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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
IN RE:
PANTHERA ENTERPRISES, LLC,
Debtor.
Bankr. Case No. 19-00787
Chapter 11
PANTHERA TRAINING, LLC,
Movant,
v.
PANTHERA ENTERPRISES, LLC,
Respondent.
Document No. ____
Related to Doc. No. 34
Responses Due: 10/25/19
Preliminary Hearing: 10/28/19 at 2:00 p.m.
DEBTOR’S RESPONSE AND OBJECTION TO MOTION TO COMPEL
Panthera Enterprises, LLC (the “Debtor” or “Enterprises”), by and through its
undersigned counsel, hereby files this response (the “Response”) to the Motion to Compel
Performance Under Subcontract (the “Motion”) filed by Panthera Training, LLC (“Movant” or
“Training”), setting forth as follows:
INTRODUCTION
1. The Motion filed by Training should and must be denied summarily for various reasons.
First, although failing to set forth any definitive authority or bases for the relief purportedly
sought, the Motion appears to assert something akin to an alleged breach of contract claim and
request for an injunction against the Debtor. Accordingly, the relief that Training seeks can only
be brought against the Debtor and before this court in the form of an adversary proceeding
pursuant to Bankruptcy Rules 7001 et al. Specifically, Bankruptcy Rules 7001(1) and 7001(7)
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apply to the relief requested. Debtor hereby advises the court that it has and will assert various
defenses and counterclaims to any such action if and when appropriately commenced against the
Debtor. Also, Training’s characterizations of the terms of the Subcontract (which was not
submitted to the Court) are disingenuous and mistaken at best and, intentionally misleading to
this Court at worst.
2. Although the Movant cannot proceed with the relief it seeks via the motion proceeding
that it has chosen, the Debtor will nonetheless take this opportunity to set forth various key
points in response to the flawed and misleading allegations set forth in the Motion.
RESPONSE AND OBJECTION
3. The Debtor acknowledges that it entered into and executed several agreements with the
Movant pre-Petition Date. Namely, the Debtor and the Movant executed that certain commercial
lease dated June 1, 2018 related to the Debtor’s 750 acre training facility (the “Property”) located
at 2506 Fish Pond Road, Old Fields, West Virginia 26845 (the “Lease”). It should be noted that
the Debtor has given notice of termination of the Lease to Movant and that the Debtor has
commenced an adversary proceeding in this Court to enforce its rights. The Debtor and the
Movant also executed that certain Subcontract dated June 1, 2018 (the “Subcontract”) pursuant
to which the Debtor engaged Movant as a subcontractor to perform work for Debtor on various
Prime Contracts (defined hereafter) held by the Debtor and its subsidiary.
4. The Debtor and/or its subsidiary, Panthera Training Center, LLC, is party to certain prime
contracts with various United States government agencies or departments, including contracts
with the United States Drug Enforcement Agency (the “DEA Contract”), the United States Army
(the “Army Contract”), and the United State Special Operations Command (the “SOCOM
Contract”)(collectively, the “Prime Contracts”). The aforementioned government agencies and
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departments are referred to in the Subcontract (and hereafter in this Response) as Debtor’s
“Clients.”
5. The Subcontract relates to the Debtor’s subcontracting of work to be provided under the
Prime Contracts.
6. The Motion recites the aforementioned details correctly, but thereafter begins to rapidly
stray from any reasonable interpretation of the facts and circumstances.
7. Important to understanding the mechanics of work under the Subcontract is an
explanation of how the Debtor assigns work under the Subcontract by issuing individual task
orders (the “Task Orders”). Specifically, the Debtor may issue a Task Order directing Movant to
perform certain tasks and services to a particular Client for a particular time period. The Task
Orders have individual and distinct work scopes and expiration dates. Issuance of Task Orders is
the mechanism by which the Debtor requests and directs work to be performed by Movant under
the Subcontract. Task Orders relevant to the instant Response are discussed more fully below.
8. Also, the Motion conveniently fails to cite to or set forth any actual language or terms
contained in the Subcontract because any such citations would directly contradict the Motion’s
false allegations.
9. Relevant to such false allegations in the Motion, the Debtor points out the following key
provisions from the Subcontract:
A. Section 1.1 of the Subcontract provides that “[t]he term of this Subcontract is from 1 June
2018 to 31 May 2023” but that “[i]ndividual task orders which may be issued under this
subcontract will have their own, individual periods of performance.” Accordingly,
although the primary term of the Subcontract is through May 31, 2023, any work to be
assigned and performed under the Subcontract is subject to the specific expiration dates
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set forth in any Task Orders issued by the Debtor. As of the Petition Date, only one Task
Order was outstanding and active, which task order relates only to the SOCOM Contract.
Furthermore, as of the Petition Date, all other Task Orders issued under the Subcontract
were and are expired and have not been renewed by the Debtor.
B. Section 1.2(c) of the Subcontract provides that Subcontractor shall “provide appropriate
office space at the Facility for [Debtor’s personnel] to facilitate communications with
Client personnel regarding the Prime Contract, and/or to monitor the training and
Subcontractor’s performance..” Accordingly, not only is the Debtor entitled to
communicate with its Clients (the Government entities that are parties to the Prime
Contracts) at its discretion, but Debtor is even entitled to be on site at the Property at any
and all times in order to facilitate such communications. Movant’s allegations to the
contrary are patently false.
C. Section 1.4 of the Subcontract provides that “[t]his is an Indefinite Delivery, Indefinite
Quantity subcontract. This Subcontract shall have no guaranteed value except as
provided for by each individual Task Order as issued. Nothing in this Subcontract shall
be construed to contain any obligation by Panthera (Debtor) to issue any subsequent Task
Orders under this agreement.” Accordingly, the Subcontract has no value to Movant
unless the Debtor decides to assign work to Movant by issuing Task Orders. The Debtor
can cease assigning work at any time. As noted above, which Movant failed to mention
in its Motion, the Task Orders under the DEA Contract and the Army Contract expired
pre-Petition Date and no new Task Orders have been issued to Movant related to those
Prime Contracts. As of the Petition Date, only one Task Order related to the SOCOM
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Contract remains outstanding – the Motion does not refer or relate to the SOCOM Task
Order.
D. Section 1.7 of the Subcontract, entitled “Limitation of Funding,” provides that “[f]unding
for this Subcontract shall be limited to the cumulative value of any Task Orders issued
hereunder. [Debtor] shall not be obligated to compensate Subcontractor for any work
performed or expenses incurred under this Subcontract in excess of the cumulative Task
Order value.” Accordingly, the Debtor is not responsible or liable for any work allegedly
performed by Movant that is not authorized or covered by an outstanding Task Order.
E. Section 2.23 of the Subcontract, entitled “Communications with Client,” provides that
“[s]ubcontractor is expressly prohibited from communicating with the Client’s personnel
with respect to the Prime Contract and/or Subcontract management issues, pricing,
payments, specific tasking or Subcontractor’s performance under the tasks related to this
Subcontract, without the prior consent of Panthera (Debtor). Any authorized
communications, other than those expressly provided for herein, between Subcontractor’s
personal and the Client’s personnel shall be conducted in the presence of Panthera’s
(Debtor’s) Technical Representative or other authorized representative unless otherwise
agreed by the Parties.”
F. Part VI, Section 5 of the Subcontract, entitled “Non-Circumvention,” provides that
Movant may not “directly or indirectly initiate, solicit, negotiate, contract or enter into
any business transactions, agreement or undertakings with any…third party identified or
introduced by [Debtor]” and that Movant may not “seek to by-pass, compete, avoid or
circumvent the [Debtor] from any business opportunity or by otherwise exploiting or
deriving any benefit from certain Confidential Information” provided by Debtor. Part VI,
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Section 5 further confirms that Debtor has the primary relationship with its Clients and
that Movant is prohibited from attempting to benefit therefrom or otherwise usurp the
Debtor’s business relationships under the Prime Contracts.
10. The above provisions of the Subcontract are merely key examples of express terms that
contradict the entirety of Movant’s Motion. To be sure, the initial focus of the Motion appears to
seek payment for work allegedly performed related to the DEA Contract on September 19, 2019.
As mentioned above, Movant failed to advise the Court that the operative Task Order related to
the DEA Contract expired on September 10, 2019 and the Debtor did not issue any additional
Task Order(s) under the Subcontract. Accordingly, any work performed by Movant purportedly
pursuant to the Subcontract subsequent to September 10, 2019 was unauthorized and certainly
not performed at the direction or request of Debtor. Importantly, Movant is the subcontractor
and works for and at the direction of the Debtor. Again, Section 1.4 of the Subcontract expressly
provides that Debtor may cease issuing Task Orders at any time and at its sole discretion.
Furthermore, Section 1.7 of the Subcontract expressly provides that Debtor is not liable or
responsible for any unauthorized or unrequested work performed by the Movant.
11. The Motion additionally purports to seek an order prohibiting Debtor from
communicating with its Clients. The absurdity of this request should seem clear, but apparently
not to Movant. As set forth above, the Debtor is the primary point of contact to its Clients and is
not limited in any way in its communications with such Clients. In fact, the Movant is the party
that is limited in its permitted communications with Debtor’s Clients, as expressly set forth in
Section 2.23 and Part VI, Section 5 of the Subcontract.
12. Based solely on the above, Movant’s Motion is without merit and should be summarily
dismissed.
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13. Regardless, the claims and requests for relief sought by the Movant can only be properly
brought as an adversary proceeding subject to the procedures and protections of all applicable
Rules of Bankruptcy Procedure, including but not limited to Bankruptcy Rules 7001 et seq.
14. Additionally, the Debtor further points out that because the Subcontract is an executory
contract subject to Section 365 of the Bankruptcy Code, Debtor has the right to reject the
Subcontract at any time. Accordingly, the Debtor has complete control over the future
administration of the Subcontract and Movant is subject to Debtor’s discretion in that regard.
Movant’s Motion is an attempt to circumvent Debtor’s rights under Section 365 including
applicable time periods in which Debtor may exercise such rights.
15. Lastly, on or about October 4, 2019, the Debtor gave Movant written notice of various
outstanding and continuing events of default under the Subcontract. Accordingly, it is Debtor’s
position that the Movant has in fact defaulted under the Subcontract. Moreover, as noted above,
Debtor has and will assert defenses and counterclaims to any properly brought action against the
Debtor based on the Subcontract.
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WHEREFORE, the Debtor, Panthera Enterprises, LLC, requests that this Honorable
Court enter an order denying Movant’s Motion to Compel and entering such other and further
relief as this Court deems just and proper.
Date: October 25, 2019
BERNSTEIN-BURKLEY, P.C.
By:/s/ John J. Richardson
John J. Richardson, Esq.
WV ID: 13140
jrichardson@bernsteinlaw.com
Robert S. Bernstein, Esq.
WV ID: 4708
rbernstein@bernsteinlaw.com
Mark A. Lindsay, Esq.
PA ID: 89487
mlindsay@bernsteinlaw.com
Pro Hac Admission Pending
707 Grant Street, Ste. 2200
Pittsburgh, PA 15219
Phone: (412) 456-8101
Fax: (412) 456-8135
Counsel for Debtor
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