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SO ORDERED. a Sane, □□

SIGNED September 30, 2025. Sy MP EES

"STRICT OFS

Ww: Kohe—

Ww. KOLWE

ED STATES BANKRUPTCY JUDGE

UNITED STATES BANKRUPTCY COURT

WESTERN DISTRICT OF LOUISIANA

LAFAYETTE DIVISION

In re: Case No. 17-51323

Linder Oil Company, A Partnership,

Debtor

Lucy G. Sikes, Chapter 7 Trustee and Chapter 7

the Cadle Company, II, Inc.,

Plaintiffs

Judge John W. Kolwe

v.

Crescent Bank & Trust; Consolidated Adv. Proc. No. 19-5105

Reserves Company, L.C.; Roger D.

Linder; G. Miles Biggs, Jr.; Louisiana

General Oil Company; and Linder

Energy Company

Defendants

REPORT AND RECOMMENDATION ON PRETRIAL MOTIONS

The District Court has withdrawn the reference in this and a few related

adversary proceedings to allow for a trial by jury. Once before the District Court, the

parties collectively filed 12 pre-trial motions, which the District Court has referred to

this Court. All of these motions concern the scope of evidence to be permitted at trial,

whether motions in limine or Daubert motions. The Court has considered each Motion

and is now prepared to rule. The Court is issuing this ruling as a Report and

Recommendation.

THE MOTIONS

Defendants G. Miles Biggs, Jr., Roger Linder, Consolidated Reserves

Company, L.C., Louisiana General Oil Company, and Linder Energy Company

(collectively, the “Non-Bank Defendants”) have filed two motions:

• Motion in Limine to Exclude Evidence Inconsistent with Plaintiffs’

Complaint at Trial (ECF #492) (D.Ct. #25);

• Motion in Limine to Exclude Evidence Sought to Be Introduced at Trial

for an Improper Purpose (ECF #493; D.Ct. #26).

The Plaintiffs, Lucy G. Sikes, Trustee (the “Trustee”) for the Chapter 7 Estate

of Linder Oil Company, A Partnership (the “Debtor”), and The Cadle Company II,

Inc. (“Cadle”), have filed nine motions:

• Motion to Introduce Deposition Testimony of Roberta Linder Cuccia at

Trial (ECF #494; D.Ct. #27);

• Motion to Introduce Deposition Testimony of Fred B. Morgan, III at

Trial (ECF #495; D.Ct. #28);

• Motion to Introduce Deposition Testimony of Bonnie Higgins at Trial

(ECF #496; D.Ct. #29);

• Motion to Exclude or, Alternatively, Limit the Expert Report and

Testimony of Defendants’ Expert, Thomas M. Talley, P.G. (ECF #497;

D.Ct. #30);

• Motion to Exclude or, Alternatively, Limit the Expert Report and

Testimony of Defendants’ Expert, H. Kenneth Lefoldt, Jr., CPA (ECF

#498; D.Ct. #31);

• Motion to Exclude or, Alternatively, Limit the Expert Report and

Testimony of Defendants’ Expert, Joseph H. Neely (ECF #499; D.Ct.

#32);

• Motion to Exclude or, Alternatively, Limit the Expert Report and

Testimony of Defendants’ Expert, Ralph A. Litolff, Jr. at Trial (ECF

#500; D.Ct. #33);

• Motion in Limine Regarding Cadle’s Acquisition of the Loans and Other

Litigation (ECF #501; D.Ct. #34); and

• Motion in Limine to Bar Evidence Relating to Enterprise Insolvency,

Including Expert Testimony, at Trial (ECF #502; D.Ct. #35).

Finally, both the Non-Bank Defendants and Defendant Crescent Bank & Trust

have filed a Motion to Introduce Deposition Testimony of Daniel Cadle at Trial (ECF

#506; D.Ct. #43).

Thus, there are a total of 12 Motions before the Court: four Daubert motions,

four motions concerning the use of deposition testimony at trial, and four motions

dealing with other issues. However titled, all of these motions are motions in limine

subject to the same general standard, addressed in the next section. For the

background facts and jurisdictional analysis, the Court adopts its Ruling on Motions

for Partial Summary Judgment (ECF #475).

GENERAL STANDARD FOR MOTIONS IN LIMINE

All twelve motions are motions in limine, which is “any motion, whether made

before or during trial, to exclude anticipated prejudicial evidence before the evidence

is actually offered.”1 “Motions in limine are intended to prevent allegedly prejudicial

evidence from being so much as whispered before a jury prior to obtaining the Court's

permission to broach the topic.”2 “The grant or denial of a motion in limine is

considered discretionary, and thus will be reversed only for an abuse of discretion and

a showing of prejudice.”3 Although it is common for parties to file motions in limine,

courts have routinely noted that they are often used to raise issues that would be

1 Luce v. United States, 469 U.S. 38, 40 n.2, 105 S. Ct. 460, 462, 83 L. Ed. 2d 443 (1984).

2 Cramer v. Sabine Transp. Co., 141 F. Supp. 2d 727, 733 (S.D. Tex. 2001).

3 Hesling v. CSX Transp., Inc., 396 F.3d 632, 643 (5th Cir. 2005) (citing Buford v. Howe, 10 F.3d

1184, 1188 (5th Cir. 1994)).

better reserved for the actual trial of the case, as Judge Doughty in the Western

District recently noted:

“It is well settled that motions in limine are disfavored.”

Auenson v. Lewis, 1996 WL 457258, at *1 (E.D. La.

8/12/1996) (citing Hawthorne Partners v. AT&T

Technologies, Inc., 831 F. Supp. 1398, 1400 (N.D. Ill.

1993)). “Motions in limine are frequently made in the

abstract and in anticipation of some hypothetical

circumstance that may not develop at trial.” Collins v.

Wayne Corp., 621 F.2d 777, 784 (5th Cir. 1980) (superseded

on other grounds). “An order in limine excludes only clearly

inadmissible evidence; therefore, evidence should not be

excluded before trial unless it is clearly inadmissible on all

potential grounds.” Rivera v. Robinson, 464 F. Supp. 3d

847, 853 (E.D. La. 2020) (quoting Auenson, 1996 WL

457258, at *1) (emphasis added). Instead, courts should

reserve evidentiary rulings until trial so that questions as

to the evidence “may be resolved in the proper context.”

Auenson, 1996 WL 457258, at *1. Last, a motion “set[ting]

forth a [ ] laundry list of matters, most of them of a highly

vague nature ... constitutes an improper ‘shotgun’ motion

which fails to meet this court’s standards for motions in

limine.” Estate of Wilson v. Mariner Health Care, Inc., 2008

WL 5255819, at *1 (N.D. Miss. Dec. 16, 2008).4

Accordingly, unless evidence meets the stringent standard for exclusion at the

pretrial stage, denial of a motion in limine is without prejudice to reasserting

objections at trial as appropriate under the Federal Rules of Evidence.

The Court will now address each set of motions.

DAUBERT MOTIONS

Daubert Standard

In determining the admissibility of expert testimony, this Court is guided by

Rule 702 of the Federal Rules of Evidence and the standard established in Daubert v.

Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), as interpreted by the Fifth

4 United States v. Brown-Manning, No. 3:23-CR-00213, 2025 WL 242205, at *1 (W.D. La. Jan. 17,

2025).

Circuit Court of Appeals. Under Daubert, district courts serve as gatekeepers, tasked

with ensuring that expert testimony is both relevant and reliable before it may be

presented to the jury.5

The Fifth Circuit has emphasized that expert testimony must be assessed for

both its reliability and relevance.6 Reliability requires an assessment of whether the

reasoning or methodology underlying the testimony is scientifically valid, while

relevance requires that the testimony “assist the trier of fact to understand the

evidence or to determine a fact in issue.”7

To determine reliability, courts may consider the non-exclusive Daubert

factors:

1. Whether the theory or technique has been tested;

2. Whether it has been subjected to peer review and publication;

3. The known or potential rate of error;

4. The existence and maintenance of standards controlling the technique’s

operation; and

5. Whether the methodology is generally accepted within the relevant scientific

community.8

Expert testimony must also be based on more than “subjective belief or

unsupported speculation.”9 Even a qualified expert may offer an opinion that is

inadmissible if the opinion lacks a reliable foundation or if the expert has not reliably

applied the methodology to the facts of the case.10 “Although the Daubert analysis is

applied to ensure expert witnesses have employed reliable principles and methods in

reaching their conclusions, the test does not judge the expert conclusions

5 See Kumho Tire Co. v. Carmichael, 526 U.S. 137, 147 (1999); Moore v. Ashland Chem. Inc., 151

F.3d 269, 275–76 (5th Cir. 1998) (en banc).

6 United States v. Ebron, 683 F.3d 105, 139 (5th Cir. 2012).

7 Knight v. Kirby Inland Marine Inc., 482 F.3d 347, 352 (5th Cir. 2007).

8 Daubert, 509 U.S. at 593–94; Johnson v. Arkema, Inc., 685 F.3d 452, 459 (5th Cir. 2012).

9 Daubert, 509 U.S. at 590.

10 See Kumho Tire, 526 U.S. at 153-54.

themselves.”11 Ultimately, the burden is on the party offering the expert to establish

admissibility.12

In this case, the four Daubert motions generally do not attack the reliability of

the expert testimony, i.e., the reasoning or methodology of the experts, which is

typically the more complicated determination for a Daubert motion and the prong

that benefits most from deciding in advance of trial to save the jury’s time. Instead,

the motions primarily focus on the relevance of the expert testimony, placing these

motions squarely within the typical motion in limine analysis. The Court now turns

to each of the Plaintiffs’ Daubert motions.

Motion Regarding Thomas M. Talley, P.G. (ECF #497; D.Ct. #30)

The Plaintiffs challenge the use of Thomas M. Talley, a geologist who issued

an expert report, on the grounds that his opinions on the so-called “group insolvency”

or “enterprise insolvency” theory are irrelevant to this trial based on this Court’s

rejection of that theory in its Ruling on multiple Motions for Partial Summary

Judgment.13 The Plaintiffs refer to a series of oil-and-gas reserves reports prepared

by Collarini Associates in 2015-2016 (the “Collarini Reports”), and the Plaintiffs

argue that Crescent is trying to use Talley to vouch for the reliability of those third-

party reports, with the “apparent objective [being] to enable its second expert, H.

Kenneth Lefoldt, Jr., CPA…to use the Collarini Reports as the basis for his opinion

that the Linder Group was solvent at the relevant times, and thereby refute the

Trustee’s claims.”14

11 Guy v. Crown Equip. Corp., 394 F.3d 320, 325 (5th Cir. 2004) (citing Daubert, 509 U.S. at 594–

95) (emphasis in Guy).

12 See Moore, 151 F.3d at 276.

13 See Ruling on Motions for Partial Summary Judgment, pp. 19-23 (ECF #23).

14 See Plaintiffs’ Memorandum in Support, pp. 2-3 (ECF #497-1). Remarkably, neither the

Plaintiffs nor the Defendants actually attached Mr. Talley’s opinions. The Plaintiffs have submitted a

13-page Expert Report from Mr. Talley dated June 21, 2024 (ECF #503) that does not contain a single

opinion, only Mr. Talley’s qualifications and information on his employer. The Defendants submitted

excerpts from a deposition transcript with their Opposition, as did the Plaintiffs with their Reply, but

that is the extent of the evidence before the Court.

In connection with its March 31, 2025 Ruling on Motions for Partial Summary

Judgment (ECF #475), this Court rejected Crescent’s “group insolvency” theory.15

Crescent’s theory is that solvency for purposes of the Louisiana revocatory action

should be determined by reference to several companies that are legally related to

the Debtor, but not directly liable to the creditors, rather than the solvency of just the

Debtor, which is the only entity liable to the unsecured creditors. The Court found

that the theory has no support in Louisiana statutory or case law and therefore

rejected it. That Ruling remains the law of the case, and thus the Defendants may

not rely on Mr. Talley’s report or testimony that is contrary to the Court’s previous

Ruling. Thus, to the extent Mr. Talley’s testimony seeks to address the “group

insolvency” theory for purposes of the Louisiana revocatory action, the Court

recommends that this motion be granted in part. Otherwise, to the extent the

Defendants might use Mr. Talley’s testimony for any other proper purpose, the Court

recommends that this motion be denied in part so that the Defendants may address

any such argument at trial.

Motion Regarding H. Kenneth Lefoldt, Jr., CPA (ECF #498; D.Ct.

#31)16

The Plaintiffs seek to exclude the testimony of H. Kenneth Lefoldt, Jr., CPA,

proposed expert witness for the Non-Bank Defendants. First, they attack the

reliability of his testimony to the extent he relies on the contents of the Collarini

Reports referenced above. As the Plaintiffs note, Fed. R. Evid. 703 permits experts to

base their opinions on facts or data from other sources, but they argue that Mr.

Lefoldt is simply parroting the findings of the Collarini Reports. Put another way,

they claim Mr. Lefoldt is not providing an original opinion. In response, Crescent

argues that courts have allowed experts to rely on reserve reports in rendering expert

opinions, and the extent of Mr. Lefoldt’s reliance on the reports goes to the weight of

15 See Ruling on Motions for Partial Summary Judgment, pp. 19-23 (ECF #475).

16 The Plaintiffs initially attached the wrong Memorandum in Support to their motion but

submitted the correct Memorandum in Support as a separate filing. See Memorandum in Support of

Lefoldt Motion (ECF #504).

his testimony, not its admissibility.17 This Court agrees with Crescent on this point

and does not find Mr. Lefoldt’s report or anticipated testimony to be unreliable on

that basis.

The Plaintiffs’ primary argument with respect to Mr. Lefoldt is that his

testimony is not relevant because it concerns the “group insolvency” theory that the

Court rejected. The Court agrees and recommends treating this motion the same as

the motion concerning Mr. Talley’s testimony: granting it in part to the extent the

testimony concerns the “group insolvency” theory in the context of the Louisiana

revocatory action but otherwise denying it in part and determining in the context of

trial whether it may be relevant to any other issue in the case.18

Motion Regarding Joseph H. Neely (ECF #499; D.Ct. #32)

The Plaintiffs have also filed a Daubert Motion concerning the use of Joseph

H. Neely’s proposed expert testimony. Mr. Neely is the former director of the Federal

Deposit Insurance Corporation in Washington, D.C., and the former commissioner of

the Department of Banking and Consumer Finance for the State of Mississippi. His

expert report, dated June 6, 2024, sets out four opinions regarding the banking

relationships among the various parties, including the Debtor and Crescent,

specifically:

• Opinion #1: There is no basis to suggest that Linder’s personal

relationship with Crescent executives compromised the business

relationship to the benefit of Consolidated and/or Crescent.

• Opinion #2: In this case, Plaintiffs’ allegations that Crescent lacked

concern for intercompany transfers, source of payments and other

17 See Crescent’s Opposition, pp. 6-8 (ECF #524).

18 For its part, Crescent argues that the group insolvency theory may be relevant to supposed

Louisiana Oil Well Lien Act (“LOWLA”) claims by the three putative predicate creditors in this case.

Id. at pp. 10-11 (ECF #524). As Crescent is well aware, no such LOWLA claims have ever been at issue

in this case, so the Court is doubtful that evidence of the solvency of the entire so-called Linder Oil

Group would be relevant to any issue or would do anything other than confuse the jury.

relationships does not support the conclusion that Crescent departed

from acceptable banking practices or breached any banking regulations.

• Opinion #3: There is no evidence to suggest that the Debtor was in

concert with Crescent Bank and Consolidated to defraud the Debtor’s

creditors, including First NBC.

• Opinion #4: The purchaser in a loan sale transaction with the FDIC

assumes the position of the former lender, via the receivership transfer,

regarding the former lender’s contractual relationship with the

borrower.

See Neely Expert Report (ECF #512-1). Mr. Neely explains these opinions with

extensive discussion in his report.

The Plaintiffs claim Mr. Neely’s opinions should be excluded because they

opine on legal matters which are better handled by the Court. For Opinion #2, which

opines that Crescent did not breach banking regulations, the Plaintiffs argue that

that point has never even been alleged and that the opinion should be excluded on

that basis. The Defendants point out that experts are permitted to discuss applicable

laws and regulations in reaching their own opinions, and Mr. Neely’s opinions are not

necessarily simply pure legal conclusions.

Although a close call, particularly with respect to Opinion #4 the Court tends

to agree with the Defendants, and finds, based on the record before it, that Mr. Neely’s

opinions are not, on their face, improper, and potential problems could be alleviated

with appropriate jury instructions. Certainly Mr. Neely is qualified to opine on

banking matters based on his extensive experience, and the Court cannot say at this

time that his opinions are unreliable or irrelevant in the abstract, as presented in

these pretrial motions.

The Court therefore recommends that this motion be denied, and any specific

objection the Plaintiffs’ may have can be addressed at trial.

Motion Regarding Ralph A. Litolff, Jr. at Trial (ECF #500; D.Ct. #33)

The Plaintiffs attack the anticipated testimony of Ralph A. Litolff, Jr., whom

the Non-Bank Defendants have retained to opine on the solvency of the Debtor during

the period of 2010-2016, on the grounds that he is not an expert on statutory

insolvency standards and that he bases his valuation opinions on the Debtor’s tax

returns. In the Plaintiffs’ view, his expert testimony should go beyond the tax returns

and rely on other independent facts to prove the Debtor’s solvency. In opposition, the

Non-Bank Defendants essentially argue that Mr. Litolff does have experience with

the statutory insolvency standards and that the Plaintiffs’ arguments really go to the

weight of Mr. Litolff’s testimony, which the jury should be able to decide.

The Court agrees with the Non-Bank Defendants’ position. The Court does not

find that Mr. Litolff’s methodology is flawed on its face or that it should be excluded

simply because he relied on the Debtor’s filed tax returns. Instead, the Court finds

that the Plaintiffs’ argument primarily goes to the weight of Mr. Litolff’s anticipated

testimony, and that is a matter that can certainly be addressed through cross-

examination before the jury. Accordingly, the Court recommends that this motion be

denied.

MOTIONS CONCERNING USE OF DEPOSITION TESTIMONY AT TRIAL

The Court now turns to the four motions concerning the use of deposition

testimony at trial. The admissibility of deposition testimony at trial is governed by

Rule 32 of the Federal Rules of Civil Procedure. Under Rule 32(a)(4), a party may use

deposition testimony in lieu of live testimony at trial if the witness is unavailable,

including when the witness is outside the court’s subpoena power. Specifically, Rule

32(a)(4)(B) provides, in relevant part:

A party may use for any purpose the deposition of a

witness, whether or not a party, if the court finds: (B) that

the witness is more than 100 miles from the place of

hearing or trial... unless it appears that the absence was

procured by the party offering the deposition….

The 100-mile limitation aligns with the subpoena power of the Court as

outlined in Rule 45(c)(1)(A), which generally limits subpoenas for trial attendance to

persons within 100 miles of the courthouse or within the state if certain conditions

are met. See Fed. R. Civ. P. 45(c).

Pre-recorded video deposition testimony or the reading of deposition testimony

are “acceptable substitute[s] for oral testimony when in-court observation of the

witness is extremely difficult or virtually impossible.”19 “The party who wishes to use

the deposition has the burden of showing the unavailability of the witness.”20

The requisite showing to permit deposition testimony over

live testimony is steep. Deposition testimony is prohibited

unless “live testimony from the deponent is impossible or

highly impracticable.” [Swearingen v. Gillar Home Health

Care, L.P.), 759 Fed. Appx. 322, 324 (5th Cir. 2019]

(quoting McDowell v. Blankenship, 759 F.3d 847, 851 (8th

Cir. 2014)). This standard has been likened to when “the

witness [is] unavailable to testify because he is dead.”

Ruelas v. W. Truck & Trailer Maint., Inc., 2019 WL

13150106 at *2 (W.D. Tex. Oct. 1, 2019) (internal marks

omitted). The burden of attending trial must be more than

mere inconvenience. See Swearingen, 759 Fed. Appx. at

324 (seeing little relevance in the fact that a witness would

miss work); see also Ruelas, 2019 WL 13150106 at *2

(denying use of doctor’s deposition at trial because “he is a

currently practicing orthopedic surgeon and requiring him

to appear live in lieu of treating patients is not

warranted.”). A showing of one of the Rule 32(a)(4)

exceptions is also strictly enforced. See Swearingen, 759

Fed. Appx. at 322 (witness located 95.5 miles away was not

“sufficiently close” to satisfy Rule 32(a)(4)(B)).21

Significantly, the exceptions are alternative, so a party need only prove that

one of the exceptions exists, such as the witness being located more than 100 miles

19 Greinstein v. Granite Servs. Int’l, Inc., No. 2:18-CV-208-Z-BR, 2023 WL 3943231, at *1 (N.D.

Tex. June 9, 2023) (quoting Swearingen v. Gillar Home Health Care, L.P.), 759 Fed. Appx. 322, 324

(5th Cir. 2019)).

20 Swearingen v. Gillar Home Health Care, L.P., 759 F. App’x 322, 324 (5th Cir. 2019) (citing Jauch

v. Corley, 830 F.2d 47, 50 (5th Cir. 1987)).

21 Greinstein, id. at *2.

away, to satisfy the exception to the use of deposition testimony. However, the

proponent of the deposition must still prove that the evidence is admissible:

In considering the use of depositions at a trial or hearing,

it is helpful to remember that the problem has two aspects.

First, the conditions set forth in Rule 32(a) must be

satisfied before the deposition can be used at all. Second,

when it is found that these conditions authorize the use of

the deposition, it must be determined whether the matters

contained in it are admissible under the rules of evidence.

Under some circumstances state law may be determinative

of the second point. But state law has no bearing on the

first, which is controlled solely by Rule 32(a) itself.22

In this case, all four motions involve witnesses who live more than 100 miles

from the courthouse, so Rule 32(a)(4)(B)’s exception is satisfied, leaving the issue of

whether that testimony is admissible.

Motion to Introduce Deposition Testimony of Roberta Linder Cuccia

(ECF #494; D.Ct. #27)

The Plaintiffs seek to use portions of the deposition of Roberta Linder Cuccia

at trial because she testified that she received benefits and paychecks from the Debtor

even though she was not actually employed by the Debtor, and she purportedly

invoked her Fifth Amendment privilege against self-incrimination in the deposition,

which under case law cited by the Plaintiffs makes the deposition available for use at

trial.

In response, the Defendants argue that the only reason the Plaintiffs seek to

introduce the testimony is to point to her invocation of the Fifth Amendment, and the

Fifth Circuit has held that invoking the right is an ambiguous response. Therefore,

the Defendants argue that the deposition testimony would be unfairly prejudicial or

misleading to the jury.

22 Wright & Miller, Federal Practice and Procedure (3d ed.), § 2142 (General Principles Relating

to the Use of a Deposition) (footnotes omitted).

Based on the Court’s review of the submitted deposition excerpts and the

arguments of the parties, the Court recommends that the Plaintiffs’ motion be denied

in part and granted in part as follows:

Denied in Part. The Court agrees with the Defendants

that any reference to Ms. Cuccia’s invocation of the Fifth

Amendment in her deposition testimony would be unfairly

prejudicial and could possibly mislead the jury. Thus, the

Court recommends that the Plaintiffs’ motion to use Ms.

Cuccia’s invocation of the Fifth Amendment be denied in

part.

Granted in Part. Since Ms. Cuccia’s testimony regarding

the status of her employment with the Debtor and the

benefits and paychecks she received from the Debtor

appear to be relevant, and thus admissible, the Court

recommends that this motion be granted in part.

Motion to Introduce Deposition Testimony of Fred B. Morgan, III (ECF

#495; D.Ct. #28);

The Court previously denied the Plaintiffs’ Motion to Compel Deposition of

Fred Morgan by Order dated July 17, 2024 (ECF #390), in large part because Crescent

argued that he had already given an extensive Rule 2004 Examination deposition on

behalf of Crescent in Debtor’s main bankruptcy case, and because any additional

deposition would be a burden on Mr. Morgan, who was in poor health at the time

(undergoing major cancer treatments) and was not expected to be able to testify at

trial. The Court’s denial of that motion to compel a second deposition was premised

on the fact that Mr. Morgan’s Rule 2004 Examination testimony might be used at

trial in lieu of live testimony.

Thus, the Court recommends that the Plaintiffs’ motion be granted, that the

Defendants be allowed to counter-designate testimony from the deposition for their

own use at trial as set out in Exhibit A to their Opposition (ECF #527-1), and that

the Plaintiffs’ own designations be allowed as set out in their Reply (ECF #560) and

the Exhibit thereto (ECF #560-1).

Motion to Introduce Deposition Testimony of Bonnie Higgins (ECF

#496; D.Ct. #29)

There was no objection to this Motion, and the Court recommends that it be

granted, allowing the Plaintiffs to use the deposition testimony of Bonnie Higgins at

trial, subject to any proper evidentiary objections raised at trial.

Motion to Introduce Deposition Testimony of Daniel Cadle (ECF #506;

D.Ct. #43).

Finally, there was no objection to this Motion, and the Court recommends that

it be granted, allowing the Plaintiffs to use the deposition testimony of Daniel Cadle

at trial, subject to any proper evidentiary objections raised at trial and subject to the

caveat, as explained below in connection with Plaintiffs’ Motion in Limine Regarding

Cadle’s Acquisition of the Loans and Other Litigation (ECF #501; D.Ct. #34), that any

reference to the purchase price should be excluded except to the extent that the

Plaintiffs make it a live issue by referring to the Defendants’ attempted purchase of

the same debt for a low price.

REMAINING MOTIONS

The Court now turns to the remaining four motions, which concern more

general issues.

Non-Bank Defendants’ Motion in Limine to Exclude Evidence

Inconsistent with Plaintiffs’ Complaint at Trial (ECF #492) (D.Ct. #25)

The Non-Bank Defendants seek to exclude evidence allegedly inconsistent with

the Plaintiffs’ Complaint at trial. First, they argue that the Complaint states that

Cadle is the successor to First NBC Bank (“FNBC”) and is a secured creditor, so any

evidence contrary to those assertions must be excluded. (The Non-Bank Defendants

also argue that Cadle is imputed with FNBC’s knowledge, but that assertion is

beyond the scope of this motion, which only seeks to exclude evidence inconsistent

with the Complaint, not to make legal determinations.) In response, the Plaintiffs

argue that this Court has already ruled on these matters multiple times, and this

motion in limine effectively represents a third bite at the apple. Regardless of that

issue, the Plaintiffs correctly point out that Cadle’s Proofs of Claim only assert that

$4.17 million of its claim, a tiny percentage, is secured, and the Complaint never

states that Cadle is fully secured. Thus, the motion should be denied to the extent it

seeks to exclude evidence that Cadle is only partially secured.

Furthermore, there is no question that Cadle is a successor in interest to

FNBC, and Cadle has never claimed otherwise. The real significance to the

Defendants of Cadle’s status as FNBC’s successor in interest is their argument that

that status imputes FNBC’s knowledge to Cadle and therefore destroys certain claims

by the Plaintiffs. The Court has not previously addressed the question of whether any

knowledge imputed to Cadle could affect the Trustee’s claims. Thus, to the extent the

motion seeks to preclude Cadle from arguing that it is not a successor in interest to

FNBC, it should be granted, but to the extent the motion seeks to preclude the

Plaintiffs from making any argument regarding knowledge supposedly imputed to

Cadle and its effect on the case, it should be denied, as that question remains open,

and any evidence on that point cannot be said to be clearly inadmissible prior to trial.

The Non-Bank Defendants also argue that the Plaintiffs should not be able to

recover the so-called Partner Distributions beyond what they identified in the

Amended Complaint. Paragraph 13 of the Amended Complaint alleges that Mr.

Linder and Mr. Biggs made distributions of almost $9 million in 2009 and 2010.23

Paragraph 55 states: “The Debtor’s financial statements also reveal that the Debtor

made ‘partners [sic] distributions’ in 2009 of $4,374,000 and in 2010 of $4,568,500

(the ‘Partner Distributions’).”24 The Defendants argue that these are the only Partner

Distributions the Plaintiffs may seek to recover.

The Plaintiffs argue that there were similar distributions made from 2010

through 2017 and that this is really a disguised motion for summary judgment rather

than a mere evidentiary motion. The Court respectfully disagrees. First, the Plaintiffs

23 Amended Complaint, ¶ 13 (ECF #74).

24 Id., ¶ 55).

specifically defined the Partner Distributions to be those made in 2009 and 2010 in

their own Amended Complaint. Second, the Defendants have not waived this

argument. The Non-Bank Defendants’ Memorandum in Support of Motion for

Summary Judgment, for example, argues that the Amended Complaint overstated

the amount of Partner Distributions in 2009 and 2010.25

Based on the case law cited by the Non-Bank Defendants,26 it seems that the

Partner Distributions, as defined in the Amended Complaint, include only

distributions made in 2009 and 2010, and any evidence of Partner Distributions from

outside that time period should be excluded from consideration of any award to or

recovery by the Plaintiffs based on Partner Distributions specifically. However, the

Court does not believe that a flat exclusion of all evidence of such distributions should

be made prior to trial. It seems clear to the Court that the nature of the Plaintiffs’

claims, including the allegations of a pattern of fraud, may require reference to

distributions and other transactions for other purposes. It is not proper to effectively

close off any reference to evidence because one use might not be permissible (i.e., it

should not be used in determining any award to or recovery by the Plaintiffs) if it

could be permissible for other purposes. Thus, with respect to Partner Distributions,

the Court recommends that this motion be granted in part and denied in part.

Non-Bank Defendants’ Motion in Limine to Exclude Evidence Sought

to Be Introduced at Trial for an Improper Purpose (ECF #493; D.Ct.

#26)

In this motion, the Non-Bank Defendants seek to exclude a 2011 DOI letter

and 2009 misdemeanor conviction involving the Debtor, as well as the deposition of

Roberta Linder Cuccia, because that evidence’s probative value is substantially

outweighed by the danger of unfair prejudice.

25 See Non-Bank Defendants’ Memorandum in Support of Motion for Partial Summary Judgment,

pp. 16-18 (ECF #423-1).

26 See Cunningham v. Offshore Specialty Fabricators, Inc., 2010 U.S. Dist. LEXIS 163635, *34-35

(E.D. Tx. 2010); In re Corland Corp., 967 F.2d 1069, 1079 (5th Cir. 1992); and United States ex rel.

Ghaprial v. Quorum Health Resources, Inc., 1999 U.S. Dist. LEXIS 325, *12-13 (E.D. La. 1999).

First, the Defendants argue that the Debtor’s 2009 misdemeanor conviction for

failing to implement sufficient safeguards to detect and prevent the discharge of

produced water into a body of water is more than 10 years old and therefore, under

Fifth Circuit case law, by definition unduly prejudicial. The Defendants argue that

this evidence is not even relevant, so any prejudice would outweigh its probative

effect. The Plaintiffs argue that the Debtor’s actions in connection with the 2009

misdemeanor conviction could be used to impeach the testimony of defendants Mr.

Linder and Mr. Biggs to the extent they assert that they did not have authority over

the Debtor. Given that there are numerous other ways to prove that those individuals

exercised control and that the 2009 misdemeanor for failing to implement certain

environmental controls does not relate to any of the claims at issue here, the Court

finds that any probative value would be substantially outweighed by potential

prejudice. The Court recommends that this motion be granted in part with respect to

the 2009 misdemeanor conviction.

Similarly, the Defendants argue that a 2011 letter to the Debtor from the U.S.

Department of the Interior concerning civil penalties for violation of a regulation

should be excluded on the same basis. The Court agrees. The Plaintiffs argue that the

circumstances surrounding the issuance of the 2011 letter demonstrates alleged false

statements by Mr. Biggs and Mr. Linder and shows that they exercised control over

the Debtor. The Court finds that the letter is not relevant to the Plaintiffs’ claims

because the circumstances giving rise to the letter are not at issue in this dispute,

while the suggestion that the individual Defendants made false statements is

prejudicial. Furthermore, it is not seriously disputed that Mr. Biggs and Mr. Linder

exercised control over the Debtor, and there are many other ways to prove that fact.

Because the main use of this otherwise irrelevant evidence seems to be to suggest

that the individual Defendants are generally untrustworthy, the Court finds that the

prejudicial effect of the 2011 letter outweighs any probative value and should

therefore be excluded. The Court therefore recommends that the motion be granted

in part with respect to the letter.

Finally, the Defendants seek to exclude the deposition and text messages of

Roberta Linder Cuccia, Mr. Linder’s daughter and a non-party to this proceeding. The

Defendants argue that the Plaintiffs will seek to use the deposition solely to point to

her invocation of the Fifth Amendment, which would be unduly prejudicial. In

connection with the Plaintiff’s Motion to Introduce Deposition Testimony of Roberta

Linder Cuccia (ECF #494; D.Ct. #27), discussed above, the Court already found that

referring to Ms. Cuccia’s invocation of the Fifth Amendment would indeed be unduly

prejudicial, and this motion should be granted with respect to the Fifth Amendment

invocation. However, the deposition and text messages contain other evidence beyond

the limited invocation of the Fifth Amendment, and that evidence could be

admissible. Thus, the Court recommends that this motion be denied in part as to the

deposition and text messages unrelated to the Fifth Amendment issue.

Plaintiffs’ Motion in Limine Regarding Cadle’s Acquisition of the Loans

and Other Litigation (ECF #501; D.Ct. #34)

In this motion, the Plaintiffs seek to exclude any evidence regarding Cadle’s

acquisition of the FNBC loans for less than face value and evidence of other related

litigation, on the ground that what Cadle paid for the loans is irrelevant, and the

evidence regarding Cadle’s litigation practices in other matters would not only be

irrelevant but would be unfairly prejudicial in painting Cadle as litigious.

The Defendants argue that the evidence of what Cadle paid for the loans is

relevant because the Amended Complaint seeks to portray Crescent in a bad light for

attempting to buy the loans for a relatively small sum (which was, as the Defendants

acknowledge, less than what Cadle paid), and because Crescent’s status as holder in

due course is at issue.

First, the Court thinks the probative value of the facts concerning Cadle’s

purchase is very low, given that Cadle purchased the debt after the petition date, and

Cadle’s actions are not really in question. Furthermore, Crescent’s status as holder

in due course has never really been at issue throughout the entire course of this

protracted adversary proceeding, whether in the Defendants’ various answers to the

complaint or in their motions. Thus, evidence of Cadle’s acquisition of the debt does

not seem relevant, while there is a risk of jury confusion and prejudice to Cadle, and

the Court would recommend granting this motion absent any other factors.

However, in the interest of fair play, to the extent the Plaintiffs might attempt

to suggest fraudulent intent from the fact that the Defendants sought to purchase the

debt for a low price, then the Defendants should be able to counter that inference by

presenting evidence that Cadle itself purchased the debt for a similarly low price. Out

of an abundance of caution, the Court recommends granting this motion except to the

extent the Plaintiffs seek to introduce evidence of the Defendants’ attempted

purchase of the debt.

Plaintiffs’ Motion in Limine to Bar Evidence Relating to Enterprise

Insolvency, Including Expert Testimony, at Trial (ECF #502; D.Ct.

#35)

The Plaintiffs seek to exclude any evidence of the Defendants’ “enterprise

insolvency” or “group insolvency” theory, which is a theory put forward by the

Defendants that insolvency must be determined not for the individual Debtor but for

the entire group of Debtor-affiliated companies for purposes of satisfying the

insolvency element of the Plaintiffs’ claims. The Plaintiffs based this motion on the

fact that this Court, in its Ruling on Motions for Partial Summary Judgment, this

rejected the group insolvency theory altogether. Because the Court has already

rejected the group insolvency theory, any evidence pertaining to it is irrelevant and

should be excluded with respect to the insolvency element of the Plaintiffs’ claims.

Tellingly, the Defendants’ opposition continues to assert the group insolvency

theory and amounts to a collateral attack on the Court’s Ruling on Motions for Partial

Summary Judgment. The Court will not reverse that decision, and the Defendants

should not be able to confuse the jury with reference to a concept that has no legal

basis.27

The Court is therefore inclined to recommend that this motion be denied.

However, the Court is mindful of the fact that references to the financial health of

27 See also footnote 18, supra.

the Debtor and generally affiliated entities may be relevant to other defenses in this

case, such as Crescent’s reasoning in deciding to lend to certain entities in the first

place, and it is impossible to predict in advance whether there might be some proper

purpose or how to appropriately limit the scope of such evidence. Accordingly, out of

an abundance of caution, the Court recommends that this motion be granted in part

to the extent the Defendants seek to discuss “group insolvency” in the context of the

Louisiana revocatory action but otherwise denied in part, allowing the parties to take

up the issue at trial in the context of a live dispute.

RECOMMENDED DISPOSITION OF EACH MOTION

For the reasons set out above,

IT IS RECOMMENDED that the Plaintiffs’ Motion to Exclude or,

Alternatively, Limit the Expert Report and Testimony of Defendants’ Expert, Thomas

M. Talley, P.G. (ECF #497; D.Ct. #30) be GRANTED IN PART with respect to

testimony regarding the “group insolvency” theory in connection with the Louisiana

revocatory action but otherwise DENIED IN PART.

IT IS FURTHER RECOMMENDED that the Plaintiffs’ Motion to Exclude or,

Alternatively, Limit the Expert Report and Testimony of Defendants’ Expert, H.

Kenneth Lefoldt, Jr., CPA (ECF #498; D.Ct. #31) be GRANTED IN PART with respect

to testimony regarding the “group insolvency” theory in connection with the

Louisiana revocatory action but otherwise DENIED IN PART.

IT IS FURTHER RECOMMENDED that the Plaintiffs’ Motion to Exclude or,

Alternatively, Limit the Expert Report and Testimony of Defendants’ Expert, Joseph

H. Neely (ECF #499; D.Ct. #32) be DENIED.

IT IS FURTHER RECOMMENDED that the Plaintiffs’ Motion to Exclude or,

Alternatively, Limit the Expert Report and Testimony of Defendants’ Expert, Ralph

A. Litolff, Jr. at Trial (ECF #500; D.Ct. #33) be DENIED.

IT IS FURTHER RECOMMENDED that the Plaintiffs’ Motion to Introduce

Deposition Testimony of Roberta Linder Cuccia at Trial (ECF #494; D.Ct. #27) be

DENIED IN PART as to her invocation of the Fifth Amendment but otherwise

GRANTED IN PART, permitting the Plaintiffs to use her testimony concerning, inter

alia, the status of her employment with the Debtor and the benefits and paychecks

she received from the Debtor.

IT IS FURTHER RECOMMENDED that the Plaintiffs’ Motion to Introduce

Deposition Testimony of Fred B. Morgan, III at Trial (ECF #495; D.Ct. #28) be

GRANTED, that the Defendants be allowed to counter-designate testimony from the

deposition for their own use at trial as set out in Exhibit A to their Opposition (ECF

#527-1), and that the Plaintiffs’ own designations be allowed as set out in their Reply

(ECF #560) and the Exhibit thereto (ECF #560-1).

IT IS FURTHER RECOMMENDED that the Plaintiffs’ Motion to Introduce

Deposition Testimony of Bonnie Higgins at Trial (ECF #496; D.Ct. #29) be

GRANTED.

IT IS FURTHER RECOMMENDED that the Defendants’ Motion to Introduce

Deposition Testimony of Daniel Cadle (ECF #506; D.Ct. #43) be GRANTED.

IT IS FURTHER RECOMMENDED that the Non-Bank Defendants’ Motion in

Limine to Exclude Evidence Inconsistent with Plaintiffs’ Complaint at Trial (ECF

#492) (D.Ct. #25) be GRANTED IN PART insofar as the Plaintiffs seek to recover

damages under their Partner Distributions claim for distributions before 2009 or

after 2010 but otherwise DENIED IN PART.

IT IS FURTHER RECOMMENDED that the Non-Bank Defendants’ Motion in

Limine to Exclude Evidence Sought to Be Introduced at Trial for an Improper

Purpose (ECF #493; D.Ct. #26) be GRANTED IN PART with respect to the 2009

misdemeanor conviction, the 2011 Department of the Interior letter, and Roberta

Linder Cuccia’s invocation of the Fifth Amendment, but otherwise DENIED IN

PART.

IT IS FURTHER RECOMMENDED that the Plaintiffs’ Motion in Limine

Regarding Cadle’s Acquisition of the Loans and Other Litigation (ECF #501; D.Ct.

#34) be GRANTED except to the extent the Plaintiffs seek to introduce evidence of

the Defendants’ attempted purchase of the debt.

IT IS FURTHER RECOMMENDED that the Plaintiffs’ Motion in Limine to

Bar Evidence Relating to Enterprise Insolvency, Including Expert Testimony, at Trial

(ECF #502; D.Ct. #35) be GRANTED IN PART with respect to testimony regarding

the “group insolvency” theory in connection with the Louisiana revocatory action but

otherwise DENIED IN PART.