
    IN RE: ALLIED CONSOLIDATED INDUSTRIES, INC., Debtor. John K. Lane, Plaintiff, v. State of Ohio, Defendant.
    CASE NUMBER 16-40675 (Substantively Consolidated)
    ADVERSARY NUMBER 17-04033
    United States Bankruptcy Court, N.D. Ohio.
    Signed December 21, 2017
    
      Michael J. Moran, Gibson & Moran, Cuyahoga Falls, OH, for Plaintiff.
    Richard P. Schroeter, Jr, Amer Cunningham Co., L.P.A., Akron, OH, for Defendant.
   MEMORANDUM OPINION REGARDING MOTION TO DISMISS AND/OR REQUEST FOR ABSTENTION FROM JURISDICTION

HONORABLE KAY WOODS

This cause is before the Court on Motion to Dismiss and/or Request for Abstention from Jurisdiction (“Motion to Dismiss”) (Doc. 5) filed by Defendant State of Ohio, Department of Taxation (“State of Ohio”), on November 8, 2017. The State of Ohio requests that the Court either (i) dismiss this adversary proceeding pursuant to Federal Rule of Civil Procedure 12(b)(1) or (6); or (ii) abstain from hearing this adversary proceeding pursuant to 11 U.S.C. § 505(a). On November 20, 2017, John K. Lane, Trustee of the Creditor Trust (“Creditor Trustee”), filed Response to Motion to Dismiss and/or Request for Abstention from Jurisdiction (“Response”) (Doc. 6). On November 27, 2017, the State of Ohio filed Reply to Trustee’s Response to Department of Taxation’s Motion to Dismiss (“Reply”) (Doc. 7).

For the reasons set forth herein, the Court will deny the Motion to Dismiss.

This Court has jurisdiction pursuant to 28 U.S.C. § 1334 and General Order No. 2012-7 entered in this district pursuant to 28 U.S.C. § 157(a). Venue in this Court is proper pursuant to 28 U.S.C. §§ 1391(b), 1408, and 1409. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). The following constitutes the Court’s findings of fact and conclusions of law pursuant to Federal Rule of Bankruptcy Procedure 7052.

I. BACKGROUND

A. Main Case

On April 13, 2016, Debtors and Debtors-in-Possession Allied Consolidated Industries, Inc., Allied Erecting & Dismantling Co., Inc., Allied Industrial Scrap, Inc., and Allied-Gator, Inc. (collectively, “Debtors”) filed voluntary petitions pursuant to chapter 11 of the Bankruptcy Code. The Debtors’ cases were substantively consolidated on July 11, 2016, and Case No. 16-40675 (“Main Case”) was designated as the case to be used for docketing purposes (see Main Case, Doc. 123).

On December 30, 2016, the State of Ohio filed a proof of claim in Case No. 16^10672, which was denominated Claim No. 8-1 (“Claim 8”). The State of Ohio asserts a claim in the amount of $993,950.58, of which it asserts $881,918.75 is a priority claim pursuant to 11 U.S.C. § 507(a)(8) and $112,031.83 is a general unsecured claim. On December 30, 2016, the Debtors filed Objection to Proof of Claim Number 8 Filed by the Ohio Department of Taxation (“Objection”) (Main Case, Doc. 226). The Debtors seek to disallow Claim 8 in its entirety on the basis that their “records indicate that no tax, interest or penalties are due for the time period indicated on Proof of Claim number 8.” (Obj. ¶ 7.) The Debtors provide no further basis for the Objection. The State of Ohio filed State of Ohio, Department of Taxation’s Response to Debtor’s Objection to Proof of Claim No. 8 (“Objection Response”) (Main Case, Doc. 262) on January 27, 2017. The State of Ohio states, “Debtor’s bare bones objection is insufficient to contest the presumed validity of ODT’s claim and should be summarily denied.” (Obj. Resp. at 1.) On January 80, 2017, the Official Committee of Unsecured Creditors (“Committee”), filed Official Committee of Unsecured Creditors [sic] Statement in Support of Debtor’s Objection to Proof of Claim No. 8 Filed by the Ohio Department of Taxation and Response [sic] to State of Ohio, Department of Taxation’s Response to Debtor’s Objection to Proof of Claim No. 8 (Main Case, Doc. 264). On February 2, 2017, the State of Ohio filed State of Ohio, Department of Taxation’s Response to Committee’s Statement in Support of Debtor’s Objection to Proof of Claim No. 8 (Main Case, Doc. 269).

The Objection was scheduled for a hearing on February 15, 2017. The day prior to that hearing, the Debtors rescheduled the hearing to April 26, 2017 (see Main Case, Doc. 282). Two days before the rescheduled hearing, the State of Ohio filed Motion to Continue Hearing on Objection to Claim No. 8 (Main Case, Doc. 347). With the consent of the Debtors, the State of Ohio moved for an indefinite continuance of the Objection until the Court resolved two pending motions to convert the Main Case to a chapter 7 proceeding. The following day, the Court granted the motion and adjourned the Objection until a future date to be scheduled by the Court (see Main Case, Doc. 348).

After the Debtors unsuccessfully attempted to propose a confirmable chapter 11 plan of reorganization, on May 2, 2017, the Debtors and the Committee jointly filed Second Amended Joint Plan of Reorganization Proposed by the Debtor and the Official Committee of Unsecured Creditors (“Joint Plan”) (Main Case⅝ Doc. 356) and Amended Second Disclosure Statement for Joint Plan of Reorganization Proposed by the Debtor and the Official Committee of Unsecured Creditors (“Joint Disclosure Statement”) (Main Case, Doc. 357). Exhibit A to the Joint Plan is the Creditor Trust Agreement. The State of Ohio did not object to either the Joint Disclosure Statement or the Joint Plan. The Court held a confirmation hearing regarding the Joint Plan on June 14, 2017, and, on June 19, 2017, entered Order Confirming Second Amended Joint Plan of Reorganization, as Modified (“Confirmation Order”) (Main Case, Doc. 378). Pursuant to the Joint Plan and Confirmation Order, Inglewood Associates, LLC, represented by Mr. Lane, was appointed Creditor Trustee of the Creditor Trust. On June 20, 2017, the Court denied both motions to convert the Debtors’ case to a chapter 7 proceeding (see Main Case, Docs. 380-81).

One of the primary issues before the Court is whether the Joint Disclosure Statement, Joint Plan, Creditor Trust Agreement, and/or Confirmation Order (collectively, “Plan Documents”) reserved for the Creditor Trustee the right to pursue this adversary proceeding. The relevant provisions of the Plan Documents are set forth as follows.

1. Joint Disclosure Statement

The dispute between the Debtors and State of Ohio is expressly addressed in the Joint Disclosure Statement:

Debtor believes that there are no tax claims, except the State of Ohio, Department of Taxation (“ODOT”) filed proof of claim number 8-1 in the AED Case in the amount of $993,950.58 based upon an assessment. Of that amount ODOT claims $881,918.75 is a Tax Claim and $112,031.83 is a Class 5 Claim. The Debtor believes that there may be a basis to challenge this assessment inasmuch as it is based upon a use tax for equipment used in manufacturing. The Debtor believes that such equipment is exempt from use tax. The Debtor will continue through the process necessary to challenge this assessment. The balance of the other State of Ohio claims asserting priority is approximately $15,000.

(Jt. Disclosure Statement Art. 11(c).)

2. Joint Plan and Creditor Trust Agreement

The Joint Plan and Creditor Trust Agreement do not expressly mention the dispute between the Debtors and State of Ohio. However, the parties identify the following provisions of those documents as relevant to this adversary proceeding.

First, the Joint Plan addresses Disputed Claims:

A “Disputed Claim” is an Unclassified Claim or a Classified Claim in Classes 1, 4, 5 or 6 that has- not been allowed or disallowed (by a Final Order), or as to which either: (i) a proof of claim or an application has been filed . or deemed filed, and the Reorganized Debtor, the Creditor Trustee or any other party in interest has filed an objection ....

(Jt. Plan Art. 5.1.) Because the Objection was filed prior to the Joint Plan, the claim of the State of Ohio is, by definition, a Disputed Claim. The Joint Plan provides that a Disputed Claim will receive no distribution until the Court enters an order upholding the validity of the Disputed Claim. {Id. Art. 5.2.) Because the Objection has not been withdrawn or resolved by an order of the Court, the claim of the State of Ohio remains a Disputed Claim.

Second, the Joint Plan states that all of the Debtors’ “rights, title and interest in and to the Litigation Claims, shall be transferred to the Reorganized Debtor, to be prosecuted, defended, compromised, settled and otherwise dealt with in its sole and absolute discretion.” {Id. Art. 6.2.) The Litigation Claims are defined in the Joint Plan as “all of the following actions and the various claims for breaches of contract, covenants, good faith, fair dealing, consequential and business damage claims that were listed in the Debtor’s bankruptcy schedules: .... ” {Id. Art. I.) The Objection is not (i) identified in the Joint Plan as a Litigation Claim; or (ii) a claim for breach of contract or damages listed in the Debtors’ bankruptcy schedules. In addition, because this adversary proceeding had not been initiated when the Joint Plan was filed, it could not have been identified in the Joint Plan as a Litigation Claim. Accordingly, neither the Objection nor this adversary proceeding constitutes a Litigation Claim transferred to the Reorganized Debtor.

Third, the Joint Plan provides that the Trust Assets will be transferred to the Creditor Trust upon confirmation of the Joint Plan. {Id. Art. 8.2.) The Trust Assets are defined as “all assets of the Debtor as of the Effective Date other than the Reorganized Debtor Assets and include without limitation the following: .(Id.) Neither the Objection nor this adversary proceeding are included in the Trust Assets. As stated in the Joint Plan, “In summary—upon confirmation the Creditor Trust assets [sic] shall receive all of the real and personal property of the Debtor, both tangible and intangible, except the Litigation Claims which shall remain with the Reorganized Debtor ....” (Id.)

Fourth, the Joint Plan grants the Creditor Trustee the following authority:

(m) To object to any Claim and prosecute Claims objections pursuant to the provisions of this Plan and to be substituted as the real party in interest in any objection to a claim or any litigation commenced before the Effective Date by the Creditor Committee or the Debtor other than the Litigation Claims that are not Trust Assets[.]

(Id. Art. 8.3(m).) The authority of the Creditor Trustee, as set forth in the Creditor Trust Agreement, contains a nearly verbatim provision. (Creditor Trust Agreement Art. 6.1(m).) The Creditor Trust Agreement specifies that the Creditor Trustee “shall have only such rights, powers and privileges expressly set forth in the Plan and this Agreement and as otherwise provided by applicable law.” (Id. Art. 6.1.) In addition, the Creditor Trust Agreement further grants the Creditor Trustee the authority to “[p]erform such functions and take such actions as are provided for or permitted in the Plan, the Confirmation Order or any other agreement executed pursuant to the Plan.” (Id. Art. 6.1(r).)

Finally, the Joint Plan states:

[T]he Bankruptcy Court will retain such jurisdiction over the Case and Creditor Trust after the Effective Date as follows:
(a) To hear and decide objections to Claims; and to disallow, determine, liquidate, classify, estimate, or establish the priority or secured or unsecured status or the amount of any Claim, including ... the resolution of any and all objections to the allowance or priority of Claims[.]

(Jt. Plan Art. 9.14(a).)

3. Confirmation Order

The authority granted to the Creditor Trustee pursuant to the Confirmation Order includes the following:

[E]xcept as expressly provided in the Plan, the Trustee shall be deemed a representative of the Debtor’s estate and shall have, and be entitled to exercise, all rights and powers provided to the estates under the Bankruptcy Code, including Section 1107 thereof, in addition to all powers, authority, rights, and responsibilities granted to the Creditor Trustee in the Plan and Trust Agreement.

(Confirmation Order ¶ C.)

B. Adversary Proceeding

On October 6, 2017, the Creditor Trustee filed Complaint for Determination of Tax Liability (Doc. 1) pursuant to 11 U.S.C. § 505. In the Complaint, the Creditor Trustee disputes the amount owed to the State of Ohio as set forth in Claim 8 and requests that this Court determine the correct amount of taxes and penalties owed to the State of Ohio.

In the Motion to Dismiss, the State of Ohio contends that the Joint Plan did not reserve for the Creditor Trustee the power to pursue this adversary proceeding to determine the Debtors’ tax liability to the State of Ohio. Consequently, the State of Ohio argues that the doctrine of res judica-ta bars the Creditor Trustee from pursuing this adversary proceeding. In the alternative, the State of Ohio requests that this Court abstain, from exercising discretionary jurisdiction over this adversary proceeding. Instead, the State of Ohio contends that the Court should resolve this dispute through the pending Objection.

The Creditor Trustee, on the other hand, argues that res judicata is not applicable in this adversary proceeding because there was neither a final' decision on the merits regarding the Debtors’ tax liability nor was this issue previously litigated. The Creditor Trustee also argues that the Joint Plan reserves for the Creditor Trustee the right to object to claims filed in the Debtors’ bankruptcy cases. Finally, the Creditor Trustee argues that the Court should not abstain from hearing this adversary proceeding because § 505 was intended to promote the speedy resolution of tax claims.

II. ANALYSIS

The Court will first address whether res judicata is a defense to this adversary proceeding. The Court will then address whether abstaining from hearing this adversary proceeding is appropriate.

A. Res Judicata

1. Arguments of the Parties

The State of Ohio argues that the Plan Documents fail to reserve for the Creditor Trustee the power to pursue this adversary proceeding. Specifically, the State of Ohio argues that the Joint Plan transferred nearly all litigation claims to the Reorganized Debtor and the claims reserved for the Creditor Trustee do not expressly include adversary proceedings commenced pursuant to 11 U.S.C. § 505. The State of Ohio argues that, except for those causes of action specifically set forth in the Joint Plan, the Joint Plan “grants no other rights in litigation, claims, or causes of action to the Trust.” (Mot. to Dismiss at 6.) The State of Ohio contends that the Creditor Trustee “is bound to challenge [the State of Ohio]’s claim through the already pending claims objection. As a result, this action is barred by the Confirmed Plan under the doctrine of res judicata, and the Trustee lacks standing.” (Id. at 3.)

The State of Ohio further states that the Creditor Trust Agreement does not permit the Trustee to initiate any new litigation, except as follows:

To object to any Claim and prosecute Claims objections pursuant to the provisions of the Plan and to be substituted as the real party in interest in any. objection to a claim or any litigation commenced before the Effective Date by the Creditor Committee or the Debtor other than the Litigation Claims that are not Trust Assets[.]

(Creditor Trust Agreement Art. 6.1.) The State of Ohio concludes that, pursuant to the Creditor Trust Agreement, the Creditor Trustee possesses only those powers expressly set forth therein and, thus, can only be substituted as the real party in interest to pursue the pending' Objection.

The Creditor Trustee, on the other hand, states that the elements of res judi-cata are not present. The Creditor Trustee further argues that the Joint Plan, in fact, (i) reserves jurisdiction for this Court to determine the amount and establish the priority of claims; and (ii) grants the Creditor Trustee the authority to bring an action to do so. Finally, the Joint Disclosure Statement specifically recites the status of the dispute between the Debtors and State of Ohio and placed the State of Ohio on notice that its claim would be challenged.

2. Analysis

Despite the Creditor Trustee’s argument to the contrary, the elements necessary for the defense of res judicata may be present following confirmation of a chapter 11 plan of reorganization. In Browning v. Levy, 283 F.3d 761 (6th Cir. 2002), the Sixth Circuit stated:

As a general rule, the “confirmation of a plan of reorganization constitutes a final judgment in bankruptcy proceedings.” Sanders Confectionery Prods., Inc. v. Heller Fin., Inc., 973 F.2d 474, 480 (6th Cir. 1992). Such confirmation by a bankruptcy court “has the effect of a judgment by the district court and res judicata principles bar relitigation of any issues raised or that could have been raised in the confirmation proceedings.” In re Chattanooga Wholesale Antiques, Inc., 930 F.2d 458, 463 (6th Cir. 1991).

Id. at 772. Furthermore, confirmation of a chapter 11 plan is binding upon a creditor trustee tasked with liquidating the debtor’s assets. “Res judicata also bars those in privity with parties from bringing suit later. Privity in this sense means a successor in interest to the party, one who controlled the earlier action, or one whose interests were adequately represented.” Sanders Confectionery Prods. v. Heller Fin., Inc., 973 F.2d 474, 481 (6th Cir. 1992) (citing Latham v. Wells Fargo Bank, N.A., 896 F.2d 979 (5th Cir. 1990)). However, res judicata is not a valid defense to a cause of action specifically reserved in the plan of reorganization.

Res judicata does not apply where a claim is expressly reserved by the litigant in the earlier bankruptcy proceeding. D & K Props. Crystal Lake v. Mut. Life Ins. Co., 112 F.3d 257, 260 (7th Cir. 1997). Because all of the elements of res judicata are satisfied in the present case, NW must have either adjudicated its claims in the bankruptcy proceeding or reserved them in the reorganization plan or confirmation order. Id. at 259-60; In re Micro-Time Mgmt. Sys., Inc., 1993 U.S. App. LEXIS 859, 1993 WL 7524, at *4.

Browning, 283 F.3d at 774. Thus, the issue before this Court becomes whether the Plan Documents reserved this cause of action for the Creditor Trustee.

First, the general reservation of rights provision in the Confirmation Order is itself insufficient to grant the Creditor Trustee the authority to bring this adversary proceeding. In Browning, the successor in interest to the debtor argued that the following reservation of rights provision in the disclosure statement was sufficient to overcome res judicata:

In accordance with section 1123(b) of the Bankruptcy Code, the Company shall retain and may enforce any claims, rights, and causes of action that the Debtor or its bankruptcy estate may hold against any person or entity, including, without limitation, claims and causes of action arising under section 542, 543, 544, 547, 548, 550, or 553 of the Bankruptcy Code.

Id. at 774-75. The Sixth Circuit disagreed: “[A] general reservation of rights does not suffice to avoid res judicata.” Id. at 774 (citation and parenthetical omitted). The court expounded, “NW’s blanket reservation was of little value to the bankruptcy court and the other parties to the bankruptcy proceeding because it did not enable the value of NW’s claims to be taken into account in the disposition of the debt- or’s estate. Significantly, it neither names SSD nor states the factual basis for the reserved claims.” Id. at 775.

The general reservation of rights in the Confirmation Order, which grants the Creditor Trustee “all rights and powers provided to the estates under the Bankruptcy Code, including Section 1107 thereof’ (Confirmation Order ¶ C), is not materially distinct from the reservation of rights provision in Browning and, thus, does not give the Creditor Trustee the authority to pursue this cause of action.

Second, the retention of jurisdiction paragraph in the Joint Plan is itself insufficient to grant the Creditor Trustee the authority to bring this adversary proceeding. In Harstad v. First American Bank, 39 F.3d 898 (8th Cir. 1994), the debtors argued that the following provision in the chapter 11 plan reserved their right to pursue a post-confirmation preference action: “The Court will retain jurisdiction until this Plan has been fully consummated for the following purposes: ... determination of all causes of actions [sic] between Debtors and any other party, including but not limited to any right of Debtors to recover assets pursuant to the provisions of the Bankruptcy Code .Id. at 902. The Eighth Circuit disagreed:

Article X, captioned “Continuing Jurisdiction,” concerns the ongoing jurisdiction of the Bankruptcy Court for matters that arise after plan confirmation. Noting the retention of the court’s statutory jurisdiction to hear post-confirmation matters is a far cry from reserving to the debtors a right to bring post-confirmation claims to recover preferences paid by the debtors but never disclosed by them during the pre-confir-mation proceedings.

Id. (n. 7 omitted).

Although the Joint Plan specifically retains the Court’s jurisdiction to “hear and decide objections to Claims; and to disallow, determine, liquidate, classify, estimate, or establish the priority or secured or unsecured status or the amount of any Claim, including ... the resolution of any and all objections to the allowance or priority of Claims” (Jt. Plan Art. 9.14.), such provision alone does not grant the Creditor Trustee the authority to bring such claims. As explained by the Eight Circuit in Har-stad, retention of post-confirmation jurisdiction by the bankruptcy court and the reservation of a cause of action by the plan proponent are not synonymous.

Having determined that neither the reservation of rights nor the retention of jurisdiction provision itself is sufficient to reserve the authority for the Creditor Trustee to pursue this adversary proceeding, the Court must next (i) identify those provisions of the Plan Documents that address the claim of the State of Ohio and/or claims in general; and (ii) determine if those provisions adequately reserved the right of the Creditor Trustee to initiate this adversary proceeding.

The Joint Disclosure Statement expressly addresses the claim of the State of Ohio:

Debtor believes that there are no tax claims, except the State of Ohio, Department of Taxation (“ODOT”) filed proof of claim number 8-1 in the AED Case in the amount of $993,950.58 based upon an assessment. Of that amount ODOT claims $881,918.75 is a Tax Claim and $112,031.83 is a Class 5 Claim. The Debtor believes that there may be a basis to challenge this assessment inasmuch as it is based upon a use tax for equipment used in manufacturing. The Debtor believes that such equipment is exempt from use tax. The Debtor will continue through the process necessary to challenge this assessment. The balance of the other State of Ohio claims asserting priority is ' approximately $15,000.

(Jt. Disclosure Statement Art. 11(c) (emphasis added).) The following provision in the Joint Plan addresses the determination of claims generally:

A “Disputed Claim” is an Unclassified Claim or a Classified Claim in Classes 1, 4, 5 or 6 that has not been allowed or disallowed (by a Final Order), or as to which either: (i) a proof of claim or an application has been filed or deemed filed, and the Reorganized Debtor, the Creditor Trustee or any other party in interest has filed an objection ....

(Jt. Plan Art. 5.1.) As stated in Part 1(A)(2) above, because the Objection was filed pri- or to the Joint Plan and the Objection has not been withdrawn or resolved by an order of the Court, the claim of the State of Ohio is a Disputed Claim under the Joint Plan. The Joint Plan also grants the Creditor Trustee the following authority:

To object to any Claim and prosecute Claims objections pursuant to the provisions of this Plan and to be substituted as the real party in interest in any objection to a claim or any litigation commenced before the Effective Date by the Creditor Committee or the Debtor other than the Litigation Claims that are not Trust Assets[.]

(Id. Art. 8.3(m).) The Creditor Trust Agreement contains a nearly verbatim provision. (See Creditor Trust Agreement Art. 6.1(m).)

The State of Ohio asserts that the majority of courts have held that a reservation of rights in a plan of reorganization must be “specific and unequivocal.” (Mot. to Dismiss at 7 (quoting Harstad v. First American Bank, 39 F.3d 898, 902 (8th Cir. 1994)).) However, following briefing in this adversary proceeding, the Sixth Circuit addressed this precise issue in Nestlé Waters North America, Inc. v. Mountain Glacier LLC (In re Mountain Glacier LLC), 877 F.3d 246 (6th Cir. 2017). In Mountain Glacier, the reorganized debtor sought to pursue a pre-petition arbitration claim following confirmation of the chapter 11 plan of reorganization. The opposing party objected on the basis that the plan failed to reserve the arbitration claim. The Sixth Circuit disagreed based on the following disclosures:

The disclosure statement described the claim as “a counterclaim asserted by the Debtor against Nestlé Waters North American, Inc. in arbitration pending in Chicago, IL,” which “remain[ed] unliqui-dated and ha[d] unknown value.” And Mountain Glacier’s plan indicated that this arbitration claim would be transferred to the “Reorganized Debtor”— i.e., Mountain Glacier—upon the plan’s confirmation.

Id. at 248 (citations omitted). Regarding the required reservation of a cause of action, the Sixth Circuit stated, “[A] debtor’s reservation is sufficient so long as it enables creditors to (1) identify the claims (or potential claims) at issue and (2) evaluate whether those claims might provide additional assets for distribution.” Id. at 249 (citations and parenthetical omitted) (emphasis added). The court found that there was “no doubt” that creditors could identify the reserved claim. Id. at 249.

Creditors thus knew that there was an ongoing claim and a potential recovery. If creditors wanted more information, they could have objected to the reservation (or plan) and asked the bankruptcy court to require a more fulsome description. But no creditor did. And Nestlé Waters certainly had all the information it needed—after all, it was the other party in the arbitration.

Id. (internal citation and parenthetical omitted).

In In re Bleu Room Experience, Inc., 304 B.R. 309 (Bankr. E.D. Mich. 2004), the Bankruptcy Court for the Eastern District of Michigan addressed the reservation necessary to provide the authority to dispute claims. The debtor’s disclosure statement generally reserved the right to object to claims and stated that the debtor had not yet completed the claims review process. In addition, the debtor’s plan provided that the reorganized debtor was not obligated to pay any contested claim if the debtor or reorganized debtor filed a motion, objection, or adversary proceeding objecting to the claim. The bankruptcy court found that these provisions were sufficient to support the reorganized debtor’s authority to object to claims. Specifically addressing objections to claims, the court stated:

So long as the debtor’s plan reserves the right to object to claims, creditors have sufficient notice that the amount of their claim may be in dispute. A creditor has the right to vote against the plan if it dislikes the treatment of its claim. Moreover, any adverse impact on the creditor as a result of the fact that its claim potentially remains unliquidated at the time of confirmation, [sic] is outweighed by the substantial disservice to all creditors, due to the delay that would result if every claim objection had to be resolved, or even specified, prior to confirmation.

Id. at 315.

The standard in the Sixth Circuit to reserve a claim following confirmation of a chapter 11 plan of reorganization, as set forth in Browning and expounded upon in Mountain Glacier, requires that creditors be able to identify the claims or potential claims being reserved and evaluate the effects of those claims on the bankruptcy estate. The Plan Documents meet those criteria. First, the Joint Disclosure Statement (i) expressly identifies the tax assessment dispute with the State of Ohio; (ii) provides the basis for the dispute; and (iii) states that the tax assessment will be challenged. Second, the Joint Plan defines the claim of the State of Ohio as a Disputed Claim and provides that no distribution will be made on such Disputed Claim until entry of an order of this Court. Third, the Joint Plan and Creditor Trust Agreement each provide the Creditor Trustee with the authority to object to and prosecute objections to claims.

The Court finds the analysis of the bankruptcy court in Bleu Room Experience guiding. As explained by the bankruptcy court, if a plan reserves the right to object to claims, all creditors who have filed a proof of claim have sufficient notice that their claim may be disputed. In this instance, the Objection was already pending at the time of confirmation, so the State of Ohio was certainly on notice that its claim was disputed.

The State of Ohio argues that the Joint Plan specifically transferred all Litigation Claims to the Reorganized Debtor. However, as explained in Part 1(A)(2) above, neither the Objection nor this adversary proceeding constitutes a Litigation Claim transferred to the Reorganized Debtor.

The State of Ohio also argues that the Joint Disclosure Statement requires the Creditor Trustee to challenge its claim through the Objection, rather than this adversary proceeding filed pursuant to § 505. The State of Ohio relies on the following provision: “The Debtor will continue through the process necessary to challenge [the State of Ohio’s] assessment.” (Jt. Disclosure Statement Art. 11(c).) The State of Ohio argues that, because the Objection was pending when the Joint Disclosure Statement was filed, the above provision requires the Creditor Trustee to “continue” with the Objection. The Court disagrees. Specifically, the above provision authorizes the Creditor Trustee to continue the “process necessary” to contest the State of Ohio’s assessment, but provides no limitation as to what that process is.

Finally, the State of Ohio argues that the Joint Plan and Creditor Trust Agreement do not permit the Creditor Trustee to initiate any new litigation, but only “[t]o object to any Claim and prosecute Claims objections pursuant to the provisions of the Plan and to be substituted as the real party in interest in any objection to a claim or any litigation commenced before the Effective Date .... ” (Creditor Trust Agreement Art. 6.1.) The Court also finds that this provision in not as restrictive as the State of Ohio contends. Being on notice that its assessment against the Debtors was disputed, the State of Ohio likewise was on notice that the Creditor Trustee would take appropriate action to challenge the tax assessment, which could include filing an adversary proceeding pursuant to § 505 to determine the Debtors’ tax liability-

Federal Rule of Bankruptcy Procedure 3007 governs objections to claims, which simply must “be filed and served at least 30 days before any scheduled hearing on the objection .... ” Fed. R. Bankr. P. 3007(a)(1) (2017). In addition, an objection to claim can be made in an adversary proceeding: “A party in interest shall not include a demand for relief of a kind specified in Rule 7001 in an objection to the allowance of a claim, but may include the objection in an adversary proceeding.” Fed. R. Bankr. P. 3007(b). The committee notes to Rule 3007 further explain:

Permitting the plaintiff in the adversary proceeding to include an objection to a claim would not unfairly surprise the defendant as might be the case if the action were brought as a contested matter that included an action to obtain relief of a kind specified in Rule 7001.... If a claim objection is filed separately from a related adversary proceeding, the court may consolidate the objection with the adversary proceeding under Rule 7042.

Id (2007 Comm. Notes).

The Joint Plan and Creditor Trust Agreement authorize the Creditor Trustee to be substituted as the real party in interest to and prosecute the pending Objection. This adversary proceeding, like the Objection, seeks a determination of the allowed amount of Claim 8. This adversary proceeding is, in essence, an amendment to the pending Objection to include a declaratory judgment, which requires an adversary proceeding. To the extent the Creditor Trustee requires leave to amend the Objection, the Court will freely grant such leave. Furthermore, the Court will consolidate the Objection and all responses thereto with this adversary proceeding.

For the reasons set forth above, the Court finds that the Plan Documents reserved for the Creditor Trustee the right to pursue this adversary proceeding to determine the amount and priority of the claim of the State of Ohio.

B. Request for Abstention

1. Arguments of the Parties

The State of Ohio requests that, if the Court does not dismiss this adversary proceeding, the Court abstain from issuing a ruling. The State of Ohio states that this matter involves complex tax issues that are better suited for a tax tribunal. The State of Ohio further argues that the outcome of this adversary proceeding would have no effect on the administration of the estate because its claim is required to be paid in full pursuant to the Joint Plan. However, at the same time, the State of Ohio argues that resolution of its tax claim should be achieved through the Objection, rather than this adversary proceeding, because it is a more efficient and speedy process.

The Creditor Trustee, on the other hand, argues that speedy resolution of this adversary proceeding will prevent further delay of distribution to unsecured creditors. The Creditor Trustee states that resolution of this matter in state court could takes years, “during which time the Trustee would be required to escrow funds to satisfy the State’s priority claim to the detriment of unsecured creditors.” (Resp. at 7.)

2. Analysis

Section 505(a) makes clear that the bankruptcy court’s determination of a tax claim is permissive, rather than mandatory. 11 U.S.C. § 505(a)(1) (2017) (emphasis added) (“Except as provided in paragraph (2) of this subsection, the court may determine the amount or legality of any tax ....”) Courts have generally used a six-part test to determine if abstention is warranted: (i) complexity of the tax issues to be decided; (ii) the need to administer the bankruptcy case in an orderly and efficient manner; (iii) the burden on the bankruptcy court’s docket; (iv) the length of time required for the trial and the decision; (v) the asset and liability structure of the debtor; and (vi) the potential prejudice to the parties. Miller v. IRS (In re Miller), 300 B.R. 422, 432 (Bankr. N.D. Ohio 2003) (citation omitted).

Critical to the Court’s analysis is that the State of Ohio does not argue that this adversary proceeding should be determined by another tribunal. Instead, the State of Ohio argues that this matter should be determined through the Objection, rather than this adversary proceeding. (Reply at 9-10 (“But the parties are not trading this proceeding for one in state court. Instead they are trading this proceeding for a claims objection that is already pending with this Court.”).) As set forth in Part 11(A)(2) above, the Court (i) has determined that the Objection and this adversary proceeding are not separate and distinct; and (ii) will consolidate the Objection with this adversary proceeding. Thus, there is no longer an issue of whether the Creditor Trustee will pursue the Objection or this adversary proceeding.

The State of Ohio has placed too great a distinction on the differences between contested matters, such as the Objection, and adversary proceedings. (Id. at 8 (“It is clear that the Trustee, in hindsight, believes that a § 505(a) action provides him with procedural advantages not available to him in the claims objection proceeding and provides some additional nuisance value to spur a more advantageous settlement.”).) Generally speaking, the same rules of discovery apply in contested matters and adversary proceedings. See FED. R. BANKR. P. 9014(c) (2017). Thus, this adversary proceeding will not provide the Creditor Trustee with any procedural advantages.

Furthermore, the Court’s Adversary Case Management Order (Doe. 2) provides that, absent cause and an order of the Court, discovery should be completed within 120 days after service of the summons and complaint. (Adv. Case Mgmt. Order ¶ 3.) Thus, resolution of this adversary proceeding will not necessarily take any greater time or resources than proceeding with the Objection. Because there is no great distinction between discovery in a contested matter and an adversary proceeding and the State of Ohio does not wish to have the present dispute heard by another tribunal, the factors listed above concerning the appropriateness of abstention are of little or no consequence.

Because the Court must ultimately resolve this matter in one procedural form or another, which the state of Ohio does not dispute, the Court finds that the State of Ohio has not stated any cause for the Court to abstain from moving forward with this adversary proceeding. As explained in Part 11(A)(2) above, the Plan Documents do not limit the manner in which the Creditor Trustee may proceed against the State of Ohio. As a consequence, the Court will deny the State of Ohio’s request to abstain from hearing this adversary proceeding.

III. CONCLUSION

The Joint Disclosure Statement expressly states that the claim of the State of Ohio is disputed, but provides no limitation on the manner in which the Creditor Trustee can dispute such claim. Likewise, the Joint Plan defines Claim 8 as a Disputed Claim and provides that a Disputed Claim will receive no distribution until the Court enters an order upholding the validity of the Disputed Claim. Finally, the Joint Plan and Creditor Trust agreement grant the Creditor Trustee the authority to dispute claims. The Court finds that these provisions collectively authorize the Creditor Trustee to pursue this adversary proceeding to obtain a determination of the tax due to the State of Ohio. The Court also finds that the Plan Documents do not require the Creditor Trustee to dispute the claim of the State of Ohio through the Objection. Regardless, the Court finds that this adversary proceeding is an amendment to the Objection and will consolidate the Objection herein.

The Court also finds that the State of Ohio has not stated cause for this Court to abstain from hearing this adversary proceeding. Specifically, the State of Ohio does not seek to have this dispute heard before another tribunal, but instead seeks to have the Objection heard. The procedural subtleties between contested matters and adversary proceedings are insufficient cause to grant the State of Ohio’s request for abstention.

For the reasons set forth above, the Court will deny the Motion to Dismiss.

An appropriate order will follow.

ORDER DENYING MOTION TO DISMISS AND/OR REQUEST FOR ABSTENTION FROM JURISDICTION

This cause is before the Court on Motion to Dismiss and/or Request for Abstention from Jurisdiction (Doc. 5) filed by Defendant State of Ohio, Department of Taxation, on November 8, 2017. The State of Ohio requests that the Court either (i) dismiss this adversary proceeding pursuant to Federal Rule of Civil Procedure 12(b)(1) or (6); or (ii) abstain from hearing this adversary proceeding pursuant to 11 U.S.C. § 505(a). On November 20, 2017, John K. Lane, Trustee of the Creditor Trust, filed Response to Motion to Dismiss and/or Request for Abstention from Jurisdiction (Doc. 6). On November 27, 2017, the State of Ohio filed Reply to Trustee’s Response to Department of Taxation’s Motion to Dismiss (Doc. 7).

For the reasons set forth in the Court’s Memorandum Opinion Regarding Motion to Dismiss and/or Request for Abstention from Jurisdiction entered on this date, the Court hereby:

1. Finds that the Plan Documents authorize the Creditor Trustee to pursue this adversary proceeding;

2. Finds that the Plan Documents do not require the Creditor Trustee to dispute the claim of the State of Ohio through the Objection;

3. Finds that this adversary proceeding is an amendment to the Objection;

4. To the extent necessary, grants the Creditor Trustee leave to amend the Objection in the form of this adversary proceeding nunc pro tunc to the filing of the Complaint;

5. Orders that the Objection is consolidated with this adversary proceeding;

6. Finds that the State of Ohio has not stated cause for this Court to abstain from hearing this adversary proceeding; and

7. Denies the Motion to Dismiss.

Pursuant to Federal Rule of Bankruptcy Procedure 7012(a), the State of Ohio is required to file an answer to the Complaint within 14 days. However, the Court hereby grants the State of Ohio an extension of time to file an answer until on or before January 11, 2018.

IT IS SO ORDERED. 
      
      . Although the Main Case—In re Allied Consolidated Industries, Inc., Case No. 16-40675—was designated as the case to be used for docketing purposes, the State of Ohio filed Claim 8 in In re Allied Erecting & Dismantling Co., Inc., Case No. 16-40672.
     
      
      . All capitalized terms not defined herein are defined in the Joint Disclosure Statement, Joint Plan, Creditor Trust Agreement, and/or Confirmation Order.
     
      
      . There is no dispute that the Plan Documents do not establish the amount or priority, if any, of Claim 8. The Joint Plan defines Claim 8 as a Disputed Claim for which the State of Ohio will receive no distribution until further order of the Court. Thus, the Plan Documents do not contain the elements for res judicata regarding the merits of Claim 8.
     
      
      . Rights can be reserved in a disclosure statement, as well as a plan of reorganization. “Although the Bankruptcy Code speaks in terms of reservations in the plan, a debtor can preserve its right to litigate claims in either the plan or the disclosure statement.” Goldin Assocs. v. Donaldson, Lufkin & Jenrette Sec. Corp., No. 00 Civ. 8688, 2004 WL 1119652, *3, 2004 U.S. Dist. LEXIS 9153, *13 (S.D.N.Y. May 25, 2004) (citations, parenthet-icals, n. 6 omitted); see also Nestlé Waters North America, Inc. v. Mountain Glacier LLC (In re Mountain Glacier LLC), 877 F.3d 246 (6th Cir. 2017) (examining a disclosure statement in conjunction with a chapter 11 plan of reorganization to assess the adequacy of a reservation of rights).
     
      
      . Federal Rule of Bankruptcy Procedure 7001 governs adversary proceedings, which include proceedings to obtain a declaratory judgment such as a determination of tax liability brought pursuant to § 505.
     
      
      . All capitalized terms not defined herein are defined in the Memorandum Opinion Regarding Motion to Dismiss and/or Request for Abstention.
     