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acts "as a trustee in a case under this title."48 The court agreed that, at first blush, it would appear that the debtor's objection had some merit. However, looking to the UST's duties as described in 28 U.S.C. S 586(a), noted the court, the UST sometimes acts as a governmental unit and sometimes does not. Ordinarily, the UST will "supervise the administration of cases and trustees in cases under chapter 7, 11, 12, 13, or 15 of title 11. . . ." 28 U.S.C. S 586(a)(3). However, in very rare circumstances, the UST may also act as a "trustee in a case under title 11." See 28 U.S.C. S 586(a)(2). In the latter, less likely cases, concluded the court, the UST would not be a governmental unit and so would not have standing to object to confirmation under section 1129(d). In this case, however, the UST was not acting as a "case trustee." Thus, in this case, the UST was a governmental unit with standing to object to confirmation under section 1129(d).
* In re Lloyd E. Mitchell, Inc., 373 B.R. 416 (Bankr. D. Md. Aug. 2007) (Alquist, J.)
Can the creditor in Class A object based on a plan's treatment of creditors in Class B?
The court questioned whether insurance carriers, who were placed into their own separate class under the proposed plan, had standing to object to the plan based on the impairment of an entirely separate class of creditors. However, because the motions then before the court did not yet require the court to confirm the plan, the court declined to decide the insurance carriers' standing to object.
* AVCO Corp. v. Citation Corp. (In re Citation Corp.), 371 B.R. 518 (N.D. Ala. July 2007) (Guin, J.)
Beneficiary of trust created in a prior bankruptcy was not an aggrieved party with standing to object to a plan in the subsequent case. The debtor's first chapter 11 case resulted in a confirmed plan which converted unsecured claims into beneficial interests in a creditor trust. Before the trustee could satisfy its obligations under the terms of the plan from the first case, the debtor filed this subsequent case and proposed a prepackaged plan. A creditor of the debtor in the first case (now a trust beneficiary) objected to the prepackaged plan and disclosure statements in the second case. Over the creditor's objection, the bankruptcy court confirmed the prepackaged plan. On appeal, the district court held that the creditor was not an aggrieved person because it no longer held a claim against the debtor -- only a beneficial interest in a trust which held an unimpaired claim against the debtor. The court further noted that, even if the objecting creditor could establish standing to object, its appeal was equitably moot because the creditor failed to request a stay pending the appeal, the plan had been substantially consummated, and the relief requested would effectively unravel the entire confirmed plan.
48 11 U.S.C. S 101(27).
