Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.


United States District Court, Southern District of New York

January 30, 2003


The opinion of the court was delivered by: Sweet, District Judge


Appellant Europe Movieco Partners Limited ("Movieco") has moved on an emergency basis pursuant to Rules 8011 and 8019 of the Federal Rules of Bankruptcy Procedure for an expedited determination of Movieco's appeal from an Order of the United State Bankruptcy Court for the Southern District of New York entered on January 8, 2003 (the "Rejection Order"), permitting the debtor, United Pan-Europe Communications, N.V. ("UPC"), to reject an agreement between Movieco and UPC.

For the following reasons, that motion is denied.


UPC is a holding company organized under the laws of The Netherlands, with its statutory seat and principal place of business in Amsterdam, Holland. UPC has no business operations or employees in the United States. UPC's principal assets consist of its direct and indirect interests in approximately 200 operating subsidiaries, which own and operate broadband communication networks that provide telephone, cable and internet services to residential and commercial businesses in eleven countries in Europe.

Movieco is a limited liability company organized under the laws of England, with its principal place of business in London, England. Movieco possesses a broadcast license issued by the Independent Television Commission of the United Kingdom pursuant to Part 1 of the Broadcasting Act of 1990, as amended by the Broadcasting Act of 1996. Movieco operates and broadcasts two movie channels, Cinenova and Cinenova 2, from England via satellite uplink for reception by subscribers in Benelux countries. Movieco is regulated by British television authorities.

The Agreement

UPC and Movieco entered into a Cable Affiliation Agreement (the "Agreement") on December 21, 1999. Under the Agreement, Movieco licensed to UPC, for a period of seven years, the right and the obligation to receive and distribute the Cinenova movie channel to UPC's subscribers on its cable systems in The Netherlands and Flemish-speaking Belgium. In consideration for this license, UPC is required to pay a certain monthly fee to Movieco. UPC has been in breach of its payment obligations under the Agreement since February 2002.

The Dual Insolvency Proceedings

On December 3, 2002, UPC filed a petition with the District Court of Amsterdam (Rechtbank) (the "Dutch Bankruptcy Court"), requesting that it grant UPC a suspension of payments or moratorium under Dutch bankruptcy law. With its petition, UPC filed a proposed plan of compulsory composition under the Dutch Faillissementswet ("Dutch Bankruptcy Code").

Also on December 3, 2002, UPC filed a voluntary bankruptcy petition under Chapter 11 of the United States Bankruptcy Code. With its petition, UPC filed a proposed plan of reorganization and an accompanying disclosure statement. On or about December 23, 2002, UPC filed an amended plan of reorganization (the "Amended Plan") and a related amended disclosure statement. The Amended Plan provides that holders of "rejection claims" will be provided the treatment accorded holders of pre-petition general unsecured claims and, thus, will be satisfied through the distribution of a pro rata share of equity in New UPC. Confirmation of the Amended Plan is scheduled to be heard on February 20, 2003.

Rejection Order

Also on December 3, 2002, UPC filed a motion to reject the Agreement under section 365 of the U.S. Bankruptcy Code (the "Rejection Motion"). Movieco objected to the motion on the grounds that extending section 365 of the Bankruptcy Code to permit rejection of a contract between a Dutch company and an English company that is performed entirely overseas is contrary to the laws of the debtor's homeland and ran afoul of well-founded principles of international comity and the presumption against extra-territoriality. Movieco requested that the Bankruptcy Court abstain from hearing the Rejection Motion in deference to Dutch law and the proceedings pending before the Dutch Bankruptcy Court.

The Bankruptcy Court heard oral arguments on January 7, 2003. Concluding that no conflict existed between Dutch insolvency law and the U.S. Bankruptcy Code and that, in any event, the appropriate foreign tribunal would determine the preemptive effect, if any, of the Amended Plan, the Bankruptcy Court granted the Rejection Motion, authorizing rejection of the Agreement as of March 1, 2003.

The Rejection Order was entered on the Bankruptcy Court's docket on January 8, 2003. On January 16, 2003, Movieco filed a timely Notice of Appeal.

In pleadings served on UPC on January 24, 2003, Movieco has applied for an injunction requiring UPC to perform the agreement on various grounds, including the alleged unavailability of voluntary termination under Dutch law and the purported violation of Dutch competition laws.

On January 24, 2003, Movieco made the instant motion. Movieco included in its motion a proposed schedule for briefing and 5 argument of its appeal that would result in the first brief filed on February 3, 2003 and argument held on February 23, 2002. Oral argument was held on the instant motion on January 29, 2003, at which time the motion was considered fully submitted.


Bankruptcy Rule 8019 permits a district court to suspend or modify the normal rules and procedures governing appeals from a bankruptcy court decision and expedite the determination of an appeal. F.R.Bankr.P. 8019 ("In the interest of expediting decision or for other cause, the district court or the bankruptcy appellate panel may suspend the requirements or provisions of the rules in Part VIII, except Rules 8001, 8002 and 8013 and may order proceedings in accordance with the direction."); In re Island Helicopters, Inc., No. 97 Civ. 4584, 1997 WL 466973, at *4 (E.D.N.Y. Aug. 13, 1997) (permitting expedited appeal); In re Mego Int'l Inc., 30 B.R. 479, 479-80 (S.D.N.Y. 1983) (opinion issued on expedited appeal); 10 Collier on Bankruptcy ¶ 8019.01 (15th ed. 2002) ("The primary purpose of Federal Rule of Bankruptcy Procedure 8019 is to give the district courts . . . the power to expedite the consideration of cases that are `of primary concern to the public or to the litigants.'") (citing Original Advisory Committee Note to Rule 2 of the Federal Rules of Appellate Procedure, from which Rule 8019 is drawn).

"Courts will invoke the power given them by Rule 8019 if there are unusual time considerations or if unfairness to the litigants would otherwise result." 10 Collier on Bankruptcy ¶ 8019.01; see also Groendyke Transp. Inc. v. Davis, 406 F.2d 1158, 1162 (5th Cir. 1969) (permitting expedited disposition because important public policy issues were involved and appellant's position was clearly correct as a matter of law); In re Finley, 135 B.R. 456, 458 (S.D.N.Y. 1992) (relying on specific detailed allegations that the debtor's plan could not be implemented until all appeals were resolved, the court agreed to prompt resolution of appeal). For the purposes of determining this motion and in the absence of any discussion by the parties of the legislative history of Rule 8019 to the contrary, the "good cause" required by Rule 8019 will be equated to the requirement of "irreparable harm" required of emergency motions by Rule 8011.*fn1

Based on the papers and on the arguments presented at a hearing on January 29, 2003, the Court holds that Movieco has failed to present sufficient considerations to justify an expedited schedule.

Movieco points to the fast approaching March 1, 2003 date set by the Bankruptcy Court, at which time UPC can reject the Agreement to show that time is of the essence. Movieco claims that in the absence of an expedited appeal to address whether Section 365 applies to the Agreement (and thus whether any rejection by UPC of the Agreement would be excused under U.S. Bankruptcy law), it would suffer economic and reputational harm if UPC rejected the Agreement and ceased broadcast of Movieco's movie channel. Further, Movieco argues that it stands to lose a substantial source of revenue if the Agreement is rejected, as more than 50 percent of Movieco's revenues are derived from payments UPC is obligated to make under the Agreement.

As an initial matter, according to Movieco's Head of Legal Affairs, UPC has been in breach of its payment obligations to Movieco since February 2002. In light of the ongoing nature of UPC's nonpayment, it is difficult to discern a compelling need to prevent UPC from rejecting the Agreement. In any case, the harm complained of appears to be almost entirely economic in nature, and one for which a legal remedy would exist should Movieco be successful in arguing that Section 365 does not apply in this situation and should Movieco further be successful in its arguments in an extra-territorial court that UPC should not be allowed to reject the Agreement. E.g., In re Dairy Mart, 272 B.R. at 71 n. 3 ("Monetary loss alone will generally not amount to irreparable harm. . . .") (citing Borey v. Nat'l Union Fire Ins. Co. of Pittsburgh, 934 F.2d 30, 34 (2d Cir. 1991)); Everest Capital Inv. Ltd. v. Editek, Inc., 1996 WL 695794, at *3 (S.D.N.Y. Dec. 4, 1996) ("Irreparable harm is injury for which a monetary award cannot be adequate compensation") (citing Int'l Dairy Foods Ass'n v. Amestoy, 92 F.3d 67, 71 (2d Cir. 1996) (internal citations omitted)).

The only potential "irreparable harm" cited is the conclusory allegation that "reputational harm" will ensue if the Agreement is rejected. There are no specific allegations as to what Movieco's current reputation is in the Benelux countries and how that reputation would be affected by the rejection of the Agreement. Nor has Movieco alleged that it could not in any case obtain a contract with another corporation that would provide similar services as UPC had done — and perhaps lead to a better payment history. In light of these conclusory allegations, Movieco has failed to show irreparable harm. E.g., In re Texaco, Inc., 81 B.R. 820, 829 (Bankr.S.D.N.Y. 1988) (holding that conclusory statements of irreparable harm, without more, do not suffice to grant relief); In re Penn-Dixie Indus., Inc., 6 B.R. 832, 837 (Bankr.S.D.N.Y. 1980) (denying emergency relief because "there ha[d] been no demonstration by [p]laintiffs of any real injury whatsoever that would result from a denial of the relief sought"). In any case, because Movieco fails to establish what sort of reputational harm would occur, it is impossible to judge whether that too would be compensable with an eventual monetary award.

Movieco also points out that its appeal will raise important public policy issues regarding international comity and the extra-territorial reach of section 365 of the U.S. Bankruptcy Code. Movieco has failed to explain, however, why these public policy considerations merit an expedited appeal. Indeed, given the weighty nature of the issues involved, due time and consideration should be given to their briefing and argument by the parties and the measuring thereof by this Court.

Because Movieco has failed to establish the existence of irreparable harm, the motion for expedited treatment must be denied.


For the foregoing reasons, Movieco's motion is denied.

It is so ordered.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.