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13, 2009, the UCA filed its Rule 2019(a) statement to which the UCA attached the 2005 Plan and a document listing all of the Class 6 creditors whom the UCA was representing.
Issues: "[W]hether an individual may represent a distinct group of unsecured creditors in a Chapter 11 case simply by virtue of his appointment as an 'unsecured creditor agent' in the confirmed plan in a prior case."
Rules: (1) "Rule 2019 requires that 'every person purporting to represent more than one creditor in a chapter 11 reorganization case file a verified statement setting forth the names and addresses of the creditors, the nature and amount of the claims and the relevant facts and circumstances surrounding employment of the 'agent' ... [and] that the entity provide a 'copy of the instrument, if any, whereby the entity, committee, or indenture trustee is empowered to act on behalf of creditors' ... Normally, 'this includes an executed power of attorney authorizing counsel to file a proof of claim.'" The consequences of a failure to comply with Rule 2019 are at the bankruptcy court's discretion and may include holding invalid any authority the entity who failed to file a 2019 statement purportedly held.
Holding: The UCA did not have authority under the 2005 Plan or as an agent of the former Class 6 creditors to file Claim 88.
Reasoning: (1) The purpose of Rule 2019 is to further the Bankruptcy Code's goal of "complete disclosure during the business reorganization process, and was designed to cover entities which, during the bankruptcy case, act in a fiduciary capacity to those they represent, but are not otherwise subject to the control of the court." Here, the UCA failed to timely file a 2019 statement; in fact, the 2019 statement was filed grossly late, so late that the UCA is deemed to have failed to comply with Rule 2019. This is especially true in light of the fact that the UCA did not file a 2019 statement until after the February 3, 2009 hearing in which the Debtor's attorney argued that such failure precluded the UCA from representing the Class 6 creditors. "The Court will not retroactively acknowledge the 2019 Disclosures." On this basis alone, the UCA does not have authority to file Claim 88. (2) In any event, because the UCA seeks only to represent the former Class 6 creditors, the Court "sees no reason to appoint a representative for a sub-group of unsecured creditors simply because their pre-petition debts arise from a confirmed plan in a prior Chapter 11 case." The 2005 Plan is treated as nothing more than a pre-petition contract in the 2008 Case. Additionally, the UCA does not seek to fully represent the Class 6 creditors; instead, the UCA only seeks to represent the Class 6 creditor's rights under the 2005 Plan. "To appoint the UCA as a representative for certain unsecured creditors only with respect to certain claims would require the Debtor and this Court to wade through a quagmire of overlapping claims, due process concerns, and multifarious standing issues. This, the Court will not do." (3) The Court then sustained the Debtor's objection for three reasons. (1) the UCA failed to comply with Rule 2019, (2) the 2005 Plan does not authorize the UCA to file proofs of claim on behalf of the Class 6 creditors since the 2005 Plan does not provide express - as opposed to implied - permission to do so, and (3) the UCA does not qualify as 'authorized agent' under the general principles of agency law. And, moreover, Claim 88 does not comply with Rule 3001(a) and (c) for three reasons: (1) it does not contain the names of the individual claimants, and (2) the UCA did not attach the bases of the Class 6 creditors' claims. Lastly, the court notes that there is significant overlap between Claim 88 and numerous other proofs of claim filed by individual creditors that belonged to Class 6.
Facts: Keltic Financial Partners, LP ("Keltic") appeals from an order of the bankruptcy court that allowed Foreside Management Company, LLC (the "Debtor") to (1) buy specialized equipment from its primary secured lender, Chittenden Trust Company ("Chittenden"), (2) obtain post-petition financing for the purchase, and (3) modify an existing lease with the Debtor's tenants. The Debtor
