itt educational services, inc., et al...case 16-07207-jmc-7a doc 3353 filed 04/26/19 eod 04/26/19...
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UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION IN RE: ) ) ITT EDUCATIONAL SERVICES, INC., et al.1 ) Case No. 16-07207-JMC-7A ) Debtors. ) Jointly Administered
TRUSTEE’S MOTION TO COMPROMISE AND SETTLE AVOIDANCE CLAIM AGAINST CAREERBUILDER, LLC d/b/a CAREERBUILDER.COM
Deborah J. Caruso, the chapter 7 trustee in this case (the “Trustee”), by counsel, pursuant
11 U.S.C. §§ 105 and 363 and Rule 9019 of the Federal Rules of Bankruptcy Procedure, requests
entry of an order authorizing the Trustee to compromise and settle all claims and causes of action
related to CareerBuilder, LLC d/b/a CareerBuilder.com (“CareerBuilder”), including but not
limited to, those claims and causes of action related to the Avoidance Claim (as defined below)
on the following grounds:
I. JURISDICTION
1. The Court has jurisdiction over this motion pursuant to 28 U.S.C. §§ 157 and
1334. This matter is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2).
2. Venue is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409.
3. The statutory predicate for relief are sections 105 and 363 of the United States
Code (the “Bankruptcy Code”) and Rule 9019 of the Federal Rules of Bankruptcy Procedure (the
“Bankruptcy Rules”).
1 The debtors in these cases, along with the last four digits of their respective federal tax identification numbers are ITT Educational Services, Inc. [1311]; ESI Service Corp. [2117]; and Daniel Webster College, Inc. [5980].
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II. BACKGROUND
4. On September 16, 2016 (the “Petition Date”), ITT Educational Services, Inc.
(“ITT”), ESI Service Corp. (“ESI”) and Daniel Webster College, Inc. (“Webster College,” and
together with ITT and ESI, the “Affiliated Debtors”) filed voluntary petitions for relief under
chapter 7 of the Bankruptcy Code. The Trustee was appointed interim trustee under section 701
of the Bankruptcy Code in each of the Affiliated Debtors’ bankruptcy cases on the Petition Date,
and in accordance with section 702(d) of the Bankruptcy Code, became the permanent case
trustee on November 1, 2016 following the conclusion of the meeting of creditors held pursuant
to section 341(a) of the Bankruptcy Code.
5. On October 4, 2016, the Court entered its Order Granting Motion for Joint
Administration of Chapter 7 Cases [Docs 221 & 222], directing the Affiliated Debtors’
bankruptcy cases to be jointly administered for procedural purposes only.
6. Prior to the Petition Date, CareerBuilder provided construction services to the
Affiliated Debtors in connection with the Affiliated Debtors’ operation of schools.
7. On June 29, 2018, the Trustee filed a Complaint to Avoid and Recover Transfers
Pursuant to 11 U.S.C. §§ 547, 548 and 550 and to Disallow Claims Pursuant to 11 U.S.C. § 502
(the “Complaint”) against CareerBuilder, Adversary Proceeding No. 18-50132 (the “Adversary
Proceeding”). In the Complaint, the Trustee seeks to avoid and recover, pursuant to chapter 5 of
the Bankruptcy Code, transfers received by CareerBuilder from the Affiliated Debtors in the
amount of $40,320.82 (the “Avoidance Claim”).
III. SETTLEMENT
8. In the interest of avoiding the uncertainties and expenses of further litigation, the
Trustee and CareerBuilder have reached a settlement, subject to Court approval, resolving all
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claims, including the Avoidance Claim. Attached and incorporated as Exhibit 1 is the Settlement
Agreement and Mutual Release (the “Settlement Agreement”) reflecting the agreement reached
by the Trustee and CareerBuilder.
9. The pertinent terms of the Settlement Agreement are as follows:
(a) CareerBuilder is to pay the Trustee the sum of $10,000.00 (the “Settlement Payment”) on or before May 17, 2019.
(b) CareerBuilder has agreed to waive any and all claims and/or claims for
administrative expenses it may have, asserted or unasserted, against the Affiliated Debtors or their bankruptcy estates, including but not limited to any right CareerBuilder may have under section 502(h) of the Bankruptcy Code to file a proof of claim (or to increase the amount set forth in an existing proof of claim) in the amount of the Settlement Payment. CareerBuilder shall not receive any distribution of any kind from the Affiliated Debtors’ bankruptcy estates in connection with this case.
(c) The Trustee and CareerBuilder on behalf of themselves and related
parties, do fully, finally and forever release, acquit and discharge each other and all of their officers, directors, employees, representatives, agents and professionals, and all of their respective successors and assigns, from any and all claims, demands, obligations, judgments, actions, causes of action and/or liability of every kind and nature whatsoever, known or unknown, suspected or unsuspected, fixed or contingent, which it ever had or now had against the other party, including but not limited to those arising out of or related to the Complaint.
(d) Following the Settlement Effective Date, the Trustee shall file a notice of
dismissal with prejudice in the Adversary Proceeding. 10. Because the Settlement Agreement provides for a full release of CareerBuilder
and is not limited to only those claims and causes of action related to the Avoidance Claim, the
Trustee has elected to opt out of the settlement procedures for avoidance claims previously
approved by the Court on May 30, 2018 [Doc 2556], and is seeking separate Court approval of
the Settlement Agreement.
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IV. RELIEF REQUESTED
11. The Trustee requests entry of an order, pursuant to sections 105 and 363 of the
Bankruptcy Code and Bankruptcy Rule 9019: (a) authorizing the Trustee, pursuant to the terms
of the Settlement Agreement, to compromise and settle all claims and causes of action related to
CareerBuilder, including but not limited to, those claims and causes of action related to the
Avoidance Claim; (b) approving the Settlement Agreement; and (c) authorizing the Trustee to
retain the Settlement Payment in the amount of $10,000.00 for the general administration by the
Affiliated Debtors’ bankruptcy estates.
V. GROUNDS FOR GRANTING RELIEF
12. A court may authorize a trustee to enter into a settlement so long as it is a sound
exercise of the trustee’s business judgment. See 11 U.S.C. § 363(b); In re UAL Corp., 443 F.3d
565, 571 (7th Cir. 2006) (use under section 363 of the Bankruptcy Code must “[make] good
business sense”); In re Schipper, 933 F.2d 513, 515 (7th Cir. 1991) (section 363 involves
exercise of fiduciary duties and requires an “articulated business justification”); see also In re
Olde Prairie Block Owners, LLC, 448 B.R. 482, 492 (Bankr. N.D. Ill. 2011) (same). Moreover,
when applying the “business judgment” standard to a use of estate property under section 363 of
the Bankruptcy Code, a trustee’s judgment is “entitled to great judicial deference as long as a
sound business reason is given.” See In re Efoora, Inc., 472 B.R. 481, 488 (Bankr. N.D. Ill.
2012).
13. Similarly, Bankruptcy Rule 9019(a) sets forth the requirements for compromises
and settlements and permits a bankruptcy court to approve a trustee’s “compromise or
settlement” after notice and a hearing, if such settlement is “fair and equitable . . . and in the best
interests of the bankruptcy estate.” Depoister v. Mary M. Holloway Found., 36 F.3d 582, 586
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(7th Cir. 1994); see also In re Energy Co-op., Inc., 886 F.2d 921, 927 (7th Cir. 1989) (“The
benchmark for determining the propriety of a bankruptcy settlement is whether the settlement is
in the best interests of the estate.”); In re Smith, No. 02-16450-JKC-7A, 2008 WL 4276171, at *2
(Bankr. S.D. Ind. Sept. 10, 2008) (same). Settlements should be approved unless “the settlement
‘falls below the lowest point in the range of reasonableness.’” In re Commercial Loan Corp.,
316 B.R. 690, 698 (Bankr. N.D. Ill. 2004) (quoting Energy Co-op., 886 F.2d at 929); In re
Doctors Hosp. of Hyde Park, Inc., 474 F.3d 421, 426 (7th Cir. 2007); see also In re Artra Grp.,
Inc., 300 B.R. 699, 702 (Bankr. N.D. Ill. 2003). Settlements and compromises are favored in
bankruptcy because they expedite case administration and reduce unnecessary administrative
costs. Fogel v. Zell, 221 F.3d 955, 960 (7th Cir. 2000). In determining whether a compromise is
in the best interests of the estate, the Court must compare “the settlement’s terms with the
litigation’s probable costs and probable benefits.” In re Am. Reserve Corp., 841 F.2d 159, 161
(7th Cir. 1987); see also Doctors Hosp., 474 F.3d at 426 (“Among the factors the court considers
are the litigation’s probability of success, complexity, expense, inconvenience, and delay,
including the possibility that disapproving the settlement will cause wasting of assets.”) (internal
quotation marks and citations omitted); Commercial Loan, 316 B.R. at 697 (holding that relevant
factors a bankruptcy court should consider in approving a settlement include “the litigation’s
probability of success, its complexity, and its ‘attendant expense, inconvenience and delay’”
(quoting Am. Reserve Corp., 841 F.2d at 161)).
14. The Trustee has determined the settlement terms based on the merits of
CareerBuilder’s defenses to the Avoidance Claim and the risk and expense to the Affiliated
Debtors’ bankruptcy estates if the Avoidance Claim was litigated. After review of
CareerBuilder’s defenses to the Avoidance Claim, the Trustee has determined the net transfer
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liability to be less than the total gross amount of the Transfers. As such, the terms of the
Settlement Agreement reflect a compromise between the parties, whereby CareerBuilder is
paying $10,000.00 towards the net transfer liability and waiving its right to receive a distribution
in this case. Based upon these considerations and the Trustee’s business judgment, the Trustee
respectfully submits that the Settlement Agreement is fair, equitable, in the best interest of the
Affiliated Debtors’ bankruptcy estates and within the range of reasonableness for approval under
Bankruptcy Rule 9019(a).
VI. NOTICE
15. Pursuant to the Notice, Case Management and Administrative Procedures (the
“Case Management Procedures”) approved by the Court on October 4, 2016 [Doc 220], the
Trustee will serve a copy of this motion on the following (as defined in the Case Management
Procedures): (a) the Core Group; (b) the Request for Notice List; (c) the Appearance List; and
(d) CareerBuilder.
NOTICE IS GIVEN, that pursuant to the Case Management Procedures, any objection to this motion must be in writing and filed with the Bankruptcy Clerk by no later than 4:00 p.m. (prevailing Eastern Time) on June 5, 2019. Those not required or not permitted to file electronically must deliver any objection by U.S. mail, courier, overnight/express mail or in person at:
116 U.S. Courthouse 46 East Ohio Street Indianapolis, IN 46204
The objecting party must also serve a copy of the written objection upon the Trustee’s counsel, at Counsel for Trustee Deborah J. Caruso, Rubin & Levin, P.C., 135 N. Pennsylvania Street, Suite 1400, Indianapolis, IN 46204. If an objection is NOT timely filed, the requested relief may be granted without a hearing. NOTICE IS FURTHER GIVEN that in the event an objection to this motion is timely filed, a hearing on this motion and such objection will be conducted on June 12, 2019 at 1:30 p.m. (prevailing Eastern time), in Room 325 of the United States Courthouse, 46 East Ohio Street, Indianapolis, IN 46204.
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WHEREFORE, the Trustee respectfully requests entry of an order: (i) authorizing the
Trustee, pursuant to the terms of the Settlement Agreement, to compromise and settle all claims
and causes of action related to CareerBuilder, including but not limited to, those claims and
causes of action related to the Avoidance Claim; (ii) approving the Settlement Agreement; (iii)
authorizing the Trustee to retain the Settlement Payment in the amount of $10,000.00 for the
general administration by the Affiliated Debtors’ bankruptcy estates, and (iv) granting the
Trustee all other just and proper relief.
Respectfully submitted,
RUBIN & LEVIN, P.C.
By: /s/ John C. Hoard John C. Hoard
Deborah J. Caruso (Atty. No. 4273-49) John C. Hoard (Atty. No. 8024-49)
James E. Rossow Jr. (Atty. No. 21063-29) Meredith R. Theisen (Atty. No. 28804-49)
RUBIN & LEVIN, P.C. 135 N. Pennsylvania Street, Suite 1400
Indianapolis, Indiana 46204 Tel: (317) 634-0300 Fax: (317) 263-9411 Email: [email protected]
[email protected] [email protected]
[email protected] Attorneys for Deborah J. Caruso, Trustee
CERTIFICATE OF SERVICE
I hereby certify that on April 26, 2019, a copy of the foregoing Trustee’s Motion to Compromise and Settle Avoidance Claim Against CareerBuilder, LLC d/b/a CareerBuilder.com was filed electronically. Pursuant to Section IV.C.3(a) of the Case Management Procedures, notice of this filing will be sent to the following parties through the Court’s Electronic Case Filing System. Parties may access this filing through the Court’s system.
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John Joseph Allman [email protected], [email protected] Richard Allyn [email protected] Robert N Amkraut [email protected] Scott S. Anders [email protected], [email protected] Manuel German Arreaza [email protected] Todd Allan Atkinson [email protected] Darren Azman [email protected] Kay Dee Baird [email protected], [email protected];[email protected] Michael I. Baird [email protected], [email protected] Christopher E. Baker [email protected], [email protected] James David Ballinger [email protected], [email protected] Joseph E. Bant [email protected] William J. Barrett [email protected], [email protected] Ashley Flynn Bartram [email protected] Alex M Beeman [email protected], [email protected] Thomas M Beeman [email protected] Richard James Bernard [email protected] Thomas Berndt [email protected], [email protected] John J Berry [email protected], [email protected] Lauren Beslow [email protected] Brandon Craig Bickle [email protected] Michael Blumenthal [email protected] David J. Bodle [email protected], [email protected] Robert A. Breidenbach [email protected] Wendy D Brewer [email protected], [email protected] Kayla D. Britton [email protected], [email protected] Robert Bernard Bruner [email protected] Jason R Burke [email protected], [email protected] Erin Busch [email protected] John Cannizzaro [email protected], [email protected] Kevin M. Capuzzi [email protected], [email protected];[email protected] James E. Carlberg [email protected], [email protected];[email protected] Steven Dean Carpenter [email protected] Deborah Caruso [email protected], [email protected];[email protected];[email protected] Deborah J. Caruso [email protected], [email protected] Joshua W. Casselman [email protected], [email protected];[email protected] Ben T. Caughey [email protected] Sonia A. Chae [email protected] John Andrew Chanin [email protected], [email protected] Courtney Elaine Chilcote [email protected], [email protected];[email protected] Dale C Christensen [email protected]
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Eboney Delane Cobb [email protected] Tiffany Cobb [email protected] Michael Edward Collins [email protected] Michael Anthony Collyard [email protected], [email protected] Eileen Connor [email protected] Lawrence D. Coppel [email protected] Heather M. Crockett [email protected], [email protected] J Russell Cunningham [email protected], [email protected] Erica Dausch [email protected] Melissa J. DeGroff [email protected], [email protected] Dustin R. DeNeal [email protected], [email protected] Laura A DuVall [email protected], [email protected] Stephen Emedi [email protected] Abby Engen [email protected], [email protected] Annette England [email protected] Charles Anthony Ercole [email protected], [email protected] Carolyn Meredith Fast [email protected] Elaine Victoria Fenna [email protected] Andrew W Ferich [email protected] Scott Patrick Fisher [email protected], [email protected] John David Folds [email protected], [email protected] Jennifer N Fountain [email protected], [email protected] Sarah Lynn Fowler [email protected], [email protected] Robert W. Fuller [email protected] Carlos Galliani [email protected] Jonathan William Garlough [email protected], [email protected];[email protected] Lisa Giandomenico [email protected] Lea Pauley Goff [email protected], [email protected] Barry S. Gold [email protected] John C Goodchild [email protected] Douglas Gooding [email protected] John Andrew Goodridge [email protected], [email protected];[email protected] Michael Wayne Grant [email protected] Richard Grayson Grant [email protected], [email protected] Alan Mark Grochal [email protected] Elizabeth N. Hahn [email protected], [email protected] Gregory Forrest Hahn [email protected], [email protected] Julian Ari Hammond [email protected], [email protected] Wallace M Handler [email protected], [email protected] William J. Hanlon [email protected] Adam Craig Harris [email protected] Brian Hauck [email protected] Jeffrey M. Hawkinson [email protected], [email protected] Michael J. Hebenstreit [email protected], [email protected];[email protected];[email protected] Amanda Marie Hendren [email protected]
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Claude Michael Higgins [email protected] Michael W. Hile [email protected], [email protected] Sean M Hirschten [email protected] Robert M. Hirsh [email protected] John C. Hoard [email protected], [email protected];[email protected];[email protected] Curt Derek Hochbein [email protected], [email protected];[email protected];[email protected] Jeffrey A Hokanson [email protected] Steven Howard Holinstat [email protected] Diana Hooley [email protected] Thomas Ross Hooper [email protected] George Wade Hopper [email protected], [email protected] Andrew E. Houha [email protected] Andrew W. Hull [email protected], [email protected] James C Jacobsen [email protected], [email protected] Christine K. Jacobson [email protected], [email protected] Jay Jaffe [email protected], [email protected] David Januszewski [email protected] Benjamin F Johns [email protected], [email protected] Russell Ray Johnson [email protected] Kenneth C. Jones [email protected] Anthony R. Jost [email protected], [email protected] David J. Jurkiewicz [email protected], [email protected];[email protected];[email protected] Timothy Q. Karcher [email protected] Alan Katz [email protected] Richard B. Kaufman [email protected] Carly Kessler [email protected] John M. Ketcham [email protected], [email protected] Taejin Kim [email protected] Edward M King [email protected], [email protected];[email protected] Roy F. Kiplinger [email protected], [email protected] Jackson Taylor Kirklin [email protected], [email protected];[email protected] James A. Knauer [email protected], [email protected] Kevin Dale Koons [email protected] Harris J. Koroglu [email protected], [email protected] Lawrence Joel Kotler [email protected] Robert R Kracht [email protected] Andrew L. Kraemer [email protected], [email protected] David R. Krebs [email protected], [email protected] Jerrold Scott Kulback [email protected] Jay R LaBarge [email protected] Darryl S Laddin [email protected] Michael J. Langlois [email protected], [email protected]
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Vilda Samuel Laurin [email protected] Jordan A Lavinsky [email protected] Todd Evan Leatherman [email protected] David S Lefere [email protected], [email protected] Anthony Darrell Lehman [email protected] Martha R. Lehman [email protected], [email protected];[email protected];[email protected] Gary H Leibowitz [email protected], [email protected];[email protected] Donald D Levenhagen [email protected] Elizabeth Marie Little [email protected] Edward J LoBello [email protected] Melinda Hoover MacAnally [email protected], [email protected];[email protected] Christopher John Madaio [email protected] John A. Majors [email protected], [email protected] Steven A. Malcoun [email protected] Jonathan Marshall [email protected] Thomas Marvin Martin [email protected] Jeff J. Marwil [email protected], [email protected];[email protected];[email protected] Richard J Mason [email protected] C. Ed Massey [email protected], [email protected] Ann Wilkinson Matthews [email protected] Rachel Jaffe Mauceri [email protected] Michael Wesley McBride [email protected], [email protected] Michael K. McCrory [email protected], [email protected] Maureen Elin McOwen [email protected] Harley K Means [email protected], [email protected];[email protected];[email protected] Toby Merrill [email protected], [email protected] Robert W. Miller [email protected] Sherry Millman [email protected] Jason Milstone [email protected] Thomas E Mixdorf [email protected], [email protected] Evgeny Grigori Mogilevsky [email protected], [email protected];[email protected] James P Moloy [email protected], [email protected];[email protected] Ronald J. Moore [email protected] Hal F Morris [email protected] Michael David Morris [email protected] Kevin Alonzo Morrissey [email protected], [email protected];[email protected];[email protected] Whitney L Mosby [email protected], [email protected] C Daniel Motsinger [email protected],
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[email protected];[email protected];[email protected] Lee Duck Moylan [email protected], [email protected] Joseph L. Mulvey [email protected], [email protected] Abraham Murphy [email protected] Justin Scott Murray [email protected] Alissa M. Nann [email protected], [email protected] Henry Seiji Newman [email protected] Kevin M. Newman [email protected], [email protected] Cassandra A. Nielsen [email protected], [email protected],[email protected];[email protected] Ryan Charles Nixon [email protected] Isaac Nutovic [email protected] Michael O'Donnell [email protected] Gregory Ostendorf [email protected], [email protected] Weston Erick Overturf [email protected], [email protected];[email protected] Pamela A. Paige [email protected], [email protected] Kenneth Pasquale [email protected] Eric Pendergraft [email protected], [email protected];[email protected] Danielle Ann Pham [email protected] Anthony Pirraglia [email protected] Jack A Raisner [email protected], [email protected];[email protected] Jonathan Hjalmer Reischl [email protected] Michael Rella [email protected] Caroline Ellona Richardson [email protected], [email protected] James Leigh Richmond [email protected] Mai Lan Gabrielle Rodgers [email protected], [email protected] John M. Rogers [email protected], [email protected];[email protected];[email protected] Melissa M. Root [email protected], [email protected] David A. Rosenthal [email protected] James E Rossow [email protected], [email protected];[email protected];[email protected] Rene Sara Roupinian [email protected], [email protected];[email protected];[email protected];[email protected];[email protected] Victoria Fay Roytenberg [email protected], [email protected] Steven Eric Runyan [email protected] Craig Damon Rust [email protected], [email protected] Karl T Ryan [email protected], [email protected] Joseph Michael Sanders [email protected] Thomas C Scherer [email protected], [email protected] James R. Schrier [email protected], [email protected];[email protected] Ronald James Schutz [email protected] H. Jeffrey Schwartz [email protected]
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Courtney Michelle Scott [email protected] Joseph E Shickich [email protected], [email protected] Randall R Shouse [email protected], [email protected] William E Smith [email protected], [email protected] Lauren C. Sorrell [email protected], [email protected];[email protected] Berry Dan Spears [email protected] Catherine L. Steege [email protected], [email protected];[email protected] LaChelle D Stepp [email protected], [email protected] Jason V Stitt [email protected] Sharon Stolte [email protected] Jesse Ellsworth Summers [email protected], [email protected] Jonathan David Sundheimer [email protected] Nathan L Swehla [email protected] Nancy K. Swift [email protected], [email protected] Andrew W.J. Tarr [email protected] Eric Jay Taube [email protected], [email protected];[email protected] Meredith R. Theisen [email protected], [email protected];[email protected] Meredith R. Theisen [email protected], [email protected];[email protected] Jessica L Titler [email protected] David Tocco [email protected], [email protected] Todd Christian Toral [email protected], [email protected] Ronald M. Tucker [email protected], [email protected],[email protected] Christopher Turner [email protected], [email protected] U.S. Trustee [email protected] Michael Ungar [email protected] Lauren Valkenaar [email protected] Sally E Veghte [email protected], [email protected] Rachel Claire Verbeke [email protected] Aimee Vidaurri [email protected] Amy L VonDielingen [email protected] Amy E Vulpio [email protected] Carolyn Graff Wade [email protected] Louis Hanner Watson [email protected] Jeffrey R. Waxman [email protected], [email protected];[email protected] Christine M.H. Wellons [email protected] Philip A. Whistler [email protected], [email protected] Bradley Winston [email protected], [email protected] Brandon Michael Wise [email protected] Cathleen Dianne Wyatt [email protected], [email protected] Joseph Yar [email protected], [email protected];[email protected] James T Young [email protected], lking@rubin-
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levin.net;[email protected];[email protected] James E. Zoccola [email protected]
I further certify that on April 26, 2019, pursuant to Section IV.C.3(c) of the Case
Management Procedures, a copy of the foregoing Trustee’s Motion to Compromise and Settle Avoidance Claim Against CareerBuilder, LLC d/b/a CareerBuilder.com was emailed to the following:
Arlington ISD/Richardson ISD: Eboney Cobb at [email protected] CEC Red Run, LLC: Alan M. Grochal at [email protected] SWRE Deal V Building, LLC: Paul Weiser at [email protected] Tarrant County/Dallas County: Elizabeth Weller at [email protected] Northwest Natural Gas Company: Ashlee Minty at [email protected] Solar Drive Business, LLC: Chris W. Halling at [email protected] Market-Turk Company: Jordan A. Lavinsky at [email protected] Taxing Authority for Harris County, Texas: John P. Dillman at [email protected] Texas Comptroller of Public Accounts: Rachel Obaldo at [email protected] Clear Creek Independent School District: Carl O. Sandin at [email protected] Synchrony Bank: Recovery Management Systems Corporation at [email protected] Bexar County: Don Stecker at [email protected] SWRE Deal V Building, LLC: Nancy K. Swift at [email protected] TN Dept. of Revenue: Michael Willey at [email protected] Florida Department of Education: Benman D. Szeto at [email protected] Last Second Media, Inc.: T. Todd Egland at [email protected] Hung Duong: Kevin Schwin at [email protected] Travis County: Kay D. Brock at [email protected] Able Building Maintenance: Scott D. Fink at [email protected] Marathon Ventures, LLC: Daniel M. Karger at [email protected] Oklahoma County Treasurer: Tammy Jones at [email protected] JM Partners LLC: John Marshall at [email protected]
I further certify that on April 26, 2019, pursuant to Section IV.C.3(b)(ii) of the Case Management Procedures, a copy of the foregoing Trustee’s Motion to Compromise and Settle Avoidance Claim Against CareerBuilder, LLC d/b/a CareerBuilder.com was mailed by first-class U.S. Mail, postage prepaid, and properly addressed to the following: CareerBuilder, LLC d/b/a CareerBuilder.com 200 N. LaSalle Street, Suite 1100 Chicago, IL 60601 /s/ John C. Hoard
John C. Hoard G:\WP80\TRUSTEE\Caruso\ITT Avoidance Actions - 86700001\Defendants\Career Builder Com-86700047\Drafts\Settlement Motion.docx
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SETTLEMENT AGREEMENT AND MUTUAL RELEASE This Settlement Agreement and Mutual Release (this “Agreement”), is made by and between Deborah J. Caruso, in her sole capacity as the chapter 7 trustee for the bankruptcy estates of ITT Educational Services, Inc., ESI Service Corp., and Daniel Webster College, Inc., and not individually (the “Trustee”) and CareerBuilder, LLC d/b/a CareerBuilder.com (the “Transferee”).
RECITALS
A. On September 16, 2016 (the “Petition Date”), ITT Educational Services, Inc., ESI Service Corp., and Daniel Webster College, Inc. (collectively, the “Debtors”) each filed a voluntary bankruptcy petition under chapter 7 of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Indiana, Indianapolis Division (the “Bankruptcy Court”), thereby commencing bankruptcy cases which are now jointly administered under Case No. 16-07207-JMC (the “Bankruptcy Case”).
B. The Trustee was appointed interim trustee under section 701 of the Bankruptcy
Code in each of the Debtors’ bankruptcy cases on the Petition Date, and in accordance with section 702(d) of the Bankruptcy Code, became the permanent case trustee on November 1, 2016 following the conclusion of the meeting of creditors held pursuant to section 341(a) of the Bankruptcy Code. Pursuant to section 323(a) of the Bankruptcy Code, the Trustee is the representative of the Debtors’ bankruptcy estates.
C. On June 29, 2018, the Trustee filed a Complaint to Avoid and Recover Transfers
Pursuant to 11 U.S.C. §§ 547, 548 and 550 and to Disallow Claims Pursuant to 11 U.S.C. § 502 (the “Complaint”) against the Transferee, Adversary Proceeding No. 18-50132 (the “Adversary Proceeding”). In the Complaint, the Trustee seeks to avoid and recover, pursuant to chapter 5 of the Bankruptcy Code, transfer(s) received by the Transferee from the Debtors as set forth in Exhibit A attached and incorporated herein totaling $40,320.82 (the “Transfers”).
D. Following good faith negotiations and in the interest of avoiding the cost and
uncertainty of litigation, the Trustee and the Transferee have agreed to settle the claims asserted in the Adversary Proceeding on the terms set forth below.
AGREEMENT NOW, THEREFORE, in consideration of the Recitals, the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Trustee and the Transferee (each a “Party” and together, the “Parties”) agree as follows:
1. Incorporation of Recitals. The foregoing recitals are true and correct and incorporated herein as substantive provisions and not as mere recitals.
2. Bankruptcy Court Approval. The Trustee shall file a motion in the Bankruptcy
Case requesting the Bankruptcy Court approve this Agreement pursuant to Rule 9019 of the
Exhibit 1 Page 1 of 5
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File No. 86700047
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Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”). The Parties acknowledge that this Agreement is subject to the Bankruptcy Court entering a final and non-appealable order in the Bankruptcy Case, which approves this Agreement pursuant to the Bankruptcy Rule 9019 (“Bankruptcy Court Approval”).
3. Settlement Payment. In full and final settlement of the Trustee’s claims for
avoidance and recovery of the Transfers under chapter 5 of the Bankruptcy Code, the Transferee shall pay the Trustee the sum of $10,000.00 (the “Settlement Payment”). The Settlement Payment shall be payable to “Deborah J. Caruso, Trustee” and mailed to the following:
Deborah J. Caruso, Trustee Rubin & Levin, P.C. 135 N. Pennsylvania Street, Suite 1400 Indianapolis, IN 46204
The Settlement Payment is due on or before May 17, 2019 (the “Payment Deadline”). The Trustee shall hold the Settlement Payment in escrow until Bankruptcy Court Approval is obtained. Upon Bankruptcy Court Approval, the Trustee shall be authorized to retain the Settlement Payment for general administration by the Debtors’ bankruptcy estates. In the event Bankruptcy Court Approval is not obtained, this Agreement shall be void and the Trustee shall return the Settlement Payment to the Transferee.
4. Settlement Effective Date. This Agreement shall become effective on the first
date when (a) it has been duly executed by both Parties, (b) Bankruptcy Court Approval has been obtained, and (c) the Trustee has received the full amount of the Settlement Payment in good and sufficient funds (the “Settlement Effective Date”).
5. Dismissal of Adversary Proceeding. Following the Settlement Effective Date,
counsel for the Trustee shall file a notice of dismissal or stipulation of dismissal with prejudice signed by all parties who have appeared in the Adversary Proceeding.
6. Mutual Releases. Both Parties acknowledge this Agreement is intended to fully
resolve the Transferee’s liability, if any, for the Transfers made by the Debtors to the Transferee. On the Settlement Effective Date, the Trustee and the Transferee, do fully, finally and forever release, acquit and discharge each other and all of their officers, directors, employees, representatives, agents and professionals, and all of their respective successors and assigns, from any and all claims, demands, obligations, judgments, actions, causes of action and/or liability of every kind and nature whatsoever, known or unknown, suspected or unsuspected, fixed or contingent, which it ever had or now had against the other party, including but not limited to those arising out of or related to the Complaint.
7. Transferee’s Claims Against the Debtors’ Estates. The Transferee hereby
waives any and all claims and/or claims for administrative expenses it may have, asserted or unasserted, against the Debtors or the Debtors’ bankruptcy estates, including but not limited to any filed proof of claim and right it may have under section 502(h) of the Bankruptcy Code to file a proof of claim (or to increase the amount set forth in an existing proof of claim) in the
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amount of the Settlement Payment. Furthermore, the Transferee shall withdraw any filed proof of claim or pending application for payment of administrative expense and shall not receive any distribution of any kind from the Debtors’ bankruptcy estates in connection with the Bankruptcy Case.
8. No Admission of Liability. Each of the Parties acknowledge this Agreement is a
compromise of a disputed claim and that the Settlement Payment made hereunder is not intended to be construed as an admission of any liability by either Party.
9. Entire Agreement. Except as otherwise provided, this Agreement contains the
entire agreement between the Parties as it relates to the Transfers, and no representations or promises, other than those contained or referred to herein, have been made by any Party to any other Party to secure the execution of this Agreement, either before or after the transactions giving rise to the present dispute arose.
10. No Oral Modifications. No waiver, modification, amendment, discharge or
change of this Agreement, except as otherwise provided herein, shall be valid unless the same is in writing and signed by the Parties. No waiver of any particular provision shall constitute a waiver of any other provision of this Agreement. Any such waiver or consent shall be effective only in the specific instances and for the purpose specifically stated therein.
11. Voluntary Act. Each of the Parties represents and warrants that it is authorized
and empowered to execute this Agreement. The Parties acknowledge that they have read this Agreement in its entirety, fully understood its terms, and voluntarily accepted the terms set forth herein. Further, each Party acknowledges that it has had an opportunity to consult with legal counsel and any other advisers of its choice with respect to the terms of this Agreement and it is signing this Agreement of its own free will.
12. Choice of Law. The Parties agree that this Agreement is governed by the laws of
the State of Indiana. The Bankruptcy Court shall retain exclusive jurisdiction to enforce this Agreement, including after the Bankruptcy Case is dismissed, closed, or converted to another chapter of the Bankruptcy Code.
13. Attorney Fees. Each Party shall bear its own attorneys’ fees and costs relating to
the Transfers settlement negotiations and the negotiation and execution of this Settlement Agreement. However, if the Trustee must commence an action to enforce the terms of this Agreement, the Trustee shall be entitled to an award, in addition to any other claims or damages, of her costs and expenses including attorneys’ fees, in connection with said enforcement action.
14. Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of the Parties hereto, and their respective heirs, executors, administrators, legal representatives, successors and assigns.
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