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of prejudice without evidence of what was destroyed and how the destruction prejudiced the claimant. The court, nevertheless, concluded that the debtor's behavior warranted an award of a portion of the claimant's fees and costs for its trouble, to be determined at a later time. Those creditors whose claims were partially allowed or disallowed would have no such right.
* OHC Liquidation Trust v. Credit Suisse (In re Oakwood Homes Corp.), 378 B.R 59
(Bankr. D. Del. Nov. 2007) (Walsh, J.) Liquidation trust was entitled to a jury trial. A liquidation trust sought a determination of its Seventh Amendment right to trial by jury in an adversary proceeding where the trust asserted 10 claims -- seven pertaining to claims objections and three centered around a distinct nucleus of operative facts. Before the debtors retained the defendants as financial advisors for the debtors' efforts to reorganize, the defendants had agreed to serve the debtors as lenders and agents for the debtors' loan purchase facility. The trust asserted two tort claims and a claim for breach of fiduciary duty for the period during which the defendants' served as lenders and servicing agents. The trust asked the court to determine whether those claims could be tried before a jury.
The bankruptcy court applied the "three stages" of Granfinanciera and concluded that the trust, indeed, had a Seventh Amendment right to a jury trial. Specifically, the court held that the trust asserted two legal claims and one equitable claim. The court also recognized that the complaint requested legal remedies (money damages) for these three causes of action, a factor weighing in favor of the trust's right to a jury trial. Additionally, the court held that while the resolution of these three causes of action could augment the estate, they would not affect the allowance or disallowance of the defendants' claims and so were not part of the claims allowance process. Said the court, the trust's choice to combine its claim objections with affirmative litigation did not "magically convert[]" the trust's legal claims into equitable ones. Thus, the court concluded, the trust's claims satisfied the Granfinanciera test. Finally, the bankruptcy court dismissed the defendant's argument that the debtors contractually waived their Seventh Amendment rights, noting that only two of the 15 debtors signed the relevant contracts, and that the defendants' failed to rebut the presumption against such waivers. Accordingly, the court held that the plaintiff trust did have the right to a jury trial on three of 10 causes of action.
* Zurich Am. Ins. Co. v. Int'l Fibercom, Inc. (In re Int'l Fibercom, Inc.), 503 F.3d 933 (9th Cir. Sept. 2007) (Hug, J.)
Two years later, bankruptcy court properly "clarified" its prior order under Rule 60(b)(6). As part of the debtor's "first day motions," the bankruptcy court issued an assumption order, allowing the debtor to assume an insurance policy which the provider agreed to extend until the debtor's assets could be sold. The extended policy granted the provider a first lien in "additional collateral" to secure deductibles arising under the assumed policy. The assets were later sold, and the case was converted to chapter 7. Two years after the assumption order, the insurance provider requested reimbursement for the unpaid deductibles (most of which arose pre-petition, unbeknownst to the bankruptcy court upon issuing the assumption order). The assumption order was ambiguous as to whether the "additional collateral" secured only postpetition deductibles or all deductibles. The trustee, therefore, moved under Rule 60(b) for the court to "clarify" the two-year-old assumption order. Recognizing that the order violated local
