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bar date had not yet passed. The court further held that 42 of the 127 actions should be remanded to the state courts which had presided over most of the pre-trial matters.
* In re RNI Wind Down Corp., 369 B.R. 174 (Bankr. D. Del. July 2007) (Sontchi, J.)
Former officer's claim for advancement of legal fees was not a contingent claim and could not be estimated. The administrator of a confirmed chapter 11 liquidating plan sought to disallow the claim of a former officer under section 502(e)(1)(B). The debtor's by-laws provided for indemnity and advancement of legal fees for the defense of the officer's actions taken in his official capacity. The former officer filed a claim for his defense costs. The court allowed the officer's claim, concluding that the administrator failed to satisfy its burden of proving that the claim was contingent or that the officer was co-liable with the debtor. Instead, the court held that the former officer had a fixed (not contingent) right to the advancement of legal fees, subject only to his own contingent obligation to repay the debtor at some later time. Furthermore, said the court, it was too soon to say whether the debtor would be jointly liable for the officer's alleged misconduct. The court further declined to estimate the claim because the purpose for estimation under section 502(c) is to prevent undue delay, not to reduce the debtor's liability.
* In re Zaruba, 384 B.R. 254 (Bankr. D. Alaska Mar. 2008) (MacDonald, J.) Disclosure statements must explain the source of the debtor's information. The debtors' disclosure statements indicated that the debtors "have been advised that there will be no adverse tax consequences as a result of the transactions proposed in this plan." Would that satisfy you as a plan solicitee? This "information" was not only conclusory, said the court, but was also unsupported and all together ignorant of "the tax effects of the plan on a typical creditor in the case." In short, it was not adequate information. The debtor also tried to dispense of the requirement to conduct and provide a liquidation analysis, expecting that the majority of classes would support the plan without the analysis. "Proper disclosure, however, is a predicate to plan solicitation and voting. Votes cannot be counted until proper disclosure has been made," said the court. Back to the drawing board.39
39 The court also concluded that the plan was infeasible and failed several other requirements of section 1129(a).
