HENRY J. BOROFF, Bankruptcy Judge.
Before the Court is a "Motion for Interpretation of Order" (the "Motion for Interpretation") filed by The Education Resources Institute, Inc. ("TERI"), through which TERI asks this Court to interpret its order dated June 23, 2008 granting TERI's "Motion ... for Order (A) ... Authorizing [TERI] to Reject Certain Contracts with The First Marblehead Corporation and (B) ... Authorizing [TERI] to Enter into a Transition Services Agreement" (the "Contracts Motion" and "Contracts Order"). See Contracts Motion, June 5, 2008, ECF No. 238; Contracts Order, June 23, 2008, ECF No. 364. Through its Motion for Interpretation, TERI asks this Court to "interpret the Contracts Order to preclude the First Marblehead Entities from asserting that restrictions on TERI's use of Data and TERI's obligations to indemnify the First Marblehead Entities have not expired and that the Court otherwise enforce the Contracts Order." Motion for Interpretation, p.3 ¶ 3, ECF No. 1171.
TERI filed its Chapter 11 petition in April 2008 and filed the Contracts Motion two months later. In the Contracts Motion, TERI sought authority to reject various pre-petition contracts with First Marblehead Corporation, First Marblehead Education Resources, Inc., and TERI Marketing Services, Inc. (together or separately, "First Marblehead"), pursuant to which TERI, in 2001, outsourced substantially all of its loan-related and administrative services to First Marblehead (the "First Marblehead Contracts").
TERI's rejection of the First Marblehead Contracts was essential to its eventual reorganization, as TERI could no longer afford the fees required under those agreements. On the other hand, since First Marblehead had performed the bulk of TERI's services for many years, TERI was ill-equipped to immediately take over those functions upon rejection of the First Marblehead Contracts. To address those difficulties, the Contracts Motion also asked the Court to grant TERI the authority to enter into a Transitional Services Agreement (the "TSA"), pursuant to which First Marblehead would assist TERI in the transition of services from First Marblehead to TERI in exchange for payment far less than provided for under the original contracts. Importantly, the TSA also addressed the status of the Loan Database, as previously governed by the Database Agreement. Under the TSA, First Marblehead would retain perpetual rights to use of the Loan Database (in its redacted form), and would, in return for a fee to be paid by TERI, assist in rebuilding TERI's copy of the Loan Database. TSA, § 2.1.
The TSA was limited in duration. The initial term of the agreement expired on July 31, 2008, subject to two 30-day extensions. TSA, § 1.5. According to First Marblehead, those extension periods were effected by TERI, with First Marblehead's approval, and the TSA terminated at the end of September 2008. Objection to Motion for Interpretation of Order, p. 2 n. 4, Nov. 22, 2010, ECF No. 1180.
On October 29, 2010, this Court entered an order confirming TERI's Modified Fourth Amended Joint Plan of Reorganization (the "Plan"). See Findings of Fact, Conclusions of Law, and Order ... Confirming the Modified Fourth Amended Joint Plan of Reorganization ...," ECF No. 1170. On November 2, TERI filed its Motion for Interpretation of the June 23, 2008 Contracts Order. The motion came as no great surprise, as TERI and First Marblehead had foreshadowed the existence of the present dispute (the "Database Dispute") in their stipulation resolving various claims prior to confirmation of the Plan. See Joint Motion for Order Authorizing and Approving Stipulation Resolving Claims of First Marblehead Education
The Database Dispute centers around whether the TSA, in connection with the transfer of data from First Marblehead to TERI through the "rebuilding" of TERI's Loan Database, indefinitely extended the Data Use Restrictions or whether the TSA incorporated the Database Agreement's limitation of those restrictions to a period of two years after termination. TERI says that the TSA incorporated the two-year limit on the Data Use Restrictions provided in the Database Agreement. First Marblehead, however, maintains that the TSA extended those restrictions in perpetuity. TERI, feeling threatened by First Marblehead's assertion that TERI no longer has the right to use its Loan Database in any way it sees fit, filed the Motion for Interpretation seeking a ruling confirming its construction of the TSA.
A hearing on the Motion for Interpretation (the "Hearing") was initially set for November 15, 2010. At First Marblehead's request, however, the Court extended the deadline for First Marblehead to file a response to the motion and continued the Hearing to November 29, 2010. First Marblehead filed an objection to the Motion for Interpretation (the "Objection"), and TERI then filed a supplemental reply to the Objection (the "Reply"). At the conclusion of the Hearing, the Court took the matter under advisement. The following constitute the Court's conclusions of law, addressing each of First Marblehead's objections in turn.
First Marblehead first says the Motion for Interpretation should be denied because it was not filed as an adversary proceeding. According to First Marblehead, TERI is seeking, if not an advisory opinion, then declaratory and injunctive relief, which under the Federal Rules of Bankruptcy Procedure (the "Rules" or "Bankruptcy Rules") must be sought through an adversary proceeding. See Fed. R. Bankr.P. 7001. TERI says that it seeks neither declaratory nor injunctive relief, and, therefore, the matter was properly brought as a contested matter by the filing of the Motion for Interpretation. According to TERI, it asks only that the Court interpret the Contracts Order, and does not "seek to restrain any party from taking any action nor does it seek to require any party to take any action." Reply to Objection to Motion for Interpretation of Order, p. 6, Nov. 24, 2010, ECF No. 1181.
The Court agrees with First Marblehead that, to the extent TERI asks the Court to enjoin First Marblehead from doing anything or asks the Court to order First Marblehead to take a particular action, Rule 7001(7) requires the filing of an adversary proceeding. See Fed. R. Bankr.P. 7001(7) ("The following are adversary proceedings ... (7) a proceeding to obtain an injunction. . . ."). But to the extent the motion asks the Court merely to interpret the Contracts Order, a request which does strike the Court as one for declaratory relief, an adversary proceeding is not required. As TERI noted in its Reply, Rule 7001(9) requires an adversary proceeding in order to obtain declaratory relief only when that request is related to one of the types of matters enumerated in Rules 7001(1) through (8). Fed. R. Bankr.P. 7001(9). Standing alone, TERI's request for an interpretation of the Contracts Order is not related to any of the types of relief listed in subsections (1) through (8) of that Rule and may be brought by motion as a contested matter
Moreover, First Marblehead has not been prejudiced by the procedure employed here. While First Marblehead complains of the Court's quickness to schedule the matter for hearing, the Court notes that, upon First Marblehead's request, it rescheduled that hearing and extended the deadline for First Marblehead to respond. Furthermore, the Motion for Interpretation could not have taken First Marblehead by surprise. By its own admission, the Database Dispute has been festering since at least July 2009. See Objection, p. 31 ¶ 82. Finally, First Marblehead's thorough and well-prepared Objection belies any claim that First Marblehead has been afforded inadequate time to present its defense to the motion. There are no factual issues in dispute requiring an extended discovery period or evidentiary hearing and both parties have had a fair opportunity to fully address the relevant legal issues. Accordingly, requiring the filing of an adversary proceeding at this juncture would provide nothing other than fruitless delay.
First Marblehead's first jurisdictional attack is premised on its claim that this Court has no jurisdiction under 28 U.S.C. § 1334(b), focusing primarily on the contention that the Court has no related-to jurisdiction over the present dispute because TERI's Plan has been confirmed and the resolution of this matter will not impact the estate or TERI's creditors. The cases relied upon by First Marblehead are factually distinguishable from this case, however. In contrast to cases where courts have found no bankruptcy court jurisdiction over post-confirmation disputes, the dispute here (1) arose entirely pre-confirmation; (2) directly effects the prospects for the newly reorganized TERI; (3) was specifically identified during the Plan confirmation process; and (4) was brought before the Court for resolution less than a week after the Confirmation Order entered.
While First Marblehead's argument has a certain semantic appeal, it is blatantly contradicted by the terms of the TSA. The TSA, which was attached to the Contracts Motion and carefully reviewed by this Court before it entered the Contracts Order, provides that, as a condition precedent to the effectiveness of the TSA, this Court "shall have entered a final order in form and substance reasonably acceptable to [First Marblehead] approving this Agreement...." TSA, § 1.4(c) (emphasis supplied). There is no question but that the Contracts Order did just that—it did not merely authorize TERI to enter into the TSA, but, as understood by the Court, TERI, and First Marblehead, it approved the terms of the TSA and retained jurisdiction to construe and enforce those terms.
The second jurisdictional objection raised by First Marblehead is its contention that there is no case or controversy that is ripe for determination, see U.S. Const. art. III, § 2 (jurisdiction of federal courts limited to "cases" and "controversies"),
Consistent with Supreme Court and First Circuit case law, the Court rules that there is a case or controversy here—a dispute plainly stated and identified specifically in the parties' stipulation in connection with confirmation of the Plan—and that dispute is ripe for resolution. First Marblehead's interpretation of the TSA tightly circumscribes the uses to which TERI may put the Loan Database in its future business endeavors. Thus, TERI cannot freely plan its affairs or conduct
The crux of the Database Dispute is the parties' opposing interpretations of § 2.1(ii) of the TSA. In relevant part, that section provides:
According to First Marblehead's interpretation of this provision, the Data Use Restrictions, as well as certain other obligations (the "Surviving Obligations"), continue in perpetuity, since § 2.1(ii) does not specify a temporal limit on those restrictions and obligations. Furthermore, says First Marblehead, this indefinite survival is indicated by § 3.13 of the TSA, which provides that the provisions of Article II (including § 2.1(ii)) survive the termination of the TSA.
While the Court agrees that § 2.1(ii) is inartfully drafted, it ultimately concludes that, when read in tandem with the Database Agreement to which it refers, the provision is not ambiguous and does not provide for the indefinite survival of the Data Use Restrictions and other Surviving Obligations.
Section 2.1(ii) of the TSA makes clear that the Data Use Restrictions, as defined by the Database Agreement, would remain binding on TERI despite the rejection of the Database Agreement. Section 2.1(ii) makes specific reference to § 10.01 of the Database Agreement, seemingly to define which other "additional terms" survive termination. But § 10.01 of the Database Agreement does not define "Surviving Obligations." The only thing § 10.01 of the Database Agreement does is provide that the Surviving Obligations as defined elsewhere in the agreement survive termination of the agreement for a period of two years. See Database Agreement, § 10.01 ("The Surviving Obligations shall survive
If the TSA were intended to continue the Data Use Restrictions and other Surviving Obligations in perpetuity, there would be no need to refer to § 10.01 of the Database Agreement—the TSA could simply have provided that the Surviving Obligations (as defined in Article I of the Database Agreement) remain in full force and effect. Instead, the TSA makes specific reference to the provision of the Database Agreement that imposes a two-year limitation on that survival. The Court is thus compelled to conclude that the only logical reading of § 2.1(ii) requires incorporation of the two-year limit on the applicability of the Data Use Restrictions and other Surviving Obligations.
And § 3.13 of the TSA does not change this conclusion; that section does nothing more than make clear that Article II of the TSA survived the termination of the TSA. This too does not extend the Surviving Obligations indefinitely. Rather, since the TSA, by its terms, would terminate within four months at the most, § 3.13 merely clarifies that the two-year duration specified for the Data Use Restrictions and other Surviving Obligations would extend beyond the shorter term of the TSA.
Because the Court has determined that a plain reading of the TSA and relevant provisions of the Database Agreement compel the conclusion that the Data Use Restrictions and other Surviving Obligations would survive for two years after the termination of the Database Agreement, the Court finds it unnecessary to consider any extrinsic evidence.
In conclusion, the Court rules that it has jurisdiction to decide the Motion for Interpretation and to resolve the dispute over the proper construction of § 2.1(ii) of the TSA. That provision, which incorporates the Data Use Restrictions, expressly refers to the two-year limit on those restrictions and other Surviving Obligations under