the equities rarely, if
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ever, favor a party who fails to file within the clear dictates
of a court rule, and where the rule is entirely clear, we
continue to expect that a party claiming excusable neglect
will, in the ordinary sense, lose under the Pioneer test. 	See
in re Enron, 419 F.3d at 123.
Although courts consider all of the Pioneer factors,
the hard-line approach focuses mainly on the reason for the
delay and whether it was within the reasonable control of the
claimant. 	Id. at 122. 	This is usually because the other
Pioneer factors ordinarily weigh in favor of the parties
seeking an extension. 	Id.
Focusing on the central Pioneer factor here, Mr.
Bryant contends that he did not receive adequate notice because
he was not listed in the Chapter 11 schedule of liabilities and
was not personally notified of the bar date order. 	As
discussed above, however, the Court has concluded that he did
receive adequate notice of the bar date, based on the evidence
I have before me and the mailbox presumption.
Moreover, he offers no other explanation for the
delay other than the mediation in which he was involved. 	But
as to the mediation, he points to no facts about that mediation
that would excuse his failure to file a claim. 	And given all
these facts, the reasons for delay weigh against the movant.
The Court next considers the length of the delay and
its potential impact on the judicial proceedings. 	There is no
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bright line governing when the lateness of a claim is
substantial. 	Id. at 128. 	Instead courts consider the degree
to which the delay might disrupt the judicial administration of
a particular case. 	Id. 	Thus, the length of the delay,
the complexity of the case, and the progress made in a case are
all relevant considerations, but none are dispositive on their
own. 	Id. at 128-29.
Here, the length of the delay is significant. 	This
motion was filed more than a year-and-a-half after the Court
entered the bar date order. 	Courts have recognized such delays
as substantial. 	See In Re AMR Corp., 429 B.R. 660, 667 (Bankr.
S.D.N.Y. 2013) (finding a three-month delay to be substantial).
Furthermore, the claim here would be disruptive to
the administration of the case because the debtors are well
advanced in these Chapter 11 cases, having confirmed the plan
and already begun to make distributions to holders of allowed
claims and equity interests.
Lastly, the Court considers the danger of prejudice
to the debtors if the Court allows the late filed claim.
Courts have often recognized the danger of opening the
floodgates to potential claimants, particularly in large cases
such as these. 	See, e.g., In re Enron Corp., 419 F.3d at 132,
n.2 (noting that courts in this and other circuits regularly
cite the potential flood of similar claims as the basis for
rejecting late filed claims); see also In re Dana Corp., 2007
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Bankr. LEXIS 1934, at *19 (Bankr. S.D.N.Y. May 30, 2007).
Permitting this late filed claim here could help to
open the floodgates to other creditors who failed to timely
file their claims. 	That would result in disruption of the
administration of these Chapter 11 cases, particularly given
that the debtors have begun to make distributions.
Finally, while not raised by Mr. Bryant, the Court
considers if any documents that he filed might be considered an
informal proof of claim. 	An informal proof of claim is an
equitable remedy available where a creditor fails to comply
with the technical procedures for filing a proof of claim, but
still took some action to preserve its interest, and put the
debtors on notice of a claim. 	See In re M.J. Waterman &
Assocs., 227 F.3d 604, 608-09 (6th Cir. 2000); see also In re
Residential Capital LLC, 12-12020, 2014 WL 3057111 (Bankr.
S.D.N.Y. July 7, 2014) (finding a creditor’s initiation of an
adversary proceeding before the bar date sufficient to qualify
as an informal proof of claim); see also In re Dana Corp., 06-
10354, 2008 WL 2885901, at *3 (Bankr. S.D.N.Y. July 23, 2008)
(applying an informal proof of claim concept in a Chapter 11
case).
An informal proof of claim must meet certain
requirements. 	First, it must have been timely filed with the
bankruptcy court and become part of the judicial record;
second, it must state the existence and nature of the debt;
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third, it must state the amount of the claim against the
estate; and fourth, it must evidence the creditor’s intent to
hold the debtors liable for the debt. 	See In re Enron
Creditors Recovery Corp., 370 B.R. 90, 99 (Bankr. S.D.N.Y.
2007).
Courts may grant relief to a creditor that provides
the requisite claim information in a non-standard form, but
that relief is limited to documents filed before the expiration
of the applicable bar date. 	See In re Lehman Bros. Holding,
433 B.R. 113, 121-22 (Bankr. S.D.N.Y. 2010), aff’d 445 B.R. 130
(Bankr. S.D.N.Y. 2011).
Applying these standards here, there is nothing
Mr. Bryant has done that would qualify as an informal proof of
claim. 	While he states in his motion that he was engaged in
mediation with the debtors, nothing related to that process
resulted in a bankruptcy filing that would have given the
debtors notice of the claim. 	Therefore, the Court finds that
the movant has not filed an informal proof of claim.
For all these reasons, the Court finds that
Mr. Bryant received adequate notice of the bar date and has
failed to demonstrate that his late filed claim was a product
of excusable neglect. 	Accordingly, the Court denies the
motion. 	The Court sympathizes with Mr. Bryant’s circumstances
and appreciates his efforts at representing himself, and I will
note again that I thought he did a fine job of representing
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himself. 	But as a Judge, I am required to apply the law even
if it means that I must often be the bearer of bad news. 	I
will enter an order that is consistent with this bench ruling.
(II) LAWRENCE M. MEADOWS
Moving on to the other matter, before the Court is the
objection of the debtors to proofs of claim numbered 13478,
13788 and 13865, which were filed by Lawrence M. Meadows, as
well as the response of Mr. Meadows to that objection. 	See ECF
Nos. 11840 and 11919.
The debtors’ objection has essentially two parts.
The debtors first object to Mr. Meadows’s original proof of
claim for long-term disability benefits, arguing that they have
prevailed on these issues in federal court proceedings in
Florida, and the United States Court of Appeals for the
Eleventh Circuit.
Second, the debtors object to Mr. Meadows’s amended
proofs of claim. 	Debtors argue that these amended proofs of
claim are untimely because they were filed months after the bar
date order in these bankruptcy cases, and that the additional
relief sought in these amended proofs of claim does not relate
back to the one timely filed claim or to anything else.
For the reasons that I will explain, the debtors’
objection is granted.
The background to this present dispute is
complicated. 	Mr. Meadows is a former American Airlines pilot
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and received long-term disability benefits from 2004 through
December of 2007 when those benefits were terminated. 	See
Objection, ¶ 11; Meadows’s Response, ¶ 1. 	That termination was
upheld in an administrative appeals process with American’s
Pension Benefits Administrative Committee on June 10, 2008.
See Objection ¶ 12. 	Later, Mr. Meadows was placed on unpaid
sick leave status, and was ultimately terminated from his
employment at AMR on October 24th, 2011. 	See Meadows’ Response
¶ 3; Objection ¶ 15.
Mr. Meadows commenced various proceedings and
lawsuits in connection with both the termination of his long-
term disability benefits and the termination of his employment
with American Airlines. 	A brief description of some of these
cases is necessary to understand the objection now before the
Court.
The first and most relevant of these proceedings
relates to the termination of Mr. Meadows’s long-term
disability benefits. 	In 2008, Mr. Meadows sought a review of
the termination of his disability benefits via the
administrative appeals process with the Pension Benefit
Administration Committee (the “PBAC”). 	The PBAC issued a final
denial of disability benefits in June of 2008. 	See Objection
¶ 12.
In July of 2010, Mr. Meadows filed a lawsuit against
the debtors, the PBAC, and American’s Pilot Retirement Benefit
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Program. 	That lawsuit was filed in the United States District
Court for the District of Florida, seeking recovery of long-
term disability benefits. 	That case was Case No. 1:10-cv-22175
and I will refer to that generally as the “ERISA action” as it
was a complaint for disability benefits.
In 2011, the Florida court granted summary judgment
in favor of American concluding that “based on the facts, the
language of the plan, and the relevant medical records, the
Court finds that even if Mr. Meadows’s termination of benefits
could be regarded as a de novo wrong, the decision was not
arbitrary and capricious and thus, must be affirmed.” 	See
Meadows v. American Airlines, 2011 U.S. Dist. LEXIS 30839 at
*67 (S.D. Fla., Mar. 24, 2011).
Mr. Meadows appealed that ruling to the Eleventh
Circuit, which affirmed the Florida court’s ruling. 	See
Meadows v. American Airlines, Inc., 520 F. App’x 787 (11th Cir.
2013).
In March of 2014, Mr. Meadows filed a motion with the
Florida District Court to reconsider its March 2011 decision
under Rule 60(b) of the Federal Rules of Civil Procedure. 	See
10-CV-22175, Dkt. 89. 	That motion was denied by the Florida
District Court on May 14, 2014. 	See id. at Dkt. 94.
That information described Mr. Meadows’s first
relevant proceeding. 	The second relevant proceeding of
Mr. Meadows is the so-called SOX action, with the term SOX
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referring to the Sarbanes-Oxley Act. 	That action began
September 12, 2011, when Mr. Meadows filed a complaint with the
Occupational Safety and Health Administration of the United
States Department of Labor (“OSHA”). 	That complaint alleged
that the debtors retaliated against him for reporting corporate
fraud by threatening to terminate his employment.
As the Department of Labor’s investigation of such
matters is not covered by the automatic stay, the matter moved
forward. 	See 11 U.S.C. § 362(b)(4).
In December of 2012, the Secretary of the Department
of Labor found that there was no reasonable cause to believe
that the debtors violated the statute. 	See Debtor’s Reply,
¶ 7. 	Then in February of 2013, Mr. Meadows administratively
appealed the Department of Labor’s decision and the matter was
then assigned to an administrative law judge. 	That matter is
currently pending.
Mr. Meadows’s third relevant proceeding is so-called
Grievance 12-011. 	In that grievance, Mr. Meadows sought to
grieve the “improper assertions and actions” with respect to
his employment status, seniority and discharge. 	Obj. Ex. B,
Grievance 12-011. 	Mr. Meadows’ request for grievance was made
pursuant to Section 21 of the relevant collective bargaining
agreement that he was employed under between the pilots and the
debtors.
The crux of Mr. Meadows’s complaint appears to be
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that he was never contacted by nor received a formal notice
from any supervisor with respect to his employment status,
seniority, or discharge. 	In addition, the grievance referenced
the Americans with Disabilities Act, as well as his status as a
federal whistleblower under the Sarbanes-Oxley regulations.
On July 13, 2012, the Allied Pilots Association (the
“APA”), which is the collective bargaining representative of
Mr. Meadows, filed its own proof of claim, and that proof of
claim is number 8331. 	That proof of claim included Mr.
Meadows’s Grievance 12-011, as well as many other grievances by
many other employees.
The APA subsequently entered into a settlement
agreement with the debtors that extinguished all claims,
including APA Claim 8331, with the exception of very specific
grievances. 	See Obj. ¶ 26, citing ECF No. 5800.
Mr. Meadows’s Grievance 12-011 was one such grievance
that was excluded from the APA settlement. 	See ECF No. 5626 at
516. 	In March of 2014, the APA filed an amended claim that
excluded Grievance 12-011 from the list of grievances that were
carved out of the settlement. 	See Obj. ¶ 27; Claim 13866. 	In
sum, the APA amended claim operated to extinguish Grievance 12-
011 by including it in the settlement, or at least that is how
it appears.
At the hearing on this matter, counsel for the APA
summed up the matter as follows: “The APA included Grievance
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12-011 among the list of 37 that were excepted from the overall
settlement on the equity side. 	The grievance then moved
through the process up to the pre-arbitration conference, in
which the parties made one final attempt to resolve grievances
and decide which go to arbitration and which don’t.
Unfortunately, no resolution was possible at which point the
APA decided, and in August of 2013, when it was decided, it
informed Mr. Meadows that it would not be taking this grievance
to arbitration because it did not allege a violation that the
arbitrator would have any jurisdiction over. 	At that point,
the process ended.” 	Hr’g. Trans. 70:16-71:2.
The debtors characterize Mr. Meadows’s Grievance 12-
011 as addressing whether the company acted properly in
terminating Mr. Meadows’s employment under the terms of the
collective bargaining agreement. 	Hr’g. Trans., Apr. 17, 34:20-
24. 	The debtors note that Mr. Meadows now has a pending
lawsuit to compel arbitration of that same grievance. 	Id. at
36:17-18.
Counsel for AMR confirmed that the process of fully
litigating Grievance 12-011, including this mediation
arbitration, is unaffected by the debtors’ objection. 	In other
words, Grievance 12-011 is on a “separate track, and the
debtors are not asking for any relief as to Mr. Meadows’s
ability to continue with that grievance, including dealing with
the union regarding the grievance.” 	Hr’g. Trans. 37:3-12.
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Instead, the Grievance will run its process under the union and
the CBA process outside this Court. 	Id. at 37:13-19.
Before moving on to the events of the bankruptcy
case, I just wanted to note that Mr. Meadows has also filed
other actions that were not included in the original or amended
claims. 	Those include an SEC whistleblower complaint, alleging
security fraud, and a third grievance based on a right of
special assignment to a non-flying position. 	Those proceedings
are not relevant for purposes of this ruling, but the Court
mentions them only to flush out the extensive litigation that
has occurred and is still occurring involving these parties.
Turning to the relevant events in these bankruptcy
cases, the debtors filed for relief under the Bankruptcy Code
in November of 2011. 	As I explained in the other bench ruling
this morning, the Court entered a bar date order establishing
July 16, 2012, as the bar date in these bankruptcy cases. 	See
ECF 2609. 	The bar date order clearly states that failure to
file a timely proof of claim will forever bar a party from
asserting such a claim against the debtors and their Chapter 11
estates. 	See ECF No. 2609, Annex I.
On March 20, 2012, Mr. Meadows filed his original
proof of claim for $470,340, with $338,000 listed as priority
and the balance as an unsecured claim. 	See Claim No. 1916.
This original claim was for “pilot long-term disability
payments.” 	No supporting documentation was submitted. 	See
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Obj. Ex. A at 1.
This was the only claim filed by Mr. Meadows before
the bar date. 	After the bar date, Mr. Meadows filed three
additional proofs of claim (collectively, the “Amended
Claims”). 	The first Amended Claim was filed approximately
eight months after the bar date in March of 2013. 	See Claim
13478. 	Claim 13478 sought “at least $500,000” for long-term
pilot disability, and “EECO charges including, but not limited
to wrongful termination and discrimination, SOX claim, et
cetera.” 	Id. 	Attached to the claim was a list of the
proceedings and various lawsuits of Mr. Meadows, including
various EEOC charges, the SOX action, the appeal of the
determination by the PBAC and Grievance 12-011. 	See Meadows’s
Resp. ¶ 11. 	Of the $5 million sought, $338,900 requested
priority treatment, leaving the balance of $161,100 as an
unsecured claim.
On January 24, 2014, approximately eighteen months
after the bar date, Mr. Meadows filed the second Amended Claim,
number 13788, which was identical to Claim 13478, except for
adding one additional proceeding, Grievance 13-064, which is
based on Mr. Meadows’s removal from American’s seniority list.
That grievance was filed in October of 2013, heard in February
of 2014, and denied on March 26, 2014. 	See Meadows’s Resp. ¶¶
45-48. 	Mr. Meadows has indicated that the APA refuses to
appeal Grievance 13-064. 	He will seek to compel arbitration.
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Two months later, Mr. Meadows filed the third Amended
Claim, number 13865, which corrected the amount of the claim
seeking priority status. 	The idea was that Claim Number 13788
was filed as a wholly unsecured claim.
Subsequent to these events, on October 21, 2013, the
Court entered an order confirming the Debtors’ Fourth Amended
Joint Chapter 11 plan. 	ECF 10367. 	The plan went effective
December 9, 2013, with the legal effect of discharging any and
all prepetition claims that arose against the Debtors, except
for those preserved by a properly filed proof of claim. 	See
id.
The legal standard here is straightforward. 	A
correctly filed proof of claim constitutes prima facie evidence
of its validity and the amount of the claim. 	To overcome this
presumption, the objecting party must provide evidence which it
believes would refute at least one of the allegations essential
to the claim. 	See In re Riley, 245 B.R. 768, 773 (2d Cir. BAP
2000). 	Upon such objection, the burden then shifts back to the
claimant to produce additional evidence to prove the validity
of the claim by a preponderance of the evidence. 	See In re
Rescap, 507 B.R. 477, 490 (Bankr. S.D.N.Y. 2014) (collecting
cases).
Bankruptcy Code Section 502(b)(1) provides that
claims may not be allowed to the extent that such claims are
unenforceable against the debtor and the property of the debtor
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under any agreement or applicable law. 	See id.
The Debtors argue that the long-term disability claim
asserted has been fully adjudicated and that it has been
determined that the debtors have no liability with respect to
those claims. 	See Obj. ¶ 30.
In his papers and at the hearing on the objection,
Mr. Meadows argued that the Eleventh Circuit’s affirmation of
the summary judgment ruling in favor of American Airlines was
“not finally adjudicated” within the meaning of the Bankruptcy
Code, given his then pending motion for reconsideration under
Rule 60(b) of the Federal Rules of Civil Procedure. 	The Rule
60(b) motion for reconsideration was then pending in front of
the Florida District Court. 	The parties at the hearing agreed
to wait for the final decision on the Rule 60(b) motion before
having the court rule on the long term disability component of
Mr. Meadows’s claim.
On May 14, 2014, the Florida Court entered its ruling
denying the motion for reconsideration. 	ECF No. 12017, Ex. A.
Given this latest ruling and other prior rulings of the Florida
District Court and the Eleventh Circuit, it is clear that the
issue of the termination of long-term disability insurance has
been fully litigated and resolved by the Florida District Court
and the United States Court of Appeals for the Eleventh
Circuit. 	In those proceedings, the Florida District Court and
the Eleventh Circuit ruled in favor of the Debtors on that
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issue. 	Given that undisputed fact, the Court agrees with the
debtors’ objection and finds it should be granted with respect
to the long-term disability issue, which is the subject of the
original proof of claim, but which is also mentioned in the
Amended Claims.
The Court turns now to the second issue: whether
additional matters in the Amended Claims filed in March of
2013, and January and March of 2014, should be barred as
untimely. 	These Amended Claims were filed eight, eighteen and
twenty months after the bar date respectively.
Courts in the Second Circuit apply a two-prong test
to determine whether to permit a post-bar-date amendment to a
timely filed proof of claim. 	See In re Barquet Group, Inc.,
477 B.R. 454, 464 (Bankr. S.D.N.Y. 2012).
The first prong, known as the relation-back
requirement, asks whether there was an assertion of a similar
claim or demand evidencing an intention to hold the estate
liable. 	Id. (quoting In re Enron Corp., 419 F.3d at 133).
This prong will be satisfied if the amendment: 1) corrects a
defect of form in the original claim; 2) describes the original
claim with greater particularity; or 3) pleads a new theory of
recovery based on the facts set forth in the original claim.
See In re Univo, 2012 Bankr. LEXIS 1089, at *7 (Bankr. S.D.N.Y.
Mar. 14, 2012) (citing In re Enron Corp., 419 F.3d at 133).
Keeping in mind the standards applicable under Rule
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15 of the Federal Rules of Civil Procedure for amendment, “the
central inquiry is whether adequate notice of the matters
raised in the amended pleading has been given to the opposing
party within the statute of limitations by the general fact
situation alleged in the original pleading.” 	See Slayton v.
Am. Express Corp., 460 F.3d 215, 228 (2d Cir. 2006). 	In
Slayton, the Second Circuit applied that principle and
considered whether the amendments were a “natural off shoot” of
the original pleadings. 	Id. at 228-29.
“Courts must subject post-bar-date amendments to
careful scrutiny to assure that there [is] no attempt to file a
new claim under the guise of an amendment.” 	Midland Cogen.’l
Venture Ltd. P’ship v. Enron Corp. (In re Enron Corp.), 419
F.3d 115, 124 (2d Cir. 2005) (quoting Integrated Res., Inc.,
157 B.R. 66, 70 (S.D.N.Y. 1993) (internal citations omitted).
Only if the amendment relates back, meaning the first
prong is satisfied, will the Court then apply the second prong,
which is to examine whether permitting the amendment would be
equitable. 	See In re Enron, 419 F.3d at 133. 	Under the
equitable prong, three factors must be considered. 	First,
whether the debtor or its creditors would be unduly prejudiced
by the amendment; second, whether the creditors would receive a
windfall from the disallowance; and third, whether the claimant
acted in good faith and can justify the delay. 	Id.
Turning to the relation-back to the original claim,
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the debtors argue that the Amended Claims do not satisfy the
requirements for relation-back. 	They also claim that
permitting the amendments would not be equitable. 	The debtors
note that the original claim does not arise from the same set
of facts as the Amended Claims. 	Specifically, the debtors
point out that the allegations pertinent to the SOX and the
EEOC actions occurred subsequent to the facts that give rise to
the ERISA claim, and therefore, cannot relate back.
As counsel for AMR correctly observed at the hearing,
“The original claim was based on a denial of long-term
disability claims that happened in 2007. 	The new claims and
late-filed amendments relate to actions that occurred in 2011
and forward.” 	Hr’g. Trans. 32:12-15. 	Moreover, the new claims
seek an amount that is more than ten times what was asserted in
the original claim: $500,000 versus $5 million. 	And, the
original claim failed to include any details of supporting
documentation that would put the debtors on notice that claims
beyond the simple long-term disability benefits were being
asserted. 	More specifically, the original claims specify the
basis for the $470,000 claim only as “long-term disability
benefits.” 	The parties agree that the reference to long-term
disability benefits in that claim refers to the ERISA action
that was pending in the Florida District Court, and eventually
in front of the Eleventh Circuit.
Mr. Meadows disagrees with this conclusion,
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contending that the original claim and new claims were all
based on the same set of facts: the denial of disability
benefits, the subsequent termination and the removal from the
pilot seniority lists.
But the mere framing of the issue that way explains
why the Court disagrees. 	Namely, the original claim dealt only
with the denial of the disability of benefits, and nowhere
mentioned termination or removal from the pilot seniority list.
Mr. Meadows’s assertions are also undercut by his concession
that the original claim did not preserve his EEOC or his SOX
claim. 	Hr’g. Trans. 59-60; Obj. ¶ 39. (noting Mr. Meadows’s
concession in a letter that “his SOX and EEOC claims were not
preserved in his original proof of claim.”). 	In fact, in a
letter to the APA, Mr. Meadows stated, “My federal SOX and EEOC
claims are not preserved by original proof of claim.” 	He went
on to say that his “SOX and EEOC claims were only preserved
with the bankruptcy court, as part of my preserved APA
Grievance 12-011.” 	Hr’g. Trans. 59-60.
At the hearing on this objection, the Court asked
counsel for Mr. Meadows to confirm that the admission was a
limited admission and preserved Mr. Meadows’s right that the
APA grievance relates back. 	But, it does seem to concede that
it was not pled or covered by the first claim. 	Counsel for Mr.
Meadows responded “that’s correct.” 	Id.
Now, the Court turns to Mr. Meadows’s reliance upon
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the rights preserved under Grievance 12-011 as a basis for
permitting his Amended Claims to go forward. 	The debtors do
not challenge the ability of Mr. Meadows to continue pursuing
his potential remedies under Grievance 12-011, and the debtors
include a provision to that effect in their proposed order on
this objection. 	See ECF No. 11840, Ex. F. (“Notwithstanding
the foregoing, Mr. Meadows shall be permitted to arbitrate
Grievance 12-011 before the System Board to the extent that
such arbitration is limited in scope to claims involving
interpretation of the [collective bargaining agreement] and
provides remedies, if any, and if appropriate that are
customary in the grievance procedures created by the Railway
Labor Act.”); see also Obj. ¶ 40 (“Furthermore, the AP claim
only preserves one of Mr. Meadows’s claims, i.e., Grievance 12-
011.”).
However, the debtors argue that the limited scope of
the grievance under the relevant collective bargaining
agreement does not provide a springboard for Mr. Meadows to sue
in this Court with respect to claims that were not presented in
his original proofs of claim. 	See Hr’g. Trans. 37:21-25.
The Court agrees with the debtors on this issue for
at least two independent reasons. 	First, the grievance process
covers only matters that are so-called “minor disputes”
regarding interpretation of the operative collective bargaining
agreement. 	This fact was confirmed by Mr. Meadows’s union
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representative, the APA at the hearing on this objection, and
by case law under the Railway Labor Act, which governs the
collective bargaining agreement involving Mr. Meadows, and
therefore, this grievance process. 	See Hr’g. Trans. 70:8-9
(APA’s counsel stated, “The purpose of a grievance is to
challenge an alleged violation of the contract.”); see also
Allied Pilots Ass’n v. AMR Corp., (In re AMR Corp.), 471 B.R.
51, 58 (Bankr. S.D.N.Y. 2012) (discussing the Railway Labor
Act, as well as the concept of “minor disputes.”).
Given the limited scope of the grievance to the
collective bargaining agreement matter, it follows that
Grievance 12-011 cannot somehow preserve Mr. Meadows’s right to
pursue the far more wide-ranging statutory claims set forth in
the Amended Claims. 	See generally Hawaiian Airlines v. Norris,
512 U.S. 246, 256 to 58, 1991 and Whitaker versus American
Airlines, Inc., at 285 F.3d 9940 at 946, an Eleventh Circuit
case from 2012 (both discussing “minor disputes” and what can
be grieved under the Railway Labor Act, along with the relevant
processes for such grievances).
As I said, there is also a second independent reason
to agree with the debtors. 	The decision-maker for Grievance
12-011 will ultimately decide what is appropriately within the
scope of that grievance. 	Whatever the decision-maker in that
grievance permits to go forward in the grievance process thus
is properly part of the grievance. 	What the decision-maker
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decides should not be part of the grievance is not. 	This, of
course, is all subject to whatever appellate rights the parties
have arising out of the grievance process. 	But the Court is
well aware that the decision-maker in this grievance process is
in a far better position than this Court to determine the
permissible scope of the grievance procedures.
At the end of the day, therefore, Mr. Meadows will
end up with whatever rights in the grievance process he should
have by virtue of Grievance 12-011, which is all that was
preserved by virtue of the APA settlement and reservation of
rights.
Finally, the Court rejects Mr. Meadows’ argument that
these Amended Claims should be permitted as late filed, based
on the concept of excusable neglect, which is encompassed in
Federal Bankruptcy Rule 9006(b)(1), which empowers a Court to
permit a late filing based on excusable neglect. 	See
generally, Pioneer Inv. Servs. v. Brunswick Assocs., 507 U.S.
380, 382 (1993). 	The claimant bears the burden of proving
excusable neglect. 	See In re Enron Corp., 419 F.3d at 121.
Again, although excusable neglect is not defined in
the Bankruptcy Code, the Supreme Court in the Pioneer case
recognized that the analysis parallels the equitable test for
amendments. 	See In re Calpine Corp., 2007 U.S. Dist. LEXIS
86514, at *14 (S.D.N.Y. 2007). 	As set forth in more detail in
today’s prior ruling regarding Mr. Bryant, a bankruptcy court
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should consider the danger of prejudice to the debtor, the
length of delay, the potential impact on judicial proceedings,
the reason for the delay, including whether it was in the
reasonable control of the movant, and whether the movant acted
in good faith. 	See Pioneer, 507 U.S. at 395-96.
The justification for delay is weighted most heavily.
See In re Enron Corp., 419 F.3d at 122-23. 	As noted earlier,
the Second Circuit takes a “hardline in applying the Pioneer
test.” 	See In re Enron Corp., 419 F.3d at 122.
Mr. Meadows points to his prior counsel to justify
the delay in filing the new claims. 	While the Court
sympathizes with Mr. Meadows’s frustration with his former
counsel, the Court rejects Mr. Meadows’s argument.
As Mr. Meadows’s papers concede, the case law is
clear that an attorney’s mistake does not ordinarily or even
necessarily constitute excusable neglect. 	See Pioneer, 507
U.S. at 396-97 (noting that claimants are responsible for the
acts and omissions of their counsel, and that inadvertence,
ignorance of the rules, and mistakes concerning the rules do
not usually constitute excusable neglect. 	See also In re North
New England Tel. Op’s. LLC, 540 B.R. 372, 381-82 (Bankr.
S.D.N.Y. 2014) aff’d sub nom In re N. New England Tel. Op’s.
LLC, 09-16365, 2014 WL 3952925.
Where, as here, the filing deadline is entirely
clear, a party claiming excusable neglect will, in the ordinary
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course, lose under the Pioneer test. 	See CVI GVF (LUX) MASTER
S.A.R.L. v. Lehman Bros. Holdings Inc., 445 B.R. 137, 141
(S.D.N.Y. 2011). 	Mr. Meadows has presented nothing to justify
a departure from this ordinary rule. 	Indeed the additional
Pioneer factors in this case only further support this result.
There has been a significant delay in filing the Amended
Claims. 	That delay was eight months, eighteen months, and
twenty months respectively, after the bar date. 	See In re AMR
Corp., 492 B.R. 660, 667 (Bankr. S.D.N.Y. 2013) (finding three
months to be a substantial delay).
In evaluating delay under Pioneer and its progeny,
courts also consider whether the plan of reorganization has
been filed or confirmed, and consider the delay in the context
of the proceeding as a whole. 	See In re Global Aviation
Holdings, Inc., 495 B.R. 60, 66 (Bankr. E.D.N.Y. 2013).
Here, we are approaching the one-year anniversary of
the confirmation of the plan. 	The case law recognizes that
there is a danger in opening the floodgates to potential
claimants at such a late juncture. 	See In re Enron Corp., 419
F.3d at 132, n.2 (2d Cir. 2005).
Moreover, the debtors set forth an additional basis
for prejudice here; namely, the settlement between the debtors
and the APA concerning a variety of matters, including
grievances such as Mr. Meadows’s. 	The debtors note that the
settlement at issue in this case would be partially undone by
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permitting the late-filed claims here. 	That is an additional
basis for prejudice, but is an independent basis, and my ruling
would be the same without it.
By considering all the Pioneer factors, the Court
concludes that there is not a sufficient basis to allow the
Amended Claims under the excusable neglect standard. 	For all
those reasons, the Court will grant the objection of the
debtors to proofs of claims 13478, 13788 and 13865, as set
forth in the debtors’ objection.
I will sign the order consistent with this bench ruling.
11-15463-shl Doc 12288 Filed 10/09/14 Entered 10/09/14 16:51:38 Main Document
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