Section 1123 Contents of plan (Judge Gargotta)
Crescent Resources v. Burr (July 22, 2011)
Issue: Does the Plan of Reorganization “specifically and unequivocally” retain the causes of action alleged in the Complaint?
Holding: This Court finds that (1) the Plan preserved the claims made in the Complaint under Sections 544, 548, and 550 and turnover claims with language which was specific and unequivocal, (2) the Plan does not preserve the claims made in the Complaint under “state fraudulent transfer law,” and (3) the Court grants leave for the Plaintiff to amend the Complaint consistent with this Opinion. The Defendant’s Motion to Dismiss should be DENIED in part and GRANTED in part.
In re Crescent Resources (July 22, 2011)
Issue: Does the Trust have authority and standing to pursue turnover claims under Section 542 of the Bankruptcy Code? Also, does this Court have jurisdiction over these claims?
Holding: The Court rejects the Trust’s argument that Movant Duke lacks standing to bring this challenge. The Court finds that (1) the Debtor’s Plan of Reorganization and related documents effectively transferred ownership of any attorney-held files owned by the Debtor to the Litigation Trust and (2) the Plan preserved turnover claims with language which was specific and unequivocal. Therefore, the Trust has standing to pursue the Turnover Claims and this court has subject matter jurisdiction.
In re Mangia Pizza Investments, LP (June 14, 2012)
Issue: Can either the Debtor’s or Creditor Cloud Cap’s competing Plan be confirmed?
Holding: Debtor’s Plan is denied because it is not feasible under § 1129(a)(11) and it violates the absolute priority rule of § 1129(b)(2)(B)(ii). It also discriminates against an equity owner of the Debtor. The fact that Creditor acquired a claim and then proposed a plan is not per se bad faith. The Creditor’s Plan, however, is also not confirmed, but they may file a non-material modification to deal with exculpation, releases, default language, and other mechanical provisions. Further, Creditor must provide for the payment of the Debtor’s counsel and demonstrate that they have the funds to pay all administrative, secured, and priority claims, and make a distribution to unsecured creditors on a pro rata basis at 22%.