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  • NATIONS CONSULTING GROUP, LLC VS ULTIMATE JETCHARTERS, LLC COGNOVIT ACTION document preview
  • NATIONS CONSULTING GROUP, LLC VS ULTIMATE JETCHARTERS, LLC COGNOVIT ACTION document preview
  • NATIONS CONSULTING GROUP, LLC VS ULTIMATE JETCHARTERS, LLC COGNOVIT ACTION document preview
  • NATIONS CONSULTING GROUP, LLC VS ULTIMATE JETCHARTERS, LLC COGNOVIT ACTION document preview
  • NATIONS CONSULTING GROUP, LLC VS ULTIMATE JETCHARTERS, LLC COGNOVIT ACTION document preview
  • NATIONS CONSULTING GROUP, LLC VS ULTIMATE JETCHARTERS, LLC COGNOVIT ACTION document preview
  • NATIONS CONSULTING GROUP, LLC VS ULTIMATE JETCHARTERS, LLC COGNOVIT ACTION document preview
  • NATIONS CONSULTING GROUP, LLC VS ULTIMATE JETCHARTERS, LLC COGNOVIT ACTION document preview
						
                                

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CV-2022-10-3618 BAKER ROSS, SUSAN 10/25/2023 16:26:18 PM EXTO Page 1 of 9 IN THE UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION In re: ) ) CHAPTER 11 ULTIMATE JETCHARTERS, LLC, ) ) CASE NO. 23-51404 Debtor. ) ) JUDGE ALAN M. KOSCHIK NFS LEASING, LLC ) 900 Cummings Center, Suite 226-U ) Beverly, MA 01915, ) ) Plaintiff, ) ADVERSARY CASE NO. ______________ ) JUDGE ALAN M. KOSCHIK v. ) ) ULTIMATE JETCHARTERS, LLC, et al., ) 6061 W. Airport Drive ) North Canton, Ohio 44720, ) ) Defendants. ) ) NOTICE OF REMOVAL For its Notice of Removal, interested party NFS Leasing, Inc. (“NFS”), pursuant to 28 U.S.C. § 1452(a) and Rule 9027 of the Federal Bankruptcy Procedure (the “Bankruptcy Rules”) removes its action filed in the Summit County, Ohio Court of Common Pleas (the “State Court”) as Case No. CV-2022-11-37941 entitled NFS Leasing, Inc. v. Ultimate JetCharters, LLC (the 1 Intervenor Nations Consulting Group, LLC (“Nations”) filed an Intervenor’s Complaint against Plaintiff NFS in the Summit County Case. On September 5, 2023, the Court in the Summit County Case issued an Order consolidating the Summit County Case into another pending action, Nations Consulting Group, LLC v. Ultimate JetCharters, LLC, CV- 2022-10-3618. NFS was not a party to the original Case No. CV-2022-10-3618 (nor was it a party to a third case consolidated with Nations Consulting), and NFS does not seek removal of the claims asserted by the parties to the 4853-7828-1352, v.6 Exhibit A Sandra Kurt, Summit County Clerk of Courts CV-2022-10-3618 BAKER ROSS, SUSAN 10/25/2023 16:26:18 PM EXTO Page 2 of 9 “Summit County Case”) to the United States Bankruptcy Court for the Northern District of Ohio, and states as follows. BACKGROUND -- THE DEBTOR’S CASE 1. On October 10, 2023 (the “Petition Date”), Ultimate JetCharters, LLC (the “Debtor” or “JetCharters”) filed its voluntary petition in this Court for reorganization relief pursuant to chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”). The Debtor continues to operate its businesses and manage its property as a debtor-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. 2. According to the Debtor’s filings with this Court, the Debtor is a charter airline authorized by the Federal Aviation Administration (“F.A.A.”) to provide private jet charters and corporate travel for up to thirty passengers and provides services to business travelers, casino visitors and sports teams throughout the United States. 3. No trustee or examiner has been appointed in this case. THE SUMMIT COUNTY CASE 4. On November 7, 2022, NFS commenced the Summit County Case by filing its Verified Complaint (including Exhibits A-U) against the Debtor and Ultimate Leasing, LLC (“Ultimate Leasing”). The same day, NFS filed its Motion for Replevin (including Affidavits of Eric Renaud and Mark Halsor), and Motion for Preliminary Injunctive Relief. Ultimate Leasing did not file an Answer or otherwise appear in the action. The Debtor filed its Answer on December 14, 2023.2 other two consolidated actions. No substantive filings pertaining to the claims being removed herein were made in Case No. CV-2022-10-3618 prior to the Petition Date. 2 Attached hereto as Notice of Removal Exhibits Part 1 through 5 are a copy of the docket of the Summit County Case (as of a few minutes before this filing) together with all process, pleadings and orders in the Summit County Case. 2 4853-7828-1352, v.6 Sandra Kurt, Summit County Clerk of Courts CV-2022-10-3618 BAKER ROSS, SUSAN 10/25/2023 16:26:18 PM EXTO Page 3 of 9 5. NFS’s Verified Complaint in the Summit County Case asserted, amongst other relief, that NFS is entitled to possession of three aircraft engines, serial numbers CD0011, CD0026, and CD0115 (the “Disputed Engines”), as those aircraft engines are subject to a perfected security interest granted by Ultimate Leasing to NFS in connection with a loan. Ultimate Leasing defaulted under its loan with NFS, and as such, NFS is entitled to execute on its security interests. NFS further alleged that JetCharters’ Chief Manager had transferred the Disputed Engines from JetCharters to an affiliated company, Ultimate Leasing, prior to NFS’s loan. The Debtor asserted in the Summit County Case that the Debtor (not Ultimate Leasing) was the owner of the Disputed Engines, and now claims the Disputed Engines are assets of the Debtor and are property of the Debtor’s bankruptcy estate. 6. Nations Consulting Group, LLC (“Nations”) the purported secured lender of the Debtor, sought to intervene in the Summit County Case to assert that it had a “first priority interest” in the Disputed Engines under a security agreement covering, among other specified collateral, “all equipment” of the Debtor. The Summit County court granted the Motion to Intervene, and Nations filed an Intervenor’s Complaint in the Summit County Case on June 15, 2023. NFS submitted its Answer to the Intervenor’s Complaint on July 12, 2023, noting that NFS, but not Nations, had perfected its interest in the Disputed Engines in accordance with federal and international law. 7. At the heart of the dispute in the Summit County Case is a determination of the Debtor’s interest in the Disputed Engines and a determination of the validity, extent, or priority of the liens, both of which are critical to the Debtor’s ability to reorganize and administer its estate. 3 4853-7828-1352, v.6 Sandra Kurt, Summit County Clerk of Courts CV-2022-10-3618 BAKER ROSS, SUSAN 10/25/2023 16:26:18 PM EXTO Page 4 of 9 The claims for relief in NFS’s Verified Complaint assert, amongst other relief, NFS’s entitlement to possession of the three Disputed Engines that Debtor claims are assets of the bankruptcy estate:  Count I: Collateral Possession (of the Disputed Engines);  Count II: Breach of Lease (relating to the Debtor’s use of the Disputed Engines under two leases);  Count III: Unjust Enrichment (claims for the value of the Debtor’s use of the Disputed Engines)  Count IV: Declaratory Judgment (that the Debtor’s Chief Manager had authority to, and did transfer the Disputed Engines from the Debtor to its affiliate Ultimate Leasing);  Count V: Preliminary Injunction (seeking that the Disputed Engines, of which NFS is entitled possession, be grounded and preserved). 8. With the Debtor’s chapter 11 filing, the determination of the nature of the Debtor’s interests in the Disputed Engines (whether by lease or ownership), its ability to continue to use them and the validity, priority, and extent of the respective purported liens that were central to the Summit County Case, properly should be decided by this Court as they relate to this chapter 11 case and as core matters within 28 U.S.C. § 157(B)(2)(A), (K), (M) and (O). Similarly, the claims in Nations’ Complaint as Intervenor are also core proceedings, as they involve determinations of the validity, extent, or priority of liens over the collateral, which Nations and the Debtor claim are part of the estate (and NFS claims are no longer the property of JetCharters), as set forth in 28 U.S.C. § 157(B)(2)(K). 9. Furthermore, 28 U.S.C. § 157(b)(3) provides that a “determination that a proceeding is not a core proceeding shall not be made solely on the basis that its resolution may be affected by state law.” This Court is not precluded from adjudicating state law claims when those claims are at the “heart of the administration of the bankrupt estate.” Ben Cooper, Inc. v. The Insurance Co. of the State of Pennsylvania (In re Ben Cooper, Inc.), 896 F.2d 1394, 1399 (2d Cir. 1990), cert. granted, 497 4 4853-7828-1352, v.6 Sandra Kurt, Summit County Clerk of Courts CV-2022-10-3618 BAKER ROSS, SUSAN 10/25/2023 16:26:18 PM EXTO Page 5 of 9 U.S. 1023, vacated and remanded, 498 U.S. 964 (1990), reinstated, 924 F.2d 36, cert. denied, 500 U.S. 928 (1991); In re Parke Imperial Canton, Ltd., 177 B.R. 544, 548 (Bankr. N.D. Ohio 1994). 10. Because the determination of the nature of the bankruptcy estate’s interest in the Disputed Engines and the validity, extent and priority of the liens on those Disputed Engines is at the heart of the administration of the Debtor’s estate, these are matters that should be determined by the Court. REMOVAL 11. Removal of the Summit County Case from the State Court to this Court is proper. Removal is governed by: (a) 28 U.S.C. § 1452(a) which provides, in pertinent part: “A party may remove any claim or cause of action in a civil action ... to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim or cause of action under section 1334 of this title;” and (b) General Order No. 2012-7 entered on April 4, 2012 by the United States District Court for the Northern District of Ohio. Removed actions are within the scope of the general automatic reference of bankruptcy proceedings to the bankruptcy judges. Aztec Indus., Inc. v. Standard Ohio Co. (In re Aztec Indus., Inc.), 84 B.R. 464, 468 (Bankr. N.D. Ohio 1987), and cases cited; Cook v. Cook, 215 B.R. 975, 977 n. 1 (Bankr. E.D. Mich. 1997). 12. Section 1334 establishes four categories of proceedings which are within the jurisdiction of the district court: (1) cases under title 11, (2) civil proceedings arising under title 11, (3) civil proceedings arising in a case under title 11, and (4) civil proceedings related to a case under title 11.3 3 Section 1334 provides in pertinent part: (a) Except as provided in subsection (b) of this section, the district courts shall have original and exclusive jurisdiction of all cases under title 11. 5 4853-7828-1352, v.6 Sandra Kurt, Summit County Clerk of Courts CV-2022-10-3618 BAKER ROSS, SUSAN 10/25/2023 16:26:18 PM EXTO Page 6 of 9 13. Of these categories, the first refers to the bankruptcy petition itself. Michigan Employment Security Commission v. Wolverine Radio Company (In re Wolverine Radio Company), 930 F.2d 1132, 1141 (6th Cir. 1991) (citation omitted). The second category provides that bankruptcy courts will be able to hear “any matter under which a claim is made under a provision of Title 11.” United Security & Communications, Inc. v. Rite Aid Corporation (In re United Security & Communications, Inc.), 93 B.R. 945, 950 (Bankr. S.D. Ohio 1988) (citation omitted). The third category refers to “administrative” matters that arise only in bankruptcy and “are not based on any right expressly created by Title 11, but nevertheless, would have no existence outside of the bankruptcy.” Wood v. Wood (In re Wood), 825 F.2d 90, 97 (5th Cir. 1987). 12. The Sixth Circuit has interpreted broadly “related to” jurisdiction, the fourth category. E.g., In re HNRC Dissolution Co., 761 Fed. Appx. 553, 559-60 (6th Cir. 2019). “Although situations may arise where an extremely tenuous connection to the estate would not satisfy the jurisdictional requirement, we believe that a broader interpretation of the statute more closely reflects congressional intent in adopting the new bankruptcy laws.” In re Salem Mortgage Co., 783 F.2d 626, 634 (6th Cir. 1986) (citing, with approval, the test described in In re General Oil Distributors, Inc., 21 B.R. 888, 892 n.13 (Bankr. E.D.N.Y. 1982). “Related to” jurisdiction is present where “the outcome of that proceeding could conceivably have any effect on the estate being administered in bankruptcy.” In re HNRC Dissolution Co., at 559-60 (emphasis added); see also, Wood v. Wood (In re Wood), 825 F.2d 90, 97 (5th Cir. 1987) (holding that section 1334(b) requires only that the claim conceivably affect the bankruptcy estate). Broad related-to (b) Except as provided in subsection (e)(2), and notwithstanding any Act of Congress that confers exclusive jurisdiction on a court or courts other than the district courts, the district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11. 6 4853-7828-1352, v.6 Sandra Kurt, Summit County Clerk of Courts CV-2022-10-3618 BAKER ROSS, SUSAN 10/25/2023 16:26:18 PM EXTO Page 7 of 9 jurisdiction enables the bankruptcy court “to deal efficiently and effectively with the entire universe of matters connected with bankruptcy estates.” In re Boston Reg. Med. Ctr., Inc., 410 F.3d 100, 105 (1st Cir. 2005). 13. Pursuant to 28 U.S.C. § 1334(b) and controlling precedent in the Sixth Circuit, this Court has “related to” jurisdiction over the Summit County Case because, as described above, the determinations to be made in connection with the Disputed Engines in the Summit County Case directly affect the administration of and are related to this chapter 11 case. 14. The time within which the Summit County Case must be removed is set forth by Rule 9027(a)(2) which provides, in pertinent part, that if the “cause of action in a civil action is pending when a case under the [Bankruptcy] Code is commenced, a notice of removal may be filed only within the longest of (A) 90 days after the order for relief in the case under the Code….” This removal is timely, as it was filed fifteen (15) days after the Petition Date. CONSENT TO ENTRY OF FINAL ORDERS OR JUDGMENT BY THE BANKRUPTCY COURT 15. NFS consents to the entry of final orders or judgments by the Court of the claims for which it seeks removal. 7 4853-7828-1352, v.6 Sandra Kurt, Summit County Clerk of Courts CV-2022-10-3618 BAKER ROSS, SUSAN 10/25/2023 16:26:18 PM EXTO Page 8 of 9 Respectfully submitted, /s/ Ronald M. McMillan MAURA L. HUGHES (0061929) GUS KALLERGIS (0071577) RONALD M. McMILLAN (0072437) JOHN F. FISHER (0085455) CALFEE, HALTER & GRISWOLD LLP The Calfee Building 1405 East Sixth Street Cleveland, OH 44114-1607 (216) 622-8200 (Phone) (216) 241-0816 (Fax) mhughes@calfee.com gkallergis@calfee.com rmcmillan@calfee.com jfisher@calfee.com Attorneys for NFS Leasing, Inc. 8 4853-7828-1352, v.6 Sandra Kurt, Summit County Clerk of Courts CV-2022-10-3618 BAKER ROSS, SUSAN 10/25/2023 16:26:18 PM EXTO Page 9 of 9 CERTIFICATE OF SERVICE The foregoing, Plaintiff NFS Leasing, Inc.’s Notice of Removal, has been filed electronically this 25th day of October, 2023 with the United States Bankruptcy Court for the Northern District of Ohio. Notice of the filing will be sent by email to all counsel by operation of the Court’s electronic filing system and all parties may access this filing through that system. Further, a copy was served via email, this 25th day of October, 2023 upon the following: Jon A. Troyer Arnold & Associates, Ltd. 4580 Stephen Circle NW #100 Canton, OH 44718 jtroyer@asalawfirm.com Counsel for Defendant Ultimate JetCharters, LLC Scott P. Sandrock Matthew R. Duncan Jack W. Hinneberg Brennan, Manna & Diamond, LLC 75 East Market Street Akron, Ohio 44308 spsandrock@bmdllc.com mrduncan@bmdllc.com jwhinneberg@bmdllc.com Counsel for Intervenor Nations Consulting Group, LLC /s/ Ronald M. McMillan One of the Attorneys for NFS Leasing, Inc. 9 4853-7828-1352, v.6 Sandra Kurt, Summit County Clerk of Courts