Menu    6 ABR 306  

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF ALASKA

In re:

           Case No. A91-01050-DMD
           Chapter 7
THOMAS T. REDMOND and
SONJA K. REDMOND,
 
Debtors. 

ORDER DENYING MOTION TO CLOSE CASE AND
DENYING MOTION TO
REVOKE TECHNICAL ABANDONMENT

      The debtors' motion to close case and the trustee's motion to revoke technical abandonment duly came before the court for a hearing on October 27, 1999. Thomas Yerbich appeared for the debtor. Gary Spraker appeared on behalf of William Barstow, trustee. After hearing the evidence and reviewing the arguments of counsel and their memoranda, IT IS ORDERED:

      The debtors' motion to close case is DENIED. The trustee's motion to revoke technical abandonment is DENIED as moot.

Discussion

      The Exxon Valdez ran aground on Bligh Reef in Prince William Sound on March 24, 1989. Class actions were filed on behalf of fishermen and other claimants on March 27, 1989, in Alaska State Superior Court and on March 30, 1989, in the United States District Court. The Superior Court certified classes in September of 1990. Classes were removed to the United States District Court November 6, 1991. The class action ultimately resulted in a 5 billion dollar federal judgment in favor of the classes and against Exxon on   TOP    6 ABR 307   September 16, 1994. That judgment is on appeal to the Ninth Circuit. Thomas T. Redmond and Sonja J. Redmond are members of the class action against Exxon.

      The Redmonds filed for chapter 7 relief on December 27, 1991. Paragraph 20 of the official forms, Schedule B-2, requires the debtors to list "other contingent and unliquidated claims of every nature, including tax refunds, counterclaims of the debtor, and rights to setoff claims." The debtors stated:

Trans-Alaska Pipeline Liability Fund Claims No. 001308-01, 001308-02, and 001308-03,
Owner:HusbandDebtors' interest:Undetermined
 Total debt on property:0.0
Possession:In debtor's possession.
Additional Information: Arise out of 1989 Exxon Valdez oil spill; claims filed by Faegre & Benson of Minneapolis, Minnesota; based on loss of income as Commercial Fisherman during 1989 season.

Trans-Alaska Pipeline Liability Fund Claim No. 004584-01
Owner:WifeDebtors' interest:Undetermined
 Total debt on property:0.0
Possession:In debtor's possession.
Additional Information: Claim arises out of 1989 Exxon Valdez oilspill; based on lost income during 1989 season as crew member.(1)

Their chapter 7 trustee, William D. Dudley, filed a report of no distribution on April 3, 1992. A final decree closing the case was entered on April 23, 1992. The United States Trustee moved to reopen the case on March 15, 1999, on the grounds that there were potential assets to distribute to creditors, including claims related to the "Exxon Valdez Oil Spill   TOP    6 ABR 308   Litigation."(2) The case was reopened March 16, 1999, and the debtors have since moved to close the estate on the grounds that there are no assets to administer.

11 U.S.C. § 554(c) provides:

(c) Unless the court orders otherwise, any property scheduled under section 521(1) of this title not otherwise administered at the time of the closing of a case is abandoned to the debtor and administered for purposes of section 350 of this title.

Because the debtors' claims against Exxon were not scheduled under § 521(1) of Title 11, they were never abandoned to the debtors, and remain property of the estate.

      The Transalaska Pipeline Liability Fund (TAPLF) was created by Congress in 1973 as part of the Transalaska Pipeline Authorization Act.(3) The Act provides for strict liability for all damages caused as a result of oil discharge from a vessel.(4) Liability for one incident is capped at 100 million dollars.(5) Owners and operators are responsible for fourteen million dollars of the fund.(6) The balance comes from a 5 cent per barrel fee collected from the owner of the oil when the oil is loaded on a tanker.(7) Claims against the fund have been treated as administrative claims. Claimants do not have to sue the fund to have their claims allowed. If there are insufficient funds to cover all claims, claimants share the funds pro rata.(8)

  TOP    6 ABR 309   Claims against the Exxon Corporation and related entities for negligence or reckless conduct have no damages cap and require actual litigation. The Exxon Valdez proceedings have been pending for years and are now before the Ninth Circuit. These proceedings are not administrative in nature. They constitute class action litigation on a massive scale.

      The Redmonds properly scheduled their TAPLF claims. They were required to schedule all "contingent and unliquidated claims of every nature," however. They failed to schedule their claims against Exxon. The fact that the debtors provided additional information stating that their claims arose out of commercial fishing losses from the 1989 Exxon Valdez oil spill does not excuse their failure to schedule this valuable asset. Nor does the fact that the trustee may have known about the federal district court claims change the result. Only scheduled claims may be abandoned under 11 U.S.C. § 554(c).(9) The Redmonds' TAPLF claims were scheduled and have been abandoned to them, to the detriment of their creditors. However, the Redmonds' claims against Exxon and related entities currently being asserted in the Exxon Valdez litigation now pending before the Ninth Circuit were not scheduled and have not been abandoned. They remain property of the estate for the trustee to administer for the benefit of creditors.



DATED: January 3, 2000. 
 BY THE COURT
 DONALD MacDONALD IV
 United States Bankruptcy Judge



N O T E S:

TOP    6 ABR 307  1. Schedule B-2, p. 5, filed January 10, 1992 [Docket No. 12].

TOP    6 ABR 308  2. Ex Parte Motion to Reopen Case, Authorize Trustee Appointment, and Defer Court Fees, filed March 15, 1999 [Docket No. 27].

TOP    6 ABR 308  3. 43 U.S.C. §§ 1651-1655.

TOP    6 ABR 308  4. 43 U.S.C. § 1653(c)(1).

TOP    6 ABR 308  5. 43 U.S.C. § 1653(c)(3).

TOP    6 ABR 308  6. Id.

TOP    6 ABR 308  7. 43 U.S.C. § 1653(c)(5).

TOP    6 ABR 308  8. 43 U.S.C. § 1653(c)(3).

TOP    6 ABR 309  9. Vreugdenhill v. Navistar Int'l Transp. Corp., 950 F.2d 524, 526 (8th Cir. 1991); Pace v. Battley (In re Pace), 146 B.R. 562, 564 (B.A.P. 9th Cir. 1992), aff'd, 17 F.3d 395 (9th Cir. 1994) (table).