In Re: Avaya Inc.

Background

Alan Wattenmaker, proceeding without a lawyer, appealed the Bankruptcy Court’s entry of a final decree in Avaya Inc.’s Chapter 11 bankruptcy case. Avaya had employed Wattenmaker from 1998 until 2009. After Wattenmaker sued Avaya in New York Supreme Court alleging age, religion, and disability discrimination, that court ordered Avaya to pay him $92,000 and guarantee retirement benefits similar to a pension. The appeal of that state-court decision was stayed after Avaya filed for bankruptcy.

Wattenmaker filed a bankruptcy claim seeking the $92,000, an undetermined amount of retirement benefits, and expenses. The Bankruptcy Court allowed parts of his claim to proceed as a general unsecured claim. Avaya later moved to close its bankruptcy case by obtaining a final decree. Wattenmaker opposed that motion. After a hearing at which Wattenmaker was present, the Bankruptcy Court entered the final decree on June 4, 2019. The Bankruptcy Court retained jurisdiction over Wattenmaker’s claim and later resolved Avaya’s motion for summary judgment, ruling that Wattenmaker did not have a valid claim for attorney’s fees or expenses.

Issues on Appeal

Wattenmaker argued that the Bankruptcy Court erred by entering the final decree before his claim was resolved. He also argued that he did not receive sufficient notice or a proper opportunity to be heard on Avaya’s motion to close the case. He asked the district court to reverse the Bankruptcy Court and send the matter back for further proceedings.

Analysis

The district court explained that a final decree under the Bankruptcy Code and Bankruptcy Rule 3022 closes a Chapter 11 case after the estate has been fully administered. The court described the decree as essentially an administrative docket entry and noted that a bankruptcy case can be reopened after a final decree. The Rule 3022 advisory factors include whether the plan-confirmation order is final, required deposits and property transfers have occurred, the reorganized debtor has assumed management, plan payments have begun, and motions and other proceedings have been resolved. No single factor is required or controlling.

The court held that the Bankruptcy Court properly considered those factors. The confirmation order was final and non-appealable; Avaya had emerged as a reorganized entity; Avaya had assumed management of property covered by the plan; and plan distributions had begun. Only two claims remained unresolved, including Wattenmaker’s. The district court emphasized that the Bankruptcy Court retained jurisdiction over Wattenmaker’s claim and had told him that the decree would not affect it. The fact that his claim remained unresolved therefore did not require keeping the entire bankruptcy case open.

The district court also rejected Wattenmaker’s notice and hearing argument. Avaya filed its motion on April 25, 2019, Wattenmaker received notice and filed an objection, and he attended the later hearing, spoke at length, and presented his position. The court found that he received the process he was due.

Disposition

The court affirmed the Bankruptcy Court’s decision in full and directed the Clerk of Court to close the district-court case. It also certified under 28 U.S.C. § 1915(a)(3) that any appeal from the order would not be taken in good faith and denied permission to appeal without paying court fees. The opinion directed that a copy be mailed to Wattenmaker, who was representing himself.