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United States Bankruptcy Court for the District of Delaware
March 21, 2022, Decided
Chapter 7, Case No. 20-10553 (CSS), Adv. Pro. No.: 20-50548 (CSS), Related Adv. Docket No.: 43
Date: March 21, 2022
Sontchi, J. /s/ Christopher S. Sontchi
Plaintiffs Todd Stewart and Jennifer Sawle (the "Plaintiffs") filed an adversary complaint alleging that the Debtors2 violated the Federal Worker Adjustment and Retraining Notification Act (the "WARN Act")3 by failing to provide them (and similarly situated persons) with at least 60 days' notice of their employment termination. Before the Court is the Chapter 7 Trustee's Motion for Summary Judgment asserting three defenses to the Complaint: (i) notice was not required because the relevant Debtors were "liquidating fiduciaries" and not "employers" under the WARN Act; (ii) notice was not required because an "unforeseeable business circumstance" caused the mass layoffs; and (iii) notice was not required because a natural disaster caused the mass layoffs. For the reasons set forth herein, [**2] the Court concludes that both the unforeseeable business circumstance and natural disaster exceptions apply here and, therefore, the Debtors were not required to provide the 60-days WARN Act notice to employees before the March 20, 2020 layoff. The Trustee's Summary Judgment Motion will be granted.
This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 157 and 1334. Venue is proper in the United States Bankruptcy Court for the District of Delaware pursuant to 28 U.S.C. § 1409. This is a core proceeding pursuant to § 157(b)(2)(A), (B) and (O), and this Court has the Constitutional authority to enter a final order.
The Trustee filed a Statement of Undisputed Facts in Support of the Summary Judgment Motion (the "SOF").4 The Plaintiffs filed a response to the Trustee's SOF, often objecting to the Trustee's characterization of certain facts, and arguing that the Plaintiffs were not given an adequate opportunity to conduct discovery before the Trustee filed the Summary Judgment Motion.5 Below, however, are the facts as agreed to by the Plaintiffs and facts arising from orders or transcripts in this bankruptcy case. Because the Court concludes that this combination of undisputed facts and facts in the record provide a sufficient [**3] basis for ruling on the Trustee's [*528] Summary Judgment Motion, the Plaintiffs' Cross-Motion to Defer Ruling is denied.6
Art Van Furniture, LLC ("Art Van") was a brick-and-mortar furniture and mattress retailer headquartered in Warren, Michigan.7 Art Van was founded in 1959 and was owned by its founder, Art Van Elslander, until it was sold to funds affiliated with Thomas H. Lee Partners, L.P. ("THL") in March 2017.8 Pennsylvania-based Levin Furniture and Wolf Furniture were acquired by Art Van in November 2017.9
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
638 B.R. 523 *; 2022 Bankr. LEXIS 693 **
IN RE: ART VAN FURNITURE, LLC, et al., Debtors.TODD STEWART and JENNIFER SAWLE on behalf of themselves and all others similarly situated, Plaintiffs, v. ART VAN FURNITURE, LLC, et al., Defendants.
Subsequent History: Magistrate's recommendation at Stewart v. Giuliano (In re Art Van Furniture, LLC), 2022 U.S. Dist. LEXIS 78057, 2022 WL 1284494 (D. Del., Apr. 29, 2022)
Reversed by, in part, Affirmed by, in part, Remanded by Stewart v. Giuliano (In re Start Man Furniture, LLC), 2022 U.S. Dist. LEXIS 224187, 2022 WL 17593131 (D. Del., Dec. 13, 2022)
notice, liquidating, layoff, employees, fiduciary, natural disaster, Sales, summary judgment, terminated, wind-down, undisputed, circumstances, unforeseen, pandemic, entity, retail, material fact, regulations, Furniture, nonmoving, closures, planned, business enterprise, obligations, permanent, genuine, orderly, parties, reasons, virus
Civil Procedure, Summary Judgment, Entitlement as Matter of Law, Appropriateness, Judgments, Entitlement as Matter of Law, Legal Entitlement, Materiality of Facts, Genuine Disputes, Burdens of Proof, Burdens of Proof, Nonmovant Persuasion & Proof, Movant Persuasion & Proof, Need for Trial, Business & Corporate Compliance, Worker Adjustment & Retraining Notification Act, Scope & Definitions, Covered Employers, Labor & Employment Law, Mass Layoffs, Remedies, Backpay, Layoffs & Plant Closings, Civil Actions, Defenses, Faltering Company Exception, Wage & Hour Laws, Overtime & Work Periods, Bankruptcy Law, Bankruptcy, Reorganizations, Eligibility, Business & Corporate Compliance, Liquidations, Examiners, Officers & Trustees, Duties & Functions, Capacities & Roles, Evidence, Allocation