Narrative Opinion Summary
In this case, Duke Energy Trading and Marketing, L.L.C. sought partial summary judgment to dismiss several claims brought by the Chapter 7 trustee for Aurora Natural Gas, L.L.C., retaining only the claim to avoid a transfer under 11 U.S.C. § 548(a)(1)(A). The trustee opposed the motion, which centered on the avoidance of transfers totaling over $19 million and additional breach of contract claims. Duke contended that protections under 11 U.S.C. §§ 362(b)(6) and 546(e) shielded it as a forward contract merchant from liability for settlement payments made before bankruptcy. However, factual disputes regarding the nature of these payments, Duke's status as a forward contract merchant, and whether the transactions qualified as forward contracts precluded summary judgment. The court found that genuine issues of material fact existed, particularly concerning Duke's manual and automatic payment processes, alleged overpayments, and subsequent setoffs. Consequently, the court denied Duke's motion for partial summary judgment, finding that these factual disputes necessitate resolution at trial.
Legal Issues Addressed
Avoidance of Transfers under Bankruptcy Codesubscribe to see similar legal issues
Application: There are genuine material facts around whether Duke utilized remedies outside the contract to adjust for incorrect payment amounts for natural gas deliveries.
Reasoning: There are genuine material facts around whether Duke utilized remedies outside the contract to adjust for incorrect payment amounts for natural gas deliveries.
Bankruptcy Code Section 362(b)(6) and 546(e)subscribe to see similar legal issues
Application: These sections protect forward contract merchants from liability for settlement payments, but there are unresolved factual questions about the applicability in this case.
Reasoning: Duke argues that provisions under 11 U.S.C. §§ 362(b)(6) and 546(e) protect it from liability, asserting that the trustee cannot avoid transfers categorized as 'settlement payments' made by a 'forward contract merchant' prior to bankruptcy.
Burden of Proof in Summary Judgmentsubscribe to see similar legal issues
Application: The movant must demonstrate a lack of genuine disputes, while the responding party must provide specific facts to show otherwise.
Reasoning: The burden lies with the movant to demonstrate a lack of genuine disputes, while the responding party must provide specific facts to show otherwise.
Definition and Role of a Forward Contract Merchantsubscribe to see similar legal issues
Application: The court finds insufficient evidence to establish Duke's status as a forward contract merchant in its dealings with Aurora.
Reasoning: The court finds insufficient evidence in the summary judgment record to establish Duke's status as a forward contract merchant.
Summary Judgment Standardssubscribe to see similar legal issues
Application: Summary judgment is appropriate when there is no genuine issue of material fact, and the court must view facts favorably for the opposing party.
Reasoning: A summary judgment is warranted when there is no genuine issue of material fact, as established in key U.S. Supreme Court cases, and the court must view facts favorably for the opposing party.