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Nestle Waters v. Mountain Glacier Continues

The case between Nestle Waters and Mountain Glacier could be called "the water wars," except for one thing.

There was a cease-fire when Mountain Glacier filed for bankruptcy and the case was stayed. Now reorganized, the company wants back into the fight.

Nestle Waters said Mountain Glacier waived its claims, but the U.S. Sixth Circuit Court of Appeals said there will be another battle in Nestle Waters North America, Inc. v. Mountain Glacier, LLC.

Reserved Claims

Judge Amal Thapar explained the issue as clear as a mountain spring.

"Sometimes bankrupt debtors want to hold on to legal claims that pre-date their bankruptcies," he wrote. "They are allowed to do so -- but only if they reserve those claims in their reorganization plans."

Recently confirmed as a member of the appeals court, Thapar said it depends on "exactly what a debtor needs to say about a claim to preserve it for later."

The companies were in arbitration when Mountain Glacier filed for bankruptcy. After its reorganization, the delivery company sought to resume its counterclaim.

Nestle Waters, the world's "number one bottled water company," argued that its opponent did not sufficiently identify its arbitration claim. The Sixth Circuit disagreed.

Sufficient Identification

The appeals court said Mountain Glacier identified a counterclaim in its bankruptcy disclosures by naming Nestle Waters in an arbitration pending in Chicago.

"There is no doubt that creditors could identify the claim," the panel said. "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."

According to reports, the water wars will resume.

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