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W. Wilmington Oil Feild v. Nabors Corp. Servs. (In re CJ Holding Co.)

W. Wilmington Oil Feild v. Nabors Corp. Servs. (In re CJ Holding Co.)

United States Court of Appeals for the Fifth Circuit

March 10, 2022, Filed

No. 21-20394

Opinion

Edith Brown Clement, Circuit Judge:

Sixty-seven creditors of C&J Well Services, Inc. (the Claimants) failed to file timely proofs of claim. After an approximately two-year-and-nine-month delay, the Claimants filed a motion in the bankruptcy court seeking leave to file their respective proofs of claim. After conducting a hearing, the bankruptcy court denied their [*2]  motions, holding that the Claimants did not demonstrate that their untimeliness was the result of excusable neglect. The Claimants appealed, and the district court reversed.

Because the bankruptcy court did not abuse its discretion in determining that the Claimants failed to meet their burden of proving excusable neglect, we REVERSE the judgment of the district court and reinstate the judgment of the bankruptcy court.

Brandyn Ridgeway and Tim Smith are former employees of Nabors Completion and Production Services Co., which was an oil and gas services contractor that performed work in the West Wilmington Oil Field. In March 2015, Nabors Completion and Production Services Co. merged with C&J Energy Ltd. to become C&J Well Services, Inc. (CJWS).

In April 2015, Ridgeway and Smith filed a putative class action lawsuit against CJWS in California state court, alleging various wage-related claims. CJWS removed the action to the United States District Court for the Central District of California and moved to compel arbitration pursuant to a company-wide arbitration agreement, which included a class action waiver. The district court denied the motion, holding that the arbitration agreement and [*3]  its class action waiver were unenforceable. CJWS appealed the district court's order to the United States Court of Appeals for the Ninth Circuit.

On July 20, 2016, while the appeal was still pending, CJWS and several of its affiliates (the Debtors) filed voluntary Chapter 11 petitions in the United States Bankruptcy Court for the Southern District of Texas. Shortly thereafter, CJWS filed a suggestion of bankruptcy in the Central District of California and the Ninth Circuit, resulting in an automatic stay of the wage litigation that was then on appeal.

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2022 U.S. App. LEXIS 6270 *; 27 F.4th 1105

IN RE: CJ HOLDING COMPANY, Debtor, WEST WILMINGTON OIL FIELD CLAIMANTS, Appellee, versus NABORS CORPORATE SERVICES, INCORPORATED; CONWAY MACKENZIE MANAGEMENT SERVICES, L.L.C., as Unsecured Claims Representative; REORGANIZED DEBTORS, Appellants.

Prior History:  [*1] Appeal from the United States District Court for the Southern District of Texas. USDC No. 4:20-CV-3014.

W. Wilmington Oil Field v. CJ Holding Co., 2021 U.S. Dist. LEXIS 149292, 2021 WL 3356371 (S.D. Tex., June 29, 2021)

CORE TERMS

Claimants, bankruptcy court, proof of claim, district court, arbitrations, notice, excusable neglect, putative class member, good faith, mediation, judicial proceedings, individual proof, factors, leave to file, bar-date, favors, weighs, reasonable control, lack of diligence, filing proof, timely file, confirmation, proceedings, sixty-seven, late-filed, negotiated, bankruptcy proceedings, automatic stay, late claim, bad faith

Bankruptcy Law, Judicial Review, Standards of Review, Abuse of Discretion, De Novo Standard of Review, Clear Error Review, Civil Procedure, Relief From Judgments, Excusable Mistakes & Neglect, Excusable Neglect, Evidence, Burdens of Proof, Allocation, Claims, Proof of Claim, Effects & Procedures, Plans, Postconfirmation Effects, Effects of Confirmation, Governments, State & Territorial Governments, Claims By & Against, Procedural Matters, Adversary Proceedings, Causes of Action, Contested Matters, Judgments, Special Proceedings, Class Actions, Certification of Classes