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Cibro petroleum bankruptcy

cibro petroleum bankruptcy

Cibro is a company formerly engaged in refining, marketing, transporting, and distributing petroleum and asphalt products; it used to operate a refinery at the Port of Albany ("Cibro Facility"). See 4/5/01 Affidavit of Defendant's Attorney Jeremy J.O. Harwood, ("Harwood Aff. No. 1") ¶ 4. Cibro filed for Chapter 11 relief on January 3, Cibro Sales Corp. supplied bunker oil to the vessel both before and after the filing of the bankruptcy petition and had not been paid. Cibro was listed as a creditor in the Ch. XI proceedings, and a copy of the stay order was mailed to it on June 9, Cibro Petroleum Prods., Inc. v. City of Albany (In re Winimo Realty Corp.), B.R. 99, (S.D.N.Y. ) (same). “Courts have accordingly recognized a distinction in the divestment of jurisdiction between acts undertaken to enforce the judgment and acts which expand upon or alter it; the former being permissible and the latter prohibited.”.

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Cibro did not apply to the Oklahoma bankruptcy court for modification of the stay order. The Debtors knew of the seizure. They did not intervene and the money was not used. The record shows that Judges Brotman and Barrow had several telephone conversations relating to the seizure of the ship. In a June 23 hearing of which all interested parties had notice, Judge Brotman considered whether the admiralty proceedings violated the stay order.

He concluded that they did not because under maritime law the Time Charter Party conferred no property rights on AI and, hence, there was no interference with any property right of the Debtors. Judge Brotman offered to take appropriate action to allow an expedited appeal to the United States Court of Appeals for the Third Circuit. No appeal was taken. Shell Curacao, the exporter of the cargo, offered to pay the Cibro bill on the assignment to it of the Cibro claim against AI.

This was apparently done. The seizure was released on June No cargo was unloaded during the period of seizure. Pursuant to a petition of the Debtors, Judge Barrow on July 14 entered an order requiring Cibro and its attorneys Degen and Connell to appear before him on September 6 and show cause why they should not be held in contempt for violation of the stay order.

The three so charged filed special appearances asserting that the Oklahoma court had no jurisdiction over them. Judge Barrow held a three-day evidentiary hearing.

We ignore the manner in which this hearing was conducted because it has no affect on our decision. At its conclusion, Judge Barrow made an oral order finding Cibro and lawyers Connell and Degen in contempt for violation of the stay order.

The court further ordered that Christopher Bohlman, the general manager of Cibro, Connell, and Degen be incarcerated until compliance with the court's payment order. Our case No. After the docketing of the appeal in No. Cirillo, officers of Cibro, and to Nicholas J. Healy and Allan A. Baillie, members of a law firm which represented Cibro in the New Jersey proceedings.

The orders required that the named parties appear and show cause why they should not be held in contempt for failure to comply with certain post-judgment matters and for failure to cause Cibro to pay the prior contempt judgment.

The charged parties then petitioned the court of appeals to vacate the show cause orders and to enjoin further action with respect thereto. We granted a stay until final disposition of the case. We companioned Nos. The bankruptcy court held Cibro and its attorneys guilty of an action which the admiralty court held proper under maritime law. Conflicts and potential conflicts between admiralty and bankruptcy law have been noted by legal scholars. See, e. When a bankruptcy stay order collides with a maritime lien, problems are bound to arise.

The prime issue is whether the admiralty proceedings were directed against property of the Debtor subject to the bankruptcy court's summary jurisdiction. AI and the ship's owner entered into a "Time Charter Party," which is essentially a lease of cargo space on a vessel for a set period of time. The shipowner is required to man the ship, to pay the crew, and to maintain the ship and its facilities in good operating condition.

The owner retains the right to change the ship's registry and to substitute another vessel. The charterer is required to pay a monthly charge for the vessel's services as well as to provide all fuel and pay various fees. The charterer has the right to employ the vessel as it desires from port to port and to sublease.

A time charter "is a contract for a special service to be rendered by the owners of the vessel" and is to be distinguished from "a contract for the lease of the vessel. United States, 81 U. The latter is a demise or bare-boat charter under which the charterer takes possession of the ship, mans it, and becomes in effect the owner for the length of the charter.

Marr Enterprises, Inc. Lewis Refrigeration Co. Under a time charter, the ship owner agrees to carry goods in a ship in which the charterer has no property interest. Bergan v. International Freighting Corp. The lien is a proprietary right in the vessel itself as distinct from any personal liability. In re Marine Transit Corp. Jurisdiction lies in the district where the vessel is located. Platoro Ltd. Unidentified Remains of a Vessel, 5 Cir. The New Jersey proceeding was strictly against the ship and did not seek any in personam judgment.

The unique attributes of a Time Charter Party and a maritime lien must be considered together with the broad summary jurisdiction of the federal bankruptcy courts. This is not a case like The Isle of Mull, 4 Cir. Also, it is not like Venore Transp. The admiralty proceeding was not directed at the time charter contract.

AI's right to use the ship was not taken or lost. Cases where the bankrupt is the shipowner and a conflict arises between the application of admiralty or bankruptcy law are also not pertinent. AI is a time charterer, not an owner.

Although bankruptcy courts have wide powers, they are courts of limited jurisdiction, and their power to act must be found expressly in the Bankruptcy Act. First State Bank v. Sand Springs State Bank, 10 Cir. The bankruptcy court has exclusive jurisdiction over the debtor and its property wherever located. Under 11 U. For property to be within the court's summary jurisdiction, the debtor must have title or possession when the bankruptcy petition is filed.

Thompson v. Magnolia Petroleum Co. Landy, U. The finding of the bankruptcy court to the contrary is wrong. AI had a time charter, nothing more. Debtors say that the stay order was violated by interference with two distinct property rights of the debtors, AI's right to use the ship and West Bank's ownership of the cargo.

As to the latter, Judge Barrow found that the asphalt aboard the ship belonged to AI. The finding is clearly erroneous. In any event, ownership of the cargo is of no pertinence to the contempt proceedings.

Because of concern over its possessory lien on the cargo, the shipowner not Cibro, prevented the unloading of the vessel. In his oral decision, Judge Brotman expressly allowed the removal of the cargo. The detention of the cargo by the ship owner cannot support a contempt judgment against Cibro and its lawyers. The seizure of the ship temporarily affected AI's right to use it.

In Callaway v. Benton, U. In its Conclusion of Law 8, the bankruptcy court held that Cibro "has obtained a preference by its conduct in arresting the S. The holding may not stand. The situation is not like that considered in Katchen v. There the Supreme Court held that a bankruptcy court had summary jurisdiction to order the surrender of a voidable preference asserted by a trustee in response to a proof of claim filed by the creditor who received the preference.

The record before us does not disclose any proof of claim filed by Cibro against the Debtors or any of them. None of the appellants consented to the summary jurisdiction of the Oklahoma court. The record is unclear as to who is holder of the claim against the Debtors for the fuel furnished by Cibro. Some was furnished before the bankruptcy and some after. The ship was released upon the agreement to pay, or payment, by Shell Curacao to Cibro in return for the assignment by Cibro to Shell Curacao of its claim against AI.

From the record presented we cannot determine who owes what to whom. It is enough to say that in these contempt proceedings we are not concerned with a preference and express no opinion in that regard. We agree with the New Jersey court that the arrest of the ship did not violate the stay order. The contempt proceedings were no more than an effort to use the contempt powers of the court for the resolution of a civil dispute.

Cibro, its officers and attorneys were not guilty of any contempt.

cibro petroleum bankruptcy

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