.jpg)
Effect of Pending Appeal on Claim Allowance Under 502
Dennis is right. It also isn't unliquidated.
Maybe you could have the court estimate the claim based on likelihood of success on appeal.
Jeff is there some insurance for the claim? Then you could separately classify but still has to be fair discrimination.
Jason
Sent from my iPhone
> On Apr 17, 2015, at 7:41 PM, cdcbaa cdcbaamailbox@gmail.com [cdcbaa] wrote:
>
> Jeff:
>
> A judgment is not contingent.
>
> D
>
> Dennis McGoldrick, 350 S. Crenshaw Bl., #A207B, Torrance, Ca 90503 310-328-1001-voice
>
>
>> On Apr 16, 2015, at 7:55 AM, Catherine Christiansen christiansenlaw@yahoo.com [cdcbaa] wrote:
>>
>>
>> Why don't you ask the court for a continuance?
>>
>>
>> Law Office of Catherine Christiansen
>> Certified Specialist, Bankruptcy Law, The State Bar of California Board of Legal Specialization.
>>
>>
>>
>>
>>
>>
>>
>>
>>
>> On Wednesday, April 15, 2015 4:40 PM, "jsmith@cgsattys.com [cdcbaa]" wrote:
>>
>>
>>
>> My Chapter 11 debtors have a massive civil judment against them in another state for a personal injury action that went to a jury trial. Their insurance carrier is paying for an appeal of that verdict. The appeal was argued out of state yesterday. Expect a result in a few weeks/months.
>>
>> Plaintiffs timely filed proofs of claim that attach their judgment(s). My DS & Plan are due essentially now.
>>
>> Appellate counsel is arguing a point of law, that if accepted by the state appellate court, would absolve the Debtors of ALL liability. In other words, the biggest argument on the table is "all or nothing" in that appeal. I am looking for case law that allows me to make a limited objection to the claims on the basis of the pending appeal. If we win, we owe these claimants nothing. If we lose the appeal we have to account for them in the plan as unsecured creditors. I've been at this research all day, and cannot find a thing on the effect of an appeal of a jugment on the allowance of a claim.
>>
>> I want to object that the claim is still contingent until the appeal concludes, but I'm not sure that is the right language. I am almost certain that I have seen a case in my career on this issue, but I'm drawing blanks right now.
>>
>> If the claim is allowed it completely skews all the voting numbers and really the plan. The judgments are millions of dollars and outweigh all other debts. If not allowed the plan is pretty simple, we can pay everybody, relatively quick. If allowed, they control the confirmation process and cram down might be an issue.
>>
>> If the appeal is not the basis of objection, then I would ask if you believe that there is basis to seperately classify these claimants based on the pending appeal. It really makes the Plan tough to draft if it is but I'd try to work it that way if I had to.
>>
>> Thanks
>>
>> Jeffrey B. Smith
>
>
type="text/html";
boundaryple-Mail-1C7BE456-0A49-4028-A2A6-37FF3AB9CE8A
The post was migrated from Yahoo.
Jeff:
A judgment is not contingent.
D
Dennis McGoldrick, 350 S. Crenshaw Bl., #A207B, Torrance, Ca 90503 310-328-1001-voice
> On Apr 16, 2015, at 7:55 AM, Catherine Christiansen christiansenlaw@yahoo.com [cdcbaa] wrote:
>
> Why don't you ask the court for a continuance?
>
>
> Law Office of Catherine Christiansen
> Certified Specialist, Bankruptcy Law, The State Bar of California Board of Legal Specialization.
>
>
>
>
>
>
>
>
>
> On Wednesday, April 15, 2015 4:40 PM, "jsmith@cgsattys.com [cdcbaa]" wrote:
>
>
>
> My Chapter 11 debtors have a massive civil judment against them in another state for a personal injury action that went to a jury trial. Their insurance carrier is paying for an appeal of that verdict. The appeal was argued out of state yesterday. Expect a result in a few weeks/months.
>
> Plaintiffs timely filed proofs of claim that attach their judgment(s). My DS & Plan are due essentially now.
>
> Appellate counsel is arguing a point of law, that if accepted by the state appellate court, would absolve the Debtors of ALL liability. In other words, the biggest argument on the table is "all or nothing" in that appeal. I am looking for case law that allows me to make a limited objection to the claims on the basis of the pending appeal. If we win, we owe these claimants nothing. If we lose the appeal we have to account for them in the plan as unsecured creditors. I've been at this research all day, and cannot find a thing on the effect of an appeal of a jugment on the allowance of a claim.
>
> I want to object that the claim is still contingent until the appeal concludes, but I'm not sure that is the right language. I am almost certain that I have seen a case in my career on this issue, but I'm drawing blanks right now.
>
> If the claim is allowed it completely skews all the voting numbers and really the plan. The judgments are millions of dollars and outweigh all other debts. If not allowed the plan is pretty simple, we can pay everybody, relatively quick. If allowed, they control the confirmation process and cram down might be an issue.
>
> If the appeal is not the basis of objection, then I would ask if you believe that there is basis to seperately classify these claimants based on the pending appeal. It really makes the Plan tough to draft if it is but I'd try to work it that way if I had to.
>
> Thanks
>
> Jeffrey B. Smith
>
>
>
type="text/html";
boundaryple-Mail-CEC48728-EE9C-4071-B288-DDBD26E97131
The post was migrated from Yahoo.
Unless Debtor was the petitioner, you need relief. Just file the motion
and/or stipulate to that relief and have the Court bless it. I would rather
do that then wait until it is brought up by opposing counsel.
Why not file a Plan where you assume Debtor wins the case. Plan payments
can be made into a holding account until judgment is final. At that point,
if Debtor wins, unsecured creditors are paid from the holding account and
the case is over/continues until unsecured are paid. If Debtor loses, to
the extent funds are from income generated after the petition date, those
funds are returned to Debtor and case is automatically converted to one
under Chapter 7.
Chapter 7 Trustee can deal with liquidating assets and paying creditors.
Alternatively, case can remain a Chapter 11 where Debtors liquidate assets
and pay creditors but this approach is not as clean.
Sincerely,
*Michael Avanesian, Esq. *
Simon Resnik Hayes, LLP
15233 Ventura Blvd., Suite 250
Sherman Oaks, CA 91403
Tel: 818.783.6251 | Cel: 818.817.1725
*Confidentiality**: *This electronic transmission and its contents are
legally privileged and confidential information and intended solely for the
use of the addressee. If the reader of this message is not the intended
recipient, you are hereby notified that any dissemination, distribution,
copying or other use of this message and its contents is strictly
prohibited. If you have received this transmission in error, please reply
to us immediately and delete this message from your directory.
*IRS Circular 230 Disclosure:* To ensure compliance with requirements
imposed by the IRS, please be advised that any U.S. federal tax advice
contained in this communication (including any attachments) is not intended
or written to be used or relied upon, and cannot be used or relied upon,
for the purpose of (i) avoiding penalties under the Internal Revenue Code,
or (ii) promoting, marketing or recommending to another party any
transaction or matter addressed herein.
On Fri, Apr 17, 2015 at 10:41 AM, jsmith@cgsattys.com [cdcbaa] wrote:
>
>
> Thank you all for your responses. Here is some more information.
>
>
>
> First, the continuance is a possibility but the state court appeal could
> go all the way to the Louisiana Supreme Court. The jury verdict was
> $100,000,000+ as a result of a truck accident where there were two
> fatalities and several parties severely injured, including childern who
> suffered severe burns. It is concievable that the appeals will take
> another year or even two. My clients incurred $15M of that liability
> PERSONALLY on theories of negligent entrustment of the semi tractor trailer
> rig, to the trucking company whose driver allegedly caused the accident.
> There was evidence offered at trial, excluded by the trial judge, that my
> clients were NOT EVEN the owners of the particular truck involved.
> Moreover, most states do not recognize negligent entrustment in a
> commercial setting. That second issue is a case of first iimpression in
> Louisiana. The appeals arguments have real teeth, from what I can tell.
>
>
>
> I'm not sure that the BK judge (MW) will let me wait to get to
> confirmation for two years while the appeals run. We are already 8 months
> into this. My current strategy is to ask for just that, though My clients
> are playing by the rules right now, saving money in the DIP accounts every
> month, paying their bills and not living extravently. If these injury
> claims are overturned on appeal, my clients can pay all their creditors in
> full on the effective date. I am hoping to get some love from them on the
> "wait & see" plan I am filing.
>
>
>
> My first position is to conditionally object to the injury claims on the
> basis that the judgments are not "final" until the appeals run, and as as
> long as my clients continue to accrue cash and not worsen their financial
> position, the court should wait to the end of the appeals process to have a
> confirmation hearing since we will not know if these creditors have a
> votable claim until the appeals process concludes. In reality though, if
> we lose the appeals, the Debtors will likely convert to 7. I think the
> judge already sees that.
>
>
>
> The issue of stay relief caught me by surprise. This is a purely
> defensive appeal. The fees for the appeal are being paid by an insurance
> company, so its not costing the estate anything. I would never have
> thought that my clients needed stay relief to DEFEND themselves against a
> state court claim on an appeal, particularly where there are no estate
> funds being used to prosecutre that appeal. Certainly the creditors have
> not raised the issue, and I don't know why I need that Pandora's Box opened.
>
>
>
> Eric, I looked this morning and don't see that case you are referring to.
> If you recall a name or something to guide me that would be great, however
> I have to say, I might prefer to NOT find that case, really.
>
>
>
> Thanks again for your input. Its an interesting case.
>
>
>
> Jeffrey B. Smith
>
>
>
Unless Debtor was the petitioner, you need relief. Just file the motion and/or stipulate to that relief and have the Court bless it. I would rather do that then wait until it is brought up by opposing counsel.Why not file a Plan where you assume Debtor wins the case. Plan payments can be made into a holding account until judgment is final. At that point, if Debtor wins, unsecured creditors are paid from the holding account and the case is over/continues until unsecured are paid. If Debtor loses, to the extent funds are from income generated after the petition date, those funds are returned to Debtor and case is automatically converted to one under Chapter 7.Chapter 7 Trustee can deal with liquidating assets and paying creditors.Alternatively, case can remain a Chapter 11 where Debtors liquidate assets and pay creditors but this approach is not as clean.">Sincerely,
The post was migrated from Yahoo.
Your situation reminds me of the Asbestos chapter 11 of In re Jons Manville in the southern district of new york, where they could file a chapter 11 even though it did not seem possible to have a confirmable plan when there were all these viable lawsuits out there and yet the case was not dismissed. The debtor was able to file a confirmable plan even though there were all these potential claims out there. Maybe that case would help.
David
This message is from an attorney and may contain information that is privileged and/or confidential, including, without limitation, attorney-client privileged communication(s) and/or confidential attorney work product. Unless you are the addressee or authorized to receive messages for the addressee, you may not use, copy,or disclose this message or any information contained herein. If you havereceived this message in error, please advise the sender by reply e-mail and delete any version, response, or reference to it. Thank you.
> On Apr 15, 2015, at 4:40 PM, jsmith@cgsattys.com [cdcbaa] wrote:
>
> My Chapter 11 debtors have a massive civil judment against them in another state for a personal injury action that went to a jury trial. Their insurance carrier is paying for an appeal of that verdict. The appeal was argued out of state yesterday. Expect a result in a few weeks/months.
>
>
>
> Plaintiffs timely filed proofs of claim that attach their judgment(s). My DS & Plan are due essentially now.
>
>
>
> Appellate counsel is arguing a point of law, that if accepted by the state appellate court, would absolve the Debtors of ALL liability. In other words, the biggest argument on the table is "all or nothing" in that appeal. I am looking for case law that allows me to make a limited objection to the claims on the basis of the pending appeal. If we win, we owe these claimants nothing. If we lose the appeal we have to account for them in the plan as unsecured creditors. I've been at this research all day, and cannot find a thing on the effect of an appeal of a jugment on the allowance of a claim.
>
>
>
> I want to object that the claim is still contingent until the appeal concludes, but I'm not sure that is the right language. I am almost certain that I have seen a case in my career on this issue, but I'm drawing blanks right now.
>
>
>
> If the claim is allowed it completely skews all the voting numbers and really the plan. The judgments are millions of dollars and outweigh all other debts. If not allowed the plan is pretty simple, we can pay everybody, relatively quick. If allowed, they control the confirmation process and cram down might be an issue.
>
>
>
> If the appeal is not the basis of objection, then I would ask if you believe that there is basis to seperately classify these claimants based on the pending appeal. It really makes the Plan tough to draft if it is but I'd try to work it that way if I had to.
>
>
>
> Thanks
>
>
>
> Jeffrey B. Smith
>
>
The post was migrated from Yahoo.
If you find a case that allows you to go forward, please share.
My gut tells me the best you can do is have the court estimate the claim
for purposes of plan confirmation under 502(c). I don't see where that gets
you though.
I recommend that you work out a deal with the creditor so they will vote
for your Plan. The way I see it, your reorganization Plan is going to be
split into two scenarios. The first is what happens if you win, the second
is what happens if you lose. If you win, they get nothing unsecured get x.
If you lose, they get Z. So why not write that Plan and have them vote for
it.
As an alternative, if you cannot come to an agreement, then they control
the case to the extent that the absolute priority rule is problematic. So
deal with the absolute priority rule directly assuming the unsecured class
votes against your plan.
Sincerely,
*Michael Avanesian, Esq. *
Simon Resnik Hayes, LLP
15233 Ventura Blvd., Suite 250
Sherman Oaks, CA 91403
Tel: 818.783.6251 | Cel: 818.817.1725
*Confidentiality**: *This electronic transmission and its contents are
legally privileged and confidential information and intended solely for the
use of the addressee. If the reader of this message is not the intended
recipient, you are hereby notified that any dissemination, distribution,
copying or other use of this message and its contents is strictly
prohibited. If you have received this transmission in error, please reply
to us immediately and delete this message from your directory.
*IRS Circular 230 Disclosure:* To ensure compliance with requirements
imposed by the IRS, please be advised that any U.S. federal tax advice
contained in this communication (including any attachments) is not intended
or written to be used or relied upon, and cannot be used or relied upon,
for the purpose of (i) avoiding penalties under the Internal Revenue Code,
or (ii) promoting, marketing or recommending to another party any
transaction or matter addressed herein.
On Wed, Apr 15, 2015 at 4:40 PM, jsmith@cgsattys.com [cdcbaa] wrote:
>
>
> My Chapter 11 debtors have a massive civil judment against them in another
> state for a personal injury action that went to a jury trial. Their
> insurance carrier is paying for an appeal of that verdict. The appeal was
> argued out of state yesterday. Expect a result in a few weeks/months.
>
>
>
> Plaintiffs timely filed proofs of claim that attach their judgment(s). My
> DS & Plan are due essentially now.
>
>
>
> Appellate counsel is arguing a point of law, that if accepted by the state
> appellate court, would absolve the Debtors of ALL liability. In other
> words, the biggest argument on the table is "all or nothing" in that
> appeal. I am looking for case law that allows me to make a limited
> objection to the claims on the basis of the pending appeal. If we win, we
> owe these claimants nothing. If we lose the appeal we have to account for
> them in the plan as unsecured creditors. I've been at this research all
> day, and cannot find a thing on the effect of an appeal of a jugment on the
> allowance of a claim.
>
>
>
> I want to object that the claim is still contingent until the appeal
> concludes, but I'm not sure that is the right language. I am almost
> certain that I have seen a case in my career on this issue, but I'm drawing
> blanks right now.
>
>
>
> If the claim is allowed it completely skews all the voting numbers and
> really the plan. The judgments are millions of dollars and outweigh all
> other debts. If not allowed the plan is pretty simple, we can pay
> everybody, relatively quick. If allowed, they control the confirmation
> process and cram down might be an issue.
>
>
>
> If the appeal is not the basis of objection, then I would ask if you
> believe that there is basis to seperately classify these claimants based on
> the pending appeal. It really makes the Plan tough to draft if it is but
> I'd try to work it that way if I had to.
>
>
>
> Thanks
>
>
>
> Jeffrey B. Smith
>
>
>
If you find a case that allows you to go forward, please share.My gut tells me the best you can do is have the court estimate the claim for purposes of plan confirmation under 502(c). I don't see where that gets you though.I recommend that you work out a deal with the creditor so they will vote for your Plan. The way I see it, your reorganization Plan is going to be split into two scenarios. The first is what happens if you win, the second is what happens if you lose. If you win, they get nothing unsecured get x. If you lose, they get Z. So why not write that Plan and have them vote for it.reement, then they control the case to the extent that the absolute priority rule is problematic. So deal with the absolute priority rule directly assuming the unsecured class votes against your plan.Sincerely,Michael Avanesian, Esq.Simon Resnik Hayes, LLP15233 Ventura Blvd., Suite 250Sherman Oaks, CA 91403Tel: 818.783.6251 | Cel: 818.817.1725Confidentiality:This electronic transmission and its contents are legally privileged and confidential information and intended solely for the use of the addressee. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution, copying or other use of this message and its contents is strictly prohibited. If you have received this transmission in error, please reply to us immediately and delete this message from your directory.IRS Circular 230 Disclosure:To ensure compliance with requirements imposed by the IRS, please be advised that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used or relied upon, and cannot be used or relied upon, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
On Wed, Apr 15, 2015 at 4:40 PM, jsmith@cgsattys.com [cdcbaa] <cdcbaa@yahoogroups.com> wrote:
My Chapter 11 debtorshave a massive civil judment against them in another state for a personal injury action that went to a jury trial. Their insurance carrier is paying for an appeal of that verdict. The appeal was argued out of state yesterday. Expect a result in a few weeks/months.Plaintiffs timely filed proofs of claim that attach their judgment(s). My DS & Plan are due essentially now.Appellate counsel is arguing a point of law, that if accepted by the state appellate court, would absolve the Debtors ofALL liability. In other words, the biggest argument on the table is "all or nothing" in that appeal. I am looking for case law that allows me to make a limited objection to the claims on the basis of the pending appeal. If we win, we owe these claimants nothing.s unsecured creditors.I've been at this researchall day, and cannot find a thing on the effect of an appeal of a jugment on the allowance of a claim.I want to object that the claim is still contingent until the appeal concludes, but I'm not sure that is the right language. I am almost certain that I have seen a case in my career on this issue, but I'm drawing blanks right now.If the claim is allowed it completely skews all the voting numbers and really the plan. The judgments are millions of dollars and outweigh all other debts.If not allowed the plan is pretty simple, we can pay everybody, relatively quick. If allowed, they control the confirmation process and cram down might be an issue.If the appeal is not the basis of objection, then I would ask if you believe that there is basis to seperately classify these claimants based on the pending appeal. It really makes the Plan tough to draft if it is but I'd try to work it that way if I had to. Thanks
The post was migrated from Yahoo.