FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MASSACHUSETTS [Hon. Rya W. Zobel, U.S. District Judge]
L. Miraldi, with whom Bruce W. Gladstone, Cameron &
Mittleman LLP, Charles R. Bennett, Jr., and Murphy &
King, P.C. were on brief, for appellants.
Jonathan W. Young, with whom Scott R. Magee and Locke Lord
LLP were on brief, for appellee.
Howard, Chief Judge, Souter, Associate Justice,
Lipez, Circuit Judge.
appeal involves the bankruptcy of Quincy Medical Center,
Inc., QMC ED Physicians, Inc. and Quincy Physician
Corporation ("Debtors"). Apurv Gupta and Victor
Munger ("Appellants"), former senior executives of
Debtors, appeal the district court's ruling that the
bankruptcy court lacked subject matter jurisdiction over
their post-confirmation claims for severance payments against
the purchaser of Debtors' assets. Because we agree that
the bankruptcy court had no jurisdiction over Gupta's and
Munger's claims, we affirm.
facts pertinent to this appeal -- none of which are disputed
-- are fully set forth in the opinions of the bankruptcy
court and the district court. See Quincy Med. Ctr.
v. Gupta, Nos. 12-cv-40128-RWZ and
12-cv-40131-RWZ, 2015 WL 58633, at *1-2 (D. Mass. Jan. 5,
2015); In re Quincy Med. Ctr., Inc., 479 B.R. 229,
231-33 (Bankr. D. Mass. 2012); In re Quincy Med. Ctr.,
Inc., 466 B.R. 26, 27-32 (Bankr. D. Mass. 2012). We
assume familiarity with the decisions below and discuss only
the pertinent facts here.
and Munger were senior executives at Quincy Medical Center, a
hospital operated by Debtors in Quincy, Massachusetts. On
June 30, 2011, Debtors signed an Asset Purchase Agreement
(the "APA") whereby they agreed to sell
substantially all of their assets to Quincy Medical Center, a
Steward Family Hospital, Inc. f/k/a Steward Medical Holdings
Subsidiary Five, Inc. ("Steward"). One day later, on
July 1, 2011, Debtors filed voluntary petitions under Chapter
11 of the Bankruptcy Code, and a motion (the "Sale
Motion") under sections 363 and 365 of the Bankruptcy
Code seeking bankruptcy court approval of the APA.
See 11 U.S.C. §§363, 365.
5 and 9 of the APA, which deal with the continued employment
of Debtors' former employees, are relevant to
Appellants' claims. Specifically, section 9.1 provides:
Not later than ten (10) Business Days prior to the Closing,
[Steward] shall offer employment by [Steward] to each of the
Employees who remain employed by [Debtors] as of a recent
date, . . . such employment to commence immediately following
the Closing. . . . Such individuals who accept such offer of
employment are hereinafter referred to as the
Section 9.2 further provides that Steward is obligated to pay
each transferred employee "base wage and salary levels
provided to such Employees immediately prior to the
Closing" for no less than three months after the closing
date. Additionally, section 5.14(c) of the APA provides that
"upon [Steward's] termination of the employment . .
. of any employees . . . of [Debtors] at or following the
Closing, [Steward] shall be liable to any of such persons for
severance or retention pay or any other payments otherwise
due them as employees . . . for [Debtors]."
September 26, 2011, the bankruptcy court issued an order (the
"Sale Order") approving the APA as requested in the
Sale Motion. The sale closed on October 1, 2011. Six days
later, Debtors filed a proposed Chapter 11 plan of
reorganization (the "Plan"). The bankruptcy court
thereafter confirmed the Plan (the "Confirmation
Sale Order and the Plan each contain provisions regarding the
retention of jurisdiction by the bankruptcy court over any
disputes arising under them. The Sale Order provides:
It is necessary and appropriate, in order to ensure the
validity of the sale of the Assets to Steward and to ensure
compliance with this Order, for this Court to retain
jurisdiction to: (a) interpret and enforce the provisions of
the APA, the Assigned Agreements, the Sale Motion and this
Order; (b) protect Steward and any of the Assets against any
Lien or Claim; (c) resolve any disputes arising under or
relating to the APA, the Assigned Agreements, the Sale Motion
and this Order; and (d) determine the validity, ...