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Case 20-11007-CSS Doc 297 Filed 12/29/20 Page 1 of 15 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re Chapter 11 SUPERIOR AIR CHARTER, LLC,1 Case No. 20-11007 (CSS) Debtor. Hr’g Date: Jan. 21, 2021 at 11:00 a.m. (ET) Obj. Deadline: Jan. 5, 2021 at 4:00 p.m. (ET) MOTION OF COLIN W. YATES AND HIS COUNSEL FOR RELIEF FROM THE AUTOMATIC STAY AND PLAN AND DISCHARGE INJUNCTIONS Colin W. Yates (“Mr. Yates”) and his counsel, Gilbert Employment Law, P.C. (“Gilbert Law”) and the Law Offices of George A. Shohet (“Shohet Law” and together with Mr. Yates and Gilbert Law, the “Claimant”), by and through their undersigned counsel, hereby move (this “Motion”), pursuant to sections 105(a), 362(d)(1), 524 and 1141 of the Bankruptcy Code, Bankruptcy Rules 3020(d), 4001(a) and 9014, and Local Rules 4001-1 and 9013-1, for entry of an order, substantially in the form attached hereto as Exhibit A (the “Proposed Order”), modifying the automatic stay imposed by section 362(a) of the Bankruptcy Code, the discharge injunction provided by section 524 of the Bankruptcy Code, and the Plan Injunction (as defined below) for the purposes of (i) permitting liquidation of claims against Superior Air Charter, LLC (the “Debtor”) asserted in the Claimant’s Proof of Claim (as defined below), and (ii) seeking satisfaction of any judgment or settlement solely from the proceeds of any available Insurance Policies (as defined below). In support of this Motion, the Claimant respectfully represents as follows: 1 The Debtor in this chapter 11 case, together with the last four digits of the Debtor’s federal tax identification number, is as follows: Superior Air Charter, LLC (2081). The mailing address for the Debtor, solely for purposes of notices and communications, is: 1341 W. Mockingbird Lane, Suite 600E, Dallas, Texas. RLF1 24445949v.1 Case 20-11007-CSS Doc 297 Filed 12/29/20 Page 2 of 15 JURISDICTION AND VENUE 1. This Court has jurisdiction to consider this Motion under 28 U.S.C. §§ 157 and 1334, the Amended Standing Order of Reference from the United States District Court for the District of Delaware dated as of February 29, 2012, and paragraph 34 of the Confirmation Order (as defined below). This is a core proceeding pursuant to 28 U.S.C. § 157(b). The Claimant consents to the entry of a final order by the Court in connection with this Motion to the extent that it is later determined that the Court, absent consent of the parties, cannot enter final orders or judgments in connection herewith consistent with Article III of the United States Constitution. Venue of this chapter 11 case and this Motion in this district is proper under 28 U.S.C. §§ 1408 and 1409. The statutory and legal predicate for the relief requested herein are sections 105(a), 362(d)(1), 524 and 1141 of the Bankruptcy Code, Bankruptcy Rules 3020(a), 4001(a) and 9014, and Local Rules 4001-1 and 9013-1. BACKGROUND A. Procedural Background 2. On April 28, 2020 (the “Petition Date”), the Debtor commenced the above- captioned chapter 11 case. 3. On May 12, 2020, the Office of the United States Trustee for the District of Delaware (the “U.S. Trustee”) appointed the official committee of unsecured creditors (the “Committee”) in this chapter 11 case. 4. On June 24, 2020, this Court entered the Order Establishing Deadlines for Filing Proofs of Claim and Approving the Form and Manner of Notice Thereof [Docket No. 125] (the “Bar Date Order”). The Bar Date Order established July 27, 2020 at 4:00 p.m. (ET) as the General Bar Date (as defined therein). 2 RLF1 24445949v.1 Case 20-11007-CSS Doc 297 Filed 12/29/20 Page 3 of 15 5. On July 23, 2020, the Claimant timely and properly filed proof of claim number 287, which is attached hereto as Exhibit B (the “Proof of Claim”). 6. On September 4, 2020, this Court held a hearing to consider confirmation of The Debtor and Official Committee of Unsecured Creditors’ First Amended Joint Combined Disclosure Statement and Chapter 11 Plan of Reorganization [Docket No. 168] (the “Plan”). 7. That same day, the Court entered the Findings of Fact, Conclusions of Law, and Order Approving and Confirming Debtor and Official Committee of Unsecured Creditors’ First Amended Joint Combined Disclosure Statement and Chapter 11 Plan of Reorganization [Docket No. 212] (the “Confirmation Order”). 8. Section XI.D.4 of the Plan provides for a discharge of Claims and Causes of Action (each as defined in the Plan) against the Debtor; Section XII.E of the Plan enjoins holders of Claims or Causes of Actions from commencing or continuing Causes of Action against the Debtor or the Debtors’ property (the “Plan Injunction”); and Section XVI.B of the Plan provides that the automatic stay under section 362 of the Bankruptcy Code remains in full force and effect. 9. In addition, paragraphs 11 and 12 of the Confirmation Order and Section IX of the Plan establish the GUC Trust (as defined in the Plan) and appointed the GUC Trustee (as defined in the Plan) to reconcile General Unsecured Claims (as defined in the Plan) and make distributions to beneficiaries of the GUC Trust. B. Factual Background 10. In March 2011, the Debtor hired Mr. Yates as a pilot. On May 25, 2011, Mr. Yates was working as second-in-command (i.e., first officer) under the command of another pilot (i.e., captain) on an aircraft when it crash landed at the airport in Sedona, Arizona. The National Transportation Safety Board (“NTSB”) opened an investigation into the accident immediately after 3 RLF1 24445949v.1 Case 20-11007-CSS Doc 297 Filed 12/29/20 Page 4 of 15 it occurred. 11. On June 24, 2013, the NTSB issued a report concluding that Mr. Yates and the captain were responsible for the crash landing. On June 26, 2013, Mr. Yates separately emailed the NTSB investigator (the “June 26 Email”) and the Debtor’s CEO, Alex Wilcox, describing Mr. Yates’ issues with the report. Mr. Yates alleged in the June 26 Email that there were serious miscalculations in the aircraft manuals he had been provided, and that the aircraft had a deficient braking system such that it should not land at airports like the one in Sedona, Arizona. 12. Shortly thereafter, the Debtor suspended Mr. Yates’ employment, and after a meeting between Mr. Yates, Mr. Wilcox, and another senior manager, wrongfully terminated Mr. Yates’ employment. 13. On September 24, 2014, Mr. Yates filed complaints of retaliation with the Occupational Safety and Health Administration (“OSHA”) under the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (the “Act”), which includes a whistleblower protection provision. 14. During that time, on April 8, 2015, Mr. Yates filed a companion California state court action in the Superior Court for the County of Orange, captioned, Yates v. Superior Air Charter LLC, d/b/a JetSuite Air, Case No. 30-2015-00781592-CU-WT-CJC (“State Court Action” and, collectively with the ALJ Action and ARB Appeal (as defined below) the “Prepetition Actions”). The State Court Action arises out of the same operative facts as the ALJ Action and asserts claims under the California Labor Code, Business & Professions Code, and common law. Unlike the remedies available in the ALJ Action, the State Court Action includes a punitive damages claim. The State Court Action is pending and no trial date is set. 15. On May 18, 2015, OSHA dismissed Mr. Yates’ complaint. 4 RLF1 24445949v.1 Case 20-11007-CSS Doc 297 Filed 12/29/20 Page 5 of 15 16. On June 15, 2015, Mr. Yates objected to OSHA’s dismissal, and on July 14, 2015, that matter was assigned to the U.S. Department of Labor’s Office of Administrative Law Judges (the “ALJ”) under Case No. 2015-AIR-00028 (the “ALJ Action”). 17. On July 7, 2017, the ALJ issued the Decision and Order Granting Relief (the “ALJ Order”)2 concluding that Mr. Yates’ termination was based on discriminatory and retaliatory grounds and ordering the Debtor to, among other things, (a) provide Mr. Yates with damages of not less than $143,834.55 (the “Damages Claims”) and (b) expunge Mr. Yates’ employment record. See ALJ Order p. 76, 101. The ALJ Order also provided that, within thirty days of such order, Mr. Yates may submit a fee petition detailing the aggregate amount of all costs and expenses that were reasonably incurred in the ALJ Action. See id. 18. The Debtor appealed the ALJ Order to the U.S. Department of Labor’s Administrative Review Board (the “ARB”), ARB Case No. 2017-0061 (the “ARB Appeal”). On September 26, 2019, the ARB issued its Final Decision and Order (the “ARB Order”)3 affirming the ALJ Order, with only one modification to the ALJ’s damages award – that the Debtor need not email copies of the ALJ Order to all of the Debtor’s employees, officers, and directors. No other aspect of the ALJ Order was disturbed. See ARB Order p. 10. 19. Thereafter, and pursuant to the ALJ Order, Mr. Yates filed in the ALJ Action the Complainant’s Request for Attorneys’ Fees and Costs (the “Pending Attorneys’ Fees Request”)4 seeking reimbursement of reasonable attorneys’ fees and expenses in the aggregate amount of not less than $1,061,682.03.5 In addition, the Claimant is entitled to seek fees and costs for 2 A copy of the ALJ Order is attached to the Proof of Claim.