# OLD ANR, LLC

> United States Bankruptcy Court, E.D. Virginia · May 17, 2019

URL: https://www.frixlaw.com/law-library/cases/10462987

## Case

- **Court:** United States Bankruptcy Court, E.D. Virginia
- **Decided:** May 17, 2019
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division
IN RE: OLD ANR, LLC, et al., Case No. 19-00302-KRH
Miscellaneous Proceeding
Debtors.
__________________________________
MEMORANDUM OPINION
Before the United States Bankruptcy Court for the Eastern District of Virginia (the
“Court”) is the issue of whether Mar-Bow Value Partners, LLC (“Mar-Bow”) possesses standing
to be heard on Mar-Bow Value Partners, LLC’s Amended Motion for Relief from Judgments and
for Indicative Ruling and Reply to the United States Trustee’s Response to (I)Motion to Reopen
Case and (II)Motion for Relief from Judgments and for Indicative Ruling [Case No. 15-33896-
KRH, ECF No. 4128] (the “Rule 60(d) Motion”).1 For the reasons set forth below, the Court
finds that Mar-Bow lacks standing to be heard and denies the Rule 60(d) Motion.2
Jurisdiction and Venue
As the question presented concerns Mar-Bow’s standing, the Court’s subject-matter
jurisdiction over this matter is the focus of this memorandum opinion. Venue is appropriate in
this Court pursuant to 28 U.S.C. §§ 1408 and 1409.
Factual Background and Procedural History
On August 3, 2015 (“Petition Date”), Alpha Natural Resources, Inc. (“ANR”) and 149
direct and indirect subsidiaries (collectively, the “Debtors”) each filed voluntary petitions under

1 Rule 9024 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rule(s)”) makes Rule 60(d)(3) of the
Federal Rules of Civil Procedure (the “Federal Rule(s)”) applicable in bankruptcy cases. See Fed. R. Bankr. P.
9024.
2 Findings of fact shall be construed as conclusions of law and conclusions of law shall be construed as findings of
fact when appropriate. SeeFed. R. Bankr. P. 7052.
chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in this Court.3 As part
of the Bankruptcy Case, the Debtors sought and obtained approval to employ McKinsey
Recovery and Transformation Services (“McKinsey RTS”) as their turnaround advisor.4 No
party timely objected to the employment of McKinsey RTS and the Retention Order became a
final order.

On March 23, 2016, Mar-Bow entered the Bankruptcy Case by filing a proof of claim in
the amount of $1.25 million of ANR 7.5% second lien notes due August 1, 2020 [Case No. 15-
33896-KRH, Claim No. 30-1] (the “Claim”).5 Mar-Bow is an entity “beneficially owned and
funded by” Jay Alix, the founder of the worldwide consulting firm AlixPartners.6 AlixPartners
and McKinsey RTS compete with one another in the consulting sphere.7

3 By Order, Pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure, Directing Joint
Administration of the Debtors’ Chapter 11 Cases [Case No. 15-33896-KRH, ECF No. 129] entered on August 5,
2015, the Court procedurally consolidated these petitions to be jointly administered in the chapter 11 case of ANR,
Case No. 15-33896-KRH (the “Bankruptcy Case”).
4 Appl. Debtors Retain & Employ McKinsey RTS, In re Alpha Nat. Res., Inc., Case No. 15-33896-KRH (Bankr.
E.D. Va. Aug. 24, 2015), ECF No. 212; Order Authorizing Debtors Retain & Employ McKinsey RTS, In re Alpha
Nat. Res., Inc., Case No. 15-33896-KRH (Bankr. E.D. Va. Sept. 17, 2015), ECF No. 476 [hereinafter Retention
Order].
5 Mar-Bow’s Claim was part of a $714 million indenture issued pre-Petition Date. Notice Solicitation Versions of
(A) Second Am. Joint Plan & (B) Related Second Am. Disclosure Statement, Ex. B at 15, In re Alpha Nat. Res.,
Inc., No. 15-33896-KRH (Bankr. E.D. Va. June 2, 2016), ECF No. 2594. Over 11,000 proofs of claim were filed in
the Bankruptcy Case, totaling over $5 billion. See Mot. Entry Final Decreeat¶7,In re Alpha Nat. Res., Inc.,Case
No.15-33896-KRH (Bankr. E.D. Va. June 12, 2018), ECF No. 4106.
6 Mot. Compel McKinsey RTS Comply with Bankr. R. 2014 Ex. A, at ¶ 3, In re Alpha Nat. Res., Inc., No. 15-
33896-KRH (Bankr. E.D. Va. June 6, 2016), ECF No. 2603.
7 Mar-Bow Value Partners, LLC v. McKinsey Recovery & Transformation Servs. US, LLC, Civil Action No.
3:16cv799, 2017 WL 4414155, at *2 (E.D. Va. Sept. 30, 2017), aff’d per curiam sub nom. In re Alpha Nat. Res.,
Inc., 736 F. App’x 412 (4th Cir. 2018), cert. denied, No. 18-974, 2019 WL 342275 (Apr. 22, 2019) [hereinafter
Mar-BowII].
In the Bankruptcy Case, the Court confirmed the Second Amended Joint Plan of
Reorganization of Debtors and Debtors in Possession (the “Plan”)8 on July 12, 2016. The Plan
“incorporated a delicate balance of interrelated settlements involving numerous parties.” In re
Alpha Nat. Res., Inc., No. 15-33896-KRH, 2016 Bankr. LEXIS 4374, at *30 (Bankr. E.D. Va.
Dec. 20, 2016). All impaired creditor classes entitled to vote, including the class that contained

Mar-Bow’s Claim, universally accepted the Plan in accordance with section 1126(c) of the
Bankruptcy Code.9 Id. at *30-31. Under the Plan, Mar-Bow had the right to elect to have its
Claim classified in either Class 3 (wherein qualified claimants, such as Mar-Bow if it so elected,
could participate in a rights offering) or Class 6B. Id. at *36-37. Mar-Bow “declined to
exercise” its right to participate in Class 3 and, as such, remained a Class 6B claimant. Id. Upon
the effective date of the Plan, Mar-Bow’s recovery as a Class 6B claimant became fixed.
Mar-Bow II, 2017 WL 4414155, at *18 n.42. To the extent any excess cash ever enters the
bankruptcy estates in the future, the Plan provides for that money to be distributed to the holders
of “Allowed Secured First Lien Lender Claims.” Mar-Bow II, 2017 WL 4414155, at *18. In no

event will Class 6B claims be entitled to any such funds.10
Despite the overwhelmingly successful reorganization of the Debtors, the Bankruptcy
Case has been mired by a lengthy and protracted series of objections by Mar-Bow to McKinsey

8 The Plan is attached as Appendix I to the Order Confirming Second Amended Joint Plan of Reorganization of
Debtors and Debtors in Possession, as Modified [Case No. 15-33896-KRH, ECF No. 3038] (the “Confirmation
Order”).
9 Mar-Bow objected to certain provisions of the Plan, which objections were overruled, but did not object to the
classification or treatment of its claim. In re Alpha Nat. Res., Inc., 2016 Bankr. LEXIS 4374, at *31.
10 Each Class 6B claimant has “received its full and final distribution in accordance with the Plan.” Mot. Entry
Final Decree, supra note 5, at Ex. B, 4 n.11. Accordingly, the Claim held by Mar-Bowhas been fully satisfied.
RTS’s disclosures under Bankruptcy Rule 2014.11 Mar-Bow appealed numerous orders entered
by this Court. Significantly, in Mar-Bow I, the District Court dismissed Mar-Bow’s appeal of
this Court’s Bankruptcy Rule 2014 rulings “for lack of standing,” finding that “Mar-Bow lost
any pecuniary interest in the outcome of the Rule 2014 Appeal on July 12, 2016, when the
Reorganization Plan was confirmed.” Mar-Bow I, 578 B.R. at 355. In Mar-Bow II, the District

Court dismissed Mar-Bow’s appeals for lack of standing because “Mar-Bow has no pecuniary
interest in the outcome of those appeals,” and it went further, indicating that “[e]ven if the Court
were inclined to apply the Article III standard for standing...[,] the Court likely would find that
Mar-Bowlacks standing.” Mar-Bow II,2017 WL 4414155, at *18-20 (footnote omitted).
On June 28, 2018, the Court entered the Order Approving Motion for Entry of a Final
Decree and Order (I)Closing These Chapter 11 Cases; (II)Authorizing and Directing the
Reorganized Debtors to (A)Make the Final Category 1 Distribution and (B) Apply Any
Unclaimed Distributions to the Reorganized ANR Contingent Revenue Payments;
(III)Discharging the Claims Oversight Committee; and (IV)Terminating Kurtzman Carson

Consultants, LLC as Claims, Ballot and Noticing Agent [Case No. 15-33896-KRH, ECF No.

11 Bankruptcy Rule 2014(a) provides, in pertinent part, that an application for the employment of professional
persons
shall state the specific facts showing the necessity for the employment, the name
of the person to be employed, the reasons for the selection, the professional
services to be rendered, any proposed arrangement for compensation, and, to the
best of the applicant’s knowledge, all of the person’s connections with the
debtor, creditors, any other party in interest, their respective attorneys and
accountants, the United States trustee, or any person employed in the office of
the United States trustee. The application shall be accompanied by a verified
statement of the person to be employed setting forth the person’s connections
with the debtor, creditors, or any other party in interest, their respective
attorneys and accountants, the United States trustee, or any person employed in
the office of the United States trustee.
Fed. R. Bankr. P. 2014(a). For a comprehensive account of these objections, see Mar-BowII, 2017 WL 4414155 at
*2-16; see also Mar-BowValue Partners, LLC v. McKinsey Recovery & Transformation Servs. US, LLC, 578 B.R.
325 (E.D. Va. 2017), aff’d per curiamsub nom. In re Alpha Nat. Res., Inc., 736 F. App’x 412 (4th Cir. 2018), cert.
denied, No. 18-974, 2019 WL 342275 (Apr. 22, 2019) [hereinafter Mar-BowI].
4119], closing the Bankruptcy Case after finding that the estates had been fully administered in
accordance with the Plan. On July 18, 2018, Mar-Bow filed Mar-Bow Value Partners, LLC’s
Motion to Reopen Case [Case No. 15-33896-KRH, ECF No. 4122] (the “Motion to Reopen”),
asking the Court to reopen the Bankruptcy Case pursuant to section 350(b) of the Bankruptcy
Code “(i)to address the additional disclosure violations on the part of McKinsey that have come

to light, (ii)to address credible allegations from public documents evidencing McKinsey’s fraud
on the Court and (iii)to grant Mar-Bow’s request for an indicative ruling.” Mot. to Reopen 3.
The Office of the United States Trustee (the “U.S. Trustee”) joined the Motion to Reopen,12
while OLD ANR, LLC (formerly ANR) and its affiliates (collectively, the “Reorganized
Debtors”) and McKinsey RTS each lodged objections to the Motion to Reopen.13 In response to
the objections filed by the Reorganized Debtors and McKinsey RTS, Mar-Bow filed a reply
brief.14
The Court heard argument on these pleadings at a hearing on January 9, 2019. Following
the hearing, the Court entered an Order [ECF No. 2] (the “Miscellaneous Proceeding Order”)
granting the Motion to Reopen on a limited basis. Misc. Proc. Order ¶ 1.15 The Miscellaneous

Proceeding Order briefly opened the Bankruptcy Case; entered certain documents on the docket

12 U.S. Trustee’s Resp. (I)Mot. Reopen & (II)Mot. Relief Js. & Indicative Ruling, In re Alpha Nat.Res., Inc., Case
No. 15-33896-KRH (Bankr. E.D. Va. July 31, 2018), ECF No. 4126; Comments U.S. Trustee Regarding McKinsey
RTS’s Opp’n (I)Mot. Reopen & (II)Mot. Relief Js. & Indicative Ruling, In re Alpha Nat. Res., Inc., Case No. 15-
33896-KRH (Bankr. E.D. Va. Nov. 30, 2018), ECF No. 4164.
13 Obj. Reorganized Debtors Mot. Reopen, In re Alpha Nat. Res., Inc., Case No. 15-33896-KRH (Bankr. E.D. Va.
Sept. 12, 2018), ECF No. 4148; McKinsey RTS Opp’n Mot. Reopen Case & Mot. Relief Js. & Indicative Ruling, In
re Alpha Nat. Res., Inc., Case No. 15-33896-KRH (Bankr. E.D. Va. Sept. 12, 2018), ECF No. 4149.
14 Mar-Bow Reply (I)McKinsey RTS’s Opp’n & (II)Obj. Reorganized Debtors, In re Alpha Nat. Res., Inc., Case
No. 15-33896-KRH (Bankr. E.D. Va. Sept. 26, 2018),ECF No. 4154.
15 The Court did not need to address issues pertaining to Mar-Bow’s standing in the context of the Motion to
Reopen as the U.S. Trustee clearly had standing to bring the motion. See 11 U.S.C. § 307 (“The United States
trustee may raise and may appear and be heard on any issue in any case or proceeding under this title....”).
of the Bankruptcy Case, including the Miscellaneous Proceeding Order itself; opened the above-
captioned miscellaneous proceeding (the “Miscellaneous Proceeding”); and then closed the
Bankruptcy Case. Id. ¶¶ 1-5. The Miscellaneous Proceeding was designated as the vehicle “[t]o
address the legal and factual issues raised in the pleadings identified above,” including the Rule
60(d) Motion.16 Id.¶3.

On January 16, 2019, the Court entered the Order Appointing United States Bankruptcy
Judge as Mediator [ECF No. 5] (the “Mediation Order”) in the Miscellaneous Proceeding,
appointing the Honorable Marvin Isgur as a mediator in the global dispute between Mar-Bow
and McKinsey RTS, which had arisen in two additional bankruptcy cases pending in other
bankruptcy courts.17 The mediation produced a settlement between McKinsey RTS and various
of its affiliates and the U.S. Trustee. The settlement was approved at a joint hearing that took
place on April 16, 2019, in front of this Court, the United States Bankruptcy Court for the
Southern District of New York, and the United States Bankruptcy Court for the Southern District
of Texas. See Corrected Order Approving Settlement Between U.S. Trustee & McKinsey & Co.

&Certain Affiliates[ECF No. 45] (the “Settlement Order”).
McKinsey RTS and Mar-Bow were unable to reach an agreement through mediation.
Before considering the merits of the Rule 60(d) Motion, the Court first asked the parties to
address the issue of whether Mar-Bow has standing to request such relief. On February 20,
2019, McKinsey RTS submitted McKinsey Recovery and Transformation Services U.S., LLC’s
Brief Concerning Mar-Bow Value Partners, LLC’s Lack of Standing to Pursue Motion to Reopen
Case and Motion for Relief from Judgments [ECF No. 19] (the “McKinsey RTS Brief”). On

16 The Miscellaneous Proceeding Order further provided that all documents previously filed in the Bankruptcy Case
would be deemed docketed in the Miscellaneous Proceeding. Misc. Proc. Order ¶3.
17 In re Westmoreland Coal Co., Case No. 18-35672-DRJ (Bankr. S.D. Tex.); In re SunEdison, Inc., Case No. 16-
10992-SMB (Bankr. S.D.N.Y.).
March 6, 2019, Mar-Bow filed a Response of Mar-Bow Value Partners, LLC to McKinsey RTS’s
Brief Concerning Standing [ECF No. 26] (the “Mar-Bow Response”). On March 13, 2019,
McKinsey RTS filed McKinsey Recovery & Transformation Services U.S., LLC’s Reply Brief
Concerning Mar-Bow Value Partners, LLC’s Lack of Standing [ECF No. 31] (the “McKinsey
RTS Reply”). On April 23, 2019, the Court held a hearing on the McKinsey RTS Brief, the

Mar-Bow Response, and the McKinsey RTS Reply (the “Hearing”). At the conclusion of the
Hearing, the Court took the matter under advisement.
Analysis
Standing is “[a] party’s right to make a legal claim or seek judicial enforcement of a duty
or right.” Standing, Black’s Law Dictionary (10th ed. 2014). Thus, “any party who invokes the
court’s authority must establish standing.” Ansley v. Warren, 861 F.3d 512, 517 (4th Cir. 2017)
(citing Ariz. Christian Sch. Tuition Org. v. Winn, 563 U.S. 125, 133 (2011)). In federal courts,
standing is determined by Article III of the Constitution, which confines the judicial power of the
United States to “Cases” and “Controversies.” U.S. Const. art. III, §2, cl. 1. To possess Article

III standing, “[t]he plaintiff must have (1)suffered an injury in fact, (2)that is fairly traceable to
the challenged conduct of the defendant, and (3)that is likely to be redressed by a favorable
judicial decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016) (citing Friends of the
Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81 (2000); Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). An injury in fact is “‘an invasion of a
legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not
conjectural or hypothetical.’” Id. at 1548 (quoting Lujan, 504 U.S. at 560)). There must be a
“causal connection” between the injury in fact and the defendant’s conduct; a plaintiff will not
have standing to sue based upon “the independent action of some third party not before the
court.” Lujan, 504 U.S. at 560-61; (quoting Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26,
41-42 (1976)). Finally, redressability of the injury in fact by the court must be likely “as
opposed to merely ‘speculative.’” Id. at 561 (quoting Simon, 426 U.S. at 43). The plaintiff bears
the burden of establishing these three elements. Spokeo, 136 S. Ct. at 1547 (citing FW/PBS, Inc.
v. City of Dallas, 493 U.S. 215, 231 (1990)).

While Article III dictates what a plaintiff must possess to have standing in federal court
generally, section 1109 of the Bankruptcy Code sets forth an additional standing requirement in
chapter 11 bankruptcy cases.18 In re Alpha Nat. Res. Inc., 544 B.R. at 854. Section 1109(b)
provides “[a] party in interest, including the debtor, the trustee, a creditors’ committee, an equity
security holders’ committee, a creditor, an equity security holder, or any indenture trustee, may
raise and may appear and be heard on any issue in a case under this chapter.” 11 U.S.C.
§1109(b). Section 1109(b) “is to be construed broadly, in order to allow parties affected by a
chapter 11 case to appear and be heard.” Unsecured Creditors Comm. v. Marepcon Fin. Corp.
(In re Bumper Sales, Inc.), 907 F.2d 1430, 1433 (4th Cir. 1990) (quoting In re Pub. Serv. Co. of

N.H., 88 B.R. 546, 550 (Bankr. D.N.H. 1988)). Yet, courts may prohibit a prospective “party in
interest” from participating in a chapter 11 case for a lack of standing “if he or she has no
cognizable interest (whether directly or indirectly) in the outcome of the proceeding.” 7 Collier
on Bankruptcy ¶1109.01[3] (Richard Levin & Henry J. Sommer eds., 16th ed. 2018) (emphasis
in original).
In In re Alpha Natural Resources Inc., 544 B.R. 848, this Court recognized that the term
“party in interest” appears throughout the Bankruptcy Code but “is not defined, and the Court of

18 This Court has previously declined to address the issue of whether the standing analysis under Article III and the
“[r]ight to be heard” analysis under section 1109 are different. In re Alpha Nat. Res. Inc., 544 B.R. 848, 854 n.8
(Bankr. E.D. Va. 2016). The Court does not need to resolve this issue in the current case because Mar-Bow both
fails to qualify as a “party in interest”under section 1109(b) and also lacks Article III standing.
Appeals for the Fourth Circuit has not elaborated on its meaning in § 1109(b).” Id. at 855.
Nevertheless, this Court found that the Fourth Circuit had determined the term “party in interest”
to mean “one who has a pecuniary interest in the distribution of assets to creditors” in
interpreting section 502 of the Bankruptcy Code and “persons whose pecuniary interests are
directly affected by the bankruptcy proceedings” in the context of section 102 of the Bankruptcy

Code. Id. (quoting Grausz v. Englander, 321 F.3d 467, 473 (4th Cir. 2003); Yadkin Valley Bank
& Tr. Co. v. McGee (In re Hutchinson), 5 F.3d 750, 756 (4th Cir. 1993)). Applying the canon of
statutory construction that “a term is presumed to have the same meaning throughout a statute,”
id. (quoting Va. Office for Prot. & Advocacy v. Reinhard, 405 F.3d 185, 190 (4th Cir. 2005)),
this Court held that a “party in interest” under section 1109(b) must have a “pecuniary interest at
stake” that would be “‘directly affected’ by the bankruptcy proceeding’” Id. at 856 (quoting In re
Hutchinson, 5 F.3d at 756). Similar definitions of section 1109 adopted by the Second, Third,
and Seventh Circuits bolstered this interpretation. Id.at 855(citing cases).
Accordingly, whether Mar-Bow has a right to be heard on the Rule 60(d) Motion

pursuant to section 1109 of the Bankruptcy Code turns on whether Mar-Bow has a pecuniary
interest that would be directly affected by the relief sought in the Rule 60(d) Motion. Mar-Bow
asserts that it has “a pecuniary interest for standing purposes” because “a monetary distribution
to Mar-Bow is a colorably arguable consequence of McKinsey’s frauds on the Court.”19
Mar-Bow Resp. ¶19. By its Rule 60(d) Motion, Mar-Bow asks that the Court find McKinsey
RTS committed a fraud upon the Court and, to sanction such conduct, “(1)order[ ] McKinsey
RTS to disgorge its fees and expenses ...; (2)order[ ] McKinsey RTS to disgorge all of the
MIO’s illegal profits relating to its investments in Contura...; and (3)order[ ] such additional

19 In order to resolve the issue of standing, the Court does not need to address the merits of Mar-Bow’s very serious
allegation that McKinsey RTS committed a fraud on the Court and, as such, makes no finding in that regard.
monetary sanctions as the Court deems appropriate.”20 Id. ¶20. The District Court has already
held that Mar-Bow has no pecuniary interest in any fees and expenses that may be disgorged by
McKinsey RTS. Mar-Bow II, 2017 WL 4414155, at *18. As definitively stated by the District
Court:
Mar-Bow lost any pecuniary interest in the approval of
McKinsey’s Fee Applications on July 12, 2016, when the
Bankruptcy Court confirmed the Reorganization Plan. When the
Plan was finalized, the expected recovery for Mar-Bow’s class of
claim became fixed. All additional cash will be distributed to
holders of “Allowed Secured First Lien Lender Claims,” which
does not include Mar-Bow. Therefore, even if the Court were to
grant Mar-Bow’s requested relief by remanding the case to the
Bankruptcy Court with all of Mar-Bow’s proposed mandates, and
even if the Bankruptcy Court then sanctioned McKinsey by
disgorging all of its fees, those fees would return as cash to the
Estate and be distributed to holders of “Allowed Secured First Lien
Lender Claims.” Mar-Bow would receive no pecuniary benefit at
all.
Id.(emphasis in original) (footnote omitted).
The same logic applies when considering any disgorgement of profits or additional
monetary sanctions hypothetically ordered by the Court in response to the Rule 60(d) Motion.
Mar-Bow maintains that it has a pecuniary interest in these parts of the “monetary distribution”
because “the disposition of any monetary sanctions that the Court imposes on McKinsey RTS for
its abuses of the judicial process is entirely in the Court’s discretion,” and the Court should order
that “all monetary sanctions be distributed broadly to those unsecured creditors on a pro-rata

20 “MIO” is not defined in the Rule 60(d)(3) Motion and has referred to various McKinsey RTS affiliates in
different pleadings throughout the Bankruptcy Case. Compare Third Suppl. Decl. Kevin Carmody Supp. Appl.
Debtors Retain & Employ McKinsey RTS, ¶20, In re Alpha Nat. Res., Inc., Case No. 15-33896-KRH (May 19,
2016), ECF No. 2464 (defining “MIO” as MIO Partners, Inc. and MIO Partners, Inc. (EU)), with Mar-Bow Resp.
¶3 (defining “MIO” as McKinsey Investment Office). However, based on the history of the allegations in the
Bankruptcy Case, “MIO”generically refers to a McKinsey RTS affiliate(s)that servesas a vehicle for administering
McKinsey & Company, Inc.’sERISA plan(s). “Contura”refers to Contura Energy,Inc., the legal entity “created in
order to facilitate a successful credit bid by the First Lien Lenders for any of the Debtors’ Assets....”
Confirmation Order, supra note 8, app. I at art. I, §A.161.
[sic] basis.” Mar-Bow Resp. ¶¶22. However, “[a] bankruptcy court’s order of confirmation is
treated as a final judgment with res judicata effect.” First Union Commercial Corp. v. Nelson,
Mullins, Riley & Scarborough (In re Varat Enters., Inc.), 81 F.3d 1310, 1315 (4th Cir. 1996)
(internal citations omitted). Even if the Court were to order disgorgement and other monetary
sanctions, such money would be distributed as additional cash to the holders of “Allowed

Secured First Lien Lender Claims,” “which does not include Mar-Bow,” as required by the terms
of the Plan. Mar-Bow II, 2017 WL 4414155, at *18 (emphasis added). Thus, Mar-Bow has no
pecuniary interest at stake in the current proceeding that would qualify it as a party in interest
under section 1109(b).
Even more fundamentally, Mar-Bow lacks standing under Article III to permit the Court
to consider its Rule 60(d) Motion. The first element of Article III standing is an “injury in fact,”
defined as “‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and
‘actual or imminent, not conjectural or hypothetical.’” Spokeo, 136 S. Ct. at 1547, 1548 (quoting
Lujan, 504 U.S. at 560)). Mar-Bow has no injury in fact in the current matter that satisfies this

standard. To begin with, Mar-Bow has no legally protected interest in McKinsey RTS’s
disgorged fees and expenses, disgorged profits, or any othersanctions ordered by the Court. Any
such hypothetical funds, if awarded, would be distributed to “Allowed Secured First Lien Lender
Claims.” The legally protected interest in these funds, to the extent one exists, belongs to the
First Lien Lenders, as defined by the Plan.21 Mar-Bow’s professed claim to these funds is
exceedingly “conjectural” and “hypothetical,” not “actual or imminent.” Lujan, 504 U.S. at 560
(internal quotations omitted). Mar-Bow’s only method of accessing those funds would require it
to prevail on its fraud on the court claim, obtain the disgorgement and monetary sanctions it

21 Notably, the First Lien Lenders have not appeared or filed any pleadings in connection with this current dispute
between Mar-Bowand McKinsey RTS and have not otherwise sought any relief against McKinsey RTS.
seeks, and then convince this Court to sidestep the terms of the confirmed Plan to bestow the
funds upon the unsecured creditors on a pro rata basis. The Court considers such an interest far
too conjectural to constitute an injury in fact.
To the extent Mar-Bow alleges “injury to the public’s confidence in the integrity of the
Court’s process in this case,” Mar-Bow Resp. ¶ 31 (emphasis omitted), or “a wrong against

institutions set up to protect and safeguard the public,” Hr’g Tr. 14:5-8, Apr. 23, 2019, ECF No.
50,that injury is a generalized grievance insufficient to support Article III standing. “[W]hen the
asserted harm is a ‘generalized grievance’ shared in substantially equal measure by all or a large
class of citizens, that harm alone normally does not warrant exercise of jurisdiction.” Warth v.
Seldin, 422 U.S. 490, 499 (1975) (internal citations omitted). “Normally, of course, an
individual lacks standing when seeking ‘not remediation of its own injury[,] ...but vindication
of the rule of law—the “undifferentiated public interest.”’” Mar-Bow II, 2017 WL 4414155, at
*17 n.41 (alteration in original) (citing Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 106
(1998)). Public confidence in the integrity of the courts is the quintessential generalized

grievance, shared by all citizens in substantially equal measure. Mar-Bow’s desire to restore that
confidence and rectify a wrong visited upon our public institutions would be an attempt to
vindicate the undifferentiated public interest. This alleged harm does not confer standing under
Article III.22

22 Rather, in such an instance in bankruptcy cases, the U.S. Trustee would be the proper party to raise such
concerns. Notably, here, the U.S. Trustee’s objections to McKinsey RTS’s allegedly problematic Bankruptcy Rule
2014 disclosures were resolved by the Settlement Order. The Court notes that Mar-Bow’s very serious fraud
allegations are carved out of the Court-approved settlement between the U.S. Trustee and McKinsey RTS and that
the U.S. Trustee remains free to pursue those allegations if it deems appropriate. Similarly, the United States
Attorney retains the ability to institute an action under title 18 of the United States Code if so warranted.
Mar-Bow contends that the issue of standing is fundamentally different in the context of
Federal Rule 60(d)(3).23 See Mar-Bow Resp. ¶ 13 (“Rule 60(d)(3) and the caselaw that
interprets it recognize the unique necessity that a court resolve a claim of fraud on the court on
the merits, unbound by procedural restrictions applicable to other proceedings, including
standing restrictions.” (emphasis in original)). However, this argument fundamentally conflates

this Court’s equitable powers to remedy a fraud on the court with whether Mar-Bow,
specifically, has standing to prosecute this claim of fraud on the court.
Mar-Bow relies on Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944),
to assert that the inherent equity power of the Court permits it to depart from the standing
doctrine to remedy a fraud on the court. In Hazel-Atlas, the Supreme Court recognized that a
court sitting in equity is not constrained by the “evils of archaic rigidity” and can equitably
intervene to “accord all the relief necessary to correct the particular injustices” of a fraudulent
judgment. Id. at 248. Mar-Bow analogizes the actions taken in Hazel-Atlas to wrongfully obtain
a patent judgment to McKinsey RTS’s alleged frauds on this Court. Mar-Bow Resp. ¶¶24-32.

Yet, in Hazel-Atlas, the standing of the parties was not in question because the party seeking to
set aside the fraudulent patent judgment was the defendant in the prior case against whom the
judgment was entered. Hazel-Atlas, 322 U.S. at 239-44. The case at bar more closely resembles
the case of Houck ex rel. United States v. Folding Carton Administration Committee (In re
Folding Carton Antitrust Litigation), 881 F.2d 494 (7th Cir. 1989). There a plaintiff brought a
claim of fraud on the court pursuant to Federal Rule 60(b) relying on Hazel-Atlas to establish
standing. Id. at 505. The district court determined that the plaintiff “lacked standing to bring an
independent action under Rule 60(b),” and the Seventh Circuit affirmed. Id. In explaining its

23 Seesupranote 1.
decision, the Seventh Circuit observed that “[t]he cases relied upon by [the plaintiff] in asserting
that his lack of standing is immaterial are not germane to his argument because they involve
movants whose legal interests were affected by the judgment sought to be set aside.” Id. The
Seventh Circuit concluded that “[a] nonparty who seeks to attack a fraudulently obtained
judgment through an independent action is required to show that his legal interests are affected.”

Id. (citation omitted). This Mar-Bow failed to do.
Notwithstanding Mar-Bow’s unsupported conclusion that motions for relief under
Federal Rule 60(d)(3) are unique in that they afford even “non-parties” standing, this Court
concludes otherwise, holding that “any party who invokes the court’s authority must establish
standing.” Ansley v. Warren, 861 F.3d 512, 517 (4th Cir. 2017) (citing Ariz. Christian Sch.
Tuition Org. v. Winn, 563 U.S. 125, 133 (2011)). While concededly Federal Rule 60(d)(3) “does
not limit a court’s power to . . . set aside a judgment for fraud on the court,”24 nothing in the
plain text of the rule hints that it permits a plaintiff to evade the ordinary standing requirements
established by Article III or the pecuniary interest requirement mandated by Congress to be

heard under section 1109(b) of the Bankruptcy Code. Courts that have heard Federal Rule
60(d)(3) claims have applied the typical Article III standard for standing. See, e.g., Gache v. Hill
Realty Assocs., LLC, No. 13-CV-1650 (CS), 2014 WL 5048336, at *4-5 (S.D.N.Y. Sept. 22,
2014) (applying the three-part, Article III standing test to a plaintiff bringing claims under
24 Because Mar-Bow lacks standing to bring the Rule 60(d) Motion, the Court does not need to reach the issue of
whether equity would support the relief sought therein. The Court notes that Mar-Bowis only one of the thousands
of creditors that filed claims in the Bankruptcy Case. See supra note 5. Mar-Bow held less than 0.025% of the
Debtors’ pre-Petition Date debt. Its claim was fully satisfied under the terms of the confirmed Plan. Seesupra note
10. Yet, Mar-Bow is the only creditor seeking to effectively upset the deal struck among all constituencies in the
Plan. The Court further notes that the Plan allowed the Reorganized Debtors not only to reorganize their businesses
and save thousands of jobs, but also to become, just over two years after entry of the Confirmation Order, “the
largest U.S. producer of metallurgical coal” as the product of a merger with Contura. Mot. Final Decree, supra note
5, at 4 n.2. Such a result could not have been possible without parties being able to rely upon the finality of the Plan
and the distributions provided thereunder. While Mar-Bow’s very serious allegations about McKinsey RTS are
indeed troubling, granting the relief sought in the Rule 60(d) Motion would necessarily have wide-reaching
ramifications adversely affecting parties far beyond those involved in the dispute at bar.
Federal Rule 60, including a Federal Rule 60(d)(3) claim for “fraud on the Bankruptcy Court”).
The Court concludes that Federal Rule 60(d)(3) claims, by their nature, do not exempt a plaintiff
from meeting ordinary standing requirements.
Finding that Mar-Bow does not have standing to pursue the Rule 60(d) Motion, the Court
turns to Mar-Bow’s oral request at the Hearing, if the Court determined that that Mar-Bow

lacked a pecuniary interest, for “the appointment of an investigator to look into McKinsey’s
conduct in this case,” explaining it would be “inappropriate to dismiss Mar-Bow’s claims and let
McKinsey get away without explaining itself to this Court.” Hr’g Tr. 31:8-32:10, Apr. 23, 2019,
ECF No. 50. As there is no longer a pending contested matter, the Court declines to appoint an
investigator pursuant to Rule 706 of the Federal Rules of Evidence. To the extent that the Court
may have the ability to appoint an examiner sua sponte, pursuant to the authority granted to it
under section 105(a) of the Bankruptcy Code, the Court elects not to do so at this time.
Conclusion
For the foregoing reasons, the Rule 60(d) Motion is denied for lack of standing. The oral

request for the appointment of an examiner is denied. A separate order shall issue.
DATED: May 17, 2019 /s/ Kevin R. Huennekens
UNITED STATES BANKRUPTCY JUDGE

ENTERED ON DOCKET:
May 17, 2019

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10462987. Public record. Not legal advice.