Free Status Report - District Court of Federal Claims - federal

Case 1:00-cv-00200-EJD

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS RONALD R. STICKA, TRUSTEE IN BANKRUPTCY FOR FLINTSTONE CRUSHING AND CONSTRUCTION, INC., Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) ) ) ) ) )

No. 00-200C (Judge Damich)

DEFENDANT'S STATUS REPORT Pursuant to this Court's order of July 15, 2002, defendant, the United States, respectfully submits the following status report. The bankruptcy issues have not been resolved. It is our

understanding that plaintiff still contends that this case has been settled. We disagree. Currently, there is a hearing

scheduled for October 9, 2003 in an adversary proceeding pending in a Chapter 7 bankruptcy in the United States Bankruptcy Court for the District of Oregon. That bankruptcy case is captioned In W.

Re Flintstone Crushing and Construction Co., 698-65058-fra7. Carl Hankla of the Justice Department's Tax Division is representing the Government in that case.

The main issue in the

adversary proceeding is whether there has been a settlement of the present case. Mr. Hankla will be conducting depositions

relating to the adversary proceeding while in Oregon for the hearing.

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On July 14, 2003, this Court granted plaintiff leave to file, by October 15, 2003, a Motion for Summary Judgment to Compel a Settlement Agreement. motion in the present action. Plaintiff has not filed such a Rather, as previously indicated,

plaintiff is attempting to have the bankruptcy court resolve that issue. One of the issues that the October 9, 2003 hearing is

expected to address is whether the bankruptcy court is the appropriate court to decide the issue of whether there was a settlement. It is our position that it is not.

Currently, Mr. Hankla and counsel for one of the creditors in the bankruptcy proceedings, are engaged in continuing settlement discussions regarding the issue of the Government's claim to a setoff. The longer the issue of the alleged

settlement remains unresolved, the less likely it is that the present matter will be resolved anytime soon. First, the bankruptcy court has scheduled a trial in the adversary proceeding for January 2004. Thus, to the extent that

the adversary proceeding is not settled or dismissed, the bankruptcy matter is not likely to be resolved for a minimum of approximately three months. Further, to the extent that either

side appeals the results of the adversary proceeding, the matter is not likely to reach a final resolution for many more months. Second, to the extent that the Government is required to continue to litigate the adversary proceeding, a settlement of

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the present action will be less likely.

Indeed, the longer the

bankruptcy proceedings continue, the less likely settlement becomes. Third, unless the parties in the bankruptcy can reach a settlement within a very short period of time, we will likely request that the present action be placed upon a litigation track. However, given that a hearing is scheduled for October 9,

2003, the Government believes it is appropriate to temporarily defer that decision, at least until the next status conference in the present action, which we understand will be scheduled for October 23, 2003. Respectfully submitted, PETER D. KEISLER Assistant Attorney General DAVID M. COHEN Director

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s/ Todd M. Hughes TODD M. HUGHES Assistant Director s/ Richard P. Schroeder RICHARD P. SCHROEDER Trial Attorney Commercial Litigation Branch Civil Division U.S. Department of Justice Attn: Classification Unit Eighth Floor 1100 L Street, N.W. Washington, D.C. 20530 Tele: (202) 305-7562 Facsimile: (202) 305-3291 email: [email protected] Attorneys for Defendant October 7, 2003

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Certificate of Filing

I hereby certify that on October 7, 2003, a copy of foregoing DEFENDANT'S STATUS REPORT was filed electronically. I understand

that notice of this filing will be sent to all parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system.

/s/Richard P. Schroeder