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See In re Baron's Stores, Inc., 390 B.R. 734 (Bk. S.D. Fla. 2008) (attorney surreptitiously deleted exculpatory clause; court said plan was a matter of public record and it probably wouldn't produce a different result); In re Delta Air Lines, Inc., 386 B.R. 518 (Bk. S.D.N.Y. 2008) (debtors allegedly acted fraudulent in failing to update claims estimate; here, movants had purchased claims after confirmation and waited too long, and it would be impossible to protect innocent parties); In re Davis Petroleum Corp., 385 B.R. 892 (Bk. S.D. Tx 2008) (no evidence confirmation order was procured by fraud; all parties represented by counsel).
In bankruptcy sales, Courts will protect the buyer as to liabilities assumed. For example in Al Perry Enterprises, Inc. v. Appalachian Fuels, LLC, 503 F. 3d 538 (6th Cir. 2007), the Sixth Circuit held that the purchaser of the Debtor's assets (which included an assignment of its contracts), did not assume certain a requirement that the debtor pay certain commissions on sales which had been imposed as a result of state court litigation. The Court rejected the argument that assumption of the contract implicitly included the commission obligation; the sale was free and clear of liens, claims and encumbrances, the party owed the commissions had failed to object to the sale, and the commission obligation was not mentioned in the purchase agreement or order approving the sale.
Two cases vacate sales for inadequate price. In re Berg, 383 B.R. 631 (Bk. W.D. Tex. 2008) (seriously mistaken view on amount of royalty revenue); In re Hart's Mfg. Co., 383 B.R. 720 (Bk. W.D. Tenn. 2008) (gross inadequacy of price).
In re Shenango Group Inc., 501 F.3d 338 (3d Cir. 2007) (court had related to jurisdiction over claim by retirees that plan required debtor immediately to fund pension plan because there was a close nexus between the question and the plan; matters affecting interpretation, implementation, consummation, execution or administration of the plan typically have such a close nexus; court on review of plan interpretation issues gives substantial deference to opinion of bankruptcy judge who confirmed the plan).
A recent decision may be read to suggest that there may be a somewhat different standard for transferring venue in a real estate case. See In re Dunmore Homes, Inc., 380 B.R. 663 (Bk. S.D.N.Y. 2008) (transfer to primary location of properties of developer). See also In re Buffets Holdings, Inc., 397 B.R. 725 (Bk. D. Del. 2008) (dispute between debtor and landlord over failure to repair roof transferred from home court to Michigan, where property is located).
Involuntary Petitions. An important involuntary case is In re Trusted Net Media Holdings, LLC, 2008 WL 5069824 (11th Cir. 2008). There, the question was whether there were 3 creditors with undisputed claims, and the issue was raised long after the case was filed. The debtor claimed that the filing requirements were jurisdictional, but the Court disagreed. The Court distinguished between the basic jurisdictional requirements for the exercise of
©2009 Jonathan M. Landers
