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  • Timothy Leuliette'S Response To Collins & Aikman Litigation Trust'S Sixty-Eighth Omnibus Objection To Claims (Insufficient Books and Records)

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    Timothy Leuliette, a former director of Collins & Aikman Corporation (C&A), filed a timely proof of claim for indemnification from legal expenses and potential money judgments resulting from ongoing litigation. The Collins & Aikman Litigation Trust objected to Leuliette's claim solely on the basis of "insufficient books and records" without providing any evidence to refute the claim. Leuliette argues that his claim is presumed valid and the Trust has not met its burden under bankruptcy law to overcome this presumption with evidence, so the objection should be overruled and the claim allowed in full.

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    Timothy Leuliette, a former director of Collins & Aikman Corporation (C&A), filed a timely proof of claim for indemnification from legal expenses and potential money judgments resulting from ongoing litigation. The Collins & Aikman Litigation Trust objected to Leuliette's claim solely on the basis of "insufficient books and records" without providing any evidence to refute the claim. Leuliette argues that his claim is presumed valid and the Trust has not met its burden under bankruptcy law to overcome this presumption with evidence, so the objection should be overruled and the claim allowed in full.

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    Timothy Leuliette'S Response To Collins & Aikman Litigation Trust'S Sixty-Eighth Omnibus Objection To Claims (Insufficient Books and Records)

    Uploaded by

    Chapter 11 Dockets
    Timothy Leuliette, a former director of Collins & Aikman Corporation (C&A), filed a timely proof of claim for indemnification from legal expenses and potential money judgments resulting from ongoing litigation. The Collins & Aikman Litigation Trust objected to Leuliette's claim solely on the basis of "insufficient books and records" without providing any evidence to refute the claim. Leuliette argues that his claim is presumed valid and the Trust has not met its burden under bankruptcy law to overcome this presumption with evidence, so the objection should be overruled and the claim allowed in full.

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    IN THE UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: COLLINS & AIKMAN CORPORATION,

    et al. Debtors. ) ) ) ) ) ) Chapter 11 Case No. 05-55927 (SWR) (Jointly Administered) Honorable Steven W. Rhodes

    TIMOTHY LEULIETTES RESPONSE TO COLLINS & AIKMAN LITIGATION TRUSTS SIXTY-EIGHTH OMNIBUS OBJECTION TO CLAIMS (INSUFFICIENT BOOKS AND RECORDS) 1. (C&A). 2. Pursuant to C&As By-laws C&A agreed to indemnify Leuliette against any Claimant, Timothy Leuliette is a former director of Collins & Aikman Corp.

    liability or expense incurred by in any action or proceeding to which he is made a party by reason of the fact that he is or was a director of C&A. 3. Corporate law. 4. Leuliette is a defendant in the case of Mainstay High Yield Corporate Bond Fund Leuliette is further entitled to indemnification under section 145 of Delaware

    v. Heartland Industrial Partners, L. P. et al, Case No. 07-10542, which is currently pending before the Federal District Court for the Eastern District of Michigan. Leuliette continues to incur litigation expense, including attorneys fees, for which he is entitled to indemnification (to the extent not otherwise reimbursed or paid through insurance or other third party payment). Leuliette is also entitled to indemnification for any money judgment arising out of the litigation against him.

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    5.

    On or around January 10, 2006, Leuliette filed a timely proof of claim (identified

    in Debtors objection as Clam 4653), supported by documentary evidence detailing the nature of his claim. 6. The Collins & Aikman Litigation Trust (C&A Trust) filed a pro forma omnibus

    objection to Leuliettes claim, among other claims, stating only that it cannot verify that the Debtors had any obligation to pay the claimants and/or the claims. Objection at 3. 7. According to FRBP 3001(f) the claimants properly documented proof of claim is

    prima facie evidence of the validity of the claim. If a party objects to the claim, the objecting party carries the burden of going forward with evidence to overcome the prima facie validity and amount of the claim. In re Johnson, 384 B.R. 763, 769 (Bankr. E.D. Mich. 2008); In re Hughes, 313 B.R. 205, 208 (Bankr. E.D. Mich. 2004); In other words, the objecting party must produce evidence which would refute at least one of the allegations that is essential to the legal sufficiency of the [claimants] proofs of claim. In re Dow Corning Corp., 250 B.R. 298, 321 (Bankr. E.D. Mich. 2000). 8. Leuliettes proof of claim was timely filed and meets the requirements of FRBP

    3001(f). Leuliettes claim is therefore presumed valid. 9. C&A Trusts objection of insufficient books and records fails to meet C&A

    Trusts burden of producing evidence to refute an essential element of Leuliettes claim. Indeed, C&A Trusts objection ignores the factual basis for Leuliettes claim and points to no evidence whatsoever to support its objection. Therefore the presumption of validity stands and Leuliettes claim must be allowed.

    WHEREFORE, Leuliette respectfully requests that C&A Trusts objection be overruled and Leuliettes claim be allowed in full, along with such other relief as the Court deems fair and equitable. Respectfully submitted, BARRIS, SOTT, DENN & DRIKER, P.L.L.C. By: /s/ Matthew J. Bredeweg C. David Bargamian (P43742) Matthew J. Bredeweg (P67796) Attorneys for Timothy Leuliette 211 West Fort Street, 15th Floor Detroit, Michigan 48226 (313) 965-9725 Dated: September 5, 2008

    362112.01

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